Directors Report of Axis Bank Ltd.

Mar 31, 2023

Your Board of Directors (Board) are pleased to present the 29^th Annual Report of Axis Bank Limited (Bank) together with the audited financial statements for fiscal 2023.

Financial performance and state of the Bank’s affairs

The highlights of the standalone financial performance for the fiscal year under review, are presented below:

('' in crores)
Particulars	2022-23	2021-22	Growth
Balance sheet:
Deposits	946,945	821,972	15%
Savings bank deposits	297,416	242,449	23%
Current account deposits	149,120	127,557	17%
Term deposits	500,409	451,966	11%
Advances	845,303	707,947	19%
Retail advances	487,571	400,142	22%
Non-retail advances	357,732	307,805	16%
Total assets / liabilities	1,317,326	1,175,429	12%
Profit & loss account:
Net interest income	42,946	33,132	30%
Other income	16,501	15,221	8%
Fee income	16,216	13,001	25%
Trading profit1	(242)	1,627	-
Miscellaneous income	527	593	(11%)
Operating expenses	27,398	23,611	16%
Operating profit	32,049	24,742	30%
Provisions and contingencies (other than tax)	2,653	7,360	(64%)
Profit before exceptional items and tax	29,396	17,382	69%
Exceptional items2	12,490	-	-
Profit after exceptions items, but before tax	16,906	17,283	(3%)
Provision for tax	7,326	4,357	68%
Net profit	9,580	13,025	(26%)
Balance in profit and loss account brought forward from previous fiscal year	38,100	29,985	-
Amount available for appropriation	47,680	43,010	-
Appropriations
Transfer to statutory reserve	2,395	3,256	-
Transfer to capital reserve	68	441	-
Transfer to / (from) investment reserve	(149)	149	-
Transfer to special reserve	841	609	-
Transfer to investment fluctuation reserve	73	455	-
Dividend paid	307	-	-
Surplus carried over to balance sheet	44,145	38,100	-

Key performance indicators
Key performance indicators	2022-23	2021-22
Interest income as a % of working funds1	7.09	6.26
Non-interest income as a % of working funds1	1.37	1.41
Net interest margin (%)	4.02	3.47
Return on average net worth (%)2	18.38	12.91
Operating profit as a % of working funds12	2.67	2.30
Return on average assets (%)2	1.82	1.21
Profit per employee3 ('' in lacs)	10.94	15.54
Business (Deposits less inter-bank deposits advances) per employee3 ('' in crores)	20.00	17.92
Net non-performing assets as a % of net customer assets4	0.39	0.73

¹ Working funds represent average total assets

² Excluding exceptional items

³ Productivity ratios are based on average number of employees for the fiscal year

⁴ Customer assets include advances and credit substitutes.

Previous fiscal year''s figures have been re-grouped wherever necessary.

Financial performance of the group

Subsidiaries of the Bank continued to deliver steady performance. The domestic subsidiaries, collectively, reported a net profit of '' 1,304 crores in fiscal 2023. This translates into a return on investment of ~ 50%. Consolidated profit of the group (excluding exceptional items) for fiscal 2023 stood at '' 23,172 crores, growing 64% year-on-year. Consolidated return on equity (excluding exceptional items) for fiscal 2023 stood at 18.84%, up 517 bps year-on-year, with subsidiaries contributing 46 bps.

Acquisition of Citibank’s India consumer business

The Bank has acquired on a going concern basis, the business assets and business liabilities of Citibank''s India consumer business from Citibank N. A. (acting through its branch in India) (CBNA) and the NBFC consumer business from Citicorp Finance (India) Limited (CFIL) collectively referred to as Citibank India consumer business, effective beginning of day 1 March, 2023 (referred to as legal day one) without values being assigned to individual assets and liabilities.

The transaction comprises the sale of the consumer businesses of Citibank India, which includes loans, credit cards, wealth management, commercial vehicle, construction equipment loans and retail banking operations. The acquisition provides the Bank with access to a premium customer segment, is a good strategic fit and is completely aligned with Axis Bank''s GPS (Growth, Profitability & Sustainability) strategy. The Bank has gained access to the large, affluent and profitable customer franchise of Citibank, which aligns well with its premiumisation strategy.

The Board extends a warm ''Dil Se'' welcome to the employees and customers of Citibank who have joined the Axis family and acknowledges their support during the transition period.

Dividend

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Bank has formulated and adopted a dividend distribution policy, which was reviewed by the Board. The policy is available on the website of the Bank at https://www.axisbank.com/docs/default-source/quarterlv-reports/dividend-distribution-policy-of-the-bank.pdf .

In view of the overall performance of the Bank and while retaining capital to support future growth, the Board at its meeting held on 27 April, 2023, recommended a final dividend of '' 1/- per equity share of '' 2/- each fully paid-up, subject to the approval of members at the ensuing 29^th Annual General Meeting (AGM). The record date for payment of dividend is mentioned in the notice of the ensuing 29^th AGM of the Bank.

In terms of Accounting Standard (AS) - 4 ''contingencies and events occurring after the balance sheet date'' as notified by the Ministry of Corporate Affairs (MCA) under Section 133 of the Companies Act, 2013 (Act) read together with the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Rules, 2021, such proposed dividend has not been recognised as a liability as on 31 March, 2023. Further, shares issued on exercise of stock options after 31 March, 2023 till record date will also be eligible for such proposed dividend.

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

Capital structure Share capital

During fiscal 2023, the Bank issued and allotted 7,104,176 equity shares of 21- each, fully paid-up, pursuant to exercise of stock options by the whole-time directors / employees of the Bank and of its subsidiary companies, under the Bank''s employee stock option scheme 2000-01 (ESOS).

Consequent to the above, the total issued and paid-up equity share capital of the Bank increased by '' 1.42 crores to '' 615.37 crores as on 31 March, 2023, as compared to '' 613.95 crores, as on 31 March, 2022. The equity shares issued under the ESOS rank pari-passu with the existing equity shares of the Bank.

Apart from the above, the Bank did not raise any additional equity share capital during the fiscal year.

Debt instruments

During fiscal 2023, in order to strengthen its capital adequacy and to enhance its long-term resources, the Bank issued and allotted 12,000 unsecured, rated listed subordinated taxable redeemable Basel Ill compliant tier II non-convertible debentures (Series 30) of face value of '' 1 crore each, aggregating to '' 12,000 crores, on a private placement basis. The Audit Committee of the Board (ACB) at its meeting held on 23 January, 2023, had reviewed and confirmed that the Bank had utilized the said funds for the above-mentioned purposes only.

Capital adequacy ratio

The Bank''s overall Capital Adequacy Ratio (CAR) under Basel Ill stood at 17.64% at the end of fiscal 2023, well above the benchmark requirement of 11.50% stipulated by the RBl. Of this, the common equity tier l (CET l) CAR was 14.02% (against minimum regulatory requirement of 8.00%) and tier l CAR was 14.57% (against minimum regulatory requirement of 9.50%). As on 31 March, 2023, the Bank''s tier ll CAR under Basel Ill stood at 3.07%.

Ratings of various debt instruments

The details of credit ratings obtained by the Bank along with any revisions thereto, if any, during fiscal 2023, for all the debt instruments outstanding as on 31 March, 2023, are provided in the report on corporate governance, forming part of this annual report.

Reclassification to "public" category from "promoter" category

The Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), one of the promoters of the Bank, vide its letter dated 27 March, 2023 has withdrawn the nomination of its nominee director from the Board of the Bank. SUUTI has also surrendered its right to appoint one nominee director on the Board, requested the Bank (i) to make appropriate amendments to the Articles of Association of the Bank (AOA) and (ii) to exit SUUTI from "promoter" category and reclassify it to "public" category. Accordingly, the Board on 27 March, 2023 noted the aforesaid letters and approved the amendment to the Bank''s AOA, limited to cancellation of nomination rights of SUUTI and other consequential changes thereupon, subject to the approval of the members of the Bank and Reserve Bank of India (RBl). The members of the Bank vide postal ballot on 28 April, 2023 have approved the amendment to the AOA of the Bank. The approval of RBl on amendment to the AOA is awaited, as on the date of this report.

Further, the Board at its meeting held on 28 April, 2023 has approved the request of SUUTI for reclassification, subject to approval of the stock exchanges. Since SUUTI does not hold any equity shares in the Bank, the provisions of Regulation 31A(3)(a)(iii) of the SEBI Listing Regulations with respect to approval of the members are not applicable. The application to the stock exchanges will be made within the prescribed timelines.

Deposits

Being a banking company, the disclosures relating to deposits as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Act, are not applicable to the Bank.

Change in the nature of business

During fiscal 2023, there has been no change in the nature of business of the Bank.

Material changes and commitments affecting the financial position of the Bank

There were no material changes and commitments affecting the financial position of the Bank, between the end of the fiscal year of the Bank to which the financial statements relate and up to the date of this report.

Subsidiaries, joint ventures and associates As on 31 March, 2023, the Bank has nine unlisted subsidiary companies, two step down subsidiary companies and one associate company:
Sr. no.	Name of the subsidiary/ associate company	Subsidiary/ associate	Business activity	% of shares held by the group
1.	Axis Asset Management Company Limited	Subsidiary	Managing investment portfolios of the scheme(s) launched by Axis Mutual Fund, Axis Alternative Investment Fund- category II & III and portfolios under portfolio management services.	75%
2.	Axis Mutual Fund Trustee Limited	Subsidiary	Trustee for the mutual fund business.	75%
3.	Axis Capital Limited	Subsidiary	Business of intermediation such as investment banking, capital market advisory, private equity advisory, M&A advisory and institutional equities.	100%
4.	Axis Finance Limited	Subsidiary	Non-banking financial company (NBFC) offering loans to corporates, MSME’s and retail customers.	100%
5.	Axis Securities Limited	Subsidiary	Retail broking services.	100%
6.	A. Treds Limited	Subsidiary	Facilitating financing of trade receivables.	67%
7.	Axis Trustee Services Limited	Subsidiary	Trusteeship activities and agency & administration services.	100%
8.	Freecharge Payment Technologies Private Limited	Subsidiary	Merchant acquiring services, payment aggregation services, payment support services, and business correspondent to a bank / financial institution, distribution of mutual funds.	100%
9.	Axis Bank UK Limited	Subsidiary	Banking activities in the United Kingdom.	100%
10.	Axis Capital USA, LLC,	Step down subsidiary	Services relating to equity capital market, stock broking to institutional investors in USA.	100% (held by Axis Capital Limited)
11.	Axis Pension Fund Management Limited (Incorporated on 17 May, 2022)	Step down subsidiary	Pension fund management business under the national pension system.	47.27%
12.	Max Life Insurance Company Limited	Associate	Life insurance and long-term saving and protection products.	12.99%

As on 31 March, 2023, the Bank did not have any joint venture company.

The financial position and performance of each of the Bank''s subsidiary companies is given in the management discussion & analysis report, which forms part of this annual report.

Consolidated financial statements

In accordance with the provisions of Section 129(3) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, the Bank has prepared consolidated financial statements, which forms part of this annual report. The statement in form AOC-1 containing the salient features of the financial statements of the subsidiary companies and associate company of the Bank, also forms part of this annual report.

In accordance with the third proviso to Section 136(1) of the Act, the annual report of the Bank, containing standalone financial statements and the consolidated financial statements and all other documents required to be attached thereto are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders-information/annual-reports.

Further, in accordance with the fourth proviso to the said section, the audited financial statements of each of the said subsidiary companies of the Bank are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders-information/annual-reports. The said financial statements will be available for inspection by the members of the Bank and trustees of debenture holders at the registered office of the Bank during business hours on all working days except Saturdays, Sundays, bank holidays and national holidays. Any member interested in obtaining a physical copy of the said financial statements can send an email to the company secretary of the Bank on [email protected].

Particulars of loans, guarantees and investments

Pursuant to Section 186(11) of the Act, the provisions of Section 186 of the Act, except sub-section (1), do not apply to a loan made, guarantee given or security provided by a banking company in the ordinary course of its business.

The particulars of investments made by the Bank are disclosed in schedule 8 of the financial statements as per the applicable provisions of the Banking Regulation Act, 1949.

Corporate governance

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

The corporate governance framework of the Bank incorporates all the mandatory requirements as prescribed in the SEBI Listing Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the SEBI Listing Regulations, as detailed in the report on corporate governance.

The report on corporate governance for fiscal 2023 along with general shareholder information forms part of this annual report. M. P. Chitale & Co., Chartered Accountants (ICAI firm registration no. 101851W), joint statutory auditor of the Bank has issued a certificate confirming the compliance with the provisions of Corporate Governance by the Bank for the year ended 31 March, 2023, as stipulated in Regulations 17 to 27 and clauses (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V to the SEBI Listing Regulations, and the same is attached along with the report on corporate governance.

Management’s discussion and analysis report

The management''s discussion and analysis report as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, forms part of this annual report.

Board of directors

Appointment / re-appointment of directors

During fiscal 2023, pursuant to the recommendation of the Nomination and Remuneration Committee of Directors (NRC), the Board appointed / re-appointed the following directors:

1. Manoj Kohli was appointed as an Independent Director of the Bank on 17 June, 2022, for a period of four years with effect from 17 June, 2022 upto 16 June, 2026 (both days inclusive). The said appointment was approved by the members of the Bank at the 28^th AGM held on 29 July, 2022.

2. P. N. Prasad was appointed as an Independent Director of the Bank on 20 October, 2022, for a period of four years with effect from 20 October, 2022 upto 19 October, 2026 (both days inclusive). The said appointment was approved by the members of the Bank vide postal ballot on 16 January, 2023.

3. CH SS Mallikarjunarao was appointed as an Independent Director of the Bank on 24 January, 2023, for a period of four years with effect from 1 February, 2023 upto 31 January, 2027 (both days inclusive). The said appointment was approved by the members of the Bank vide postal ballot on 28 April, 2023.

Manoj Kohli, P. N. Prasad and CH SS Mallikarjunarao are not liable to retire by rotation.

The Board has formed an opinion that Manoj Kohli, P. N. Prasad and CH SS Mallikarjunarao have the integrity, expertise and requisite experience, which is beneficial to the business interest of the Bank. Further, they are in compliance with provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to enrolling their name in the online databank of independent directors and qualifying the online proficiency self-assessment test for independent directors.

Ashish Kotecha, Non-Executive (Nominee Director) of the Bank, is liable to retire at ensuing AGM, and being eligible seeks re-appointment. Based on performance evaluation and recommendation of the NRC, the Board recommends his re-appointment to the members of the Bank.

The Board at its meeting held on 28 April, 2023, has appointed Subrat Mohanty as an Executive Director of the Bank with effect from (i) 1 May, 2023 or (ii) the date of approval of his appointment by RBI, whichever is later. His appointment is for a period of three years from the effective date of his appointment and is subject to approval of the members of the Bank and RBI. Subrat Mohanty would be liable to retire by rotation.

Resolutions in respect of re-appointment of Ashish Kotecha and appointment of Subrat Mohanty, have been included in the notice convening the 29^th AGM of the Bank.

RBI vide its letter dated 24 June, 2022 has approved the re-appointment of Rajiv Anand as the Deputy Managing Director of the Bank, for a further period of three years, with effect from 4 August, 2022 up to 3 August, 2025 (both days inclusive). Further, RBI vide its letter dated 12 July, 2022 has approved the re-appointment of Rakesh Makhija as Non-Executive (Part-Time) Chairman of the Bank, with effect from 18 July, 2022 up to 26 October, 2023 (both days inclusive).

Resignation / retirement of directors

1. S. Vishvanathan ceased to be an Independent Director of the Bank, with effect from the close of business hours on 10 February, 2023, upon completion of the maximum permissible tenure of eight continuous years, in terms of the provisions of Section 10A(2A) of the Banking Regulation Act, 1949.

2. Vasantha Govindan, ceased to be Non-Executive (Nominee Director) of the Bank with effect from 27 March, 2023, upon withdrawal of her nomination by SUUTI.

The Board acknowledges the invaluable contributions rendered by S. Vishvanathan and Vasantha Govindan during their tenure as directors and places on record its deep appreciation for their guidance as members of the Board.

Key managerial personnel

Amitabh Chaudhry, Managing Director & CEO, Rajiv Anand, Deputy Managing Director, Puneet Sharma, Group Executive & Chief Financial Officer and Sandeep Poddar, Senior Vice President II & Company Secretary are the key managerial personnel of the Bank, in terms of Section 203(1) read with Section 2(51) of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no change in the key managerial personnel of the Bank during the fiscal year under review.

Selection and appointment of directors

The selection and appointment of directors of the Bank is done in accordance with the applicable provisions of the Act, rules made thereunder, the Banking Regulation Act, 1949, the guidelines issued by the RBI and the relevant provisions of the SEBI Listing Regulations. The Bank has formulated and adopted various policies with respect to selection and appointment of directors i.e. succession planning policy for the Board and key officials of the Bank, policy on fit and proper criteria for directors of the Bank, Board diversity policy and policy on training of directors, the details of which are provided in report on corporate governance, which forms part of this annual report.

Declaration of independence

All the independent directors of the Bank have confirmed that they meet the criteria prescribed for independence under the provisions of Section 149(6) of the Act and Regulation 16(l)(b) of the SEBI Listing Regulations.

The Board has assessed the veracity of the confirmations submitted by the independent directors and thereafter has taken the same on record.

In the opinion of the Board, all the independent directors are independent of the management.

Board performance evaluation

The Act and the SEBI Listing Regulations relating to corporate governance provides for evaluation of the performance of the Board, its committees, individual directors and the chairperson of a company.

The Bank has institutionalised the board performance evaluation process. The NRC is the nodal agency for conducting the said performance evaluation. The NRC annually reviews and approves the criteria and the mechanism for carrying out the exercise effectively.

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

Directors’ responsibility statement

In terms of Section 134(3)(c) of the Act, the directors hereby state that:

a) the applicable accounting standards have been followed in the preparation of the annual accounts for the fiscal 2023.

b) accounting policies have been selected and applied consistently, and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at 31 March, 2023 and of the profit of the Bank for the fiscal year ended on that date.

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

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

e) adequate internal financial controls for the Bank to follow, have been laid down and these are operating effectively.

f) proper and adequate systems have been devised to ensure compliance with the provisions of all applicable laws and these systems are operating effectively.

Meetings of the Board / committees

The schedule in respect of the meetings of the Board / committees, to be held during the next fiscal year is circulated in advance to all the members of the Board.

During fiscal 2023, nine meetings of the Board were held. Details of board meetings is provided in the report on corporate governance, which forms part of this annual report.

Audit Committee of Board

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

During fiscal 2023, the Board has accepted all the recommendations made by the ACB.

Related party transactions

During fiscal 2023, all the related party transactions were entered into in the ordinary course of the business of the Bank and on an arm''s length basis. Accordingly, during the fiscal year, no transaction falling under the scope of Section 188(1) of the Act was entered into. Hence, form AOC-2 is not applicable to the Bank.

The details of related party transactions are provided in the note number 4.5 of schedule 18 to the standalone financial statements and in the note number 3.8 of schedule 18 to the consolidated financial statements.

Whistle blower policy and vigil mechanism

The Bank has formulated and adopted a whistle blower policy and vigil mechanism, details of which have been provided in the report on corporate governance, which forms part of this annual report.

Maintenance of cost records

Being a banking company, provisions of Section 148(1) of the Act, relating to maintenance of cost records is not applicable to the Bank.

Adequacy of internal financial controls related to financial statements

The Bank has put in place adequate internal financial controls with reference to its financial statements. These controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements.

Plan and status of Ind AS implementation

The RBI had issued a circular in February 2016 requiring banks to implement Indian accounting standards (Ind AS) and prepare standalone and consolidated Ind AS financial statements with effect from 1 April, 2018. Banks were also required to report the comparative financial statements for fiscal 2018, to be published along with the financial statement for the fiscal year beginning 1 April, 2018. However, the RBI in its press release issued on 5 April, 2018 deferred the applicability of Ind AS by one year (i.e. 1 April, 2019) for scheduled commercial banks. Further, RBI in a circular issued on 22 March, 2019 has deferred the implementation of Ind AS till further notice.

During fiscal 2017, the Bank had undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also identified and evaluated data gaps, processes and system changes required to implement Ind AS. The Bank is in the process of implementing necessary changes in its IT systems wherever required and other processes in a phased manner. The Bank is also submitting proforma Ind AS financial statements to RBI on a half-yearly basis.

In line with the RBI guidelines on Ind AS implementation, the Bank has constituted a Steering Committee comprising members from the concerned functional areas, headed by the Deputy Managing Director of the Bank. A progress report on the status of Ind AS implementation in the Bank is presented to the ACB and the Board on a quarterly basis.

Remuneration policy

The Bank has formulated and adopted a remuneration policy for its non-executive chairman and non-executive directors and a remuneration policy for its managing director & CEO, whole-time directors, material risk takers, control function staff and other employees (policies), in terms of the relevant provisions of Section 178 of the Act, the relevant rules made thereunder, the SEBI Listing Regulations and guidelines/circulars issued by the RBI.

The details of the said policies have been provided in the report on corporate governance, which forms part of this annual report. The said policies are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance in terms of the SEBI Listing Regulations.

Share based employee benefits

Axis Bank employee stock option scheme, 2000-01

The Bank has formulated and adopted Axis Bank employee stock option scheme, 2000-01 (ESOS) for the eligible employees of the Bank and that of its subsidiary companies, in terms of the regulations / guidelines issued by the Securities and Exchange Board of India (SEBI).

The members of the Bank vide postal ballot on 16 January, 2023 have approved certain amendment to ESOS in order to extend the benefits of ESOS to all eligible employees of the present / future associate companies. These amendments are not prejudicial to the interests of the employees.

Axis Bank employees stock unit scheme, 2022

In order to act as a retention mechanism, usher in an ''owner-manager'' culture, align the interest of the key executives / employees with that of the members in driving long-term value creation for the Bank, achieve greater synergy between the Bank and its subsidiary and associate companies and enable employees to participate in the long-term growth and the Bank''s financial success, the Bank has formulated and adopted Axis Bank employees stock unit scheme, 2022 (ESUS) for eligible employees of the Bank / its subsidiaries and associates in terms of the regulations / guidelines issued by the SEBI, which was approved by the members of the Bank vide postal ballot on 16 January, 2023.

The aforesaid ESOS and ESUS are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI (SBEB and SE) Regulations 2021). A certificate from the secretarial auditor of the Bank that the ESOS and ESUS have been implemented in accordance with the SEBI Regulations and in accordance with the resolutions passed by the members of the Bank, will be placed at the 29^th AGM of the Bank.

Disclosure as mandated under the provisions of Regulation 14 of the SEBI (SBEB and SE) Regulations 2021, is available on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report .

Particulars of employees

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of directors / employees of the Bank, is attached as Annexure 1 to this report.

In terms of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of this annual report.

In accordance with the provisions of Section 136(1) of the Act, the annual report excluding the aforesaid information, is being sent to the members of the Bank and others entitled thereto. The said information is available for inspection by the members at the registered office of the Bank during business hours of the Bank up to the date of the ensuing AGM.

Any member interested in obtaining a copy thereof, may write to the company secretary of the Bank at its registered office or at [email protected].

Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Bank has formulated and adopted a policy on prevention of sexual harassment of women at workplace. The Bank has complied with the provisions relating to the constitution of internal committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information relating to complaints received and redressed during fiscal 2023 is provided in the report on corporate governance, which forms part of this annual report.

Statutory auditors

M. R Chitale & Co., Chartered Accountants (ICAI firm registration no. 101851W) and CNK & Associates LLP, Chartered Accountants (ICAI firm registration no. 101961WI / W100036) were appointed as the joint statutory auditors of the Bank at the 27^th AGM, to hold office from the conclusion of the 27^th AGM until the conclusion of the 30^th AGM, on such terms and conditions, including remuneration, as may be approved by the ACB, subject to the approval of the RBI every fiscal year.

In accordance with the RBI guidelines, the Bank has framed a policy on appointment of statutory auditors and has also identified internal set of evaluation criteria for assessing the goodness of fit in terms of experience and eligibility for the audit firms including auditor independence.

There are no qualifications, reservations, adverse remarks or disclaimer made by M. R Chitale & Co., Chartered Accountants, and CNK & Associates LLP, Chartered Accountants, in the statutory auditors report.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Act and the relevant provisions of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had appointed Bhandari & Associates, company secretaries, as the secretarial auditor of the Bank, for fiscal 2023.

The secretarial audit of the Bank was conducted in respect of the matters prescribed in the said rules and set out in the secretarial audit report, for fiscal 2023, attached as Annexure 2 to this report. There are no qualifications, reservations, adverse remarks or disclaimers made by the secretarial auditor of the Bank, in its report.

In terms of SEBI circular no CIRICFDICMDl/2712019 dated 8 February, 2019, relating to annual secretarial compliance report, the Bank had appointed Bhandari & Associates, company secretaries, for issuing the aforesaid report for fiscal 2023. The Bank will submit the annual secretarial compliance report to the stock exchanges within the prescribed time.

Certificate from a company secretary in practice

In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, the Bank has obtained a certificate from Bhandari & Associates, company secretaries, confirming that none of the directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as directors of the companies either by the SEBI or the MCA or any other statutory/ regulatory authorities. The said certificate is attached as Annexure 3 to this report.

Reporting of frauds by auditors

During fiscal 2023, pursuant to Section 143(12) of the Act, neither the statutory auditors nor the secretarial auditor of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.

Secretarial standards

The Bank is in compliance with the secretarial standards on meetings of the board of directors (SS-1) and the secretarial standards on general meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). The Bank has also voluntarily adopted the recommendatory secretarial standard on dividend (SS-3) and secretarial standard on report of the board of directors (SS-4) issued by the ICSI.

Risk management

Pursuant to Regulation 21 of the SEBI Listing Regulations, the Bank has constituted a Risk Management Committee. The details of the said committee and its terms of reference are set out in the report on corporate governance, which forms part of this annual report.

The Bank has formulated and adopted a robust risk management framework. Whilst the Board is responsible for framing, implementing and monitoring the risk management framework, it has delegated its powers relating to monitoring and reviewing of risks associated with the business of the Bank to the said committee. The details of the risk management framework and issues related thereto have been disclosed in the management''s discussion and analysis report, which forms part of this annual report.

Corporate social responsibility

The Bank has been formally undertaking corporate social responsibility (CSR) activities since 2006, through Axis Bank Foundation (ABF). With the introduction of Section 135 of the Act making CSR mandatory, the Bank expanded its spectrum of activities to undertake interventions across India in identified themes, directly, through ABF and through other credible implementation partners.

Pursuant to the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules), as amended, the Bank has constituted the CSR Committee of the Board.

The Bank has formulated and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Act) under which various developmental initiatives are undertaken.

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

The annual report on CSR activities and details of amount spent or unspent by the Bank during fiscal 2023, in accordance with the CSR Rules, is attached as Annexure 4 to this report.

Business responsibility and sustainability report

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 1,000 listed entities based on their market capitalisation as on 31 March, every fiscal year, were required to submit business responsibility report (BRR), as part of their annual report.

In November 2018, the MCA constituted a committee to revise the national voluntary guidelines (NVG) on which the BRR was based. These guidelines were subsequently revised and released as the national guidelines on responsible business conduct (NGRBC) in 2019. Further, the BRR was aligned to the NGRBC and renamed and released as the business responsibility and sustainability report (BRSR) in 2020.

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, SEBI, vide its circular dated 10 May, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, to be submitted as a part of their annual report.

The Bank''s BRSR for fiscal 2023 forms part of this annual report.

Significant and material order passed by regulators or courts or tribunals impacting the going concern status and future operations of the Bank

During fiscal 2023, no significant and / or material order was passed by any regulator, court or tribunal against the Bank, which could impact its going concern status or future operations.

Conservation of energy & technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure 5 to this report.

Annual return

The annual return in Form MGT-7, as mandated under the provisions of Section 92(3) read with Section 134(3) of the Act, has been uploaded on the website of the Bank and is available at https://www.axisbank.com/shareholders-corner/shareholders-information/annual-return.

Acknowledgements and appreciations

The Board places on record its gratitude to the RBI, MCA, SEBI, other statutory and regulatory authorities, financial institutions, stock exchanges, registrar and share transfer agent, debenture trustees, depositories and correspondent banks for their continued support and guidance.

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

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

For and on behalf of the Board of Directors

Place: Mumbai Rakesh Makhija

Date: 28 April, 2023 Chairman

1

Excluding merchant exchange profit

2

Exceptional items comprise (i) full amortization of Intangibles and Goodwill amounting to ''11,949 crores; (ii) impact of policy harmonisation of operating expenses and provisions amounting to ''361 crores; and (iii) one-time acquisition related expenses amounting to ''179 crores; on account of acquisition of Citibank India consumer business. Bank has fully charged to the profit and loss account all the exceptional items in fiscal 2023. The cumulative impact of all the exceptional items on Bank''s profit and loss account (net of taxes) is ''12,353 crores (Refer note 18.1 of standalone and consolidated financial statements)

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Mar 31, 2019

Directors'' Report

The Board of Directors have the pleasure of presenting the 25^th Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the Report on the business and operations of the Bank, for the financial year ended 31^st March 2019.

Financial Performance

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

(Rs. in crore)

Particulars	2018-19	2017-18	Growth
Deposits	548,471	453,623	21%
- Savings Bank Deposits	154,129	148,202	4%
- Current Account Deposits	89,265	95,650	(7%)
Advances	494,798	439,650	13%
- Retail Advances	245,812	206,464	19%
- Non-retail Advances	248,986	233,186	7%
Total Assets/Liabilities	800,997	691,330	16%
Net Interest Income	21,708	18,618	17%
Other Income	13,130	10,967	20%
- Fee Income	10,127	8,867	14%
- Trading Profit(1)	971	1,617	(40%)
- Misc. Income	2,032	483	320%
Operating Expenses	15,833	13,990	13%
Operating Profit	19,005	15,595	22%
Provision for Tax	2,297	(154) -
Other Provisions and Write offs	12,031	15,473	(22%)
Net Profit	4,677	276	-
Balance in Profit and Loss account brought forward from previous year	23,043	24,448	(6%)
Amount Available For Appropriation	27,720	24,724	12%
Appropriations
Transfer to Statutory Reserve	1,169	69 -
Transfer (from)/to Investment Reserve	(103)	103 -
Transfer to Capital Reserve	125	102	22%
Transfer to Reserve Fund	1	2	(50%)
Dividend paid (includes tax on dividend)	-	1,405
Transfer to Investment Fluctuation reserve	600	-
Surplus carried over to Balance Sheet	25,928	23,043	12%

⁽¹⁾ Excluding Merchant Exchange Profit

Key Performance Indicators

Key Performance Indicators	2018-19	2017-18
Interest Income as a percentage of working funds1	7.38%	7.15%
Non-interest Income as a percentage of working funds*	1.76%	1.71%
Net Interest Margin	3.43%	3.44%
Return on Average Net Worth	8.09%	0.53%
Operating Profit as a percentage of working funds*	2.55%	2.43%
Return on Average Assets	0.63%	0.04%
Profit per Employee**	Rs.7.61 lakhs	Rs.0.47 lakhs
Business (Deposits less inter-bank deposits Advances) per employee**	Rs.16.53 crore	Rs.14.84 crore
Net non-performing assets as a percentage of net customer assets***	2.06%	3.40%

* 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

Capital & Reserves

During the year, the Bank allotted 51,05,935 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 said allotments, the total issued and paid-up equity share capital of the Bank, as on 31^st March 2019 increased by Rs.1.02 crore to Rs.514.33 crore, as compared to Rs.513.31 crore, as on 31^st March 2018.

The category wise Shareholding Pattern of the Bank, as on 31^st March 2019, was as under:

Sr. No.	Category / Shareholder	No. of Shares held	% of paid-up Capital
PROMOTERS
1	Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)	13,68,87,639	5.32
2	Life Insurance Corporation of India (LIC)	27,05,83,548	10.52
3	General Insurance Corporation of India	3,40,62,729	1.32
4	The New India Assurance Company Limited	2,05,91,585	0.80
5	National Insurance Company Limited	5,49,681	0.02
6	The Oriental Insurance Company Limited	49,97,520	0.19
7	United India Insurance Company Limited	3,24,076	0.01
FOREIGN INVESTORS
8	Overseas Investors (including FIIs/OCBs/NRIs)	1,33,62,98,583	51.95
9	Foreign Direct Investment (GDR)	6,83,38,285	2.66
DOMESTIC FINANCIAL INSTITUTIONS
10	Financial Institutions / Mutual Funds / Banks / NBFC / AIF	44,42,47,174	17.27
11	Others	25,47,64,051	9.94
	Total	2,57,16,44,871	100.00

The said equity shares of the Bank are listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The Unsecured, Redeemable, Non-Convertible, Subordinated, Perpetual Debentures issued by the Bank, on a private placement basis are listed on NSE and BSE. The Bonds issued by the Bank under the MTN programme on a private placement basis are listed on Singapore Stock Exchange and the Green Bonds issued by the Bank are listed on London Stock Exchange. 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, for the financial year 2018-19.

Dividend

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Bank has formulated and adopted a Dividend Distribution Policy with the objective of providing clarity to its stakeholders on the profit distribution strategies of the Bank. During the year, the said Policy has been reviewed by the Board of Directors of the Bank and hosted on the website of the Bank at https://www.axisbank.com/ shareholders-corner/corporate-governance/Compliance-Report.

The Diluted Earnings Per Share (EPS) of the Bank for the financial year 2018-19 stood at Rs.18.09 per equity share of Rs.2/- each as compared to Rs.1.12 per equity share of Rs.2/- each in the previous financial year. In view of the overall performance of the Bank and with the objective of rewarding the Shareholders of the Bank with cash dividends, while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors of the Bank at its meeting held on 25^th April 2019, recommended a dividend of Rs.1/- per equity share of Rs.2/- each for the financial year 2018-19, as compared to Nil Dividend for the financial year 2017-18, in terms of the Dividend Distribution Policy of the Bank. The said increase in EPS reflects the Bank''s confidence in its ability to consistently grow earnings over time.

Closure of Share Transfer Books And Record Date For Dividend

The Register of Members and the Share Transfer Books of the Bank will remain closed from Saturday, 6^th July 2019 to Saturday, 20^th July 2019 (both days inclusive) for the purpose of the 25^th Annual General Meeting of the Shareholders of the Bank to be held on Saturday, 20^th July 2019 and to determine the names of the Members who would be entitled to dividend, if any, declared by the Bank, for the financial year ended 31^st March 2019.

The Record Date for payment of the said dividend, if approved by the Members at the 25^th Annual General Meeting, has been fixed on Friday, 5^th July 2019. The said dividend shall be paid to those Members whose name appears on the Register of Members of the Bank/ the Statements of Beneficial Ownership as received from the Depositories, as at the close of business hours on Friday, 5^th July 2019.

Ratings of various Debt Instruments

The Senior Unsecured Redeemable Non-Convertible Debentures (Series 4) issued by the Bank, on a private placement basis, during the financial year 2018-19, were rated "CRISIL AAA" by CRISIL Ltd. and "ICRA AAA" by ICRA Ltd.

The Bonds issued by the Bank under the MTN programme, on a private placement basis, during the financial year 2018-19, were rated "BBB" by Fitch Ratings, "BBB" by Standard & Poor''s, "Baa3" by Moody''s.

The details of all credit ratings obtained by the Bank along with any revisions thereto, during the financial year 2018-19, for all the debt instruments outstanding as on 31^st March 2019, is disclosed in the Corporate Governance Report, forming part of this report.

Board of Directors

During the year, the following changes took place in the composition of the Board of Directors ("the Board") of the Bank:

- Shri Prasad Menon ceased to be an Independent Director of the Bank, with effect from the close of business hours on 8^th October 2018, upon completion of the maximum permissible tenure of 8 (eight) continuous years, under Section 10A (2A) of the Banking Regulation Act, 1949. The Board acknowledges the invaluable contributions rendered by Shri Prasad Menon 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.

- Pursuant to the recommendation of the Nomination and Remuneration Committee ("NRC"), the Board at its meeting held on 2^nd November 2018, approved the appointment of Shri Girish Paranjpe as an Independent Director of the Bank, for a period of 4 (four) consecutive years, with effect from 2^nd November 2018 upto 1^st November 2022 (both days inclusive), subject to the approval of the Shareholders of the Bank. The said appointment was approved by the Shareholders of the Bank through Postal Ballot on 17^th January 2019. During the said period, Shri Girish Paranjpe shall not be liable to retire by rotation, in terms of the provisions of Section149(13) of the Companies Act, 2013.

During his tenure as the Deputy Managing Director of the Bank, Shri V. Srinivasan facilitated the growth of the corporate lending and treasury businesses of the Bank. The Board acknowledges the invaluable contributions rendered by Shri V. Srinivasan during his tenure as the Deputy Managing Director of the Bank and places on record its deep appreciation for the insightful perspectives and suggestions provided by him during the deliberations at the meetings of the Board/ Committees of the Bank.

- Smt. Shikha Sharma, Managing Director & CEO of the Bank retired from the services of the Bank and accordingly ceased to be the Managing Director & CEO of the Bank, with effect from the close of business hours on 31^st December 2018.

During her tenure as the Managing Director & CEO, the Bank turned into a full-fledged financial institution by offering services to both corporate and retail consumers. The seamless retailisation of the Bank, achieved under her tenure, was remarkable and has led to a significant diversification of the Bank''s balance sheet. The Board acknowledges the leadership and the invaluable contributions rendered by Smt. Shikha Sharma during her tenure as the Managing Director & CEO of the Bank and places on record its deep appreciation for the insightful perspectives and suggestions provided by her at the meetings of the Board/Committees of the Bank.

- Pursuant to the recommendation of the NRC, the Board at its meeting held on 9^th July 2018, shortlisted the candidature of Shri Amitabh Chaudhry for the post of the Managing Director & CEO of the Bank, with effect from 1^st January 2019 and recommended the same for the approval of the Reserve Bank of India (RBI).

The RBI granted its approval to the appointment of Shri Amitabh Chaudhry as the Managing Director & CEO, of the Bank, for a period of 3 (three) years, with effect from 1^st January 2019 upto 31^st December 2021 (both days inclusive) and to the terms and conditions relating to the said appointment, including remuneration.

In order to facilitate smooth transition and help Shri Amitabh Chaudhry familiarize with the business and operations of the Bank, the Board at its meeting held on 2^nd November 2018, approved the appointment of Shri Amitabh Chaudhry, as the Managing Director (Designate), in executive position of the Bank, with effect from 19^th November 2018 upto 31^st December 2018 (both days inclusive).

Thereafter, pursuant to the approval of the RBI and on the recommendation of the NRC, the Board at its meeting held on 8^th December 2018, approved the appointment of Shri Amitabh Chaudhry as the Managing Director & CEO of the Bank, for a period of 3 (three) years, with effect from 1^st January 2019 up to 31^st December 2021 (both days inclusive) and the terms and conditions relating to the said appointment, including remuneration. The said appointment of Shri Amitabh Chaudhry as the Managing Director & CEO of the Bank and the terms and conditions in respect thereof, including remuneration, was approved by the Shareholders of the Bank, through Postal Ballot on 17^th January 2019.

- Pursuant to the outcome of the performance evaluation and the recommendation of the NRC, the Board at its meeting held on 8^th December 2018, had approved the re-appointment of the following Independent Directors of the Bank, for their second term, subject to approval of the Shareholders of the Bank:

a) Prof. Samir K. Barua as an Independent Director of the Bank, with effect from 1^st April 2019 upto 21^st July 2019 (both days inclusive);

b) Shri Som Mittal as an Independent Director of the Bank, with effect from 1^st April 2019 upto 21^st October 2019 (both days inclusive); and

c) Shri Rohit Bhagat as an Independent Director of the Bank, with effect from 1^st April 2019 upto 15^th January 2021 (both days inclusive).

The said re-appointment of Prof. Samir K. Barua, Shri Som Mittal and Shri Rohit Bhagat were approved by the Shareholders of the Bank, through Postal Ballot on 17^th January 2019. During the said period, Prof. Samir K. Barua, Shri Som Mittal and Shri Rohit Bhagat shall not be liable to retire by rotation, in terms of the provisions of Section 149(13) of the Companies Act, 2013.

- As part of the succession planning process of the Bank and pursuant to the recommendation of the NRC, the Board at its meeting held on 8^th December 2018, approved the re-designation of Shri Rajiv Anand as the Executive Director (Wholesale Banking) of the Bank, with effect from 21^st December 2018 upto 3^rd August 2019 (both days inclusive) i.e. for the remainder of his existing term as the Executive Director of the Bank.

- In view of the vacancy that would be caused by the expiry of tenure of Dr. Sanjiv Misra, the Non- Executive (Part-Time) Chairman of the Bank, w.e.f. the close of business hours on 17^th July 2019, as part of the succession planning process of the Bank and pursuant to the recommendation of the NRC, the Board at its meeting held on 12^th March 2019 approved the appointment of Shri Rakesh Makhija as the Non- Executive (Part-Time) Chairman of the Bank, for a period of 3 (three) years, with effect from 18^th July 2019 upto 17^th July 2022 (both days inclusive), subject to approval of the RBI and the Shareholders of the Bank.

- In terms of Section 152 of the Companies Act, 2013, Smt. Usha Sangwan is liable to retire by rotation at the ensuing AGM and being eligible has offered herself for re-appointment.

- Pursuant to the recommendation of the NRC, the Board at its meeting held on 22^nd May 2019, approved the re-appointment of Shri Rajiv Anand as the Executive Director (Wholesale Banking) of the Bank, for a further period of 3 (three) years, with effect from 4^th August 2019 upto 3^rd August 2022 (both days inclusive) and the terms and conditions relating to the said reappointment, including remuneration, subject to the approval of the RBI and the Shareholders of the Bank. During the said period, Shri Rajiv Anand, shall be liable to retire by rotation.

- Pursuant to the recommendation of the NRC, the Board at its meeting held on 22^nd May 2019, approved the re-appointment of Shri Rajesh Dahiya as the Executive Director (Corporate Centre) of the Bank, for a further period of 3 (three) years, with effect from 4^th August 2019 upto 3^rd August 2022 (both days inclusive) and the terms and conditions relating to the said reappointment, including remuneration, subject to the approval of the RBI and the Shareholders of the Bank. During the said period, Shri Rajesh Dahiya shall be liable to retire by rotation.

- Pursuant to the recommendation of the NRC, the Board at its meeting held on 22^nd May 2019, approved the appointment of Shri Pralay Mondal, Group Executive (Retail Banking) as a Director of the Bank and as the Whole Time Director designated as "Executive Director (Retail Banking)" of the Bank, for a period of 3 (three) years, with effect from 1^st August 2019 upto 31^st July 2022 (both days inclusive) and the terms and conditions relating to the said appointment, including remuneration, subject to the approval of the RBI and the Shareholders of the Bank. During the said period, Shri Pralay Mondal shall be liable to retire by rotation.

During the year, no other changes took place in the composition of the Board of Directors of the Bank. The composition of the Board of Directors of the Bank is in compliance with the applicable norms.

The ordinary resolutions in respect of the appointment / re-appointment of the Directors, as aforesaid, have been included in the Notice convening the 25^th Annual General Meeting of the Bank, to be held on Saturday, 20^th July 2019. The brief profile and details of the remuneration last drawn by the said Directors, have been annexed to the said Notice.

Selection and Appointment of Directors & Other Key Officials

The selection and appointment of Directors and other Key officials 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 Listing Regulations relating to Corporate Governance (as amended), from time to time.

The Bank has formulated and adopted a Succession Planning Policy (the Policy), for appointment of its Directors and other Key Officials. The objectives of the Policy is to assess, identify and nominate suitable candidates to fill vacancies that may arise for positions of Directors and other Key Officials of the Bank, to plan for succession of the said roles and 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, identify potential candidates and develop required competencies through planned training, development and learning initiatives and to ensure systematic and long-term development of personnel for taking higher roles and responsibilities at the senior management levels at the Bank or that of its subsidiary companies, which may arise due to impending move or retirement or resignation or sudden exit or for any reason whatsoever, of the role, incumbent or named successors.

The Bank adheres to the process and methodology prescribed by the RBI in respect of the ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible to be appointed/re-appointed as a Director of the Bank. The prescribed declarations given by the Directors other than that of the Members of the NRC are placed before the NRC and the declarations given by the Members of the NRC are placed before the Board, for its review and noting. The said declarations are obtained from all the Directors on an annual basis and also at the time of their appointment / re-appointment, in compliance with the said laws. An assessment on whether the Directors fulfil the said criteria is also carried out by the NRC and the Board on an annual basis and before considering their candidature for re-appointment.

The NRC also reviews the structure, size, composition of the Board, the regional and industry experience, track record, expertise and other relevant information and documents of the Directors before making appropriate recommendations to the Board with regard to their appointment / re-appointment, terms and conditions relating to the such appointment/re-appointment, including remuneration, designed to enhance the Board''s effectiveness.

The NRC identifies potential candidates from diverse backgrounds including but not limited to accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, information technology, core industries, infrastructure sector, payment and settlement systems, human resource, risk management and business management, thus providing the Board with Members who have special knowledge or practical experience and requisite set of skills, to serve the diverse business interests of the Bank.

Declaration of Independence

All the Independent Directors of the Bank have given their respective declarations stating that they meet the criteria prescribed for independence under the applicable laws and the Board has confirmed its veracity and taken the same on record.

Key Managerial Personnel

At the meeting of the Board held on 8^th December 2018, Shri Amitabh Chaudhry, the Managing Director & CEO of the Bank, was appointed as the Key Managerial Personnel of the Bank, with effect from 1^st January 2019, under Section 203(1) of the Companies Act, 2013.

In terms of Section 203(1) of the Companies Act, 2013, Shri Amitabh Chaudhry, Managing Director & CEO, Shri Jairam Sridharan, Group Executive & Chief Financial Officer and Shri Girish V. Koliyote, Company Secretary are the Key Managerial Personnel of the Bank.

Board Performance Evaluation

The Companies Act, 2013 and the Listing Regulations relating to Corporate Governance contains provisions on evaluation of the performance of the Board, its Committees, its individual Directors and its Chairperson.

The NRC is the nodal agency for conduct of said performance evaluation. The NRC has reviewed and approved the manner for effective evaluation of the performance of the Board, its Committees, its individual Directors and its Chairperson and the criteria for the said performance evaluation. The manner in which the said performance evaluation has been conducted is explained in the Report on Corporate Governance, which forms part of this report.

Meetings

The schedule in respect of the meetings of the Board / Committees thereof to be held during the next financial year and for the ensuing Annual General Meeting is circulated in advance to the Members of the Board. During the year, 12 meetings of the Board were held and the gap between the said meetings did not exceed the limit of 120 days, as prescribed under the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to Corporate Governance.

Audit Committee

The composition, role and functions of the Audit Committee of the 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 a Comprehensive Remuneration Policy for its Directors, Key Managerial Personnel and other Employees, in terms of the relevant provisions of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to Corporate Governance. During the year, the said Policy was reviewed by the Board of Directors of the Bank. The details of the said Remuneration Policy have been disclosed in the Report on Corporate Governance, which forms part of this report. The said Policy has been hosted on the website of the Bank at https://www.axisbank. com/shareholders-corner/corporate-governance/Compliance-Report.

Whistle Blower Policy and Vigil Mechanism

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

Subsidiaries

As on 31^st March 2019, the Bank has the following eleven unlisted subsidiary companies and one step down subsidiary;

i) Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.

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

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

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

v) Axis Securities Ltd. is in the business of marketing of credit cards and retail asset products (Discontinued its non - broking business w.e.f. 28^th March 2019) and retail broking services.

vi) A.TREDS Ltd. is engaged in the business of facilitating financing of trade receivables.

vii) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.

viii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitisation trusts.

ix) Freecharge Payment Technologies Private Ltd 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.

x) Accelyst Solutions Private Ltd. is in the business of providing Online marketing and sales promotion solutions, providing facilities to recharge online prepaid, postpaid mobile phones connections, DTH connections and data cards etc, distribution of mutual fund & insurance services.

xi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses.

xii) 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.

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 including that of all its subsidiary companies, which forms part of this report. The financial position and performance of each of the said subsidiary companies are given in 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 www.axisbank.com.

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 at 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 are no material transactions entered into with related parties. There were no transactions 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. During the year, the Policy on Related Party Transactions has been reviewed by the Board of Directors of the Bank and the same has been hosted on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/Compliance-Report, in terms of the 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 / the 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 ''owner-manager'' culture.

During the year under review, the Shareholders of the Bank, by means of a special resolution, passed through Postal Ballot on 1 7^th January 2019, approved the creation, issue and allotment of additional 2,50,00,000 stock options convertible into 2,50,00,000 equity shares of Rs.2/- each of the Bank, to the eligible Employees/Directors.

In terms of the said ESOS, as on date, up to 26,50,87,000 stock options are available for grant by the Bank to the eligible Employees/Directors. 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 approved by the NRC / Board of Directors of the Bank, 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 upto 29^th 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 with effect from the said grants made by the Bank on or after 10^th 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 20^th Annual General Meeting held on 27^th June 2014, also approved the consequent 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^th July 2014.

Since 24^th February 2001 up to 27^th March 2019, the NRC / Board had out of the said 26,50,87,000 stock options, approved the grant of 27,01,13,700 stock options (including 2,69,83,897 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 the 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 three / five years, from the date of its respective vesting, in terms of the respective ESOS of the Bank.

As of 31^st March 2019, out of the said 27,01,13,700 stock options so granted 24,54,77,475 stock options have been vested, out of which 20,24,96,929 stock options have been exercised and the balance 1,71,38,224 stock options remain unexercised. Further 2,34,94,650 stock options remained unvested and 2,69,83,897 stock options had been treated as lapsed and forfeited.

There were no material changes in the ESOS of the Bank during the financial year 2018-19 and the same is in compliance with the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended.

Statutory disclosures as mandated under 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 Report on Corporate Governance for the financial year 2018-19 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 Listing Regulations, forms part of this report.

The Corporate Governance framework of the Bank incorporates all the mandatory requirements as prescribed in the Listing Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the Listing Regulations, 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 Complaints 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 2018-19 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^st March 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) That such accounting policies as mentioned in Note no. 17 of the Notes to accounts of the Financial Statements 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^st March 2019 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

In accordance with the Companies (Amendment) Act, 2017, read with Section 134(3) of the Companies Act, 2013, the Annual Return, under Section 92 (3) of the Companies Act, 2013, can be accessed on the website of the Bank at https://www. axisbank.com/shareholders-corner/shareholders-information and the extract of the Annual Return in Form MGT-9, is provided as an annexure to this report.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of Directors / Employees of the Bank, is provided as an annexure to this report.

As on 31^st March 2019, the Bank had 57 employees who were employed throughout the year and were in receipt of remuneration of more than Rs.1.02 crore per annum and 19 employees of the Bank who were employed for part of the year and were in receipt of remuneration of more than Rs.8.50 lakh 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 76 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.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Conservation of Energy & Technology Absorption:

Energy and natural resource conservation have been focus areas for the Bank and conscious efforts are being made towards improving energy performance, year on year.

For Sustainable Development, Energy efficiency initiatives have been implemented across several branches and offices through energy and resource conservation projects.

The Bank ensures strict compliance with all statutory requirements and voluntarily undertakes several sustainable steps in order to contribute towards a better environment.

Some of the steps undertaken and the impact perceived are listed below:

- Implementation of Solar energy projects across select Branches/ Offices, aggregating ~7.05 MW. This includes 2.00 MW project at Sonalwadi, Solapur, Maharashtra.

- Implementation of Centralised Energy Management System (CEMS) to monitor and control energy consumption.

- Conversion of conventional lighting to LED in 250 plus number of Locations with premises size more than 4000 sq.ft. & implementation of LED lights in all new Branches/Offices.

- Conversion of Food/Wet waste at Axis House, Mumbai, into manure through compost machine for use in landscaping/ gardening.

- Maintenance of unity power factor through APFC panels in auto mode for optimum use of power at Axis House Mumbai and Noida.

- Installation of Motion sensors for workstation and common area lighting at Axis House, Mumbai.

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

- Daily re-cycling of 150 KL of water through Sewage Treatment Plant at Axis House, Mumbai.

- Reduction of water consumption at Axis House, Mumbai through use of aerators.

- Rain Water Harvesting of ~2000 KL of water yearly, at Axis House, Mumbai.

- Saving of water through use of Bio-blocks in urinals at Select Large Offices.

- Installation of sensors in washbasins to optimise flow of water at Select Large Offices.

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 Listing Regulations, is provided as an annexure to this report.

Risk Management

Pursuant to Regulation 21 of the 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 Listing Regulations, top 500 listed entities based on their market capitalisation as on 31^st 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 its Registered Office.

Particulars of Loans, Guarantees and Investments

The provisions relating to Section 134(3)(g) of the Companies Act, 2013 on particulars of loans, guarantees and investments are not applicable to a Banking Company, as such no disclosure is being made, in this regard.

Corporate Social Responsibility

The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the Board, in accordance with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility) Rules, 2014, as amended.

The brief outline of the CSR Policy, including overview of the programs undertaken by the Bank, the composition of the CSR Committee, average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of the amounts spent by the Bank on CSR activities during the year under review, have been provided as an annexure to this report.

During the year, the said Policy has been reviewed by the Board and the same has been hosted on the website of the Bank at https://www.axisbank.com/csr.

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^st 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^st April 2018. However, the RBI in its press release issued on 5^th April 2018 deferred the applicability of Ind AS by one year (i.e. 1^st April 2019) for Scheduled Commercial Banks. Further, RBI in a circular issued on 22^nd 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 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 of the Board. During the FY 2016-17, the Bank had undertaken 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 has also submitted to RBI Proforma Ind AS financial statements for the six months ended 30^th September 2016 and three months ended 30^th June 2017 and for the first three quarters of FY 2018-19.

The Bank is also examining impact of Ind AS on business planning, budgeting, taxation, capital planning and on capital adequacy. The Bank is also in the process of preparation of proforma Ind-AS financial statements, for the year ended 31^st March 2019. Statutory Auditor

At the 24^th Annual General Meeting of the Shareholders of the Bank held on 20^th June 2018, M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Membership Number 1 03523''W/W1 00048), were appointed as the Statutory Auditors of the Bank to hold office as such from the conclusion of the 24^th Annual General Meeting until the conclusion of the 28^th Annual General Meeting, subject to the approval of the Reserve Bank of India and on such remuneration, as may be approved by the ACB.

In terms of the relevant provisions of the Banking Regulation Act, 1949, the approval of the RBI is mandatory for appointment of Statutory Auditors of the Bank every year. The Bank will obtain the requisite approval of RBI for the appointment of M/s Haribhakti & Co. LLP as the Statutory Auditors of the Bank, for the financial year 2019-20.

In this regard, the Bank has received a certificate from the said Statutory Auditors to the effect that the appointment, if made, would be in accordance with the relevant provisions of Section 141 of the Companies Act, 2013.

As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

There are no qualifications, reservations or adverse remarks made by M/s Haribhakti & Co. LLP, Chartered Accountants, Statutory Auditors of the Bank, in their report. Further, pursuant to Section 143(12) of the Companies Act, 2013, the Statutory Auditors of the Bank have not reported any instances of frauds committed in the Bank by its officers or employees.

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 appointed M/s BNP & Associates, Company Secretaries, Mumbai, as the Secretarial Auditor of the Bank, for the financial year 2018-19. The secretarial audit of the Bank was conducted in respect of the matters prescribed in the said Rules and as set out in the Secretarial Audit Report for the financial year 201 8-19, 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.

In terms of SEBI circular no CIR/CFD/CMD1/27/2019 dated 8^th February 2019, relating to Annual Secretarial Compliance Report, the Bank appointed M/s. BNP & Associates, Company Secretaries, to conduct the audit of the Secretarial Compliance for the financial year 2018-19. The Bank will submit the Annual Secretarial Compliance Report to the Stock Exchanges within the prescribed time limit and host the same on its website.

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 2018-19, no significant or material order was passed by any Regulator, Court or Tribunal against the Bank, which could impact its going concern status or 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 Jairam Sridharan, Group Executive & CFO of the Bank, for the financial year ended 31^st March 2019, was placed before the Board of Directors at its meeting held on 25^th April 2019, in terms of Regulation 17(8) of the 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 upto the date of this report.

Post adoption of the annual financial statements by the Board of Directors, the Bank has classified an account in the sugar sector as non-performing per instructions received from the RBI, with retrospective effect from 1^st February 2016. As the Bank already held substantial provision against this account as on 31^st March 2019, no further provisioning is required due to change in the status of the account.

Acknowledgements

The Board of Directors places on record its gratitude to the Reserve Bank of India, Ministry of Corporate Affairs, Securities and Exchange Board of India, 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 the Shareholders of the Bank for their continued support and to its valued customers for their continued patronage.

The Board also expresses its deep sense of appreciation to all the employees of the Bank for their strong work ethics, excellent performance, professionalism, teamwork, commitment and initiatives which has led to the Bank reinforcing its customer centric image and making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

Place: New Delhi Dr. Sanjiv Misra

Date: 22^nd May 2019 Chairman

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Mar 31, 2018

DIRECTORS'' REPORT

The Board of Directors have the pleasure of presenting the 24^th Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the Report on the business and operations of the Bank, for the financial year ended 31^st March 2018.

FINANCIAL PERFORMANCE

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

(Rs, in crore)

Particulars	2017-18	2016-17	Growth
Deposits	453,622.72	414,378.79	9.47%
- Savings Bank Deposits	148,202.05	126,048.29	17.58%
- Current Account Deposits	95,649.55	87,001.75	9.94%
Advances	439,650.31	373,069.35	17.85%
- Retail Advances	206,464.62	167,992.95	22.90%
- Non-retail Advances	233,185.69	205,076.40	13.71%
Total Assets/Liabilities	691,329.58	601,467.67	14.94%
Net Interest Income	18,617.73	18,093.12	2.90%
Other Income	10,967.09	11,691.31	(6.91%)
- Fee Income	8,866.97	7,882.01	12.50%
- Trading Profit(1)	1,616.76	3,400.34	(52.45%)
- Misc. Income	483.36	408.96	18.19%
Operating Expenses	13,990.34	12,199.91	14.68%
Operating Profit	15,594.48	17,584.52	(11.32%)
Provision for Tax	(154.11)	1,788.28 -
Other Provisions and Write offs	15,472.91	12,116.96	27.70%
Net Profit	275.68	3,679.28	(92.51%)
Balance in Profit and Loss account brought forward from previous year	24,448.33	23,766.46 -
Amount Available For Appropriation	24,724.01	27,445.74	-
Appropriations
Transfer to Statutory Reserve	68.92	919.82	(92.51%)
Transfer (from)/to Investment Reserve	103.49	(87.16) -
Transfer to Capital Reserve	101.65	755.57	(86.55%)
Transfer to Reserve Fund	1.62	1.75	(7.43%)
Dividend paid (includes tax on dividend)	1,405.28	1,407.43	(0.15%)
Surplus carried over to Balance Sheet	23,043.05	24,448.33 -

¹ Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS

Key Performance Indicators	2017-18 V	2016-17
Interest Income as a percentage of working funds1	7.15%	7.88%
Non-interest Income as a percentage of working funds*	1.71%	2.07%
Net Interest Margin	3.44%	3.67%
Return on Average Net Worth	0.53%	7.22%
Operating Profit as a percentage of working funds*	2.43%	3.11%
Return on Average Assets	0.04%	0.65%
Profit per Employee2	Rs,0.47 lakhs	Rs,6.68 lakhs
Business (Deposits less inter-bank deposits Advances) per employee**	Rs,14.84 crore	Rs,14.00 crore
Net non-performing assets as a percentage of net customer assets3	3.40%	2.11%

CAPITAL & RESERVES

During the year, the Bank raised additional equity capital through preferential allotment of 16,53,28,892 equity shares of Rs,2 each of the Bank at a price of Rs,525.00 per equity share. Consequently, the total issued and paid-up equity share capital of the Bank increased by Rs,33.07 crore and the Reserves of the Bank increased by Rs,8,620.95 crore after charging of issue related expenses.

Further, the Bank also issued, 4,53,57,385 convertible warrants, convertible into 4,53,57,385 equity shares of Rs, 2 each of the Bank at a price of Rs,565.00 per warrant on a preferential basis. The said convertible warrants are exercisable within a period of 18 months from the date of its allotment. The said equity shares and convertible warrants were allotted to a consortium of investors (Bain Capital, Life Insurance Corporation of India and other marquee investors).

During the year, the Bank also allotted 61,73,935 equity shares of Rs,2 each of the Bank pursuant to exercise of options under the various Employee Stock Option Scheme(s) of the Bank by some of its Whole Time Directors / Employees and that of its subsidiary companies.

Pursuant to the said allotments, the total issued and paid-up equity share capital of the Bank, as on 31^st March 2018 increased to Rs,513.31 crore, as compared to Rs,479.01 crore, as on 31^st March 2017.

The category wise shareholding pattern of the Bank, as on 31^st March 2018, was as under:

Sr. No.	Category / Shareholder	No. of Shares held	% of paid-up Capital
PROMOTERS
1	Life Insurance Corporation of India (LIC)	34,94,51,108	13.62
2	Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)	25,32,70,690	9.87
3	General Insurance Corporation of India	3,72,50,000	1.45
4	The New India Assurance Company Limited	2,54,03,585	0.99
5	National Insurance Company Limited	21,34,681	0.08
6	The Oriental Insurance Company Limited	63,30,020	0.25
7	United India Insurance Company Limited	26,26,337	0.10
FOREIGN INVESTORS
8	Overseas Investors (including FIIs/OCBs/NRIs)	1,31,64,80,211	51.29
9	Foreign Direct Investment (GDR)	11,53,42,680	4.49
DOMESTIC FINANCIAL INSTITUTIONS
10	Financial Institutions / Mutual Funds / Banks / NBFC	24,27,74,995	9.46
11	Others	21,54,74,629	8.40
	Total	2,56,65,38,936	100.00

The said equity shares of the Bank are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Unsecured, Redeemable, Non-Convertible, Subordinated, Perpetual Debentures issued by the Bank on a private placement basis are listed on NSE and 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. 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 for the financial year 2017-18.

DIVIDEND

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Bank has formulated and adopted a Dividend Distribution Policy with the objective of providing clarity to its stakeholders on the profit distribution strategies of the Bank. The said Policy has been hosted on the website of the Bank at https:// www.axisbank.com/shareholders-corner/corporate-governance/Compliance-Report.

The Diluted Earnings Per Share (EPS) of the Bank for the financial year 2017-18 stood at Rs,1.12 per equity share of Rs,2/- each as compared to Rs,15.34 per equity share of Rs,2/- each in the previous financial year. After making mandatory appropriations to Statutory Reserve, Investment Reserve, Reserve Fund and Capital Reserve, no profits are available for distribution as dividend for the financial year ended 31^st March 2018. Accordingly, no dividend has been recommended by the Board of Directors of the Bank for the financial year ended 31^st March 2018.

CLOSURE OF SHARE TRANSFER BOOKS

The Register of Members and the Share Transfer Books of the Bank will be closed from Saturday, 2^nd June 2018 to Wednesday, 20^th June 2018 (both days inclusive) for the purpose of the 24^th Annual General Meeting of the Shareholders of the Bank to be held on 20^th June 2018.

RATINGS OF VARIOUS DEBT INSTRUMENTS

The Unsecured Redeemable Non-Convertible Subordinated Debentures issued by the Bank, on a private placement basis, during the financial year 2017-18, were rated "CRISIL AAA/Stable" by CRISIL Ltd, "ICRA AAA hyb" by ICRA Limited and "IND AAA" by India Ratings and Research Private Limited.

The Unsecured, Subordinated, Perpetual, Additional Tier 1, Basel III Compliant Non-Convertible Debentures issued by the Bank on a private placement basis, during the financial year 2017-18, were rated "CRISIL AA /Stable" by CRISIL Ltd, "ICRA Aa (hyb)" by ICRA Limited and "IND AA " by India Ratings & Research Private Ltd.

The Bonds issued by the Bank under the MTN programme on a private placement basis, during the financial year 2017-18, were rated "Baa3" by Moodys, "BBB-" by S&P and Fitch.

BOARD OF DIRECTORS

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

Shri V. R. Kaundinya ceased to hold office as an Independent Director of the Bank, with effect from the close of business hours on Wednesday, 11^th October 2017, upon completion of the maximum permissible tenure of 8 continuous years, under Section 10A (2A) of the Banking Regulation Act, 1949. The Board acknowledges the invaluable contributions rendered by Shri V. R. Kaundinya 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.

Shri Stephen Pagliuca (Nominee of entities affiliated to BAIN Capital) was appointed as an Additional Non-Executive (Nominee) Director of the Bank, for a period of 4 consecutive years, with effect from 19^th December 2017, subject to approval of the Shareholders of the Bank. Shri Stephen Pagliuca shall not be liable to retire by rotation during the said period.

The current term of Smt. Shikha Sharma, Managing Director & CEO of the Bank is due to expire on 31^st May 2018. The Board of Directors at its meeting held on 7^th December 2017 had re-appointed Smt. Shikha Sharma as the Managing Director & CEO of the Bank for a further period of three years w.e.f. 1^st June 2018. At the meeting of the Board of Directors held on 9^th April 2018, Smt. Shikha Sharma requested the Board that the period of her re-appointment as the Managing Director & CEO of the Bank be revised from 1^st June 2018 up to 31^st December 2018. The Board considered her request and approved her re-appointment as the Managing Director & CEO of the Bank from 1^st June 2018 up to 31^st December 2018 (both days inclusive) and the terms and conditions relating to the said re-appointment, including remuneration, subject to the approval of the RBI and the Shareholders of the Bank, which would also enable the Bank to manage the transition period and ensure orderly succession for the said post. The RBI has granted its approval to the said re-appointment and the terms and conditions, including remuneration thereof.

During the year, no other changes took place in the composition of the Board of Directors of the Bank. The composition of the Board of Directors of the Bank is in compliance with the applicable norms.

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 there under, the Banking Regulation Act, 1949, the Guidelines issued by the RBI and the relevant provisions of the Listing Regulations relating to Corporate Governance.

The Bank has a formal succession planning process in place, pursuant to which it periodically reviews its in-house talent across all levels and benchmarks it with the talent available in the banking industry. In terms of the succession planning/ talent review process, the Bank proactively takes steps to review the existing talent at the senior management level of the Bank and also engages the services of an external consultant to assess the suitability of potential candidates both from inside and outside the Bank taking into account the contemporary skills sets required for the said post and their ability to manage challenges faced by the Bank.

The Bank adheres to the process and methodology prescribed by the RBI in respect of ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible to be appointed as a Director of the Bank. The prescribed declarations given by the Directors other than that of the Members of the Nomination & Remuneration Committee (NRC) are placed before the NRC and the declarations given by the Members of the NRC are placed before the Board, for its review and noting. The said declarations are obtained from all the Directors on an annual basis and also at the time of their appointment / re-appointment, in compliance with the said laws. An assessment on whether the Directors fulfill the said criteria is also carried out by the NRC and the Board on an annual basis, before considering their candidature for re-appointment.

The NRC also reviews the structure, size, composition of the Board, the regional and industry experience, track record, expertise and other relevant information and documents of the Directors before making appropriate recommendations to the Board with regard to their appointment, re-appointment and remuneration designed to enhance the Board''s effectiveness.

The NRC on an ongoing basis also identifies potential candidates from diverse backgrounds including but not limited to accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, information technology, core industries, infrastructure sector, payment and settlement systems, human resource, risk management and business management, thus providing the Board with members who have special knowledge, practical experience and diverse set of skills, who could serve the diverse business interests of the Bank.

DECLARATION OF INDEPENDENCE

All the Independent Directors of the Bank have given their respective declarations stating that they meet the criteria prescribed for independence under the applicable laws and in the opinion of the Board, all the Independent Directors of the Bank meet the said criteria.

KEY MANAGERIAL PERSONNEL

Smt. Shikha Sharma, Managing Director & CEO, Shri Jairam Sridharan, Chief Financial Officer and Shri Girish V. Koliyote, Company Secretary are the Key Managerial Personnel of the Bank, in terms of Section 2(51) read with Section 203(1) of the Companies Act, 2013.

During the year, there were no changes in the composition of the Key Managerial Personnel of the Bank.

BOARD PERFORMANCE EVALUATION

The Companies Act, 2013 and the Listing Regulations relating to Corporate Governance contains provisions on evaluation of the performance of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Directors, Chairperson and the Board Committees.

The Bank had engaged the services of an external consultant to help it conduct an impartial and independent Board performance evaluation, as aforesaid. On the basis of their findings, a process of evaluation was recommended to the NRC for adoption. The manner in which the evaluation has been conducted is explained in the Report on Corporate Governance, which forms part of this report.

MEETINGS

The schedule of the meetings of the Board and the Board Committees for the ensuing financial year is circulated in advance to the Members of the Board, for their consideration and approval. During the year, 9 meetings of the Board of Directors of the Bank 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 Listing Regulations relating to Corporate Governance.

AUDIT COMMITTEE

The composition, role and functions of the Audit Committee of the Board of Directors 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 a Comprehensive Remuneration Policy for its Directors, Key Managerial Personnel and other Employees, in terms of the relevant provisions of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to Corporate Governance. The details of the said Remuneration Policy have been disclosed in the Report on Corporate Governance, which forms part of this report. The said Policy has been hosted on the website of the Bank at https://www. axisbank.com/shareholders-corner/corporate-governance/Compliance-Report.

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

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

SUBSIDIARIES

As on 31^st March 2018, the Bank has the following eleven unlisted subsidiary companies and one step down subsidiary;

i) Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.

ii) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.

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

iv) Axis Finance Ltd. is an NBFC and carries on the activities of loan against shares, margin funding, IPO financing, etc.

v) Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual fund business.

vi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses.

vii) Axis Securities Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services.

viii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitization trusts.

ix) A.TREDS Ltd. is engaged in the business of discounting trade receivables.

x) Free charge Payment Technologies Private Ltd. which was acquired on 6^th October 2017 is in the business of providing digital payments services through web & mobile-based platforms and payment gateways.

xi) Accelyst Solutions Private Ltd. which was acquired on 6^th October 2017 is in the business of providing digital payments services through web- & mobile-based platforms.

xii) 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.

During the Financial Year 2017-18, Axis Securities Europe Ltd. engaged in the business of financial advisory services was wound up with effect from 16^th May 2017.

During the year, the Bank acquired 100% equity capital of Accelyst Solutions Private Ltd. and Free charge Payment Technologies Private Ltd. Both the companies have become wholly owned subsidiaries of the Bank. Free charge Payment Technologies Private Ltd. is engaged in the business of operating payment system for semi-closed prepaid payment instruments and gift vouchers under the license issued by the Reserve Bank of India, card processing services, payment aggregation services, merchant acquisition services and payment support services. Accelyst Solutions Private Ltd. is engaged in the business of providing and facilitating online recharge / bill payment / coupon services, marketing platform for third parties, distribution of mutual funds and insurance products through the mobile application /website / mobile site.

During the year, Axis Capital Ltd. incorporated Axis Capital USA, LLC on 2^nd August 2017, as its wholly owned subsidiary in USA to provide financial services relating to equity capital market, institution stock broking to institutional investors in USA. It will be operational after completion of registration formalities with Financial Industry Regulatory Authority, Inc. (FINRA) and Securities and Exchange Commission, USA.

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 including that of all its subsidiary companies, which forms part of this report. The financial position and performance of each of the said subsidiary companies are given in 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 has been hosted on its website www.axisbank.com.

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 Bank''s website https://www.axisbank.com/shareholders-corner/shareholder''s-information/ annual-reports#/.

Any shareholder interested in obtaining a physical copy of the aforesaid 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 Members 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 Audit Committee of the Board (ACB). There were no material individual transactions with related parties, which were not in the normal course of the business of the Bank, nor were there any material transactions with related parties or others, which were not on arm''s length basis. Accordingly, 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, on a quarterly basis. 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 hosted on the Bank''s website at https://www.axisbank.com/docs/default-source/quarterly-reports/6policy-on-related-party transactions.pdf?sfvrsn=2, in terms of the Listing Regulations relating to Corporate Governance.

EMPLOYEE STOCK OPTION PLAN (ESOP)

Since the financial year 2000-01, the Bank has formulated and adopted several Employee Stock Option Schemes (ESOS) for the benefit of the eligible Directors / Employees of the Bank and some of its subsidiary companies, 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, from time to time. 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 ''owner-manager'' culture.

In terms of the said ESOS, as on date, up to 24,00,87,000 options can be granted by the Bank to the eligible Directors / Employees of the Bank and some of its Subsidiary Companies. The eligibility and number of options to be granted to such eligible Directors / Employees is determined on the basis of their performance and such other criteria as reviewed and approved by the NRC / Board of Directors of the Bank, as the case may be, from time to time.

During the period from February 2001 to July 2013, the Shareholders of the Bank had approved the grant of stock options, as aforesaid, on six 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^th 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 of Directors of the Bank / NRC, prevailing on the Stock Exchange which had the maximum trading volume of the Bank''s equity share during the sand period. Thereafter, under the third and subsequent ESOS of the Bank and with effect from the said grants made by the Bank on or after 10^th June 2005, the option conversion price was changed to the latest available closing price of the equity shares 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 20^th Annual General Meeting held on 27^th June 2014, also approved the consequent adjustments to the stock options granted to the eligible Directors / Employees of the Bank and that of its Subsidiary Companies, 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 ''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^th July 2014.

Since 24^th February 2001 up to 15^th May 2017, the NRC / Board had out of the said 24,00,87,000 options, approved the grant of 25,31,58,700 options (including 2,62,12,797 options which were lapsed and forfeited) to the eligible Directors / Employees of the Bank and some of its Subsidiary Companies, in terms of the various ESOS of the Bank. The said 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 options are required to be exercised by the concerned Directors / Employees of the Bank and some of its Subsidiary Companies, within a period of three / five years, from the date of its respective vesting, in terms of the respective ESOS of the Bank.

As of 31^st March 2018, out of the said 25,31,58,700 options so granted 21,34,53,153 options have been vested, out of which 19,73,90,994 options have been exercised and the balance 1,60,62,159 options remain unexercised. Further 1,34,92,750 options remained unvested and 2,62,12,797 options had been treated as lapsed and forfeited.

There were no material changes in the ESOS of the Bank during the financial year 2017-18 and the same is in compliance with the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014.

Statutory disclosures as mandated under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 have been uploaded 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 Report on Corporate Governance for the financial year 2017-18 along with a 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 Listing Regulations, forms part of this report.

The Corporate Governance framework of the Bank incorporates all the mandatory requirements as prescribed in the Listing Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the Listing Regulations, detailed 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^st March 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) That such accounting policies as mentioned in Note 17 of the Notes to accounts of the Financial Statements 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^st March 2018 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.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3) of the Companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, as amended, the extract of the Annual Return in Form MGT 9, is provided as an annexure to this report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of directors / employees of the Bank, is provided as an annexure to this report.

As on 31^st March 2018, the Bank had 50 employees who were employed throughout the year and were in receipt of remuneration of more than Rs,1.02 crore per annum and 6 employees of the Bank who were employed for part of the year and were in receipt of remuneration of more than Rs,8.50 lakhs 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 56 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:

Energy and natural resource conservation have been focus areas for the Bank and conscious efforts are being made towards improving energy performance, year on year.

For Sustainable Development, Energy efficiency initiatives have been implemented across several branches and offices through energy and resource conservation projects.

The Bank ensures strict compliance with all statutory requirements and voluntarily undertakes several sustainable steps in order to contribute towards a better environment.

Some of the steps undertaken and the impact perceived are listed below:

- Implementation of Solar energy projects across select Branches/ Offices, aggregating ~5.05 MW. This also includes 1.27 MW project at Axis House, NOIDA

- Implementation of Centralized Energy Management System (CEMS) to monitor and control energy consumption.

- Conversion of conventional lighting to LED in select premises & implementation of LED lights in all new Branches/Offices.

- Conversion of Food/Wet waste at Axis House into manure through compost machine for use in landscaping/gardening.

- Maintenance of unity power factor through 500 KVAR x 4 Nos of APFC panels in auto mode for optimum use of power at Axis House

- Installation of Motion sensors for workstation and common area lighting at Axis House.

- Re-cycling of Dry waste at Axis House into stationery items like notepads.

- Daily re-cycling of 150 KL of water through Sewage Treatment Plant at Axis House, Worli.

- Reduction of water consumption at Axis House and Gigaplex (Airoli) through use of aerators.

- Rain Water Harvesting at Axis House.

- Saving of water through use of Bio-blocks in urinals at Select Large Facilities.

- Installation of sensors i3n washbasins to optimize flow of water.

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 Listing Regulations, is provided as an annexure to this report.

RISK MANAGEMENT

Pursuant to Regulation 21 of the Listing Regulations, the Bank has constituted a Risk Management Committee of the Board of Directors. 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 Listing Regulations, top 500 listed entities based on their market capitalization as on 31^st March every year, are required to submit their Business Responsibility Report (BRR) as a part of the Annual Report. The Bank''s Business Responsibility Report describing the initiatives taken by the Bank from an environmental, social and governance perspective has been hosted on the website of the Bank, www.axisbank.com at https://www.axisbank.com/shareholders-corner/shareholder''s-information/ business-responsibility-report. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Bank at its Registered Office.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The provisions relating to Section 134(3)(g) of the Companies Act, 2013 on particulars of loans, guarantees and investments are not applicable to a Banking Company, as such no disclosure is being made in this regard.

CORPORATE SOCIAL RESPONSIBILITY

The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the Board of Directors, in accordance with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility) Rules, 2014, as amended.

The brief outline of the CSR Policy, including overview of the programs undertaken by the Bank, the composition of the CSR Committee, average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of the amounts spent by the Bank on CSR activities during the year under review, have been provided as an annexure to this report.

The Bank''s Corporate Social Responsibility Policy which has been reviewed and approved by the CSR Committee has been hosted on the website of the Bank at https://www.axisbank.com/csr.

PLAN AND STATUS OF IND AS IMPLEMENTATION

The Reserve Bank of India (RBI) 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^st April 2018. Banks are 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^st April 2018. However, the RBI in its press release issued on 5^th April 2018 has deferred the applicability of Ind AS by one year for Scheduled Commercial Banks. Banks are now required to implement Ind AS with effect from 1^st April 2019 and prepare standalone and consolidated Ind AS financial statements for FY 2019-20 with comparative figures for financial year 2018-1 9.

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 Deputy Managing Director of the Bank. A quarterly progress report on the status of Ind AS implementation in the Bank is presented to the Audit Committee of the Board. During FY 2016-17, the Bank has undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also submitted Proforma Ind AS financial statements for the six months ended 30^th September 2016 and three months ended 30^th June 2017 to the RBI.

The Bank has identified and evaluated data gaps, process and system changes required to implement Ind AS and is in the process of implementing necessary changes in its IT system and other processes. Dry-run of accounting systems and end-to-end reporting process will be undertaken at the appropriate time during the year. The Bank has been holding workshops and training for its staff, which will continue in the current year.

The Bank is in the process of preparation of opening Ind AS financials as on 1^st April 2018 and is also examining impact of Ind AS on business planning, budgeting, taxation, capital planning and on capital adequacy. The Bank will prepare quarterly Ind AS financials during the year 2018-19 for internal purpose, which will be used later, as comparative numbers for the financial year 2019-20.

STATUTORY AUDITORS

At the 20^th Annual General Meeting of the Shareholders of the Bank held on 27^th June 2014, M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Bank (Membership No. 301003E/ E300005), was appointed as the Statutory Auditors of the Bank to hold office as such from the conclusion of the 20^th Annual General Meeting until the conclusion of the 24^th Annual General Meeting, subject to the approval of the Reserve Bank of India and ratification by the Shareholders each year and on such remuneration, as may be approved by the Audit Committee of the Board (ACB).

As the term of M/s S. R. Batliboi & Co. LLP, Chartered Accountants will expire at the conclusion of the ensuing 24^th Annual General Meeting of the Bank, it is proposed to appoint M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Membership Number 103523W/W100048) as the Bank''s new Statutory Auditor, subject to the approval of the Shareholders of the Bank. Pursuant to the recommendation of the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Haribhakti & Co. LLP, Chartered Accountants, having registration number 103523W/W100048, issued by the Institute of Chartered Accountants of India, as the Statutory Auditors of the Bank for a period of four consecutive years and to hold office as such from the conclusion of the 24^th Annual General Meeting up to the conclusion of the 28^th Annual General Meeting. The Shareholders are requested to consider their appointment on such remuneration as may be decided by the ACB. The said appointment has been approved by the RBI.

In this regard, the Bank has received a certificate from the said Statutory Auditor to the effect that the appointment, if made, would be in accordance with the relevant provisions of Section 141 of the Companies Act, 2013. The said appointment has also been approved by the RBI in terms of relevant provisions of the Banking Regulation Act, 1949.

As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

There are no qualifications, reservations or adverse remarks made by M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Bank, in their report. Further, pursuant to Section 143(12) of the Companies Act, 2013, the Statutory Auditors of the Bank have not reported any instances of frauds committed in the Bank by its officers or employees.

The Board of Directors places on record their appreciation for the professional services rendered by M/s S. R. Batliboi & Co., Chartered Accountants, during their tenure as the Statutory Auditors of the Bank.

SECRETARIAL AUDITORS

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 2017-18. The secretarial audit of the Bank was conducted on a quarterly basis in respect of the matters prescribed in the said Rules and as set out in the Secretarial Audit Report for the financial year 2017-18, which is provided as an annexure to this report.

The Secretarial Auditor of the Bank, in its report has made an observation on the Directions issued by SEBI on 27^th December 2017 with respect to the alleged leakage of Unpublished Price Sensitive Information (UPSI) relating to the unaudited financial results of the Bank, for the quarter ended 30^th June 2017.

Pursuant to the said Directions, the Bank had appointed Deloitte Touche Tohmatsu India LLP, Mumbai (Deloitte) to evaluate and suggest measures to strengthen the process, controls and systems relating to preparation, finalization and disclosure of the financial results of the Bank and conduct a fact-finding review into the alleged leakage of unpublished price sensitive information relating to the unaudited financial results of the Bank, for the quarter ended 30^th June 2017 and submit a report to the Bank within the time frame prescribed by SEBI. The Bank had also appointed Ernst & Young (EY) to conduct a similar review in respect of the representatives of the Statutory Auditors of the Bank, as they had access to the said results.

The Bank has submitted its report to SEBI, in compliance with the said Directions. Based on the procedures performed by Deloitte and EY, their findings indicate that they did not come across any specific instance that indicates sharing or forwarding of UPSI data relating to the said financial results of the Bank, with any external parties/ individuals.

The Bank has also taken measures to further strengthen its process, controls and systems relating to preparation, finalization and disclosure of its financial results and to plug any possible source of leakage of UPSI relating to its financial results, in future.

Apart from the above, there are no qualifications, reservations or adverse remarks made by the Secretarial Auditor of the Bank, in its report.

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 2017-18, no significant or material orders were passed by any Regulator, Court or Tribunal against the Bank, which could impact its going concern status or 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 Smt. Shikha Sharma, Managing Director & CEO and Shri Jairam Sridharan, Group Executive & CFO of the Bank, for the financial year ended 31^st March 2018, was placed before the Board of Directors at its meeting held on 26^th April 2018, in terms of Regulation 17(8) of the 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 the date of this report.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, Ministry of Corporate Affairs, Securities and Exchange Board of India, 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 the Shareholders of the Bank for their continued support and to its valued customers for their continued patronage. The Board also expresses its deep sense of appreciation to all the employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiatives which has led to the Bank reinforcing its customer centric image and making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai Dr. Sanjiv Misra

Date: 16^th May 2018 Chairman

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Mar 31, 2017

The Board of Directors have the pleasure of presenting the 23^rd Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the Report on the business and operations of the Bank for the financial year ended 31^st March 2017.

Financial Performance

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

(Rs, in crores)

Particulars	2016-17	2015-16	Growth
Deposits	414,378.79	357,967.56	15.76%
Out of which
- Savings Bank Deposits	126,048.29	105,793.13	19.15%
- CurrentAccountDeposits	87,001.75	63,651.92	36.68%
Advances	373,069.35	338,773.72	10.12%
Out of which
- Retail Advances	167,992.95	138,520.90	21.28%
- Non-retail Advances	205,076.40	200,252.82	2.41%
Total Assets/Liabilities	601,467.67	539,821.02	11.42%
Net Interest Income	18,093.12	16,832.97	7.49%
Other Income	11,691.31	9,371.46	24.75%
Out of which
- Fee Income	7,882.01	7,501.97	5.07%
- Trading Profit(l)	3,400.34	1,246.91	172.70%
- Misc. Income	408.96	622.58	(34.31%)
Operating Expenses (excluding depreciation)	11,691.11	9,656.91	21.06%
Profit before Depreciation, Provisions and Tax	18,093.32	16,547.52	9.34%
Depreciation	508.80	443.91	14.62%
Provision for Tax	1,788.28	4,170.09	(57.12%)
Other Provisions and Write offs	12,116.96	3,709.86	226.62%
Net Profit	3,679.28	8,223.66	(55.26%)
Appropriations
Transfer to Statutory Reserve	919.82	2,055.92	(55.26%)
Transfer (from)/to Investment Reserve	(87.16)	(41.81) -
Transferto Capital Reserve	755.57	62.04 -
Transferto Reserve Fund	1.75	1.74	0.57%
Dividend Paid	1,407.43	2.81 -
Surplus carried over to Balance Sheet	681.87	6,142.96 -

¹ Excluding Merchant Exchange Profit

DIRECTORS'' REPORT (CONT.)

Key Performance Indicators	2016-17	2015-16
Interest Income as a percentage of working funds*	7.88%	8.59%
Non-interest Income as a percentage of working funds*	2.07%	1.96%
Net Interest Margin	3.67%	3.90%
Return on Average Net Worth	7.22%	17.49%
Operating Profit as a percentage of working funds*	3.11%	3.38%
Return on Average Assets	0.65%	1.72%
Profit per Employee**	Rs,6.68 lakhs	Rs,17.83 lakhs
Business (Deposits less inter-bank deposits Advances) per employee**	Rs,14.00 crores	Rs,14.84 crores
Net non-performing assets as a percentage of net customer assets***	2.11%	0.70%

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

Capital

During the year, 12,204,283 equity shares of ''2 each of the Bank were allotted by the Bank to some of its Whole Time Directors / Employees and that of its subsidiary companies, pursuant to exercise of options by them under the various Employee Stock Option Scheme(s) of the Bank. Pursuant to the said allotment, the total issued and paid-up equity share capital of the Bank, as on 31^st March 2017 increased to Rs,479.01 crore, as compared to Rs,476.57 crore, as on 31^st March 2016.

The shareholding pattern of the Bank, as on 31^st March 2017, was as under:

Sr.	Category / Shareholder	No. of Shares	% of Paid-up
No.		held	Capital
Promoters
1	Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)	27,48,40,905	11.48
2	Life Insurance Corporation of India (LIC)	33,13,08,553	13.83
3	General Insurance Corporation of India	3,99,40,000	1.67
4	The New India Assurance Company Limited	2,61,03,585	1.09
5	National Insurance Company Limited	30,63,797	0.13
6	The Oriental Insurance Company Limited	63,30,020	0.26
7	United India Insurance Company Limited	72,15,213	0.30
Foreign Investors
8	Overseas Investors (including Flls/OCBs/NRIs)	1,16,20,73,406	48.51
9	Foreign Direct Investment (GDR)	10,87,53,075	4.54
Domestic Financial Institutions
10	Financial Institutions/Mutual Funds/Banks/NBFC	16,57,97,280	6.92
11	Others	26,96,10,275	11.27
	Total	2,39,50,36,109	100.00

The said equity shares of the Bank are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Unsecured, Redeemable, Non-Convertible, Subordinated, Perpetual Debentures issued bythe Bank on a private placement basis are listed on NSE and the BSE. The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange and the Green Bonds issued by the Bank are listed on the London Stock Exchange. The Global Depository Receipts (GDR) issued by the Bank are listed on the London Stock Exchange.

The Bank has paid the listing fees to the said Stock Exchanges for the financial year 2016-17.

Approval granted by the Foreign Investment Promotion Board (FIPB) to increase Foreign Investment Limits

The FIPB vide its letter no. FC II - 125 (2013)/183 (2013) dated 19^th July 2016 granted its approval to the Bank for increasing Foreign Investment Limit from 62% to 74% of its total issued and paid up share capital on a full fungibility basis without any sub-limits, for investment by way of issue of equity shares and/or other permissible instruments to eligible non-resident investors including a Qualified Institution Placement (QIP) of equity shares and/or issue of American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) and/or investment by Qualified Foreign Investors (QFIs)/Foreign Portfolio Investors (FPIs) under Portfolio Investment Scheme (PIS) issued and permissible securities on Stock Exchange except NRI holding which shall be allowed up to 24% of the total issued and paid up share capital of the Bank. As on 31^st March 2017, the total foreign shareholding in the Bank was 53.05% of its total issued and paid up share capital.

Dividend

The Diluted Earnings Per Share (EPS) of the Bank for the financial year 2016-17 stood at Rs,15.34 per equity share of Rs,2/- each as compared to Rs,34.40 per equity share of Rs,2/- each in the previous year. In view of the overall performance of the Bank and with the objective of rewarding the Shareholders of the Bank with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors of the Bank at its meeting held on 26^th April 2017, recommended a dividend of Rs,5/- per equity share of Rs,2/- each for the financial year 2016-17, in terms of the Dividend Distribution Policy of the Bank.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the Bank has formulated and adopted the Dividend Distribution Policy with the objective of providing clarity to its stakeholders on the profit distribution strategies of the Bank. The said Policy has been hosted on the website of the Bank at https://www.axisbank.com/ shareholders-corner/corporate-aovernance/Compliance-Report.

Closure of Share Transfer Books and Record Date for Dividend

The Register of Members and the Share Transfer Books of the Bank will be closed from Saturday, 8^th July 2017 to Wednesday, 26^th July 2017 (both days inclusive) for the purpose of the 23^rd Annual General Meeting of the Shareholders of the Bank to be held on Wednesday, 26^th July 2017 and for determining the names of the Members who would be entitled to dividend, if any, declared by the Bank for the financial year ended 31^st March 2017.

The Record Date for payment of the said dividend, if approved by the Members at the 23^rd Annual General Meeting, has been fixed on Friday, 7^th July 2017. The said dividend shall be paid to those Members whose name appears on the Register of Members of the Bank/ the Statements of Beneficial Ownership as received from the Depositories, as at the close of business hours on Friday, 7^th July 2017.

Ratings of various Debt Instruments

The Unsecured, Redeemable, Non-Convertible Debentures issued by the Bank, on a private placement basis, during the financial year 2016-17, were rated "AAA/Stable" by CRISIL and "AAA" by ICRA & CARE.

The Unsecured, Redeemable, Non-Convertible Subordinated Debentures issued by the Bank, on a private placement basis, during the financial year 2016-17, were rated "AAA(hyb)" by ICRA Limited and "IND AAA" by India Ratings and Research Private Limited.

The Unsecured, Subordinated, Perpetual, Additional Tier 1, Basel III Compliant Non-Convertible Debentures issued by the Bank on a private placement basis, during the financial year 2016-17, were rated "IND AA " by India Ratings & Research Private Ltd. and "CRISIL AA(Stable)" by CRISIL Ltd.

The Bonds issued by the Bank under the MTN programme on a private placement basis, during the financial year 2016-17, were rated "AAA" by CRISIL, CARE and ICRA.

The Green Bonds issued by the Bank, on a private placement basis during the financial year 2016-17 are Asia''s first certified Green Bonds and first ever Green Bonds issued by an Indian entity and listed on the London Stock Exchange. The Green Bonds were rated "Baa3" by Moody''s, "BBB-" byS&P and "BBB-" by Fitch.

Board of Directors

In terms of Article 90 of the Articles of Association of the Bank, the Board of Directors of the Bank at its meeting held on 1 2^th May 2016 appointed Dr. Sanjiv Misra as an Independent Director and as the Non-Executive (Part Time) Chairman of the Bank, with effect from 12^th May 2016, subject to the approval of the RBI and the Shareholders of the Bank. Thereafter, RBI approved the appointment of Dr. Sanjiv Misra as the Non-Executive (Part Time) Chairman of the Bank, for a period of 3 years, with effect from 18^th July 2016, which was also approved by the Shareholders of the Bank at the 22^nd Annual General Meeting held on 22^nd July 2016.

At the said meeting, the Board of Directors of the Bank also appointed Shri Rajiv Anand, Group Executive (Retail Banking) of the Bank as a Director of the Bank and as the Whole Time Director designated as "Executive Director (Retail Banking)" of the Bank, for a period of 3 years, with effect from 12^th May 2016, subject to the approval of the RBI and the Shareholders of the Bank. The said appointment was approved by the Shareholders of the Bank at the 22^nd Annual General Meeting held on 22^nd July 2016 and thereafter by the RBI, for a period of 3 years, with effect from 4^th August 2016.

At the said meeting, the Board of Directors of the Bank also appointed Shri Rajesh Dahiya, Group Executive (Corporate Centre) as a Director of the Bank and as the Whole Time Director designated as "Executive Director (Corporate Centre)" of the Bank, for a period of 3 years, with effect from 12^th May 2016, subject to the approval of the RBI and the Shareholders of the Bank. The said appointment was approved by the Shareholders of the Bank at the 22^nd Annual General Meeting held on 22^nd July 2016 and thereafter by the RBI, for a period of 3 years, with effect from 4^th August 2016.

During the year, no other changes took place in the composition of the Board of Directors of the Bank. The composition of the Board of Directors of the Bank is in compliance with the applicable norms.

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 there under, the Banking Regulation Act, 1949, the Guidelines issued by the RBI and the Listing Regulations.

The Bank adheres to the process and methodology prescribed by the RBI in respect of ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be eligible to be appointed as a Director of a Bank. The prescribed declarations given by the Directors other than members of the Nomination & Remuneration Committee (NRC) are placed before the NRC and the declarations given by the Members of the NRC are placed before the Board, for its review and noting. The said declarations are obtained from all the Directors on an annual basis and also at the time of their appointment / re-appointment, in compliance with the said laws. An assessment on whether the Directors fulfill the said criteria is also made by the NRC and the Board on an annual basis, before considering their candidature for re-appointment.

The NRC reviews the structure, size, composition of the Board, the regional and industry experience, track record, expertise and other relevant information and documents of the Directors before making appropriate recommendations to the Board with regard to their appointment, re-appointment, remuneration and assignment of duties (viz., nomination to various Committees of the Board) designed to enhance the Board''s effectiveness. The NRC also identifies potential candidates from diverse backgrounds including but not limited to accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, information technology, core industries, infrastructure sector, payment and settlement systems, human resource, risk management and business management, thus providing the Board with members who have special knowledge, practical experience and skills, to serve the diverse business interests of the Bank.

Declaration of Independence

All the Independent Directors of the Bank have given their respective declarations stating that they meet the criteria prescribed for independence under the applicable laws and in the opinion of the Board, all the Independent Directors meet the said criteria.

Key Managerial Personnel

Smt. Shikha Sharma, Managing Director & CEO, Shri Jairam Sridharan, Chief Financial Officer and Shri Girish V Koliyote, Company Secretary are the Key Managerial Personnel of the Bank, as defined under Section 2(51) of the Companies Act, 2013.

During the year, there were no changes in the composition of the Key Managerial Personnel of the Bank.

Board Evaluation

The Companies Act, 2013, and the Listing Regulations contains provisions on evaluation of the performance of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Directors, Chairperson and the Board Committees.

The Bank had engaged the services of an external consultant to help it conduct an impartial and independent Board evaluation, as aforesaid. On the basis of their findings, a process of evaluation was recommended to the Board for adoption. The manner in which the evaluation has been conducted is explained in the Report on Corporate Governance, which is forming part of this report.

Meetings

The schedule of the meetings of the Board and the Board Committees for the ensuing financial year is circulated well in advance to the Members of the Board, for their consideration and approval. During the year, 7 meetings of the Board of Directors of the Bank 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 there under and the Listing Regulations.

Audit Committee

The composition, role and functions of the Audit Committee of the Board of Directors of the Bank is disclosed in the Report on Corporate Governance, which is forming a part of this report.

Remuneration Policy

The Bank has formulated and adopted a Remuneration Policy for its Directors, Key Managerial Personnel and other Employees, in terms of the relevant provisions of Section 178of the Companies Act, 2013, the relevant Rules made there under and the Listing Regulations. The details of the Remuneration Policy have been disclosed in the Report on Corporate Governance, which is forming part of this report.

Whistle Blower Policy and Vigil Mechanism

The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Report on Corporate Governance, which is forming part of this report.

Subsidiaries

As on 31^st March 2017, the Bank has the following nine unlisted subsidiary companies:

i) Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.

ii) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.

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

iv) Axis Finance Ltd. is an NBFC and carries on the activities of loan against shares, margin funding, IPO financing, etc.

v) Axis Mutual Fund Trustee Ltd. acts as the trustee forthe mutual fund business.

vi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses.

vii) Axis Securities Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services.

viii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitization trusts.

ix) A.TREDS Limited is engaged in the business of discounting trade receivables.

During the Financial Year 2016-17, the Bank incorporated a public limited company, in the name and style of A.TREDS Limited as its subsidiary under the relevant provisions of Companies Act, 2013 and the relevant rules made there under, with an authorized share capital of ''50,00,00,000 divided into 5,00,00,000 (five crore) equity shares of ''10/- each, to undertake amongst others the business of setting up and operating a Trade Receivables Discounting System. Further, one of the subsidiary company of the Bank, Axis Securities Europe Limited engaged in the business of financial advisory services is under the process of winding up.

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 including that of all of the said subsidiary companies, which is forming part of this report. The financial position and performance of each of the said subsidiary companies are given in 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 third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of the Bank, containing therein its standalone and the consolidated financial statements has been hosted on its website www.axisbank.com. Further, as per 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 Bank''s website www.axisbank.com.

Any shareholder who may be interested in obtaining a physical copy of the aforesaid financial statements may write to the Company Secretary at the Registered Office of the Bank. Further, please note that the said financial statements will be available for inspection by the Members of the Bank 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, 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 Audit Committee of the Board. There were no material individual transactions with related parties, which were not in the normal course of the business of the Bank, nor were there any material transactions with related parties or others, which were not on arm''s length basis. Accordingly, 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 on a quarterly basis. The Bank has developed a Standard Operating Procedure for the purpose of identifying and monitoring such transactions. The policy on Related Party Transactions as reviewed and approved by the Board at its meeting held on 20^th January 2016, has been hosted on the Bank''s website, in terms of the Listing Regulations.

Employee Stock Option Plan (ESOP)

Since the financial year 2000-01, the Bank has formulated and adopted several Employee Stock Option Schemes (ESOS) for the benefit of the eligible Directors/Employees of the Bank and that of its subsidiary companies, 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, from time to time. 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 ''owner-manager'' culture.

In terms of the said ESOS, as on date, up to 240,087,000 options can be granted by the Bank to the eligible Directors / Employees of the Bank and that of its Subsidiary Companies. The eligibility and number of options to be granted to such eligible Directors / Employees is determined on the basis of their performance and such other criteria as approved by the NRC / Board of Directors of the Bank, from time to time.

During the period from February 2001 to July 2013, the Shareholders of the Bank had approved the grant of stock options, as aforesaid, on six occasions. Under the first two ESOS and in respect of the grant of stock options made by the Bank up to 29^th 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 of Directors of the Bank / NRC, prevailing on the Stock Exchange which had the maximum trading volume of the Bank''s equity share during the staid period. Thereafter, under the third and subsequent ESOS and with effect from the said grants made by the Bank on 10^th June 2005 and thereafter, the option conversion price was changed to the latest available closing price of the equity shares prevailing on the Stock Exchange which recorded higher trading volume, on the day prior to the date of approval of grant by the NRC / Board of Directors of the Bank, as the case may be.

Pursuant to the sub-division of the equity shares of the Bank, the Shareholders of the Bank at the 20^th Annual General Meeting held on 27^th June 2014, also approved the consequent adjustments to the stock options granted to the eligible Directors / Employees of the Bank and that of its Subsidiary Companies, under its various ESOS, such that all stock options available for grant (including lapsed and forfeited options available for reissue) and those already granted but not vested/and 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 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 sub-division were proportionately adjusted by dividing the existing grant price by 5. The record date for the said sub-division was 30^th July 2014.

Since 24^th February 2001 up to 26^th April 2016, the NRC / Board had out of the said 240,087,000 options, approved the grant of 246,272,950 options (including 24,579,864 options which were lapsed / cancelled) to the eligible Directors / Employees of the Bank and that of its Subsidiary Companies, in terms of the various ESOS. The said 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. The said options are required to be exercised by the concerned Directors / Employees of the Bank and that of its Subsidiary Companies, within a period of three / five years, from the date of its respective vesting and subject to the terms as set out in the respective ESOS.

As of 31^st March 2017, out of the said 246,272,950 options so granted 207,151,583 options have been vested, out of which 191,217,059 options have been exercised and the balance 15,934,524 options remain unexercised. Further 13,776,600 options remained unvested and 25,344,767 options had been treated as lapsed/ cancelled.

Statutory disclosures in terms of Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 have been uploaded on the website of the Bank, https://www.axisbank.com/shareholders-corner/corporate-aovernance/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 Report on Corporate Governance for the financial year 2016-17 along with a 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 Listing Regulations, is forming part of this report. The Corporate Governance framework of the Bank incorporates all the mandatory requirements as set out in the Listing Regulations.

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 year ended 31^st March 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. That such accounting policies as mentioned in Note 17 of the Notes to accounts of the Financial Statements 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^st March 2017 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.

Extract of Annual Return

Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, as amended, the extract of the Annual Return in Form MGT 9, is provided as an annexure to this report.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of directors/employees of the Bank is provided as an annexure to this report.

As on 31^st March 2017, the Bank had 31 employees who were employed throughout the year and were in receipt of remuneration of more than Rs,1.02 crore per annum and 6 employees of the Bank who were employed for part of the year and were in receipt of remuneration of more than Rs,8.50 lakhs 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 annexure 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 employees containing the particulars as specified in Rule 5 (2) of the said Rules, which is available for inspection by the Members at its Registered Office 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. The financial statements and other reports of the Bank annexed hereto have been hosted on the website of the Bank, www.axisbank.com at https://www.axisbank.com/shareholders-corner/financial-results-and-other-information/quarterlv-results.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Conservation of Energy:

The Bank has always considered energy and natural resource conservation as a focus area and has been consciously making efforts towards improving the energy performance year on year. Energy efficiency improvement initiatives have been implemented across all the branches and offices by undertaking various energy and resource conservation projects for Sustainable Development.

The Bank ensures strict compliance with all the statutory requirements and has taken several sustainable steps voluntarily to contribute towards better environment. Select few steps /impact are listed below:

- Implementation of solar energy of aggregate —4.6 MW spread over select Branches/Offices.

- Implementing Energy Management System (EMS) to monitor and control energy consumption in select Branches.

- Conversion of conventional lighting to LED.

- Installed Compost Machine for converting food waste into manure at Axis House.

- Maintenance of unity power factor through 500 KVAR x 4 Nos of APFC panels in auto mode for optimum use of power at Axis House.

- Motion sensors installation for the workstations at Axis House.

- Recycle and Reuse of Food waste, Dry waste and Sewage at Axis House.

- Sewage Treatment Plant of 150 KL capacity recycles sewage water at Axis House every day.

- Use of water flow reducer to reduce the water consumption at Axis House and Gigaplex (Airoli).

- Rain Water Harvesting at Axis House.

- Introduction of bio blocks in urinals at Select Large Facilities thereby saving flushing water.

Technology Absorption:

The details pertaining to Technology Absorption have been explained in the Management''s Discussion and Analysis Report, which is provided as an annexure to this report.

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 and 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 Listing Regulations, is provided as an annexure to this report.

Risk Management

Pursuant to Regulation 21 of the Listing Regulations, the Bank has already constituted the Risk Management Committee of the Board of Directors. The details of the said Committee and its terms of reference are set out in the Report on Corporate Governance, which is forming 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 Listing Regulations, top 500 listed entities based on their market capitalization as on 31^st March every year, are required to submit their Business Responsibility Report (BRR) as a part of the Annual Report. The Bank''s Business Responsibility Report describing the initiatives taken by the Bank from an environmental, social and governance perspective has been hosted on the website of the Bank, www.axisbank.com at https://www.axisbank.com/shareholders-corner/shareholder''s-information/ business-responsibility-report. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Bank at its Registered Office.

Particulars of Loans, Guarantees and Investments

The provisions relating to Section 134(3)(g) of the Companies Act, 2013 on particulars of loans, guarantees and investments are not applicable to a Banking Company and as such no disclosure is being made in this regard.

Corporate Social Responsibility

The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the Board of Directors, in accordance with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility) Rules, 2014, as amended.

The brief outline of the CSR Policy, including overview of the programs undertaken by the Bank, the composition of the CSR Committee, average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of the amounts spent by the Bank on CSR activities during the year under review, have been provided as an annexure to this report.

Plan and Status of Ind AS Implementation

The Reserve Bank of India (RBI) 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^st April 2018. Banks are also required to report the comparative financial statements for the financial year 201 7-18, to be published along with the financial statement for the year beginning 1^st April 2018.

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 Deputy Managing Director. A quarterly progress report on the status of Ind AS implementation in the Bank is presented to the Audit Committee of the Board. During FY 2016-17, the Bank has undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also submitted Proforma Ind AS financial statements for the six months ended 30^th September 2016, to the RBI.

The Bank has identified and evaluated data gaps, process and system changes required to implement Ind AS and is in the process of implementing necessary changes in its IT system and other processes. Dry-run of accounting systems and end-to-end reporting process will be undertaken at the appropriate time during the year. The Bank has been holding workshops and training for its staff, which will continue in the current year.

The Bank is in the process of preparation of opening Ind AS financials as on 1^st April 2017 and is also examining impact of Ind AS on business planning, budgeting, taxation, capital planning and on capital adequacy. The Bank will prepare quarterly Ind AS financials during the year 2017-18 for internal purpose, which will be used later, as comparative numbers for the financial year 2018-19.

Statutory Auditors

At the 20^th Annual General Meeting of the Shareholders of the Bank held on 27^th June 2014, M/s S. R. Batliboi & Co. LLFJ Chartered Accountants, Statutory Auditors of the Bank (Membership No.301003E/E300005), were appointed as the Statutory Auditors of the Bank to hold office as such from the conclusion of the 20^th Annual General Meeting until the conclusion of the 24^th Annual General Meeting, subject to the approval of the Reserve Bank of India and ratification by the shareholders each year and on such remuneration, as may be approved by the Audit Committee of the Board (ACB).

In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors is required to be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. S. R. Batliboi & Co. LLFJ Chartered Accountants, as Statutory Auditors of the Bank for the financial year 2017-18, is being placed for ratification by the Shareholders of the Bank at the 23^rd Annual General Meeting.

As recommended by the ACB, the Board of Directors has proposed the appointment of M/s. S. R. Batliboi & Co. LLFJ Chartered Accountants, as the Statutory Auditors of the Bank for the financial year 2017-18 and to hold office as such from the conclusion of the 23^rd Annual General Meeting up to the conclusion of 24^th Annual General Meeting for the ratification by the Shareholders of the Bank at the 23^rd Annual General Meeting. The Shareholders are requested to ratify the said appointment of the Statutory Auditors and the payment of remuneration, as approved by the ACB.

In this regard, the Bank has received a certificate from the Statutory Auditors to the effect that the ratification of their appointment, if made, would be in accordance with the relevant provisions of Section 141 of the Companies Act, 2013.

As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

There are no qualifications, reservations or adverse remarks made by M/s. S. R. Batliboi & Co. LLFJ Chartered Accountants, Statutory Auditors of the Bank, in their report.

Secretarial Auditors

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 has appointed M/s. BNP & Associates, Company Secretaries, Mumbai, to act as the Secretarial Auditor of the Bank.

The secretarial audit of the Bank has been conducted on a quarterly basis in respect of the matters as set out in the said Rules and set out in the Secretarial Audit Report for the financial year 2016-17, which is provided as an annexure to this report.

There are no qualifications, reservations or adverse remarks made by M/s. BNP & Associates, Company Secretaries, Secretarial Auditor of the Bank, in their report.

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 2016-17, no significant or material orders were passed by any Regulator, Court or Tribunal against the Bank, which could impact its going concern status or 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 Smt. Shikha Sharma, Managing Director & CEO and Shri Jairam Sridharan, CFO of the Bank, for the financial year under review, was placed before the Board of Directors at its meeting held on 26^th April 2017, in terms of Regulation 17(8) of the Listing Regulations.

Acknowledgements

The Board of Directors places on record its gratitude to the RBI, FIPB, 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 the shareholders of the Bank for their continued support and to its valued customers for their continued patronage.

The Board also expresses its deep sense of appreciation to all the employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiatives which has led to the Bank reinforcing its customer centric image and making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai Dr. Sanjiv Misra

Date: 26^th April 2017 Chairman

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Mar 31, 2015

Dear Members,

The Board of Directors have the pleasure of presenting the Twenty First Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the Report on business and operations of the Bank for the financial year ended 31st March 2015.

FINANCIAL PERFORMANCE

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

(Rs. in crores) PARTICULARS 2014-15 2013-14 GROWTH

Deposits 322,441.94 280,944.56 14.77%

Out of which

* Savings Bank Deposits 88,292.08 77,775.94 13.52%

* Current Account Deposits 56,108.22 48,686.40 15.24%

Advances 281,083.03 230,066.76 22.17%

Out of which

* Retail Advances 111,932.27 88,028.38 27.15%

* Non-retail Advances 169,150.76 142,038.38 19.09%

Total Assets/Liabilities 461,932.39 383,244.89 20.53%

Net Interest Income 14,224.14 11,951.64 19.01%

Other Income 8,365.04 7,405.22 12.96%

Out of which

* Fee Income 6,778.98 5,985.44 13.26%

* Trading Profit (1) 1,134.94 695.99 63.07%

* Misc. Income 451.12 723.79 (37.67%)

Operating Expenses 8,798.07 7,536.84 16.73% (excluding depreciation)

Profit before Depreciation, 13,791.11 11,820.02 16.68% Provisions and Tax

Depreciation 405.67 363.93 11.47%

Provision for Tax 3,699.01 3,130.96 18.14%

Other Provisions and 2,328.61 2,107.46 10.49% Write-offs

Net Profit 357.82 6,217.67 18.34%

Appropriations:

Transfer to Statutory Reserve 1,839.46 1,554.42 18.34%

Transfer to Investment Reserve 25.49 50.03 (49.05%)

Transfer to Capital Reserve 63.14 38.87 62.44%

Transfer to/(from) Reserve Fund (1.27) 1.05 (220.95%)

Proposed Dividend 1,308.96 1,101.12 18.88%

Surplus carried over to 4,122.04 3,472.18 18.72% Balance Sheet

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2014-15 2013-14

Interest Income as a percentage 8.81% 8.78% of working funds*

Non-interest Income as a percentage 2.08% 2.12% of working funds*

Net Interest Margin 3.92% 3.81%

Return on Average Net Worth 18.57% 18.23%

Operating Profit as a percentage 3.33% 3.28% of working funds*

Return on Average Assets 1.83% 1.78%

Profit per Employee** Rs.17.07 lacs Rs.15.42 lacs

Business (Deposits less inter- Rs.13.71 crores Rs.12.30 crores bank deposits Advances) per employee**

Net non-performing assets as a 0.44% 0.40% percentage of net customer assets***

* 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

The Bank continued to show a healthy growth in both business and earnings, with a net profit of Rs.7,357.82 crores for the year ended 31st March 2015, registering a growth of 18.34% over the net profit of Rs.6,217.67 crores last year. The robust growth in earnings was achieved on the back of a balanced business growth across all banking segments indicative of a clear strategic focus of the Bank. The key return ratios continued to remain healthy, with Return on Equity (ROE) at 18.57% and Return on Assets (ROA) at 1.83%. During the year, the Basic Earnings Per Share (EPS) was Rs.31.18.

The Bank''s total income increased by 15.24% to reach Rs.43,843.64 crores during 2014-15, compared to ''38,046.38 crores last year. Operating revenue over the same period increased by 16.70% to Rs.22,589.18 crores driven by healthy growth in the Bank''s core income streams: net interest income (NII), fees and other income. During the year, NII increased by 19.01% to Rs.14,224.14 crores from Rs.11,951.64 crores last year and constituted 62.97% of the operating revenue. Fee, trading and other income increased by 12.96% to Rs.8,365.04 crores from Rs.7,405.22 crores last year. The operating expenses grew by 16.49% to Rs.9,203.74 crores from Rs.7,900.77 crores last year. As a result, operating profit increased by 16.84% to Rs.13,385.44 crores from Rs.11,456.09 crores reported last year.

The robust growth in NII for the year 2014-15 was achieved on the back of an expansion in the Balance Sheet size and healthy growth in low-cost Current Account and Savings Bank (CASA) deposits. During the year, total earning assets, on a daily average basis, increased by 15.75% to Rs.363,186 crores from Rs.313,775 crores last year. A steady growth in low-cost CASA, which on a daily average basis, increased by 14.78% to Rs.107,328 crores from Rs.93,506 crores last year helped in containing the cost of funds. Overall, the cost of funds for the year was 6.21 % compared to 6.24% last year. During the year, the cost of deposits decreased to 6.31% from 6.43% last year, primarily due to a decrease in cost of term deposits by 16 basis points to 8.67% from 8.83% last year. During this period, the yield on earning assets marginally improved to 9.63% from 9.59% last year. As a result, the Net Interest Margin (NIM) improved to 3.92% from 3.81% last year.

Other income comprising fees, trading profit and miscellaneous income increased by 12.96% to Rs.8,365.04 crores in 2014-15 from Rs.7,405.22 crores last year and constituted 37.03% of the operating revenue of the Bank. Fee income increased by 13.26% to Rs.6,778.98 crores from Rs.5,985.44 crores last year and remains very well diversified with 38.39% from retail banking, 26.60% from corporate banking and balance contributed by treasury, business banking and SME segments. The Bank earns fee income from a diverse set of products and businesses such as client-based merchant foreign exchange trade, service charges on liability accounts, transaction banking (including cash management services), syndication and placement fees, processing fees from loans and commission on non-funded products (such as letters of credit and bank guarantees) and fee income from the distribution of third-party personnel investment products. Fee income continues to remain a significant part of the Bank''s earnings and constituted 30.01 % of its operating revenue. A key factor for the slower growth in fee income has been the slowdown in corporate banking fees due to lack of fresh new investments and projects being undertaken. During the year, proprietary trading profits increased by 63.07% to Rs.1,134.94 crores from Rs.695.99 crores last year. Miscellaneous income was lower at Rs.451.12 crores compared to Rs.723.79 crores last year.

As a result, the operating revenue of the Bank increased by 16.70% to Rs.22,589.18 crores from Rs.19,356.86 crores last year. The core income streams (NII, fee and miscellaneous income) now constitute 94.15% of the operating revenue, reflecting the stability and sustainability of the Bank''s earnings. The Bank continued to focus on reducing transaction costs besides ensuring smoothness in operations and increasing productivity. The operating expenses increased by 16.49% to Rs.9,203.74 crores from Rs.7,900.77 crores last year. The increase in operating expenses was largely due to the growth of the Bank''s network and other infrastructure required for supporting the existing and new businesses. The Cost to Income ratio of the Bank was 40.74% compared to 40.82% last year.

During the year, the operating profit of the Bank increased by 16.84% to Rs.13,385.44 crores from Rs.11,456.09 crores last year. During this period, the Bank created total provisions (excluding provisions for tax) of Rs.2,328.61 crores compared to Rs.2,107.46 crores last year. The Bank provided Rs.1,788.61 crores towards non-performing assets compared to Rs.1,295.98 crores last year and Rs.423.88 crores towards provision for standard assets including unhedged foreign currency exposure compared to Rs.290.23 crores last year. During the year, there was a write-back of provisions against restructured assets of Rs.81.88 crores compared to a charge of Rs.194.76 crores last year. During the year under review, the Bank has also created a contingent provision of Rs.220 crores against advances and other exposures as a prudent measure and as on 31st March 2015, the Bank had outstanding contingent provision of Rs.1,000 crores. During 2014-15, the Bank restructured loans of Rs.2,721.86 crores and net restructured assets ratio (net restructured assets as percentage of net customer assets) was 2.71%. The Bank continued to maintain a healthy asset-quality with a ratio of Gross NPAs to gross customer assets at 1.34%, and Net NPA ratio (Net NPAs as percentage of net customer assets) at 0.44%. With higher levels of provisions built over and above regulatory norms during the year, the Bank''s provision coverage stood at 77.73% after considering prudential write-offs.

The healthy growth in business and earnings has resulted in an all- round improvement in various financial parameters and ratios during the year. Basic Earnings Per Share (EPS) was ''31.18 compared to ''26.51 last year, while the Diluted Earnings Per Share was Rs.30.85 compared to Rs.26.45 last year. Return on Equity (RoE) was 18.57% compared to 18.23% last year, while Book Value Per Share was Rs.188.47 compared to Rs.162.69 last year. Return on Assets (RoA) was 1.83% compared to 1.78% last year. The Net Interest Margin (NIM) for the year was 3.92% compared to 3.81 % last year. Employee productivity has also improved with Profit per Employee increasing to Rs.17.07 lacs from Rs.15.42 lacs last year and Business per Employee increasing to Rs.13.71 crores from Rs.12.30 crores last year.

The Bank displayed healthy growth in several key Balance Sheet parameters for the year ended 31st March 2015. The total assets increased by 20.53% to Rs.461,932 crores from Rs.383,245 crores on 31st March 2014. The total deposits of the Bank increased by 14.77% to Rs.322,442 crores against Rs.280,945 crores last year. Savings Bank deposits increased by 13.52% to Rs.88,292 crores, while Current Account deposits increased by 15.24% to Rs.56,108 crores. As on 31st March 2015, low-cost CASA deposits increased by 14.18% to Rs.144,400 crores from Rs.126,462 crores last year, and constituted 44.78% of total deposits as compared to 45.01% last year. On a daily average basis, Savings Bank deposits increased by 16.82% to Rs.72,694 crores, while Current Account deposits increased by 10.72% to Rs.34,634 crores. The percentage share of CASA in total deposits, on a daily average basis, was at 39.53% compared to 38.89% last year. The Bank''s endeavour over the last few years has been to diversify its term deposit mix in favour of retail deposits. As on 31st March 2015, the retail term deposits grew 26.53% and stood at Rs.106,581 crores, constituting 59.86% of the total term deposits compared to 54.53% last year. As on 31st March 2015, domestic retail term deposits grew 27.75% and stood at Rs.106,049 crores, constituting 61.27% of the total domestic term deposits compared to 58.97% last year. As on 31st March 2015, CASA and retail term deposits constituted 77.84% of total deposits. The domestic CASA and retail term deposits constituted 78.87% of total domestic deposits. In accordance with RBI''s guidelines on issuance of long term bonds for financing of infrastructure and affordable housing, the Bank successfully raised Rs.5,705 crores of long term Infrastructure bonds during the year.

The slowdown in economic activity has been much more prolonged than envisaged earlier and is reflected in the non-food credit growth of 13.2% for 2014-15. Total advances of the Bank as on 31st March 2015 increased by 22.17% to Rs.281,083 crores from Rs.230,067 crores as on 31st March 2014, due to a balanced growth across all segments. Corporate advances comprised 44.89% of total loans and increased by 23.42% to Rs.126,184 crores, Retail loans comprised 39.82% of total loans and increased by 27.15% to Rs.111,932 crores, SME loans (excluding the non-retail agricultural loans) increased by 14.51% to Rs.40,651 crores, while total SME advances (including non-retail agricultural loans) grew by 7.96% to Rs.42,967 crores and constituted 15.29% of total loans. During the year, the Bank re-organised the agricultural lending business and merged the retail portion of agricultural advances with the existing portfolio of retail loans, while non-retail agricultural loans have been merged with the SME segment. With the alignment of retail agricultural lending with retail lending, the Bank intends to serve rural customers for all their financial needs - both as agriculturists and as customers. This strategy also allows the Bank to fully leverage its distribution network. The retail loans portfolio continues to be focused on secured products, predominantly mortgages. However, as indicated in the earlier years, the Bank continued its strategic intent to further diversify its retail loans portfolio during the year. Secured loans accounted for 87% of the total retail loans. The total investments of the Bank increased by 16.55% to Rs.132,343 crores, of which investments in Government and approved securities, held mainly for SLR requirement, increased by 18.15% to Rs.82,229 crores. Other investments, including corporate debt securities, increased by 14.03% to Rs.50,114 crores.

The Bank continued to expand its distribution network, which remains an integral part of the Bank''s strategy for tapping low-cost CASA deposits , lending to retail, SME segments and the distribution of third- party products. During the year under review, the Bank added 187 branches, taking the total number of branches and extension counters (ECs) to 2,589, of which 1,324 branches/ECs are in semi-urban and rural areas and 1,265 branches in metropolitan and urban areas. As on 31st March 2015, the Bank has 435 branches in rural unbanked areas. In addition, the Bank has a network of 12,355 ATMs. The overseas operations of the Bank are spread over its seven international offices with branches at Singapore, Hong Kong, DIFC (Dubai International Financial Centre), Colombo and Shanghai and representative offices at Dubai and Abu Dhabi. The international operations of the Bank have generally catered to the needs of Indian corporates who have expanded their businesses overseas and have focused on corporate lending, trade finance, syndication, investment banking and liability businesses. As on 31st March 2015, the total assets of the Bank''s overseas branches stood at Rs.49,112 crores, constituting 10.63% of the Bank''s total assets.

CAPITAL & RESERVES

The Bank is well capitalised with an overall Capital Adequacy Ratio (CAR) of 15.09% as on 31st March 2015, computed under Basel III norms, which is well above the benchmark requirement of 9% stipulated by the Reserve Bank of India (RBI). Of this, the Common Equity Tier I CAR was 12.07% (minimum regulatory requirement of 5.50%) against 12.62% last year and Tier I CAR was 12.07% (minimum regulatory requirement of 7.00%) against 12.62% last year. The Tier II CAR was at 3.02% against 3.45% last year. During the year, the Bank raised capital of Rs.850 crores by way of subordinated bonds (unsecured redeemable non-convertible subordinated debentures) qualifying as Tier II capital. The raising of this non-equity capital has helped the Bank continue its growth strategy and has strengthened its overall capital adequacy ratio

During the year, a total of 1,708,232 equity shares of face value of Rs.10 each (before sub-division of equity shares) and 12,758,274 equity shares of Rs.2 each were allotted by the Bank to its eligible directors/employees and that of its subsidiary companies pursuant to exercise of options under its Employee Stock Option Schemes. The paidup equity share capital of the Bank rose to Rs.474.10 crores, as compared to Rs.469.84 crores last year.

The shareholding pattern of the Bank as on 31st March 2015 was as under:

Sr. Name of Shareholders % of Paid-up Capital No.

i. Administrator of the Specified Undertaking 11.59 of the Unit Trust of India (SUUTI)

ii. Life Insurance Corporation of India (LIC) 12.61 & its group entities(1)

iii. General Insurance Corporation and four 3.85 PSU insurance companies

iv. Overseas investors (including FIIs/ OCBs/ 46.90 NRIs)

v. Foreign Direct Investment (GDR issue) 3.72

vi. Other Indian financial institutions/mutual 6.62 funds/banks

vii. Others 14.71

Total 100.00

(1) Includes 296,075,087 equity shares of Rs.2/- each, representing 12.49% of the total issued and paid-up equity share capital of the Bank, held by LIC.

The Bank''s shares are listed on The National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange (SSE). The listing fees relating to the Stock Exchanges for the current year have been paid.

Sub-Division of the Bank''s Equity Shares

The shareholders at the last Annual General Meeting of the Bank held on 27th June 2014 had approved the sub-division of one equity share of the Bank having a face value of Rs.10 each into five equity shares of the face value of Rs.2 each. The sub-division of equity shares came into effect from 30th July 2014, being the record date fixed for the same.

DIVIDEND

The Bank''s Diluted Earnings Per Share (EPS) for 2014-15 has risen to Rs.30.85 from Rs.26.45 of equity share of Rs.2 each (adjusted for sub-division) for the last year. In view of the overall performance of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs.4.60 per equity share of Rs.2 each for the year ended 31st March 2015, as compared to Rs.4.00 per equity share of Rs.2 each (adjusted for sub-division) declared last year. This dividend shall be subject to tax on dividend to be paid by the Bank. This increase reflects our confidence in the Bank''s ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board of Directors have taken place. Shri R. N. Bhattacharyya, nominee of Specified Undertaking of the Unit Trust of India (SUUTI), resigned as Director of the Bank with effect from 28th June 2014. Shri Somnath Sengupta, Executive Director of the Bank had opted for early retirement and accordingly retired as such, with effect from 1st September 2014. Shri Sanjeev K. Gupta, President & Chief Financial Officer was inducted on the Board and took charge as the Executive Director (Corporate Centre) & CFO of the Bank, with effect from 4th September 2014. Shri S. B. Mathur, attained the upper age limit of 70 years as prescribed under RBI guidelines and accordingly resigned as Director of the Bank, with effect from 30th September 2014. Shri S. Vishvanathan was appointed as an Additional Independent Director of the Bank, with effect from 11th February 2015. The Board places on record its appreciation for the valuable services rendered by Shri R. N. Bhattacharyya, Shri Somnath Sengupta and Shri S. B. Mathur, during their tenure as Director of the Bank.

During the financial year 2014-15, the approval of shareholders, by way of Postal Ballot was taken on 10th March 2015 for appointment of the existing Independent Directors of the Bank.

The said Independent Directors have given their declaration stating that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement. The appointment of the Independent Directors have been done in accordance with the relevant provisions of the Companies Act, 2013 and Rules made thereunder. The details of the terms and conditions of their appointment have been hosted on the website of the Bank in compliance with revised Clause 49 of the Listing Agreement.

In terms of Section 152 of the Companies Act, 2013, Smt. Usha Sangwan shall retire at the ensuing AGM and being eligible for re-appointment, offers herself for re-appointment.

Apart from the above, no other Director was appointed or has resigned during the financial year 2014-15.

Key Managerial Personnel

Smt. Shikha Sharma, MD & CEO, Shri V. Srinivasan, Executive Director & Head (Corporate Banking), Shri Sanjeev K. Gupta, Executive Director (Corporate Centre) & Chief Financial Officer and Shri Sanjeev Kapoor, Company Secretary of the Bank are deemed to be Key Mangerial Personnel of the Bank as per the provisions of the Companies Act, 2013 and Rules made thereunder and that they were already in office before the commencement of the Companies Act, 2013.

Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, seven Board Meetings were convened and held, the details of which are given in the Report on Corporate Governance, which is forming a part of this report. The intervening gap between the said Board Meetings was within the period prescribed under the Companies Act, 2013 and revised Clause 49 of the Listing Agreement.

Selection and Appointment of Directors

The charter of Nomination and Remuneration Committee of the Board empowers it to review the structure, size, composition, diversity of the Board, evaluation of existing skills, defining gaps and making necessary recommendations to the Board. The Board of the Bank is constituted in accordance with the provision of Section 10A of the Banking Regulation Act, 1949, Companies Act, 2013 and Rules made thereunder and revised Clause 49 of the Listing Agreement. The Bank has adhered to the process and methodology as prescribed by the Reserve Bank of India in respect of ''Fit & Proper'' criteria as applicable to Private Sector Banks. The same has been followed at the time of appointment and re-appointment of Directors of the Bank.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its performance, of the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out was explained in the Report on Corporate Governance, which is forming a part of this report.

Audit Committee

The composition and the functions of the Audit Committee of the Board of Directors of the Bank is disclosed in the Report on Corporate Governance, which is forming a part of this report.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committee of the Board of Directors of the Bank formulated and adopted a policy for the selection and appointment of its MD & CEO, Executive Directors, Senior Management and their remuneration. The details of the Remuneration Policy have been stated in the Report on Corporate Governance, which is forming a part of this report.

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The details of the Whistle Blower Policy and Vigil Mechanism have been explained in the Report on Corporate Governance, which is forming a part of this report and hosted on the website of the Bank.

SUBSIDIARIES

As on 31st March 2015, the Bank has eight unlisted subsidiaries: Axis Asset Management Company Ltd., Axis Bank UK Ltd., Axis Capital Ltd., Axis Finance Ltd., Axis Mutual Fund Trustee Ltd., Axis Private Equity Ltd., Axis Securities Ltd. and Axis Trustee Services Ltd.

i) Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.

ii) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.

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

iv) Axis Finance Ltd. is an NBFC and carries on the activities of loan against shares, margin funding, IPO financing, etc.

v) Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual fund business.

vi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses.

vii) Axis Securities Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services.

viii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitisation trusts.

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, the Bank has prepared its consolidated financial statement including all of its subsidiaries, which is forming part of this report. The financial position and performance of its subsidiaries are given in the statement containing salient features of the financial statements of the said subsidiaries, which forms part of the consolidated financial statements.

In accordance with third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of the Bank, containing therein its standalone and the consolidated financial statements has been hosted on its website www.axisbank.com. Further, as per fourth proviso to the said section, the audited annual accounts of each of the said subsidiary companies of the Bank have also been hosted on the Bank''s website www.axisbank.com. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Bank''s Registered Office. Further, please note that the said documents will be available for examination by the shareholders of the Bank at its Registered Office during business hours. The said documents have been hosted on the website of the concerned subsidiary companies of the Bank, in compliance with the said section.

During the year, the Bank has divested its entire stake in its Joint Venture, Bussan Auto Finance India Private Ltd.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of the business of the Bank. Accordingly, Form AOC-2 is not applicable to the Bank. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval. Prior omnibus approval of the Audit Committee of the Board of Directors is obtained for the transactions, which are of foreseen and repetitive nature. A statement giving details of all related party transactions, entered pursuant to the omnibus approval so granted, is placed before the Audit Committee of the Board of Directors for their review on a quarterly basis. The Bank has developed a Standard Operating Procedure for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is hosted on the Bank''s website. During the year under reference, the Bank has not entered into any transaction with any related party, which may be deemed to be material, in terms of the proviso to revised Clause 49 VII C of the Listing Agreement.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme. The objective of the Scheme is to enhance employee motivation, enable employees to participate, whether 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 as an active stakeholder to usher in an ''owner-manager'' culture. Under the Scheme 240,087,000 (adjusted for sub-division) options can be granted to the eligible Directors/employees of the Bank and its subsidiaries including its Key Managerial Personnel. The Employee Stock Option Scheme has been formulated in accordance with 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. The eligibility and number of options to be granted to eligible Directors/employees is determined on the basis of their work performance and is approved by the Board of Directors.

During the period February 2001 to July 2013, the Bank''s shareholders approved plans for the issuance of stock options to employees on six occasions. Under the first two plans and upto the grants made on 29th April 2004, the option conversion price was set at the average daily high-low price of the Bank''s equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which had the maximum trading volume of the Bank''s equity share during that period. Under the third plan and subsequent plans and with effect from the grants made by the Bank on 10th June 2005 and thereafter, the pricing formula has been changed to the latest available closing price of the equity shares of the Bank prevailing on the NSE (as the NSE recorded more trading volume than BSE), on the day prior to the grant date. Along with approving the sub-division of the Bank''s equity shares, the shareholders at the AGM held on 27th June 2014 also approved the consequent adjustments to the stock options granted to its eligible Directors/employees under its various schemes such that all stock options available for grant (including lapsed and forfeited options available for reissue) and those already granted but not exercised as on record date fixed for the purpose of sub-division were proportionately converted into options for shares of face value of Rs.2/- each and the grant price of all the outstanding stock options (vested, unvested and unexercised) on the said record date were proportionately adjusted by dividing the existing grant price by 5. The record date for this purpose was 30th July 2014.

All the numbers given herein and in the Annexure I to this report pertaining to stock options are post sub-division of shares as stated above.

The Nomination and Remuneration Committee of the Board of Directors and erstwhile HR and Remuneration Committee of the Board of Directors granted options under these plans on fourteen occasions aggregating to 231,975,450 options. The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the respective grant, subject to standard vesting conditions and must be exercised within three/five years of the date of respective vesting, as the case may be. As of 31st March 2015, 166,703,149 options had been exercised and 41,829,791 options were still in force.

Other statutory disclosures as required under the SEBI (Employee Stock Options & Employee Share Purchase Scheme) Guidelines, 1999 has been given in the Annexure I to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of Corporate Governance and it aspires to benchmark itself with international best practices in this regard. The Corporate Governance practices followed by the Bank are enclosed as an Annexure to this report. The Corporate Governance framework of the Bank incorporates all the recommendations as set out in revised Clause 49 of the Listing Agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors 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 year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. That such accounting policies as mentioned in Note 17 of the Notes to the Financial Statements have been selected and applied consistently and judgement 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 31st March 2015 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.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is given in Annexure II to this report.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 134(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy and technological absorption do not apply to the Bank. The Bank is however, constantly pursuing its goal of technological up-gradation in a cost- effective manner for delivering quality customer service.

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Bank forms part of Annexure III to this Report. The Bank had 139 employees who were employed throughout the year and were in receipt of remuneration more than Rs.60 lakhs per annum and 23 employees were employed for part of the year and were in receipt of remuneration of more than Rs.5 lakh 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 employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at its Registered Office during business hours on working days of the Bank up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, he may write to the Company Secretary of the Bank at its Registered Office. The financial statements, reports etc. of the Bank have been hosted on the website of the Bank, www.axisbank.com.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Management''s Discussion and Analysis Report for the year under review, as stipulated under revised Clause 49 of the Listing Agreement with the Stock Exchanges is given in Annexure IV to this report.

BUSINESS RESPONSIBILITY REPORT

The Securities and Exchange Board of India (SEBI) through its Circular CIR/CFD/DIL/8/2012 dated 13th August 2012 has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for Top 100 listed entities based on market capitalisation at BSE and NSE as on 31st March 2012. The Bank''s Business Responsibility Report has been hosted on the Bank''s website, www.axisbank.com. Any shareholder interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of the Bank.

RISK MANAGEMENT POLICY

Pursuant to revised Clause 49 of the Listing Agreement, the Bank constituted a Risk Management Committee of the Board of Directors of the Bank. The details of the said Committee and its terms of reference are set out in the Corporate Governance Report, which is forming a 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 said risk management framework, it has delegated its powers relating to monitoring and reviewing of risk 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 annexed to this report.

CORPORATE SOCIAL RESPONSIBILITY

The Bank has constituted the Corporate Social Responsibility Committee (CSR) of the Board of Directors in accordance with the provisions of Section 135 of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility) Rules, 2014. The brief outline of the CSR Policy, including overview of the program proposed to be undertaken, the composition of the CSR Committee, average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of amount spent on CSR activities during the year have been disclosed in Annexure V to this Report, as mandated under the said Rules.

AUDITORS

Statutory Auditors

M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Bank (Membership No.301003E) will retire at the conclusion of the Twenty First Annual General Meeting of the Bank and are eligible for re-appointment, subject to the approval of Reserve Bank of India and ratification by the shareholders of the Bank. As recommended by the Audit Committee of the Board of Directors, the Board of Directors has proposed the ratification of re-appointment of M/s S. R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the Bank for the financial year 2015-16 by the shareholders of the Bank at the ensuing Annual General Meeting. The shareholders are requested to ratify their re-appointment and the remuneration as decided by the Audit Committee of the Board of Directors.

As required under revised Clause 41 I (h) of the Listing Agreement, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank has appointed M/s Mehta & Mehta, Company Secretaries in Practice (Membership No. P1996MH007500) to conduct Secretarial Audit of the Bank. The Secretarial Audit Report is given in Annexure VI to this report.

There are no qualifications, reservations or adverse remarks made by M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Bank, in their Auditors'' report or by M/s Mehta & Mehta, Company Secretaries in Practice, Secretarial Auditors of the Bank in their Secretarial Audit Report.

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 2014-15, no significant or material orders were passed by Regulators, Courts or Tribunals against the Bank, which could impact its going concern status and 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 Banks'' Fraud Risk Management Policy) and reviewed the findings in respect of investigations into frauds which were material in nature and the actions taken by the Bank in this regard.

CEO & CFO CERTIFICATION

Certificate issued by Smt. Shikha Sharma, Managing Director & CEO and Shri Sanjeev K. Gupta, Executive Director (Corporate Centre) and CFO of the Bank, in terms of revised Clause 49 (IX) of the Listing Agreement, for the year under review was placed before the Board of Directors at its meeting held on 29th April 2015.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiative, which has led to the Bank making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Sanjiv Misra Date : 29th April 2015 Chairman

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Mar 31, 2014

The Board of Directors is pleased to present the Twentieth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the report on business and operations of the Bank for the fnancial year ended 31st March 2014.

FINANCIAL PERFORMANCE

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

(Rs. in crores)

PARTICULARS 2013-14 2012-13 GROWTH

Deposits 280,944.56 252,613.59 11.22% Out of which

- Savings Bank Deposits 77,775.94 63,777.73 21.95%

- Current Account Deposits 48,686.40 48,322.10 0.75%

Advances 230,066.76 196,965.96 16.81%

Out of which

- Retail Advances 74,491.24 53,959.79 38.05%

- Non-retail Advances 155,575.52 143,006.17 8.79%

Total Assets/Liabilities 383,244.89 340,560.66 12.53%

Net Interest Income 11,951.64 9,666.26 23.64%

Other Income 7,405.22 6,551.11 13.04%

Out of which

- Trading Proft (1) 695.99 754.60 (7.77%)

- Fee and other income 6,709.23 5,796.51 15.75%

Operating Expenses (excluding depreciation) 7,536.84 6,562.51 14.85%

Proft before Depreciation, Provisions and Tax 11,820.02 9,654.86 22.43%

Depreciation 363.93 351.73 3.47%

Provision for Tax 3,130.96 2,373.26 31.93%

Other Provisions and Write offs 2,107.46 1,750.44 20.40%

Net Proft 6,217.67 5,179.43 20.05%

Appropriations:

Transfer to Statutory Reserve 1,554.42 1,294.86 20.05%

Transfer to Investment Reserve 50.03 53.46 (6.42%)

Transfer to Capital Reserve 38.87 141.46 (72.52%)

Transfer to Reserve Fund 1.05 2.61 (59.77%)

Proposed Dividend 1,101.12 987.24 11.54%

Surplus carried over to Balance Sheet 3,472.18 2,699.80 28.61%

(1) Excluding Merchant Exchange Proft

KEY PERFORMANCE INDICATORS 2013-14 2012-13

Interest Income as a percentage of working funds* 8.78% 8.90%

Non-interest Income as a percentage of working funds* 2.12% 2.15%

Net Interest Margin 3.81% 3.53%

Return on Average Net Worth 18.23% 20.51%

Operating Proft as a percentage of working funds* 3.28% 3.05%

Return on Average Assets 1.78% 1.70%

Proft per Employee** Rs.15.42 lacs Rs.14.58 lacs

Business (Deposits less inter-bank deposits Advances) per employee** Rs.12.30 crores Rs.12.15 crores

Net non-performing assets as a percentage of net customer assets*** 0.40% 0.32%

* 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 fgures have been re-grouped wherever necessary.

The Bank continued to deliver a steady growth in both business and earnings, in the midst of a moderation in economic growth and intensifying competitive fnancial landscape. The Bank reported a net proft of Rs.6,217.67 crores for the year ended 31st March 2014, registering a growth of 20.05% over the net proft of Rs.5,179.43 crores last year. The healthy growth in earnings was a result of robust business growth across banking segments indicative of a clear strategic focus. During the year, the Basic Earnings Per Share (EPS) was Rs.132.56 and a Return on Equity (ROE) was 18.23%.

During the year, the Bank''s total income increased by 12.78% to reach Rs.38,046.38 crores as compared to Rs.33,733.68 crores last year. Operating revenue over the same period increased by 19.36% to Rs.19,356.86 crores while operating proft increased by 23.14% to Rs.11,456.09 crores. The growth in earnings was mainly due to a strong growth in net interest income (NII). During the year, NII increased by 23.64% to Rs.11,951.64 crores from Rs.9,666.26 crores last year and constituting 61.74% of the operating revenue. Fee, trading and other income increased by 13.04% to Rs.7,405.22 crores from Rs.6,551.11 crores last year.

The operating expenses grew at a slower pace by 14.27% to Rs.7,900.77 crores from Rs.6,914.24 crores last year.

During the year under review, the growth in NII was attributable to an expansion in the balance sheet size, healthy growth in low-cost Current Account and Savings Bank (CASA) deposits and continued focus on increasing retail term deposits. During 2013-14, the total earning assets on a daily average basis increased by 14.63% to Rs.313,775 crores, compared to Rs.273,738 crores last year. The cost of funds improved over the year to 6.24% from 6.55% last year due to a combination of various factors. The healthy growth in low-cost CASA deposits, which on a daily average basis, increased to Rs.93,506 crores from Rs.80,941 crores, comprised 38.89% of total deposits compared to 36.28% in the previous year. Secondly, the increase in the share of retail term deposits at 54.53% of total term deposits, compared to 43.67% last year, enabled the Bank to contain its cost of funds apart from providing a stable funding base in the midst of signifcant volatility in interest rates witnessed mainly during the second quarter of the year. The raising of equity capital in the fourth quarter of the last fnancial year also contributed to the lowering of the cost of funds. During the year, the cost of deposits decreased to 6.43% from 6.73% last year primarily due to decrease in cost of term deposits by 27 basis points (from 9.10% to 8.83%). During the same period, the yield on earning assets decreased by 16 basis points to 9.59% from 9.75% last year.

Other income comprising fees, trading proft and miscellaneous income increased by 13.04% to Rs.7,405.22 crores in 2013-14 from Rs.6,551.11 crores last year and constituted 38.26% of the operating revenue of the Bank. Fee income increased by 8.41% to Rs.5,985.45 crores from Rs.5,520.93 crores last year and remains very well diversifed with 32% from retail banking, 30% from corporate banking and balance contributed by treasury, business banking, SME and agriculture segments. The main sources of fee income are client-based merchant foreign exchange trade, service charges on liability accounts, transaction banking (including cash management services), syndication and placement fees, processing fees from loans and commission on non-funded products (such as letters of credit and bank guarantees) and fee income from the distribution of third-party investment products. Fee income though has moderated slightly but continues to remain a signifcant part of the earnings and constituted 30.92% of the operating revenue of the Bank. A key factor for the muted growth in fee income has been slowdown in corporate banking fees which has been impacted by the economic slowdown resulting in lower corporate credit demand and lack of fresh new investments and projects being undertaken. During the year, proprietary trading profts decreased by 7.77% to Rs.695.99 crores from Rs.754.60 crores last year. Miscellaneous income increased to Rs.723.79 crores from Rs.275.58 crores last year.

During the year, the operating revenue of the Bank increased by 19.36% to Rs.19,356.86 crores from Rs.16,217.37 crores last year. The core income streams (NII, fee and miscellaneous income) now constitute 96.40% of the operating revenue, refecting the sustainability of the Bank''s earnings. The Bank continued to focus on business process re-engineering to reduce transaction costs besides ensuring smoothness in operations and increasing productivity. As a result, the operating expenses increased at a slower pace by 14.27% to Rs.7,900.77 crores from Rs.6,914.24 crores last year. The increase in operating expenses was largely due to the growth of the Bank''s network and other infrastructure required for supporting the existing and new businesses. The Cost to Income ratio of the Bank was 40.82% compared to 42.63% last year.

The operating proft of the Bank increased 23.14% to Rs.11,456.09 crores during the year, compared to Rs.9,303.13 crores last year. During this period, the Bank created total provisions (excluding provisions for tax) of Rs.2,107.46 crores compared to Rs.1,750.44 crores last year. The Bank provided Rs.1,295.98 crores towards non-performing assets compared to Rs.1,179.22 crores last year and Rs.290.23 crores towards provision for standard assets compared to Rs.196.68 crores last year. The Bank also provided Rs.194.76 crores compared to Rs.103.95 crores last year against restructured assets. The Bank has also created a contingent provision of Rs.405.00 crores against advances and other exposures as a prudent measure. As on 31st March 2014, the Bank had outstanding contingent provision of Rs.780.00 crores. During 2013-14, the Bank restructured loans of Rs.3,456.95 crores. The ratio of Gross NPAs to gross customer assets was 1.22% compared to 1.06% last year and Net NPA ratio (Net NPAs as percentage of net customer assets) was 0.40% compared to 0.32% last year. With higher levels of provisions built over and above regulatory norms during the year, the Bank''s provision coverage stood at 78.10% after considering prudential write- offs.

The various fnancial parameters and ratios continue to remain healthy. Basic Earnings Per Share (EPS) was Rs.132.56 compared to Rs.119.67 last year, while the

Diluted Earnings Per Share was Rs.132.23 compared to Rs.118.85 last year. Return on Equity (RoE) was 18.23% compared to 20.51% last year and Book Value Per Share increased from Rs.707.50 to Rs.813.47. Return on Assets (RoA) was 1.78% compared to 1.70% last year. The Net Interest Margin (NIM) for the year was 3.81% compared to 3.53% last year.

The Bank has continued to focus on the quality of growth and displayed healthy growth in key balance sheet parameters for the year ended 31st March 2014. The total assets increased by 12.53% to Rs.383,245 crores on 31st March 2014 from Rs.340,561 crores on 31st March 2013. The total deposits of the Bank increased by 11.22% to Rs.280,945 crores against Rs.252,614 crores last year. Savings Bank deposits increased by 21.95% to Rs.77,776 crores, while Current Account deposits increased by 0.75% to Rs.48,686 crores. Low-cost CASA deposits increased by 12.81% to Rs.126,462 crores as on 31st March 2014 compared to Rs.112,100 crores last year. As on 31st March 2014, CASA deposits constituted 45.01% of total deposits as compared to 44.38% last year. On a daily average basis, Savings Bank deposits increased by 19.11% to Rs.62,225 crores, while Current Account deposits increased by 9.00% to Rs.31,281 crores. The percentage share of CASA in total deposits, on a daily average basis, improved to 38.89% from 36.28% last year. The Bank''s endeavour over the last few years has been to diversify its term deposit mix in favour of retail deposits. As on 31st March 2014, the retail term deposits grew 37.29% and stood at Rs.84,233 crores, constituting 54.53% of the total term deposits compared to 43.67% last year. As on 31st March 2014, domestic retail term deposits grew 36.46% YoY and stood at Rs.83,010 crores, constituting 58.97% of the total domestic term deposits compared to 47.93% last year. However, excluding the FCNR(B) deposits raised to avail the concessional swap facility provided by RBI, domestic retail term deposits grew 20.87%, constituting 56.01% of domestic term deposits. During the year, the Bank mobilised foreign currency funds amounting to ~ USD 1.8 billion, including funds raised under the FCNR (B) deposit scheme, to avail the concessional swap facility provided by RBI. As on 31st March 2014, CASA and retail Term Deposits constituted 75% of total deposits. The domestic CASA and Retail Term Deposits constituted 78.36% of total domestic deposits.

The slowdown in economic growth was refected in the slower loan growth of corporate loans. Total advances of the Bank as on 31st March 2014, increased by 16.81% to Rs.230,067 crores from Rs.196,966 crores as on 31st March 2013 primarily driven by retail and SME segments. Corporate advances (comprising large, infrastructure and mid-corporate accounts) increased by 4.07% to Rs.102,238 crores, SME loans increased by 18.65% to Rs.35,502 crores, retail loans increased by 38.05% to Rs.74,491 crores and agricultural loans (including micro fnance) increased by 20.14% to Rs.17,836 crores. Excluding the effect of retail lending undertaken against FCNR(B) deposits raised under RBI''s special window, the growth in retail loans would have been 31.18% and comprised 31.27% of total loans compared to 27.40% last year. The retail loan portfolio continues to be focused on secured products, predominantly mortgages. However, the strategic intent as indicated in the previous year to further diversify into multi-product portfolio continued during the current fnancial year. Secured loans accounted for 87% of the total retail loans. The total investments of the Bank decreased by 0.17% to Rs.113,548 crores and investments in Government and approved securities, held mainly for SLR requirement, decreased by 4.02% to Rs.69,600 crores. Other investments, including corporate debt securities, increased by 6.62% to Rs.43,948 crores. As on 31st March 2014, the total assets of the Bank''s overseas branches stood at Rs.43,130 crores, constituting 11.25% of the Bank''s total assets.

As one of the key drivers of business growth and customer-acquisition, the Bank continued to enlarge its distribution network. Widening geographical reach is seen to be critical for tapping growth opportunities in newer markets, especially low- cost CASA deposits, lending to retail, agriculture and SME segments and the distribution of third-party products. During the year under review, the Bank added 455 new branches, taking the total number of branches and extension counters (ECs) to 2,402, of which 1,254 branches/ECs are in semi-urban and rural areas and 1,148 branches in metropolitan and urban areas. As on 31st March 2014, the Bank has 438 branches in rural unbanked areas. The Bank also increased its ATM network to 12,922, as compared to 11,245 ATMs last year. The overseas operations of the Bank are spread over its seven international offces with branches at Singapore, Hong Kong, DIFC (Dubai International Financial Centre), Colombo and Shanghai and representative offces at Dubai and Abu Dhabi. During the year, the Bank has upgraded its representative offce in Shanghai, China to a branch to become the frst Indian private sector bank to set up a branch in China. During the year, the Bank''s overseas subsidiary namely Axis Bank UK Ltd. commenced banking operations. The international operations of the Bank have generally catered to the needs of Indian corporates who have expanded their businesses overseas and have focused on corporate lending, trade fnance, syndication, investment banking and liability businesses.

CAPITAL & RESERVES

In terms of RBI guidelines, banks are required to compute and disclose capital adequacy ratios under Basel III capital regulations from the quarter ended 30th June 2013. The Bank is well capitalised with an overall Capital Adequacy Ratio (CAR) computed under Basel III norms as on 31st March 2014 of 16.07%, well above the benchmark requirement of 9% stipulated by Reserve Bank of India (RBI). Of this, the Common Equity Tier I CAR was 12.62% (against minimum regulatory requirement of 5%) and Tier I CAR was 12.62% (against minimum regulatory requirement of 6.5%). The capital adequacy ratio of the Bank computed under Basel II norms as on 31st March 2013 was 17.00% with Tier I CAR of 12.23% and Tier II CAR of 4.77%.

During the year, 1,890,085 equity shares were allotted to employees of the Bank/subsidiary companies pursuant to the exercising of options under the Employee Stock Option Scheme. The paid-up capital of the Bank has risen to Rs.469.84 crores, as compared to Rs.467.95 crores last year. The shareholding pattern of the Bank as of 31st March 2014 was as under:

Sr. No. Name of Shareholders % of Paid-up Capital

i. Administrator of the Specifed Undertaking of the Unit Trust of India (SUUTI) 11.70

ii. Life Insurance Corporation of India (LIC) & its group entities (1) 13.72

iii. General Insurance Corporation and four PSU insurance companies 4.22

iv. Overseas investors (including FIIs/OCBs/NRIs) 49.13

v. Foreign Direct Investment (GDR issue) 3.26

vi. Other Indian fnancial institutions/ mutual funds/banks 5.37

vii. Others 12.60

Total 100.00

(1) Includes 63,978,711 equity shares, equivalent to 13.62% of the total paid-up capital of the Bank, held by LIC.

The Bank''s shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees relating to all stock exchanges for the current year have been paid.

Sub-Division of the Bank''s Equity Shares

In order to make equity shares of the Bank affordable for small retail investors, the Board of Directors has considered and approved the sub-division of one equity share of the Bank having a face value of Rs.10 each into fve equity shares of face value of Rs.2 each. The sub-division of shares is subject to approval of the shareholders and any other statutory and regulatory approvals, as applicable.

DIVIDEND

The Bank''s Diluted Earnings Per Share (EPS) for 2013-14 has risen to Rs.132.23 from Rs.118.85 last year. In view of the overall performance of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs.20.00 per equity share, compared to Rs.18.00 per equity share declared last year. This dividend shall be subject to tax on dividend to be paid by the Bank. This increase refects our confdence in the Bank''s ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board of Directors have taken place. Shri A. K. Dasgupta, nominee of Life Insurance Corporation of India (LIC), resigned as Director with effect from 4th June 2013 consequent upon his appointment as Insurance Ombudsman at Mumbai. Smt. Usha Sangwan was nominated by LIC as its nominee Director in place of Shri A. K. Dasgupta and was, accordingly, appointed as an Additional Director of the Bank with effect from 17th October 2013. The Board places on record its appreciation for the valuable services rendered by Shri A. K. Dasgupta during his tenure as Director of the Bank.

In order to comply with the provisions of the Companies Act, 2013, Shri K. N. Prithviraj and Shri V. Srinivasan are being considered for retiring by rotation at the Twentieth Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank.

SUBSIDIARIES

As on 31st March 2014, the Bank has eight subsidiaries: Axis Capital Ltd., Axis Securities Ltd., Axis Finance Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd., Axis Mutual Fund Trustee Ltd. and Axis Bank UK Ltd.

Axis Capital Ltd. provides services relating to investment banking, equity capital markets, institutional stock broking, mergers and acquisition advisory etc. During the year, the business of marketing of credit cards and retail asset products and the business of retail broking services undertaken by Axis Capital Ltd. were demerged into Axis Securities Ltd., a wholly-owned subsidiary of Axis Capital Ltd. Subsequently, during the year, the Bank also acquired the remaining stake of Axis Capital Ltd. in Axis Securities Ltd. and consequently Axis Securities Ltd. has become a wholly-owned subsidiary of the Bank. Axis Securities Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services. Axis Finance Ltd., is an NBFC and carries on the activities of loan against shares, margin funding, IPO fnancing etc. Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses. Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitisation trusts. Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business. Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual fund business. Axis Bank UK Ltd. commenced banking operations during the year after receipt of approval from the Financial Services Authority on 19th April 2013.

In terms of the General Circular No. 2/2011 dated 8th February 2011 issued by the Ministry of Corporate Affairs, Government of India, the copies of Directors'' Reports, Auditors'' Reports and the fnancial statements of the eight subsidiaries have not been attached to the accounts of the Bank for the fnancial year ended 31st March 2014. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Registered Offce of the Bank. These documents will also be available for examination by shareholders of the Bank at its Registered Offce. The documents related to individual subsidiaries will similarly be available for examination at the respective registered offces of the companies. In line with the Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India, the consolidated fnancial results of the Bank along with its subsidiaries for the year ended 31st March 2014 are enclosed as an Annexure to this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme. The objective of the Scheme is to enhance employee motivation, enable employees to participate, whether directly or indirectly, in the long-term growth and fnancial success of the Bank, to act as a retention mechanism by enabling employee participation in the business as an active stakeholder to usher in an ''owner- manager'' culture. Under the Scheme 48,017,400 options can be granted to the employees of the Bank and its subsidiaries including Whole-time Directors. The employee stock option scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of the employee''s work performance and is approved by the Board of Directors.

Over the period February 2001 to July 2013, the Bank''s shareholders approved plans for the issuance of stock options to employees on six occasions. Under the frst two plans and upto the grant made on 29th April 2004, the option conversion price was set at the average daily high-low price of the Bank''s equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which has had the maximum trading volume of the Bank''s equity share during that period. Under the third plan and with effect from the grant made by the Bank on 10th June 2005, the pricing formula has been changed to the closing price on the day previous to the grant date. The HR and Remuneration Committee and the erstwhile Remuneration and Nomination Committee granted options under these plans on thirteen occasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006- 07, 6,729,340 during 2007-08, 2,677,355 during 2008-09, 4,413,990 during 2009-10, 2,915,200 during 2010-11, 3,268,700 during 2011-12, 2,516,000 during 2012-13 and 2,003,000 during 2013-14. The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant, subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31st March 2014, 29,080,743 options had been exercised and 10,845,556 options were in force.

Other statutory disclosures as required by the SEBI guidelines on ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of corporate governance, and it aspires to benchmark itself with international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an Annexure to this report. The Ministry of Corporate Affairs had issued Corporate Governance Voluntary Guidelines 2009. The Corporate Governance framework of the Bank incorporates majority of the recommendations contained in the above guidelines.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confrms that:

l The applicable accounting standards have been followed in the preparation of the annual accounts and proper explanations have been furnished, relating to material departures.

l Accounting policies have been selected and applied consistently and reasonably, and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Bank and of the Proft and Loss of the Bank for the fnancial year ended 31st March 2014.

- Proper and suffcient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank, and for preventing and detecting fraud and other irregularities.

l The annual accounts have been prepared on a going concern basis.

l The Bank has in place a system to ensure compliance of all laws applicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 217(1)(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules hereunder is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Offce of the Bank.

BUSINESS RESPONSIBILITY REPORT

The Securities and Exchange Board of India (SEBI) through its circular CIR/CFD/DIL/8/2012 dated 13th August 2012 has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for top 100 listed entities based on market capitalisation at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) as on 31st March 2012. The Bank''s Business Responsibility Report has been hosted on the Bank''s website, www.axisbank.com. Any shareholder interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered Offce of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, had been appointed by the shareholders at the Nineteenth Annual General Meeting as Statutory Auditors of the Bank for the year 2013-14 and will be retiring at the conclusion of the forthcoming Annual General Meeting. Deloitte Haskins & Sells have been the Statutory Auditors of the Bank since 2010-11. As per the regulations of Reserve Bank of India, the same auditors cannot be re-appointed for a period beyond 4 years. It is, accordingly, proposed to appoint M/s S. R. Batliboi & Co. LLP, Chartered Accountants, as the Bank''s new Statutory Auditors subject to the approval by the shareholders. The shareholders are requested to consider their appointment on the remuneration to be decided by the Audit Committee of the Board. The Board of Directors places on record their appreciation of the professional services rendered by Deloitte Haskins & Sells, as the Statutory Auditors of the Bank.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, fnancial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiative, which has led to the Bank making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

K. N. Prithviraj Shikha Sharma

Director Managing Director & CEO

Somnath Sengupta V. Srinivasan

Place : Mumbai Executive Director Executive Director

Date : 26th April 2014 & Head (Corporate Centre) & Head (Corporate Banking)

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Mar 31, 2013

The Board of Directors is pleased to present the Nineteenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the report on business and operations of the Bank for the financial year ended 31st March 2013.

FINANCIAL PERFORMANCE

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

(Rs. in crores)

PARTICULARS 2012-13 2011-12 GROWTH

Deposits 252,613.59 220,104.30 14.77%

Out of which

- Savings Bank Deposits 63,777.73 51,667.96 23.44%

- Current Account Deposits 48,322.10 39,754.07 21.55%

Advances 196,965.96 169,759.54 16.03%

Out of which

- Retail Advances 53,959.79 37,570.33 43.62%

- Non-retail Advances 143,006.17 132,189.21 8.18%

Total Assets/Liabilities 340,560.66 285,627.79 19.23%

Net Interest Income 9,666.26 8,017.75 20.56%

Other Income 6,551.11 5,420.22 20.86%

Out of which

- Trading Profit (1) 754.60 361.56 108.71%

- Fee and other income 5,796.51 5,058.66 14.59%

Operating Expenses (excluding depreciation) 6,562.51 5,664.86 15.85%

Profit before Depreciation, Provisions and Tax 9,654.86 7,773.11 24.21%

Depreciation 351.73 342.24 2.77%

Provision for Tax 2,373.26 2,045.63 16.02%

Other Provisions and Write offs 1,750.44 1,143.03 53.14%

Net Profit 5,179.43 4,242.21 22.09%

Appropriations:

Transfer to Statutory Reserve 1,294.86 1,060.55 22.09%

Transfer to Investment Reserve 53.46 - -

Transfer to Capital Reserve 141.46 51.90 172.56%

Transfer to Reserve Fund 2.61 - -

Proposed Dividend 987.24 770.08 28.20%

Surplus carried over to Balance Sheet 2,699.80 2,359.68 14.41%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2012-13 2011-12

Interest Income as a percentage of working funds* 8.90% 8.71%

Non-Interest Income as a percentage of working funds* 2.15% 2.15%

Net Interest Margin 3.53% 3.59%

Return on Average Net Worth 20.51% 21.22%

Operating Profit as a percentage of working funds* 3.05% 2.94%

Return on Average Assets 1.70% 1.68%

Profit per employee** Rs.14.58 lacs Rs.14.34 lacs

Business (Deposits less inter- bank deposits Advances) per employee** Rs.12.15 crores Rs.12.76 crores

Net non-performing assets as a percentage of net customer assets*** 0.32% 0.25%

- 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.

The Bank continued to grow steadily, both in business and earnings, in an increasingly competitive financial market and reported a net profit of Rs.5,179.43 crores for the year ended 31st March 2013, registering a growth of 22.09% over the net profit of Rs.4,242.21 crores last year. The strong performance in earnings resulted from the robust growth across all segments. During the year, the Bank''s total income increased by 23.05% to reach Rs.33,733.68 crores, compared to Rs.27,414.86 crores last year. Operating revenue during this period increased by 20.68% to Rs.16,217.37 crores while operating profit increased by 25.20% to Rs.9,303.13 crores. The growth in earnings may be attributed to the performance of the Bank''s core income streams: net interest income (NII), fee and other income. NII increased by 20.56% to Rs.9,666.26 crores from Rs.8,017.75 crores last year. Fee, trading and other income increased by 20.86% to Rs.6,551.11 crores from Rs.5,420.22 crores last year. The increase in earnings was partly offset by an increase in operating expenses by 15.10% to Rs.6,914.24 crores.

During the year under review, the growth in NII is attributable to an expansion in the balance sheet size and healthy low- cost Current Account and Savings Bank (CASA) deposits. During the year, the total earning assets on a daily average basis increased by 22.64% to Rs.273,738 crores, compared to Rs.223,206 crores last year. A steady growth of low-cost CASA deposits, which on a daily average basis increased to Rs.80,941 crores from Rs.70,845 crores, helped in containing the cost of funds, which had risen over the period due to the hardening of interest rates on term deposits. Overall, the daily average cost of funds in the year increased to 6.55% from 6.28% last year. During the year, the cost of deposits increased to 6.73% from 6.47% last year primarily due to an increase in cost of term deposits by 18 basis points (from 8.92% to 9.10%). During the same period, the yield on earning assets increased by 9 basis points to 9.75% from 9.66% last year.

Other income comprising fees, trading profit and miscellaneous income increased by 20.86% to Rs.6,551.11 crores in 2012-13 from Rs.5,420.22 crores last year and constituted 40.40% of the operating revenue of the Bank. Fee income constituted 34.04% of the operating revenue of the Bank and increased by 16.80% to Rs.5,520.93 crores from Rs.4,726.94 crores last year. The Bank earns fee income from a diverse set of products and businesses such as client-based merchant foreign exchange trade, transaction banking (including cash management services), syndication and placement fees, processing fees from loans and commission on non-funded products (such as letters of credit and bank guarantees), inter-change fees on ATM-sharing arrangements and fee income from the distribution of third-party personal investment products. During the year, proprietary trading profits increased by 108.71% to Rs.754.60 crores from Rs.361.56 crores last year. Miscellaneous income decreased by 16.92% to Rs.275.58 crores from Rs.331.72 crores last year mainly due to lower recoveries of loans/investments written-off in earlier years. During the year, such recoveries accounted for Rs.268.51 crores.

As a result, the operating revenue of the Bank increased by 20.68% to Rs.16,217.37 crores from Rs.13,437.97 crores last year The core income streams (NII, fee and miscellaneous income) now constitute 95.35% of the operating revenue, reflecting the sustainability of the Bank''s earnings. Operating expenses increased by 15.10% to Rs.6,914.24 crores from Rs.6,007.10 crores last year, largely as a result of the growth of the Bank''s network and other infrastructure required for supporting the existing and new businesses. The Cost to Income ratio of the Bank was 42.63% compared to 44.70% last year.

During the year, the operating profit of the Bank increased by 2 5.20% to Rs.9,303.13 crores from Rs.7,430.87 crores last year. During this period, the Bank created total provisions (excluding provisions for tax) of Rs.1,750.44 crores compared to Rs.1,143.03 crores last year. The Bank provided Rs.1,179.22 crores towards non-performing assets compared to Rs.860.43 crores last year and Rs.196.68 crores towards provision for standard assets compared to Rs.150.30 crores last year. The Bank also provided Rs.103.95 crores compared to Rs.88.86 crores last year against restructured assets. The Bank has also created a contingent provision of Rs.375 crores against advances and other exposures as a prudent measure. During 2012- 13, the Bank restructured loans of Rs.2,110.09 crores. The ratio of Gross NPAs to gross customer assets was 1.06% compared to 0.94% last year and Net NPA ratio (Net NPAs as percentage of net customer assets) was 0.32% compared to 0.25% last year With higher levels of provisions built over and above regulatory norms during the year, the Bank has maintained its provision coverage to 79.15% (after considering prudential write-offs).

The healthy growth in business and revenue has been reflected in a set of financial parameters and ratios during the year Basic Earnings Per Share (EPS) was Rs.119.67 compared to Rs.102.94 last year, while the Diluted Earnings Per Share was Rs.118.85 compared to Rs.102.20 last year. Return on Equity (RoE) was 20.51% compared to 21.22% last year and Book Value Per Share increased from Rs.551.99 to Rs.707.50. Return on Assets (RoA) is 1.70% compared to 1.68% last year. The net interest margin (NIM) for the year was 3.53% compared to 3.59% last year.

The Bank displayed healthy growth in several key balance sheet parameters for the year ended 31st March 2013. The balance sheet size increased by 19.23% to Rs.340,561 crores on 31st March 2013 from Rs.285,628 crores on 31st March 2012. As on 31st March 2013, the total deposits of the Bank stood at Rs.252,614 crores against Rs.220,104 crores last year, increasing by 14.77% over last year. Savings Bank deposits increased by 23.44% to Rs.63,778 crores, while Current Account deposits increased by 21.55% to Rs.48,322 crores. Low-cost demand deposits: Current Accounts and Savings Bank (CASA) deposits were Rs.112,100 crores as on 31st March 2013 as compared to Rs.91,422 crores last year, rising 22.62% over the year. As on 31st March 2013, CASA deposits constituted 44.38% of total deposits as compared to 41.54% last year. On a daily average basis, Savings Bank deposits increased by 20.26% to Rs.52,243 crores, while Current Account deposits increased by 4.73% to Rs.28,698 crores. The percentage share of CASA in total deposits, on a daily average basis, was 36.28% compared to 37.65% last year. In order to broaden the term deposit base, the Bank continued to focus on increasing the share of retail term deposits in total term deposits. As on 31st March 2013, the retail term deposits grew 24.37% and stood at Rs.59,531 crores, constituting 42.37% of the total term deposits compared to 37.20% last year. Total advances of the Bank were Rs.196,966 crores as on 31st March 2013, increasing by 16.03% from Rs.169,760 crores as on 31st March 2012. Of this, corporate advances (comprising large, infrastructure and mid-corporate accounts) increased 7.89% to Rs.98,239 crores and SME loans increased 25.75% to Rs.29,922 crores. Agricultural lending (including micro finance) stood at Rs.14,845 crores, decreasing 14.39% over the last year. Retail loans increased by 43.62% to Rs.53,960 crores. The percentage share of retail loans to total advances has increased to 27.40% from 22.13% last year. The retail loan portfolio continues to be focused on secured products. However, a diversification into multi- product portfolio continued during the year. Secured loans accounted for 87.14% of the total retail loans. The total investments of the Bank increased by 22.05% to Rs.1 13,737 crores and investments in government and approved securities, held mainly for SLR requirement, increased by 23.89% to Rs.72,518 crores. Other investments, including corporate debt securities, increased by 18.93% to Rs.41,219 crores. As on 31st March 2013, the total assets of the Bank''s overseas branches stood at Rs.37,152 crores, constituting 10.91% of the Bank''s total assets.

The Bank continued to enlarge its distribution network by widening its geographical reach, which is seen to be critical for tapping low-cost CASA deposits, lending to retail, agriculture and SME segments and the distribution of third- party products. During the year under review, the Bank added 325 new branches, taking the total number of branches and extension counters (ECs) to 1,947, of which 883 branches/ECs are in semi-urban and rural areas and 1,064 branches are in metropolitan and urban areas. The Bank is present in all the States and Union Territories (except Lakshadweep), covering a total of 1,263 centres. The Bank also increased its ATM network to 1 1,245, as compared to 9,924 ATMs last year. Apart from this, the Bank has an overseas presence in the form of branches at Singapore, Hong Kong, DIFC (Dubai International Financial Centre) and Colombo and representative offices at Shanghai, Dubai and Abu Dhabi.

CAPITAL & RESERVES

During the year under review, the Bank raised capital in the form of equity and debt to support future growth. It raised Tier I capital in the form of equity capital through a Qualified Institutional Placement (QIP) and a preferential allotment of equity shares to the promoters of the Bank. The Bank mobilised an aggregate of Rs.5,537.47 crores through this offering, by issuing 34,000,000 equity shares through a QIP offering and 5,837,945 shares to promoters (Life Insurance Corporation of India, General Insurance Corporation of India, New India Assurance Company Limited, National Insurance Company Limited and United India Insurance Company Limited) in order to maintain their percentage shareholding of the Bank''s promoters at the pre-QIP offering levels. The equity shares offered under the QIP offering and preferential allotment were both priced at Rs.1,390 per share.

During the year, the Bank also raised capital of Rs.2,500 crores by way of sub-ordinated bonds (unsecured redeemable non- convertible debentures) qualifying as Tier II capital. These measures have significantly strengthened the capital position of the Bank, particularly core Tier I capital, providing adequate support for future growth. The Bank is well capitalised with an overall capital adequacy ratio (CAR) of 17.00% at the end of the year, well above the benchmark requirement of 9% stipulated by Reserve Bank of India (RBI). Of this, Tier I CAR was 12.23% against 9.45% last year, while the Tier II CAR was at 4.77% against 4.21% last year. During the year, a total of 2,822,571 equity shares were allotted to employees of the Bank/subsidiary companies pursuant to exercise of options under its Employee Stock Option Scheme. The paid-up capital of the Bank rose to Rs.467.95 crores, as compared to Rs.413.20 crores last year. The shareholding pattern of the Bank as of 31st March 2013 was as under:

Sr. No. Name of Shareholders % of Paid-up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 20.78

ii. Life Insurance Corporation of India (LIC) (1) 9.26

iii. General Insurance Corporation and four PSU insurance companies 3.84

iv. Overseas investors (including FIIs/OCBs/NRIs) 41.13

v. Foreign Direct Investment (GDR issue) 8.16

vi. Other Indian financial institutions/mutual funds/banks 4.50

vii. Others 12.33

Total 100.00

(1) As per Benpos dated 31st March 2013, save and except 44,445,460 shares equivalent to 9.26% of the total paid-up capital of the Bank held by LIC, all other holdings are not considered for arriving at the Promoter''s shareholding

The Bank''s shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees relating to all stock exchanges for the current year have been paid.

DIVIDEND

The Diluted Earnings Per Share (EPS) for 2012-13 rose to Rs.118.85 from Rs.102.20 last year. In view of the overall performance of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs.18.00 per equity share, compared to Rs.16.00 per equity share declared last year. This dividend shall be subject to tax on dividend to be paid by the Bank. This increase reflects our confidence in the Bank''s ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board of Directors have taken place. The term of Dr. Adarsh Kishore as non-executive Chairman of the Bank ended on 7th March 2013. Dr. Sanjiv Misra, former Secretary, Department of Expenditure, Ministry of Finance, Government of India, former member of Finance Commission and nominee of the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) was appointed as the non-executive Chairman with effect from 8th March 2013. Reserve Bank of India vide its letter dated 6th March 2013 has granted approval for the appointment of Dr. Sanjiv Misra as the Chairman of the Bank.

Shri Somnath Sengupta and Shri V. Srinivasan who were inducted in the Board, took charge as the Executive Directors of the Bank with effect from 15th October 2012. Smt. Ireena Vittal, Independent Strategic Advisor was appointed as an Additional Independent Director of the Bank with effect from 3rd November 2012. Shri Rohit Bhagat, former Chairman, Asia Pacific, BlackRock Inc. was appointed as an Additional Independent Director of the Bank with effect from 16th January 2013. Smt. Rama Bijapurkar ceased to be a director with effect from 17th January 2013 on completion of her term of eight years pursuant to provisions of section 10A(2A)(i) of the Banking Regulation Act, 1949. The Board of Directors places on record its deep appreciation and gratitude to Dr. Adarsh Kishore for his valuable contribution as Chairman of the Bank. The Board also places on record its appreciation to Smt. Rama Bijapurkar for the valuable services rendered by her during her tenure as Director of the Bank.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Shri S. B. Mathur, Shri Prasad R. Menon and Shri R. N. Bhattacharyya retire by rotation at the Nineteenth Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank.

SUBSIDIARIES

As on 31st March 2013, the Bank has seven subsidiaries: Axis Capital Ltd. (formerly Axis Securities and Sales Ltd.), Axis Finance Private Ltd. (formerly Enam Finance Private Ltd.), Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd., Axis Mutual Fund Trustee Ltd., and Axis U.K. Ltd.

Axis Capital Ltd. was primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services. Pursuant to receipt of regulatory approvals to the Revised Scheme of Arrangement, certain businesses of Enam Securities Private Ltd. were demerged into Axis Capital Ltd., with effect from 20th October 2012. Consequently, Axis Capital Ltd. now also provides services relating to investment banking, equity capital markets, institutional stock broking, mergers and acquisition, etc. During the year, the Bank also acquired the entire share capital of Axis Finance Private Ltd., a wholly owned subsidiary of Axis Capital Ltd., and pursuant to such acquisition, Axis Finance Private Ltd. has become a direct subsidiary of the Bank. Axis Finance Private Ltd., is a NBFC and carries on the activities of loan against shares, margin funding, IPO financing etc. Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses. Axis Trustee Services Ltd. is engaged in trusteeship activities (e.g. acting as debenture trustee and as trustee to various securitisation trusts). Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business. Axis Mutual Fund Trustee Ltd. was formed to act as the trustee for the mutual fund business. Axis U.K. Ltd. had filed an application with the Financial Services Authority (FSA), UK for a banking license and to create the necessary infrastructure for banking business. Till the 31st March 2013, pending receipt of the approval, it did not commence operations. Approval has been received from the FSA on the 19th April, 2013 to commence banking operations and subsequently, the name of the Company has been changed to Axis Bank UK Ltd.

In terms of the General Circular No. 2/2011 dated 8th February 2011 issued by the Ministry of Corporate Affairs, Government of India, the copies of Directors'' Reports, Auditors'' Reports and the financial statements of the seven subsidiaries have not been attached to the accounts of the Bank for the financial year ended 31st March 2013. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Registered Office of the Bank. These documents will also be available for examination by shareholders of the Bank at its Registered Office. The documents related to individual subsidiaries will similarly be available for examination at the respective registered offices of the companies. In line with the Accounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India, the consolidated financial results of the Bank along with its subsidiaries for the year ended 31st March 2013 are enclosed as an Annexure to this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable its employees and the employees of its subsidiaries including Whole-time Directors, to participate in the future growth and financial success of the Bank. Under the Scheme 40,517,400 options can be granted to employees. The employee stock option scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of the employee''s work performance and is approved by the Board of Directors.

Over the period February 2001 to June 2010, the Bank''s shareholders approved plans for the issuance of stock options to employees on five occasions. Under the first two plans and upto the grant made on 29th April 2004, the option conversion price was set at the average daily high-low price of the Bank''s equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which has had the maximum trading volume of the Bank''s equity share during that period. Under the third plan and with effect from the grant made by the Bank on 10th June 2005, the pricing formula has been changed to the closing price on the day previous to the grant date. The Remuneration and Nomination Committee granted options under these plans on twelve occasions: 1,1 18,925 during 2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355 during 2008- 09, 4,413,990 during 2009-10, 2,915,200 during 2010-11, 3,268,700 during 2011-12 and 2,516,000 during 2012-13. The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant, subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31st March 2013, 27,190,658 options had been exercised and 10,865,025 options were in force.

Other statutory disclosures as required by the revised SEBI guidelines on ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of corporate governance, and it aspires to benchmark itself with international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained in the Corporate Governance Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

- The applicable accounting standards have been followed in the preparation of the annual accounts and proper explanations have been furnished, relating to material departures.

- Accounting policies have been selected and applied consistently and reasonably, and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Bank and of the Profit and Loss of the Bank for the financial year ended 31st March 2013.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank, and for preventing and detecting fraud and other irregularities.

- The annual accounts have been prepared on a going concern basis.

- The Bank has in place a system to ensure compliance of all laws applicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 217(1)(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules hereunder is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Bank.

BUSINESS RESPONSIBILITY REPORT

The Securities and Exchange Board of India (SEBI) through its circular CIR/CFD/DIL/8/2012 dated 13th August 2012 has mandated the inclusion of Business Responsibility (BR) Report as part of the Annual Report for top 100 listed entities based on market capitalisation at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) as on 31st March 2012. The Business Responsibility Report of the Bank has been enclosed as an Annexure to this report.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Bank will retire on the conclusion of the Nineteenth Annual General Meeting and are eligible for re-appointment, subject to the approval of Reserve Bank of India and the shareholders. As recommended by the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors for the financial year 2013-14. The shareholders are requested to consider their appointment on the remuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiative, which has led to the Bank making commendable progress in today''s challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Sanjiv Misra

Date : 24th April, 2013 Chairman

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Mar 31, 2012

The Board of Directors is pleased to present the Eighteenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors' Report and the report on business and operations of the Bank for the financial year ended 31st March 2012.

FINANCIAL PERFORMANCE

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

(Rs in crores)

PARTICULARS 2011-12 2010-11 GROWTH

Deposits 220,104.30 189,237.80 16.31%

Out of which

- Savings Bank Deposits 51,667.96 40,850.31 26.48%

- Current Account Deposits 39,754.07 36,917.09 7.68%

Advances 169,759.54 142,407.83 19.21% Out of which

- Retail Advances 37,570.33 27,759.23 35.34%

- Non-retail Advances 132,189.21 114,648.60 15.30%

Total Assets/Liabilities 285,627.79 242,713.37 17.68%

Net Interest Income 8,017.75 6,562.99 22.17%

Other Income 5,420.22 4,632.13 17.01% Out of which

- Trading Profit (1) 361.56 496.97 (27.25%)

- Fee and other income 5,058.66 4,135.16 22.33%

Operating Expenses (excluding depreciation) 5,664.86 4,489.84 26.17%

Profit before depreciation, provisions and tax 7,773.11 6,705.28 15.93%

Depreciation 342.24 289.59 18.18%

Provision for Tax 2,045.63 1,747.17 17.08%

Other Provisions and Write offs 1,143.03 1,280.03 (10.70%)

Net Profit 4,242.21 3,388.49 25.19%

Appropriations:

Transfer to Statutory Reserve 1,060.55 847.12 25.19%

Transfer to/(from) Investment Reserve - (14.94) -

Transfer to Capital Reserve 51.90 4.76 -

Transfer to/(from) General Reserve - 338.85 -

Proposed Dividend 770.08 670.36 14.88%

Surplus carried over to Balance Sheet 2,359.68 1,542.34 52.99%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2011-12 2010-11

Interest Income as a percentage of working funds* 8.71% 7.49%

Non-Interest Income as a percentage of working funds* 2.15% 2.29%

Net Interest Margin 3.59% 3.65%

Return on Average Net Worth 21.22% 20.13%

Operating Profit as a percentage of working funds* 2.94% 3.17%

Return on Average Assets 1.68% 1.68%

Profit per employee** Rs 14.34 lacs Rs 14.35 lacs

Business (Deposits less inter-bank deposits Advances) per employee** Rs 12.76 crores Rs 13.66 crores

Net non-performing assets as a percentage of net customer assets*** 0.25% 0.26%

- 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 regrouped wherever necessary.

The Bank continued to show a steady growth both in business and earnings with a net profit of Rs4,242.21 crores for the year ended 31st March 2012, registering a growth of 25.19% over the net profit of Rs3,388.49 crores last year. The strong growth in earnings was a result of robust business growth across all banking segments indicative of a clear strategic focus. During the year, the Basic Earnings Per Share (EPS) was at Rs102.94 and a Return on Equity (ROE) at 21.22%.

During the year, the total income of the Bank increased by 38.55% to reach Rs27,414.87 crores as compared to Rs19,786.94 crores last year. Operating revenue increased by 20.03% to Rs13,437.97 crores while operating profit increased by 15.82% to Rs7,430.87 crores. The growth in earnings was mainly due to a rise in core income streams such as net interest income (NII) and fee income. NII increased by 22.17% to Rs8,017.75 crores as compared to Rs6,562.99 crores last year. Fee, trading and other income increased by 17.01 % to Rs5,420.22 crores from Rs4,632.13 crores last year. The strong growth in income was partly offset by an increase in operating expenses including depreciation by 25.69% to Rs6,007.10 crores.

During the year, the growth in NII may be attributed to an expansion in the balance sheet size and healthy low-cost Current Account and Savings Bank (CASA) deposits. The total earning assets on a daily average basis increased by 24.30% to Rs223,206 crores, as compared to Rs179,573 crores last year. This was partly offset by a rise in funding costs due to hardening of general interest rates, particularly on term deposits during the year. The steady growth of low-cost CASA deposits, which on a daily average basis increased by 18.96% to Rs70,845 crores from Rs59,551 crores last year, helped in containing the cost of funds. Overall, the daily average cost of funds in the year increased to 6.28% from 4.96% last year. During the year, the cost of deposits increased to 6.47% from 4.96% last year primarily due to an increase in cost of term deposits by 211 basis points (from 6.81 % to 8.92%) as well as the cost of savings bank deposits. During the year, the yield on earning assets increased by 125 basis points to 9.66% from 8.41% last year.

Other income comprising fees, trading profit and miscellaneous income increased by 17.01% to Rs5,420.22 crores in 2011-12 from Rs4,632.13 crores last year and constituted 40.34% of operating revenue of the Bank. Fee income is a significant part of the earnings and is generated from a diverse set of businesses in the Bank. The main sources of fee income are client- based merchant foreign exchange trade, service charges from account maintenance, transaction banking (including cash management services), syndication and placement fees, processing fees from loans and commission on non- funded products (such as letters of credit and bank guarantees), inter-change fees on ATM-sharing arrangements and fee income from the distribution of third-party personal investment products. During the year, proprietary trading profits fell by 27.25% to Rs361.56 crores from Rs496.97 crores last year, owing to adverse market conditions in the debt and equity markets. Miscellaneous income dropped by 3.79%, mainly due to lower recoveries of loans written-off in earlier years. During the year, such recoveries accounted to Rs291.84 crores.

During the year, the operating revenue of the Bank increased by 20.03% to Rs13,437.97 crores, as compared to Rs11,195.12 crores last year. The core income streams (NII, fee and miscellaneous income) constituted 97.31% of the operating revenue, reflecting the stability and sustainability of the Bank's earnings. Operating expenses increased by 25.69% to Rs6,007.10 crores from Rs4,779.43 crores last year, as a result of the growth of the Bank's network and other infrastructure required for supporting the existing and new businesses. The Cost to Income ratio of the Bank was 44.70% compared to 42.69% last year.

During the year, the operating profit of the Bank increased by 15.82% to Rs7,430.87 crores from Rs6,415.69 crores last year. During this period, the Bank created total provisions (excluding provisions for tax) of Rs1,143.03 crores compared to Rs1,280.03 crores last year. Of this, the Bank provided Rs860.43 crores towards loan/investment losses compared to Rs955.12 crores last year, while the provision for standard assets was Rs150.30 crores. The Bank also provided Rs88.86 crores compared to Rs15.06 crores last year against restructured assets. During the year, the Bank restructured loans of Rs1,300.29 crores. The Bank continued to maintain a healthy asset-quality with a ratio of Gross NPAs to gross customer assets of 0.94%, as compared to 1.01 % last year, and a Net NPA ratio (Net NPAs as percentage of net customer assets) of 0.25% compared to 0.26% last year. With higher levels of provisions built over and above regulatory norms during the year, the Bank has maintained its provision coverage to 80.91% (after considering prudential write-offs).

The Bank has also shown an all-round improvement in various financial parameters and ratios during the year. Basic Earnings Per Share (EPS) was Rs102.94 as compared to Rs82.95 last year, while the Diluted Earnings Per Share was Rs102.20 compared to Rs81.61 last year. Return on Equity (RoE) improved to 21.22% from 20.13% last year and Book Value Per Share increased from Rs462.77 to Rs551.99. Return on Assets (RoA) is maintained at 1.68% as last year. The hardening of interest rates led to a contraction in the net interest margin (NIM) by 6 basis points for the year to 3.59% from 3.65% last year. On quarter-on- quarter basis, the NIM was 3.28% in Q1, 3.78% in Q2, 3.75% in Q3 and 3.55% in Q4.

The Bank has shown robust growth in several key balance sheet parameters for the year ended 31st March 2012. The total assets increased by 17.68% to Rs285,628 crores on 31st March 2012 from Rs242,713 crores on 31st March 2011. Total deposits increased by 16.31% and stood at Rs220,104 crores. Savings Bank deposits increased by 26.48% to Rs51,668 crores, while Current Account deposits increased by 7.68% to Rs39,754 crores. Low-cost demand deposits: Current Accounts and Savings Bank (CASA) deposits were Rs91,422 crores as on 31st March 2012, as compared to Rs77,767 crores last year. As on 31st March 2012, CASA deposits constituted 41.54% of total deposits as compared to 41.10% last year. On a daily average basis, Savings Bank deposits increased by 20.43% to Rs43,442 crores, while Current Account deposits increased by 16.71 % to Rs27,403 crores. The percentage share of CASA in total deposits, on a daily average basis, was 37.65% compared to 39.40% last year. The total advances of the Bank increased by 19.21% to Rs169,760 crores. Out of this, corporate advances (comprising large, infrastructure and mid-corporate accounts) increased by 19.93% to Rs91,053 crores and SME loans increased by 11.16% to Rs23,795 crores. Agricultural lending (including micro finance) stood at Rs17,340 crores, increasing 0.11% over the last year. Retail loans increased by 35.34% to Rs37,570 crores. The percentage share of retail loans to total advances has increased to 22.13% from 19.49% last year. The total investments of the Bank increased by 29.45% to Rs93,192 crores and investments in government and approved securities, held mainly for SLR requirement, increased by 32.43% to Rs58,533 crores. Other investments, including corporate debt securities, increased by 24.70% to Rs34,659 crores. As on 31st March 2012, the total assets of the Bank's overseas branches stood at Rs32,302 crores, constituting 11.31% of the Bank's total assets.

During the year, the Bank continued to expand its distribution network to enlarge its reach in geographical centres with potential for growth, especially in the areas with potential for low-cost CASA deposits, lending to retail, agriculture and SME segments and the distribution of third-party products. This year, the Bank has added 231 new branches and 1 extension counter, taking the total number of branches and extension counters (ECs) to 1,622, of which 674 branches/ECs are in semi-urban and rural areas and 948 branches are in metropolitan and urban areas. The Bank is present in all the States and Union Territories (except Lakshadweep), covering a total of 1,050 centres. The Bank has also increased its ATM network to 9,924, as compared to 6,270 ATMs last year. In addition to domestic branches, during the year the Bank opened an international branch office in Colombo, Sri Lanka to finance cross-border trade and manufacturing activities. This is in addition to the existing branches at Singapore, Hong Kong and DIFC (Dubai International Finance Centre) and representative offices at Shanghai, Dubai and Abu Dhabi.

CAPITAL & RESERVES

During the year, the Bank has raised capital of Rs3,425 crores by way of sub-ordinated bonds (unsecured redeemable non-convertible debentures) qualifying as Tier II capital. The raising of this non- equity capital has helped the Bank continue its growth strategy and has strengthened its capital adequacy ratio. The Bank is well capitalised with an overall capital adequacy ratio (CAR) of 13.66% at the end of the year, well above the benchmark requirement of 9% stipulated by Reserve Bank of India (RBI). Of this, Tier I CAR was 9.45%, as against 9.41 % last year, while the Tier II CAR was at 4.21%, as against 3.24% last year.

During the year, a total of 2,658,109 equity shares were allotted to employees of the Bank pursuant to the exercise of options under its Employee Stock Option Scheme. The paid-up capital of the Bank rose to Rs413.20 crores, as compared to Rs410.55 crores last year. The shareholding pattern of the Bank as of 31st March 2012 was as under:

Sr. No. Name of Shareholders % of Paid-up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 23.53

ii. Life Insurance Corporation of India (LIC) 9.69(1)

iii. General Insurance Corporation and four PSU insurance companies 4.16

iv. Overseas investors (including FIIs/OCBs/NRIs) 33.19

v. Foreign Direct Investment (GDR issue) 8.54

vi. Other Indian financial institutions/mutual funds/banks 6.45

vii. Others 14.44

Total 100.00

(1) Save and except 4,00,40,156 shares equivalent to 9.69% of the total paid up capital of the Bank held by LIC, all other holdings are not considered for arriving at the Promoter's shareholding.

The Bank's shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees relating to all stock exchanges for the current year have been paid.

DIVIDEND

The Diluted Earnings Per Share (EPS) for 2011-12 has risen to Rs102.20 from Rs81.61 last year. In view of the overall performance of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs16.00 per equity share, compared to Rs14.00 per equity share declared last year. This dividend shall be subject to tax on dividend to be paid by the Bank. This increase reflects our confidence in the Bank's ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board of Directors have taken place. Shri J. R. Varma ceased to be a Director of the Bank at the conclusion of the last Annual General Meeting with effect from 17th June 2011. Shri S. K. Roongta, resigned as a Director of the Bank with effect from 20th June 2011. Shri R. B. L. Vaish tendered his resignation as a Director on completion of his tenure as LIC Nominee with effect from 5th September 2011. Shri S. K. Chakrabarti, Deputy Managing Director, retired from the services of the Bank on 30th September 2011 and accordingly ceased to be a Director of the Bank with effect from 1st October 2011. Shri M. V. Subbiah resigned as a director with effect from 26th April, 2012. Prof. Samir K. Barua, Director, Indian Institute of Management, Ahmedabad was appointed as an Additional Independent Director of the Bank with effect from 22nd July 2011. Shri A. K. Dasgupta was nominated by LIC as its Nominee Director in place of Shri R. B. L. Vaish and was accordingly appointed as an Additional Director of the Bank with effect from 5th September 2011. Shri Som Mittal, President of NASSCOM was appointed as an Additional Independent Director of the Bank with effect from 22nd October 2011. We report with sadness the demise of Dr. R. H. Patil who passed away on 12th April 2012. The Board of Directors places on record its deep appreciation and gratitude to Dr. R. H. Patil, Shri M. V. Subbiah, Shri J. R. Varma, Shri S. K. Roongta, Shri R. B. L. Vaish and Shri S. K. Chakrabarti for the valuable services rendered by them during their tenure as Directors of the Bank.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Smt. Rama Bijapurkar and Shri V. R. Kaundinya retire by rotation at the Eighteenth Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank.

The Board of Directors of the Bank at its meeting held on 13th February 2012, has re-appointed Smt. Shikha Sharma as Managing Director & CEO for a further period of three years i.e. from 1st June 2012 till 31st May 2015. The re-appointment is subject to approval of Reserve Bank of India and the shareholders. Further, the Board of Directors of the Bank at its meeting held on 27th April, 2012, has decided to appoint Shri V. Srinivasan and Shri Somnath Sengupta, Executive Directors of the Bank as the Whole-time Directors of the Bank with effect from the date as may be approved by RBI.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries: Axis Securities and Sales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd., Axis Mutual Fund Trustee Ltd., and Axis U.K. Ltd.

Axis Securities and Sales Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail broking services. The primary objective of Axis Securities and Sales Ltd. is to build a specialised force of sales personnel and optimise operational efficiency by providing greater control over the sales functions, as compared to a Direct Sales Agent (DSA) model as well as undertake retail broking business. Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support to businesses. Axis Trustee Services Ltd. is engaged in trusteeship activities (e.g. acting as debenture trustee and as trustee to various securitisation trusts). Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business. Axis Mutual Fund Trustee Ltd. was formed to act as the trustee for the mutual fund business. Axis U.K. Ltd. is a private limited company registered in the UK. It was formed with the main purpose of filing an application with Financial Services Authority (FSA), UK for a banking license in the UK and for the creation of necessary infrastructure for the subsidiary to commence banking business in the UK. As of 31st March 2012, Axis U.K. Ltd. has not commenced operations.

In terms of the General Circular No. 2/2011 dated 8th February 2011 issued by the Ministry of Corporate Affairs, Government of India, the copies of Directors' Reports, Auditors' Reports and the financial statements of the six subsidiaries have not been attached to the accounts of the Bank for the financial year ended 31st March 2012. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Registered Office of the Bank. These documents will also be available for examination by shareholders of the Bank at its Registered Office. The documents related to individual subsidiaries will similarly be available for examination at the respective registered offices of the companies. In line with the Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India, the consolidated financial results of the Bank along with its subsidiaries for the year ended 31st March 2012 are enclosed as an Annexure to this report.

PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD.

On 17th November, 2010, the Board of Directors of the Bank had approved the acquisition of certain financial services business undertaken by Enam Securities Private Limited (ESPL) directly and through its wholly owned subsidiaries, by Axis Securities and Sales Limited (ASSL), a wholly owned subsidiary of the Bank by way of a demerger. However, pursuant to conditions prescribed by the Reserve Bank of India, certain modifications have been carried out to the demerger structure in terms of a revised Scheme of Arrangement under Sections 391-394 and other relevant provisions of the Companies Act, 1956. Accordingly, the acquisition will now comprise (a) a demerger of the financial services businesses from ESPL to the Bank, in consideration of which the Bank will issue shares to the shareholders of ESPL, and (b) immediately upon completion of the demerger under the Scheme, a simultaneous sale of the financial services businesses will be undertaken from the Bank to ASSL for a cash consideration, with both the aforesaid steps occurring simultaneously. The Reserve Bank of India has on 30th March, 2012, conveyed its no objection to the Scheme. Further, on 27th April, 2012, the Board of Directors of the Bank have approved the reassessment of the valuation of the ESPL business at Rs1,396 crores and consequently, in consideration for the demerger of the financial services business of ESPL, the Bank will issue shares in the ratio of 5 equity shares of the Bank (aggregating 12,090,000 equity shares) of the face value of Rs10 each for every 1 equity share (aggregating 2,418,000 equity shares) of Rs10 each held by the shareholders of ESPL. The sale of the financial services business will be simultaneously undertaken from the Bank to ASSL for a cash consideration of Rs274 crores only. The appointed date under the Scheme is 1st April, 2010, and the parties shall proceed with filing the Revised Scheme and other necessary documents with the relevant High Courts and other regulatory authorities for their approval.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable its employees and the employees of its subsidiaries including Whole-time Directors, to participate in the future growth and financial success of the Bank. Under the Scheme 40,517,400 options can be granted to employees. The employee stock option scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of the employee's work performance and is approved by the Board of Directors.

The Bank's shareholders approved plans for the issuance of stock options to employees in February 2001, June 2004, June 2006, June 2008 and June 2010. Under the first two plans and upto the grant made on 29th April 2004, the option conversion price was set at the average daily high-low price of the Bank's equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which has had the maximum trading volume of the Bank's equity share during that period. Under the third plan and with effect from the grant made by the Bank on 10th June 2005, the pricing formula has been changed to the closing price on the day previous to the grant date. The Remuneration and Nomination Committee granted options under these plans on eleven occasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355 during 2008-09, 4,413,990 during 2009-10, 2,915,200 during 2010-11 and 3,268,700 during 2011-12. The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant, subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31st March 2012, 24,368,087 options had been exercised and 11,428,248 options were in force.

Other statutory disclosures as required by the revised SEBI guidelines on ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of corporate governance, and it aspires to benchmark itself with international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained in the Corporate Governance Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

- The applicable accounting standards have been followed in the preparation of the annual accounts and proper explanations have been furnished, relating to material departures.

- Accounting policies have been selected and applied consistently and reasonably, and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Bank and of the Profit and Loss of the Bank for the financial year ended 31st March 2012.

- Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank, and for preventing and detecting fraud and other irregularities.

- The annual accounts have been prepared on a going concern basis.

- The Bank has in place a system to ensure compliance of all laws applicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 217(1 )(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules hereunder is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1 )(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Bank will retire on the conclusion of the Eighteenth Annual General Meeting and are eligible for re-appointment, subject to the approval of Reserve Bank of India and the shareholders. As recommended by the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors for the financial year 2012-13. The shareholders are requested to consider their appointment on the remuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, teamwork, commitment and initiative, which has led to the Bank making commendable progress in today's challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Adarsh Kishore

Date : 27th April, 2012 Chairman

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Mar 31, 2011

The Board of Directors is pleased to present the Seventeenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31 March, 2011.

FINANCIAL PERFORMANCE

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

(Rs. in crores)

PARTICULARS 2010-11 2009-10 Growth

Deposits 189,237.80 141,300.22 33.93%

Out of which

- Savings Bank Deposits 40,850.31 33,861.80 20.64%

- Current Account Deposits 36,917.09 32,167.74 14.76%

Advances 142,407.83 104,340.95 36.48%

Out of which

Retail Advances 27,759.23 20,820.73 33.32%

Non-retail Advances 114,648.60 83,520.22 37.27%

Total Assets/Liabilities 242,713.37 180,647.85 34.36%

Net Interest Income 6,562.995,00 4.49 31.14%

Other Income 4,632.13 3,945.78 17.39%

Out of which

- Trading Profit 496.97 822.38 (39.57%)

. Fee & other income 4,135.16 3,123.40 32.39%

Operating Expenses excl. depreciation 4,489.8 43,475.40 29.19%

Profit before depreciation, provisions and tax 6,705.28 5,474.87 22.47%

Depreciation 289.59 234.32 23.59%

Provision for Tax 1,747.17 1,336.83 30.70%

Other Provisions & Write offs 1,280.03 1,389.19 (7.86%)

Net Profit 3,388.49 2,514.53 34.76%

Appropriations:

Transfer to Statutory Reserve 847.126 28.63 34.76%

Transfer to/(from) Investment Reserve (14.94) 14.88 -

Transfer to Capital Reserve 4.76 223.92 (97.87%)

Transfer to General Reserve 338.85 0.31 -

Proposed Dividend 670.36 567.45 18.14%

Surplus carried over to Balance Sheet 1,542.34 1,079.34 42.90%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2010-11 2009-10

Interest Income as a percentage of working funds* 7.49% 7.73%

Non-Interest Income as a percentage of working funds* 2.29% 2.62%

Net Interest Margin 3.65% 3.75%

Return on Average Net Worth 20.13% 19.89%

Operating Profit as a percentage of working funds* 3.17% 3.48%

Return on Average Assets 1.68% 1.67%

Profit per employee** 14.35 lacs 11.63 lacs

Business (Deposits less inter-bank deposits + Advances) per employee** 13.66 crores 1.11 crores

Net non performing assets as a percentage of net customer assets *** 0.26% 0.36%

- 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 regrouped wherever necessary.

In 2010-11 both business and earnings grew strongly with the Bank reporting a net profit of Rs.3,388.49 crores for the year ended 31 March, 2011, rising 34.76% over the net profit of Rs.2,514.53 crores in the previous year. The solid growth of business across segments has been reflected in a set of robust financial indicators.

The Banks total income increased 26.97% to reach Rs.19,786.94 crores during 2010- 11, compared to Rs.15,583.80 crores last year. Operating revenue during this period increased 25.08% to Rs.11,195.12 crores while operating profit increased by 22.42% to Rs. 6,415.69 crores. The growth in revenues may be attributed to the performance of the Banks core income streams: net interest income (Nil), fee and other income. Nil increased by 31.14% to Rs.6,562.99 crores from ^5,004.49 crores last year, while fee and other income increased by 17.39% to Rs.4,632.13 crores from ^3,945.78 crores last year. Nil increased by 31.14% as a result of healthy growth of both assets and low-cost Current Account and Savings Bank (CASA) deposits, on a daily average basis. During the year, total earning assets, on a daily average basis, rose 34.70% to Rs.179,573 crores from Rs.133,309 crores last year. A 32.81 % growth of low-cost CASA deposits, on a daily average basis, from ^44,839 crores last year to Rs.59,551 crores, helped the Bank contain funding costs, which had risen in the last quarter of the year due to the hardening of interest rates on term deposits.

Other income comprising fees, trading profit and miscellaneous income also rose 17.39% to ^4,632.13 crores in 2010-11 from Rs.3,945.78 crores last year. Fee income constituted 33.86% of the operating revenue of the Bank and rose 29.59% to Rs.3,790.37 crores from Rs.2,924.96 crores last year. The Bank earns fee income from a diverse set of products and businesses such as client- based merchant foreign exchange trade, service charges from account maintenance, transaction banking including cash management services, syndication and placement fees, processing fees from loans and commission on non-funded products such as letters of credit and bank guarantees, inter-change fees on ATM-sharing arrangements and fee income from the distribution of third-party personal investment products. During the year, proprietary trading profits fell 39.57% to Rs.496.97 crores from Rs.822.38 crores last year, primarily due to adverse market conditions in the debt and equity markets. Miscellaneous income was buoyant, rising 73.75% mainly due to strong recoveries of loans and derivative receivables written-off in previous years. During the year, such recoveries amounted to Rs.325.22 crores compared to Rs.174.43 crores last year.

During the year, the operating revenue of the Bank increased 25.08% to Rs.11,195.12 crores from Rs.8,950.27 crores last year. The core income streams (Nil, fee and miscellaneous income) constituted 95.56% of the operating revenue, reflecting the stability and sustainability of the Banks earnings. Operating expenses increased by 28.84% to ^4,779.43 crores from Rs.3,709.72 crores last year, on the back of the continuing growth of the Banks network and infrastructure required for supporting existing and new businesses. During the year, the Cost: Income ratio was 42.69% compared to 41.45% last year.

During the year, the operating profit of the Bank increased 22.42% to Rs.6,41 5.69 crores from Rs.5,240.55 crores last year. During this period, provisions (excluding provisions for tax) charged to the Profit & Loss account were Rs.1,280.03 crores compared to Rs.1,389.19 crores last year. Of this, provisions for loan losses were ^955.12 crores compared to Rs.1,357.04 crores last year, while the provision for standard assets was Rs.166.16 crores. The Bank accelerated its provisioning requirements in some portfolios as a measure of prudence, increasing the overall provision coverage. The Bank also provided Rs.15.06 crores compared to Rs.56.47 crores last year against restructured assets. During 2010-11, the Bank restructured loans of Rs.404 crores, significantly lower than Rs.1,633 crores last year. The Bank continued to maintain a generally healthy asset-quality with a ratio of Gross NPAs to gross customer assets of 1.01% compared to 1.13% last year and a Net NPA ratio (percentage of Net NPAs as percentage of net customer assets) of 0.26% compared to 0.36% last year. With higher levels of provisions, built over and above regulatory norms during the year, the Bank has further improved its provision-coverage to 80.90% (after considering prudential write-offs) from 72.38% last year.

Due to a consistent trajectory of core earnings, there has been an all-round improvement in various financial metrics. The Return on Equity (RoE) improved to 20.13% from 19.89% last year. Basic Earnings Per Share (EPS) rose to Rs.82.95 from Rs.65.78 last year, while the Diluted Earnings Per Share was Rs.81.61 compared to Rs.64.31 last year. The Book Value Per Share increased from Rs.395.99 on 31 March, 2010 to Rs.462.77 on 31 March, 2011, while Return on Assets (RoA) improved to 1.68% from 1.67% last year. Employee productivity has also improved with Profit per Employee increasing to Rs.14.35 lacs from ^11.63 lacs last year and Business per Employee increasing to Rs.13.66 crores from Rs.11.11 crores last year. Hardening of interest rates on Term Deposits in the final quarter of the year pushed up the cost of funds, compressing the Net interest Margin by 10 basis points of the year to 3.65% from 3.75% last year. The quarterly NIMs during the year were as follows: 3.71% in Q1, 3.68% in Q2, 3.81% in Q3 and 3.44% in Q4.

The total assets of the Bank were Rs.242,713 crores, rising 34.36% from
As a conscious strategy of building a network of branches and ATMs with effective penetration, the Bank continued to enlarge its geographical coverage of centres with potential for growth, especially in the areas with potential for low- cost CASA deposits, lending to retail, agriculture and SME segments and the distribution of third party products. During the year, 407 new branches were added to the Banks network taking the total number of branches and extension counters

(ECs) to 1,390. Of these, 564 branches/ECs are in semi-urban and rural areas and 826 branches/ECs are in metropolitan and urban areas. The Bank is present in all states and Union Territories (except Lakshadweep) covering 921 centres. The ATM network of the Bank increased from 4,293 last year to 6,270 as on 31 March, 2011. During the year, the Bank also opened a Representative Office in Abu Dhabi. This was in addition to the existing branches at Singapore, Hong Kong and DIFC (Dubai International Financial Centre) and representative offices at Shanghai and Dubai.

CAPITAL & RESERVES

The Bank is well capitalised at present with an overall Capital Adequacy Ratio (CAR) of 12.65% at the end of the year, well above the benchmark requirement of 9% stipulated by Reserve Bank of India. Of this, Tier I CAR was 9.41 % against 11.18% a year earlier, while the Tier II CAR was at 3.24% against 4.62% a year earlier.

During the year under review, 5,371,724 equity shares were allotted to employees of the Bank pursuant to the exercise of options under its Employee Stock Option Scheme. The paid-up capital of the Bank as on 31 March, 2011 rose toRs.410.55 crores from ^405.17 crores as on 31 March, 2010. The shareholding pattern of the Bank as of 31 March, 2011 is stated below.

Sr.No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 23.68

ii. Life Insurance Corporation of India 9.56

iii. General Insurance Corporation and four PSU Insurance Companies 3.97

iv. Overseas Investors including Flls/OCBs/NRIs 37.89

v. Foreign Direct Investment (GDR issue) 9.19

vi. Other Indian Financial Institutions/ Mutual Funds/Banks 5.12

vi Others 10.59

Total 100.00

The Banks shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE). The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees relating to all stock exchanges for the current year have been paid. With effect from 26 March, 2001, the shares of the Bank have been included and traded in the BSEs Group A stocks. With effect from 27 March, 2009, the Banks shares have been included and traded as part of the main NIFTY Index of the NSE. Earlier, the shares of the Bank were part of the NIFTY Junior Index of the NSE.

DIVIDEND

In view of the overall performance of the Bank and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs.14.00 per equity share, compared to Rs.12.00 per equity share declared for 2009-10. This dividend shall be subject to tax on dividend to be paid by the Bank. This increase reflects our confidence in the Banks ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes have taken place in the composition of the Board of Directors. Shri M. S. Sundara Rajan, former Chairman and Managing Director of Indian Bank, was appointed as an Additional Independent Director with effect from 8 June, 2010. He resigned with effect from 22 February, 2011. Shri S. K. Roongta, former Chairman of SAIL, was appointed as an Additional Independent Director with effect from 15 July, 2010. Shri S. K. Chakrabarti, former Executive Director (Retail Banking, SME and Agri.) of the Bank was appointed as the Deputy Managing Director of the Bank with effect from 27 September, 2010. Shri Prasad R. Menon, former Managing Director, Tata Power Limited, was appointed as an Additional Independent Director with effect from 9 October, 2010. Shri R. N. Bhattacharyya, former IPS officer and nominee of the Specified Undertaking of the Unit Trust of India (SUUTI) was appointed as an Additional Director with effect from 17January, 2011.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Shri R. B. L. Vaish and Shri K. N. Prithviraj retire by rotation at the Seventeenth Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank. Shri J. R. Varma also retires by rotation but he has expressed his desire not to be re-appointed as his term of continuous period of eight years as Director under the provisions of Section 10-A(2-A)(i) of the Banking Regulation Act, 1949, comes to an end with effect from 25 June, 2011.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries: Axis Securities and Sales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd., Axis Mutual Fund Trustee Ltd. and Axis U.K. Ltd.

Axis Securities and Sales Ltd. is primarily in the business of marketing of credit cards and retail asset products as well as retail broking. The objective of this subsidiary is to build a specialised force of sales personnel and optimise operational efficiency by providing greater control over the sales functions, as compared to a Direct Sales Agent (DSA) model, as well as undertake retail broking business. Axis Private Equity Ltd., primarily carries on the activities of managing equity investments and provides venture capital support to businesses. Axis Trustee Services Ltd. is engaged in trusteeship activities (e.g. acting as debenture trustee and as trustee to various securitisation trusts). Axis Asset Management Company Ltd. primarily undertakes the activities of managing a mutual fund business and the Axis Mutual Fund Trustee Ltd. was set up to act as the trustee for the mutual fund business. On 7 March, 2011, the Bank has incorporated a new subsidiary namely Axis U.K. Ltd. as a private limited company registered in the United Kingdom (UK) with the main purpose of filing an application with Financial Services Authority (FSA), UK for a banking license in the UK and for the creation of necessary infrastructure for the subsidiary to commence banking business in the UK. As on 31 March, 2011, Axis U.K. Ltd. had not commenced operations.

In terms of an exemption received from the Ministry of Corporate Affairs, Government of India through its letter no. 47/19/2011-CL-lll dated 21 January, 2011, under Section 212(8) of the Companies Act, 1956, copies of Directors Reports, Auditors Reports and the financial statements of the five subsidiaries (Axis Securities and Sales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd. and Axis Mutual Fund Trustee Ltd.) have not been attached to the accounts of the Bank for the financial year ended 31 March, 2011. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Registered Office of the Bank. These documents will also be available for examination by shareholders of the Bank at its Registered Office. Documents related to individual subsidiaries will similarly be available for examination at the respective registered offices of the five companies. In line with the Accounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India, the consolidated financial results of the Bank along with its subsidiaries for the year ended 31 March, 2011 are enclosed as an Annexure to this report.

PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD. BY AXIS SECURITIES AND SALES LTD.

At their meetings held on 17 November, 2010, the Board of Directors of the Bank, Enam Securities Private Limited (ESPL) and Axis Securities and Sales Limited (ASSL), a wholly-owned subsidiary of the Bank, approved the acquisition of certain businesses undertaken by ESPL directly and through its wholly owned subsidiaries, by ASSL by way of a demerger. It is envisaged that these businesses will be transferred to ASSL, pursuant to a Scheme of Arrangement, as may be approved by the relevant High Courts under Sections 391 to 394 and other relevant provisions of the Companies Act, 1956 and subject to receipt of necessary requisite approvals. The appointed date for the purpose of the Demerger under the Scheme shall be 1 April, 2010. The valuation of ESPL business was assessed at ^2,067 cores in consideration for the demerger, the Bank will issue shares in the ratio of 5.7 equity shares of the Bank (aggregating 13,782,600 equity shares) of the face value of Rs.10 for every 1 equity share (aggregating 2,418,000 equity shares) of Rs.10 each held by shareholders of ESPL.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable its employees and the employees of its subsidiaries including whole-time Directors, to participate in the future growth and financial success of the Bank. Under the Scheme 40,517,400 options can be granted to employees. The employee stock option scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of the employees work performance and is approved by the Board of Directors.

The Banks shareholders approved plans for the issuance of stock options to employees in February 2001, June 2004, June 2006, June 2008 and June 2010. Under the first two plans and upto the grant made on 29 April, 2004, the option conversion price was set at the average daily high-low price of the Banks equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which has had the maximum trading volume of the Banks equity share during that period. Under the third plan and with effect from the grant made by the Bank on 10 June, 2005, the pricing formula has been changed to the closing price on the day previous to the grant date. The Remuneration and Nomination Committee granted options under these plans on ten occasions: 1,118,925 during 2000-01, 1,779,700 during 2001 -02, 2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355 during 2008-09, 4,413,990 during 2009-10 and 2,915,200 during 2010-11.

The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant, subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31 March, 2011, 21,709,978 options had been exercised and 11,122,518 options were in force.

Other statutory disclosures as required by the revised SEBI guidelines on ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving the highest standards of corporate governance and it aspires to benchmark itself with international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained in the Corporate Governance Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in the preparation of the annual accounts and proper explanations have been furnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistently and reasonably, and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Bank and of the Profit & Loss of the Bank for the financial year ended 31 March, 2011.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

v. The Bank has in place a system to ensure compliance of all laws applicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 217(1 )(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules thereunder, is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1) (iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Bank will retire on the conclusion of the Seventeenth Annual General Meeting and are eligible for re-appointment, subject to the approval of Reserve Bank of India and of the shareholders. As recommended by the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors for the financial year 2011-12. The shareholders are requested to consider their appointment on the remuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, team work, commitment, and initiative which has led to the Bank making commendable progress in todays challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Adarsh Kishore Date : 22nd April, 2011 Chairman

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Mar 31, 2010

The Board of Directors is pleased to present the Sixteenth Annual Report of your Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31st March 2010.

FINANCIAL PERFORMANCE

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

(Rs. in crores)

PARTICULARS 2009-10 2008-09 Growth

Deposits 141,300.22 117,374.11 20.38% Out of which

- Savings Bank Deposits 33,861.80 25,822.12 31.13%

» Current Account Deposits 32,167.74 24,821.61 29.60%

Advances 104,343.12 81,556.77 27.94%

Out of which - Retail Advances 20,822.90 16,051.78 29.72%

- Non-retail Advances 83,520.22 65,504.99 27.50%

Total Assets/Liabilities 180,647.85 147,722.05 22.29%

Net Interest Income 5,004.49 3,686.21 35.76%

Other Income 3,945.78 2,896.88 36.21%

Out of which

- Trading Profit (1) 822.38 373.86 119.97%

- Fee & other income 3,123.40 2,523.02 23.80%

Operating Expensesexcl. depreciation 3,475.40 2,669.55 30.19%

Profit before depreciation, provisions and tax 5,474.87 3,913.54 39.90%

Depreciation 234.32 188.66 24.20%

Provision for Tax 1.336.83 969.84 37.84%

Other Provisions & Writeoffs 1,389.19 939.68 47.84%

Net Profit 2,514.53 1,815.36 38.51%

Appropriations:

Transfer to Statutory Reserve 628.63 453.84 38.51%

Transferto Investment Reserve 14.88 0.06 -

Transferto Capital Reserve 223.92 146.72 52.62%

Transferto General Reserve 0.31 - -

Proposed Dividend 567.45 420.52 34.94%

Surplus carried overto Balance Sheet 1,079.34 794.22 35.90%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2009-10 2008-09

Interest Income as a percentage of working funds* 7.73% 8.59%

Non-Interest Income as a percentage of working funds 2.62% 2.30%

Net Interest Margin 3.75% 3.33%

Return on Average Net Worth 19.89% 19.93%

Operating Profit as a percentage of working funds 3.48% 2.95%

Return on Average Assets 1.67% 1.44%

Profit per employee** Rs. 11.63 lacs Rs. 10.02 lacs

Business (Deposits less inter bank deposits + Advances) per employee** Rs. 11.11 crores Rs. 10.60 crores

NetNon performing assets as a percentage of net customer assets*** 0.36% 0.35%

- 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 regrouped wherever necessary.

In a difficult year for the financial sector, the Bank has delivered a very strong performance with a net profit of Rs. 2,514.53 crores (38.51 % higher than the net profit of Rs. 1,81 S.36 crores last year), Basic Earnings per Share (EPS) of Rs. 65.78 (29.97% higher than the EPS of Rs. 50.61 in 2008-09) and a Return on Equity (ROE) of 19.89% compared to 19.93% last year.

In 2009-10, the total income was Rs. 15,583.80 crores, increasing by Rs. 1,851.44 crores or 13.48% over last year. During the period the operating revenue rose 35.96% to Rs. 8,950.27 crores, while operating profit increased by 40.69% to Rs. 5,240.55 crores, due to a robust growth of core income streams. The Net Interest Income (Nil) grew by Rs. 1,318.28 crores to Rs. 5,004.49 crores, rising 35.76%, due in large measure, to lower cost of deposits supported by the solid and sustained growth of the low-cost current account and savings bank (CASA) deposits as well as a sharp fall in the cost of term deposits. Nil also grew on the back of strong asset growth across business segments and on a daily average basis, the total earning assets of the Bank increased by 20.46% to Rs. 133,308.75 crores from Rs. 110,663.96 crores last year.

During the year the yield on earning assets declined by 101 basis points from 9.73% last year to 8.72% in line with the general decline in lending rates facilitated by an accommodating monetary policy. The decline in the cost of funds, on the other hand, was steeper, falling 130 basis points from 6.50% last year to 5.20%, mainly on account of the reasons stated above. The share of CASA deposits in the total deposits of the Bank on a daily average basis rose sharply by 429 basis points from 36.10% last year to 40.39% while the cost of term deposits fell 189 basis points from 9.41% last year to 7.52%. As a result, the Net Interest Margin (NIM) climbed 42 basis points over the year. In the last four quarters, the NIM has consistently improved: from 3.34% in Q1, to 3.52% in Q2,4.00% in Q3 and 4.09% in Q4.

Other income comprising fees, trading profit and miscellaneous income was Rs. 3,945.78 crores, at the end of the year, rising 36.21% or by Rs. 1,048.90 crores over the year. Fee income comprised 32.68% of the operating revenue of the Bank, generated by products and services of diverse businesses such as client-based merchant foreign exchange trade, service charges from account maintenance, transaction banking including cash management services, syndication and placement fees, processing fees from loans and commission on non-funded products such as letters of credit and bank guarantees, inter-change fees on ATM-sharing arrangements and fee income from the distribution of third-party personal investment products. There was also a healthy increase in treasury income by way of proprietary trading profit which grew 119.97% over the year to Rs. 822.38 crores, from Rs. 373.86 crores last year. Miscellaneous income rose 162.24% mainly on account of higher recoveries of loans written-off in earlier years. During the year, such recoveries amounted to Rs. 174.43 crores against Rs. 62.95 crores last year.

The Bank continued to add to its network of branches, ATMs and other channels, contributing in part to the growth of operating expenses of the Bank which rose 29.79% to Rs. 3,709.72 crores over last year. However, the Cost: Income ratio which reflects operational efficiency, improved to 41.45% in 2009-10 from 43.42% last year.

During the year, the Bank created total provisions (excluding provisions for tax) of Rs. 1,389.19 crores against Rs. 939.68 crores last year. Of this, provisions for loan losses were Rs. 1,357.04 crores (against Rs. 732.21 crores last year) as some loan segments came under stress in the wake of the economic slowdown. The Bank accelerated its provisioning requirements in several portfolios as a measure of prudence, increasing the overall provision coverage. The Bank also provided Rs. 56.47 crores against restructured assets. Global recessionary conditions and the consequential impact upon the Indian economy led to a sharp rise of restructured assets in the banking sector during the year. Although the Bank restructured assets of Rs. 1,632.97 crores during the year, it has been able to maintain the quality of its loans, ending the year with a ratio of Gross NPAs to gross customer assets of 1.13% (against 96 basis points last year) and a net NPA ratio (net NPAs as percentage of net customer assets) of 0.36% (against 35 basis points last year). With higher levels of provisions, built over and above the regulatory norms during the year, the Bank achieved a provision-coverage of 72.38% after considering prudential write-offs.

Given the strong revenue growth, key financial parameters and ratios for the year have improved. The ROE declined marginally from 19.93% in 2008-09 to 19.89%. Basic EPS rose to Rs. 65.78 from Rs. 50.61 last year, while diluted EPS was Rs. 64.31 compared to Rs. 50.27 last year. The Book Value per share rose from Rs. 284.50 on 31st March 2009 to Rs. 395.99 on 31" March 2010 while Return on Assets (ROA) improved to 1.67% from 1.44% last year. Employee productivity also improved, profit per employee increasing to Rs. 11.63 lacs from Rs. 10.02 lacs last year and business per employee increasing to Rs. 11.11 crores from Rs. 10.60 crores last year.

Despite relatively subdued growth during the first three quarters of the year, the Bank finished the year with a healthy growth of the balance sheet at Rs. 180,647.85 crores, increasing by Rs. 32,925.80 crores, or 22.29% over last year. Total deposits were Rs. 141,300.22 crores, increasing by Rs. 23,926.11 crores, or 20.38% over last year. Low-cost demand deposits (savings bank and current accounts) (CASA) were Rs. 66,029.54 crores, rising by Rs. 15,385.81 crores, or 30.38% over the year. As on 31st March 2010, the percentage share of low-cost demand deposits (CASA) in total deposits rose to 46.73% from 43.15% last year. Savings bank account deposits grew 31.13% to Rs. 33,861.80 crores, while current account deposits grew 29.60% to Rs. 32,167.74 crores. Total advances were Rs. 104,343.12 crores, growing 27.94% by Rs. 22,786.35 crores from last year. Of this, corporate advances (comprising large and mid-corporate accounts) were Rs. 52,503.53 crores, growing by Rs. 11,292.63 crores or 27.40% over last year. During the same period, advances to the SME segment (including micro finance) were Rs. 19,482.65 crores, increasing by Rs. 3,405.95 crores, or 21.19% over last year, while agricultural lending stood at Rs. 11,534.04 crores, increasing by Rs. 3,316.65 crores or 40.36% over the year. Retail loans wereRs. 20,822.90 crores, increasing by Rs. 4,771.12 crores or 29.72% from last year. The Banks total investments were Rs. 55,974.82 crores, increasing by Rs. 9,644.47 crores or 20.82% over last year. Investments in government and approved securities, mainly held to meet the Banks SLR requirement, were Rs. 34,195.88 crores increasing by Rs. 6,473.01 crores or 23.35% over last year. Other investments, including corporate debt securities, were Rs. 21,778.94 crores increasing by Rs. 3,171.46 crores or 17.04% over last year. The total assets of the Banks overseas branches as on 31" March 2010 were Rs. 13,921.42 crores, increasing by Rs. 2,245.93 crores or 19.24% over last year, constituting 7.71% of the Banks total assets.

As one of the key planks for business growth and customer-acquisition, the Bank continued to enlarge its distribution network. Widening geographical reach is critical for extending service delivery and for tapping growth opportunities in newer markets, especially in the areas of low-cost CASA deposits, lending to retail, agriculture and SME segments and the sale of third party products. The distribution network now covers 643 centres in India and 4 centres in overseas as on 31 "March 2010. The Bank crossed a landmark on 29* March opening its 1000th branch at Bandra West, Mumbai. The Bank is now present in all states and Union Territories (except Lakshadweep) and is present in 401 of the 626 district headquarters in the country. During 2009-10, 200 branches (including service branches/CPC) were added to the Banks network, taking the total number of branches and Extension Counters (ECs) to 1,035 as on 31" March 2010 from 835 last year. Of these, 320 branches are in semi-urban and rural areas and 707 branches are in metropolitan and urban areas. The ATM network of the Bank grew from 3,595 last year to 4,293 at the end of FY 2010.

CAPITAL & RESERVES

During the year under review, the Bank raised capital in the form of equity and debt to support future growth. It raised Tier I capital in the form of equity capital through simultaneous offerings in the form of a follow-on Global Depositary Receipt (GDR) issue, a Qualified Institutional Placement (QIP) and a preferential allotment of equity shares to the promoters of the Bank. The Bank mobilised an aggregate of Rs. 3,816.14 crores through the three-way offering, of which the Bank raised US Dollars 95.56 million (equivalent to Rs. 459.43 crores) through allotment of 5,055,500 GDRs each representing one equity share of the Bank at a price of US Dollars 18.90 per GDR. The Bank also raised Rs. 2,996.15 crores by issuing 33,044,500 equity shares through a QIP offering, which was priced along with the GDR at Rs. 906.70 per share (equivalent to the price offered under the GDR offering). In order to maintain the percentage shareholding of the Banks promoters at the pre-GDR/QIP offering levels. Life Insurance Corporation of India and New India Assurance Company Ltd. participated in a preferential offer by subscribing to 3,976,632 equity shares aggregating Rs. 360.56 crores. The equity shares offered under the preferential allotment were also priced at Rs. 906.70 per share (equivalent to price at which both GDR and QIP was offered). Under its Employee Stock Option Plan, the Bank allotted 4,092,369 equity shares to employees during the year under review. The Bank also raised Rs. 2,000 crores by way of subordinated bonds (unsecured redeemable non-convertible debentures) qualifying asTier II capital.

The Bank is thus well capitalized, with a capital adequacy ratio of 15.80% at the end of the year, of which the Tier I capital adequacy ratio was 11.18% against 9.26% a year earlier, while the Tier II Capital Adequacy Ratio was 4.62% against 4.43% in FY 2009. These measures have significantly strengthened the capital position of the Bank, particularly core Tier I capital, providing adequate support for its growth plans in future.

The paid up capital of the Bank as on 31st March 2010 rose to Rs. 405.17 crores from Rs. 359.01 crores as on 31" March 2009. The shareholding pattern of the Bank as of 31st March 2010 is stated below:

Sr. No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I) 24.00

ii. Life Insurance Corporation of India 10.27

iii. General Insurance Corporation and four PSU Insurance Companies 4.27

iv. Overseas Investors including Flls/OCBs/NRIs 33.68

v. Foreign Direct Investment (GDR issue) 8.37

vi. Other Indian Financial Institutions/ Mutual Funds/ Banks 7.07

vii. Others 12.34

Total 100.00

The Banks shares are listed on the NSE and the BSE. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE).

The Bonds issued by the Bank under the MTN programme are listed on the Singapore Stock Exchange. The listing fees relating to all stock exchanges for the current year have been paid. With effect from 26" March 2001, the shares of the Bank have been included and traded in the BSE Group A. Further, with effect from 27th March 2009, the Banks shares have been included and traded as part of the main NIFTY Index of the NSE. Earlier, the shares of the Bank were part of the NIFTY Juniorlndexof the NSE.

The Banks shares were voluntarily delisted from the Ahmedabad Stock Exchange with effect from 17th August 2009 as there was no trading of the Banks shares at this Stock Exchange and the only trading which took place for the last few years was that of a few shares in February 2000.

DIVIDEND

The Banks diluted EPS for 2009-10 has risen to Rs. 64.31 from Rs. 50.27 during 2008-09. In view of the overall performance of the Bank, future outlook and the objective of rewarding shareholders with cash dividends while retaining capital to maintain a healthy capital adequacy ratio to support future growth, the Board of Directors has recommended a higher dividend of Rs. 12.00 per share on equity shares, compared to Rs. 10.00 per share declared for the last year. This increase reflects our confidence in the Banks ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the Board of Directors have taken place. Dr. P.J. Nayak, former Chairman and CEO of the Bank retired with effect from 20th April 2009. Shri A. T. Pannir Selvam, nominee Director of the Specified Undertaking of the Unit Trust of India (SUUTI) passed away on 21" April 2009. Shri Ramesh Ramanathan, Independent Director resigned with effect from 14th July 2009. Five new Directors have been inducted in the Board during the year. Smt. Shikha Sharma was appointed as Managing Director and CEO of the Bank with effect from 1" June 2009. RBI gave its approval for the appointment of Shri M. M. Agrawal, former Executive Director (Corporate Banking) of the Bank as Deputy Managing Director with effect from 10th February 2010. Shri V. R. Kaundinya, Managing Director, Advanta India Ltd. was appointed as an Additional Independent Director with effect from 12th October 2009. Dr. Adarsh Kishore, former Finance Secretary, Government of India and former Executive Director, International Monetary Fund and nominee of the Specified Undertaking of the Unit Trust of India (SUUTI) was appointed as an Additional Director with effect from 15th January 2010. RBI gave its approval for the appointment of Dr. Adarsh Kishore as a non-executive Chairman of the Bank with effect from 8th March 2010. Shri S. B. Mathur, former Chairman of LIC and the National Stock Exchange of India was appointed as an Additional Independent Director with effect from 15th January 2010.

The Board of Directors places on record its appreciation and gratitude to Dr. P.J. Nayak for the pivotal role played by him in shaping the strategies of and building the Bank to its present pre-eminent position in the banking sector. The Board of Directors also places on record its appreciation and gratitude to Shri A. T. Pannir Selvam and Shri Ramesh Ramanathan for the valuable services rendered by them during their tenure as Directors of the Bank.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Dr. R. H. Patil and Smt. Rama Bijapurkar retire by rotation at the Sixteenth Annual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank.

SUBSIDIARIES

The Bank has set up five wholly-owned subsidiaries: Axis Securities and Sales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd. and Axis Mutual Fund Trustee Ltd.

Axis Securities and Sales Ltd. was set up in December 2005 (originally incorporated as UBL Sales Ltd., renamed as Axis Sales Ltd. in 2007 and now rechristened as Axis Securities and Sales Ltd. on 5th April 2010) to market credit cards and retail asset products. The objective of setting up the subsidiary was to build a specialised force of sales personnel and optimize operational efficiency by providing greater control over the sales effort in comparison with a Direct Sales Agent (DSA) model. The scope of activities of the subsidiary has now been enlarged to include retail broking. In October 2006, the Bank set up Axis Private Equity Ltd., primarily to carry on the activities of managing equity investments and provide venture capital support to businesses. Axis Trustee Services Company Ltd. was established in May 2008 to engage in trusteeship activities (e.g. acting as a debenture trustee, the trustee to various securitisation trusts as well as other trusteeship businesses). Axis Asset Management Company Ltd. was set up primarily to carry on the activities of managing a mutual fund business in January 2009 and in the same year, Axis Mutual Fund Trustee Ltd. was set up, to act as the trustee for the mutual fund business.

In terms of an exemption received from the Ministry of Corporate Affairs, Government of India through its letter no. 47/39/2010-CL-lll dated 25,h January 2010 under Section 212(8) of the Companies Act 1956, copies of the Directors Report, report of the auditors of the five subsidiaries [Axis Sales Ltd. (now renamed as Axis Securities and Sales Ltd.), Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis Asset Management Company Ltd. and Axis Mutual Fund Trustee Ltd.] along with financial statements have not been attached to the accounts of the Bank for the financial year ended 31st March 2010.

Any shareholder who is interested in obtaining a copy of these details may write to the Company Secretary at the Registered Office of the Bank. These documents will also be available for examination by shareholders of the Bank at its Registered Office and also at the registered offices of the five subsidiary companies. In line with the Accounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India, the consolidated financial results of the Bank along with its subsidiaries for the year ended 31st March 2010 are enclosed as an Annexureto this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

To enable employees including whole-time Directors of the Bank to participate in the future growth and financial success of the Bank, the Bank instituted in 2001 an Employee Stock Option Scheme under which 35,770,000 options can be granted to employees. The employee stock option scheme is in accordance with the Securities and Exchange Board of India (Employee Stock Option and Employee

Stock Purchase Scheme) Guidelines, 1999. The eligibility and number of options to be granted to an employee is determined on the basis of the employees work performance and is approved by the Board of Directors.

The Banks shareholders approved plans in February 2001, June 2004, June 2006 and June 2008 for the issuance of stock options to employees. Under the first two plans and upto the grant made on 29th April 2004, the option conversion price was set at the average daily high-low price of the Banks equity shares traded during the 52 weeks preceding the date of grant at the Stock Exchange which has had the maximum trading volume of the Banks equity share during that period. Under the third plan and with effect from the grant made by the Bank on 10"June 2005, the pricing formula has been changed to the closing price on the day previous to the grant date. The Remuneration and Nomination Committee granted options under these plans on nine occasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355 during 2008-09 and 4,413,990 during 2009-10. The options granted, which are non-transferable, vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the grant, subject to standard vesting conditions, and must be exercised within three years of the date of vesting. As of 31st March 2010, 16,338,254 options had been exercised and 13,897,518 options were in force.

Other statutory disclosures as required by the revised SEBI guidelines on ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving the highest standards of corporate governance and it aspires to benchmark itself with international best practices in this regard. The corporate governance practices followed by the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained in the Corporate Governance Voluntary Guidelines 2009 issued by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in the preparation of the annual accounts and proper explanations have been furnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistently and reasonably, and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the Bank and of the Profits Loss of the Bank for the financial year ended 31s March 2010.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies (Amendment) Act, 2000, for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

v. The Bank has in place a system to ensure compliance of all laws applicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions of Section 217(1 )(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption do not apply to the Bank. The Bank is, however, constantly pursuing its goal of technological upgradation in a cost-effective mannerfordelivering quality customer service.

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules thereunder, is given in an Annexure appended hereto and forms part of this report. In terms of Section 219(1) (iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s S. R. Batliboi & Co., Chartered Accountants, had been appointed by the shareholders at the fifteenth Annual General Meeting as Statutory Auditors of the Bank for the year 2009-10 and will be retiring at the conclusion of the forthcoming Annual General Meeting. M/s S. R. Batliboi & Co. have been the Statutory Auditors of the Bank since 2006. As per the regulations of Reserve Bank of India, the same auditors cannot be re-appointed for a period beyond 4 years. It is, accordingly, proposed to appoint M/s Deloitte Haskins & Sells, Chartered Accountants, as the Banks new Statutory Auditors subject to the approval by the shareholders. The Board of Directors place on record their appreciation of the professional services rendered by IWs S. R. Batliboi & Co., as the Statutory Auditors of the Bank.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the Reserve Bank of India, other government and regulatory authorities, financial institutions and correspondent banks for their strong support and guidance. The Board acknowledges the support of the shareholders and also places on record its sincere thanks to its valued clients and customers for their continued patronage. The Board also expresses its deep sense of appreciation to all employees of the Bank for their strong work ethic, excellent performance, professionalism, team work, commitment, and initiative which has led to the Bank making commendable progress in todays challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai Adarsh Kishore

Date : April 20,2010 Chairman