Axis Bank Limited Annual Report 2013

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FY2013 Annual Report · Axis Bank Limited

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CONTENTS

Managing Director & CEO’s Letter to Shareholders

Board of Directors

Snap Shot of Key Financial Indicators : 2009-2013

Highlights

Directors’ Report

Management’s Discussion & Analysis

Auditors’ Report

Balance Sheet

Proﬁ t and Loss Account

Cash Flow Statement

Schedules Forming Part of Balance Sheet

Schedules Forming Part of Proﬁ t and Loss Account

Signiﬁ cant Accounting Policies

Notes to Accounts

Auditors’ Certiﬁ cate on Corporate Governance

Corporate Governance

Auditors’ Report on Consolidated Financial Statements

Consolidated Financial Statements

Business Responsibility Report

Disclosures under the New Capital Adequacy Framework
(Basel II Guidelines)

Bank’s Network : List of Centres

111

112

155

167

185

MANAGING DIRECTOR & CEO’S LETTER
TO THE SHAREHOLDERS

It has been a challenging environment but despite the slowing momentum of growth in the

economy, your Bank has reported another consistent performance - reﬂ ected in a steady

growth of our customer base, widening reach through multiple channels, healthy growth of

business and revenues and stable asset quality. It is also an afﬁ rmation of the Bank’s focus on

a balanced growth strategy.

The Bank’s retail businesses grew steadily during the year and there was credible growth of

both retail deposits and loans, supported by an expanding network that is critical to the retail

franchise. We added 325 branches and 1,321 ATMs in FY 2012-13. Your Bank continues to

balance growth with proﬁ tability and generate value for our stakeholders. This is evidenced

by the consistently healthy return on assets and return on equity.

We also have a deep and abiding commitment to the environment and the underprivileged.

Towards this end, your Bank has adopted the ambitious goal of facilitating the creation of one

million sustainable livelihoods by 2017 in partnership with reputed organizations in the ﬁ eld.

During the current ﬁ nancial year, your Bank undertook a successful equity capital raising

exercise and global and domestic investors have invested `5,537 crores in the Bank. We are

grateful to all the investors who have reposed conﬁ dence in us.

Looking ahead, we are optimistic about the future and we believe that your Bank is positioned

to adapt suitably to challenges and capitalise on emerging opportunities in the economy. I truly

appreciate your support and association with the Bank and remain committed to delivering

value to all our stakeholders.

Shikha Sharma

24th April, 2013

BOARD OF DIRECTORS*

Sanjiv Misra
Shikha Sharma
K. N. Prithviraj
V. R. Kaundinya
S. B. Mathur
Prasad R. Menon
R. N. Bhattacharyya
Samir K. Barua
A. K. Dasgupta
Som Mittal
Ireena Vittal
Rohit Bhagat
Somnath Sengupta
V. Srinivasan

P. J. Oza

THE CORE MANAGEMENT TEAM

R. K. Bammi
P. Mukherjee
S. S. Bajaj
Vinod George
M. V. Subramanian
S. K. Mitra
B. Gopalakrishnan
Bapi Munshi
C. Babu Joseph
Sanjeev K. Gupta
V. K. Bajaj
Sidharth Rath
A. R. Gokulakrishnan
Rajendra D. Adsul
R. V. S. Sridhar
Lalit Chawla
Rajesh Kumar Dahiya
Sharad Bhatia
Rajiv Anand
Jairam Sridharan

*as on 24th April 2013

Chairman
Managing Director & CEO
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Executive Director & Head (Corporate Centre)
Executive Director & Head (Corporate Banking)

Company Secretary

Executive Director (Retail Banking)
President – Large Corporate and International Banking
President & Chief Audit Executive
President – Wholesale Banking Operations
President – Rural & Inclusive Banking
President – Distribution
President – Law
President & Chief Risk Ofﬁ cer
President – Executive Trustee & CEO – Axis Bank Foundation
President & Chief Financial Ofﬁ cer
President – Mid Corporates & SME
President – Treasury & Business Banking
President – Wholesale Banking Operations (Designate)
President – SME
President – IT & Retail Operations
President – Corporate Credit
President – Human Resources
President – Stressed Assets
President – Retail Banking
President – Consumer Lending

Auditors

Registrar and Share Transfer Agents

M/s Deloitte Haskins & Sells
Chartered Accountants
M/s Karvy Computershare Private Limited
UNIT: AXIS BANK LIMITED
Plot No. 17 to 24, Vittalrao Nagar, Madhapur, Hyderabad - 500 081.
Tel. No. : 040-23420815 to 23420824 Fax No. : 040-23420814
Registered Ofﬁ ce
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad - 380 006.
Tel. No. : 079-2640 9322 Fax No: 079-2640 9321
Email: p.oza@axisbank.com,sanjeev.kapoor@axisbank.com,rajendra.swaminarayan@axisbank.com
Web site : www.axisbank.com
Corporate Ofﬁ ce
Axis House, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025.
Tel. No. : 022-24252525/43252525 and Fax No. : 022-24251800

1_Contents_Highlights.indd 4

6/11/2013 1:21:48 PM

SNAP SHOT OF KEY FINANCIAL INDICATORS : 2009 - 2013

FINANCIAL HIGHLIGHTS

2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012 2012 - 2013

(` in crores)

CAGR
(5 Years)

Total Deposits

117,374.11

141,300.22

189,237.80

220,104.30

252,613.59

23.58%

- Savings Bank Deposits

25,822.12

33,861.80

40,850.31

51,667.96

63,777.73

26.13%

- Current Account Deposits

24,821.61

32,167.74

36,917.09

39,754.07

48,322.10

19.24%

Total Advances

81,556.77 104,340.95

142,407.83

169,759.54

196,965.96

26.98%

- Retail Advances

16,051.78

20,820.73

27,759.23

37,570.33

53,959.79

31.75%

Total Investments

46,330.35

55,974.82

71,991.62

93,192.09

113,737.54

27.54%

Shareholders' Funds

10,213.59

16,044.45

18,998.83

22,808.54

33,107.86

30.44%

Total Assets/Liabilities

147,722.05

180,647.85

242,713.37

285,627.79

340,560.66

25.46%

Net Interest Income

3,686.21

5,004.49

6,562.99

8,017.75

9,666.26

30.18%

Other Income

2,896.88

3,945.78

4,632.13

5,420.22

6,551.11

29.55%

Operating Revenue

6,583.09

8,950.27

11,195.12

13,437.97

16,217.37

29.92%

Operating Expenses

2,858.21

3,709.72

4,779.43

6,007.10

6,914.24

26.26%

Operating Proﬁ t

3,724.88

5,240.55

6,415.69

7,430.87

9,303.13

33.11%

Provisions and Contingencies

1,909.52

2,726.02

3,027.20

3,188.66

4,123.70

28.99%

Net Proﬁ t

1,815.36

2,514.53

3,388.49

4,242.21

5,179.43

37.06%

FINANCIAL RATIOS

2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012 2012 - 2013

Earnings Per Share (Basic) (in `)

50.61

65.78

82.95

102.94

119.67

Book Value (in `)

Return on Equity

Return on Assets

284.50

395.99

462.77

551.99

707.50

19.93%

19.89%

20.13%

21.22%

20.51%

1.44%

1.67%

1.68%

1.70%

Capital Adequacy Ratio (CAR)

13.69%

15.80%

12.65%

13.66%

17.00%

Tier I Capital (CAR)

9.26%

11.18%

9.41%

9.45%

12.23%

Dividend Per Share (in `)

10.00

12.00

14.00

16.00

18.00

Dividend Payout Ratio

23.16%

22.57%

19.78%

18.15%

19.06%

HIGHLIGHTS

Proﬁ t after tax up 22.09% to `5,179.43 crores

Net Interest Income up 20.56% to `9,666.26 crores

Fee & Other Income up 14.59% to `5,796.51crores

Deposits up 14.77% to `252,613.59 crores

Demand Deposits up 22.62% to `112,099.83 crores

Advances up 16.03% to `196,965.96 crores

Retail Assets up 43.62% to `53,959.79 crores

Network of branches and extension counters increased from 1,622 to 1,947

Total number of ATMs went up from 9,924 to 11,245

Earnings per share (Basic) increased from `102.94 to `119.67

Proposed Dividend up from 160% to 180%

Capital Adequacy Ratio stood at 17.00% as against the minimum regulatory norm of 9%

Tier - I Capital Adequacy Ratio up from 9.45% to 12.23%

DIRECTORS’ REPORT: 2012-13

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 ﬁ nancial year ended 31st March 2013.

FINANCIAL PERFORMANCE

The ﬁ nancial highlights for the year under review are presented below:

PARTICULARS
Deposits
Out of which
(cid:2) Savings Bank Deposits
(cid:2) Current Account Deposits
Advances
Out of which
(cid:2) Retail Advances
(cid:2) Non-retail Advances
Total Assets/Liabilities
Net Interest Income
Other Income
Out of which
(cid:2) Trading Proﬁ t (1)
(cid:2) Fee and other income
Operating Expenses (excluding depreciation)
Proﬁ t before Depreciation, Provisions and Tax
Depreciation
Provision for Tax
Other Provisions and Write offs
Net Proﬁ t
Appropriations:
Transfer to Statutory Reserve
Transfer to Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Proposed Dividend
Surplus carried over to Balance Sheet
(1) Excluding Merchant Exchange Proﬁ t

2012-13
252,613.59

2011-12
220,104.30

(` in crores)
GROWTH
14.77%

63,777.73
48,322.10
196,965.96

53,959.79
143,006.17
340,560.66
9,666.26
6,551.11

754.60
5,796.51
6,562.51
9,654.86
351.73
2,373.26
1,750.44
5,179.43

1,294.86
53.46
141.46
2.61
987.24
2,699.80

51,667.96
39,754.07
169,759.54

37,570.33
132,189.21
285,627.79
8,017.75
5,420.22

361.56
5,058.66
5,664.86
7,773.11
342.24
2,045.63
1,143.03
4,242.21

1,060.55
-
51.90
-
770.08
2,359.68

23.44%
21.55%
16.03%

43.62%
8.18%
19.23%
20.56%
20.86%

108.71%
14.59%
15.85%
24.21%
2.77%
16.02%
53.14%
22.09%

22.09%
-
172.56%
-
28.20%
14.41%

KEY PERFORMANCE INDICATORS
Interest Income as a percentage of working funds*
Non-Interest Income as a percentage of working funds*
Net Interest Margin
Return on Average Net Worth
Operating Proﬁ t as a percentage of working funds*
Return on Average Assets
Proﬁ t per employee**
Business (Deposits less inter-bank deposits + Advances) per employee**
Net non-performing assets as a 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.

2012-13
8.90%
2.15%
3.53%
20.51%
3.05%
1.70%
`14.58 lacs
`12.15 crores
0.32%

2011-12
8.71%
2.15%
3.59%
21.22%
2.94%
1.68%
`14.34 lacs
`12.76 crores
0.25%

Previous year ﬁ gures have been re-grouped wherever necessary.

16,217

(` in crores)

RISING PROFITABILITY

The Bank continued to grow steadily, both in business
and earnings, in an increasingly competitive ﬁ nancial
market and reported a net proﬁ t of `5,179.43 crores
for the year ended 31st March 2013, registering a
growth of 22.09% over the net proﬁ t of `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 `33,733.68 crores, compared
to `27,414.86 crores last year. Operating revenue
during this period increased by 20.68% to `16,217.37
crores while operating proﬁ t increased by 25.20%
to `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 `9,666.26 crores from `8,017.75
crores last year. Fee, trading and other income increased by 20.86% to `6,551.11 crores from `5,420.22 crores last year. The
increase in earnings was partly offset by an increase in operating expenses by 15.10% to `6,914.24 crores.

2008-09 2009-10 2010-11

2009-10 2010-11

2011-12 2012-13

Operating Revenue

2011-12 2012-13

Net Profit

2008-09

11,195

13,438

6,583

1,815

3,388

2,515

4,242

5,179

8,950

2010-11

2008-09

2011-12

2009-10

2012-13

2010-11

2012-13

2009-10

2008-09

2011-12

755

497

822

362

374

2,523

3,123

4,135

5,059

5,797

(` in crores)

TRADING PROFITS

FEE & MISCELLANEOUS INCOME

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 `273,738
crores, compared to `223,206 crores
last year. A steady growth of low-cost
CASA deposits, which on a daily average
basis increased to `80,941 crores from
`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 proﬁ t and miscellaneous income increased by 20.86% to `6,551.11 crores in 2012-13
from `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 `5,520.93 crores from `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 proﬁ ts increased
by 108.71% to `754.60 crores from `361.56 crores last year. Miscellaneous income decreased by 16.92% to `275.58 crores
from `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 `268.51 crores.
As a result, the operating revenue of the Bank increased by 20.68% to `16,217.37 crores from `13,437.97 crores last year.
The core income streams (NII, fee and miscellaneous income) now constitute 95.35% of the operating revenue, reﬂ ecting the
sustainability of the Bank’s earnings. Operating expenses increased by 15.10% to `6,914.24 crores from `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.

285

708

552

396

463

19.9

20.5

19.9

21.2

20.1

1.44%

RETURN ON ASSETS

1.67% 1.68% 1.68% 1.70%

SHAREHOLDER RETURNS

During the year,
t h e o p e r a t i n g
p r o f i t o f t h e
Bank increased
b y 2 5 . 2 0 % t o
`9,303.13 crores
from `7,430.87
crores last year.
During this period,
the Bank created
total provisions
( e x c l u d i n g
provisions for tax)
of `1,750.44 crores compared to `1,143.03 crores last year. The Bank provided `1,179.22 crores towards non-performing assets
compared to `860.43 crores last year and `196.68 crores towards provision for standard assets compared to `150.30 crores
last year. The Bank also provided `103.95 crores compared to `88.86 crores last year against restructured assets. The Bank has
also created a contingent provision of `375 crores against advances and other exposures as a prudent measure. During 2012-
13, the Bank restructured loans of `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).

2010-11
Book value per Share (`)

Return on Average Net Worth (%)

2008-09 2009-10 2010-11

2011-12 2012-13

2012-13

2011-12

2012-13

2011-12

2009-10

2010-11

2008-09

The healthy growth in business and revenue has been reﬂ ected in a set of ﬁ nancial parameters and ratios during the year.
Basic Earnings Per Share (EPS) was `119.67 compared to `102.94 last year, while the Diluted Earnings Per Share was `118.85
compared to `102.20 last year. Return on Equity (RoE) was 20.51% compared to 21.22% last year and Book Value Per Share
increased from `551.99 to `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 `340,561 crores on 31st March 2013 from `285,628 crores on 31st March 2012. As on 31st
March 2013, the total deposits of the Bank stood at `252,614 crores against `220,104 crores last year, increasing by 14.77%
over last year. Savings Bank deposits increased by 23.44% to `63,778 crores, while Current Account deposits increased by
21.55% to `48,322 crores. Low-cost demand deposits: Current Accounts and Savings Bank (CASA) deposits were `112,100
crores as on 31st March 2013 as compared to `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 `52,243 crores, while Current Account deposits increased by 4.73% to `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 `59,531 crores, constituting 42.37%
of the total term deposits compared to 37.20% last year. Total advances of the Bank were `196,966 crores as on 31st March
2013, increasing by 16.03% from `169,760 crores as on 31st March 2012. Of this, corporate advances (comprising large,
infrastructure and mid-corporate accounts) increased 7.89% to `98,239 crores and SME loans increased 25.75% to `29,922
crores. Agricultural lending (including micro ﬁ nance) stood at `14,845 crores, decreasing 14.39% over the last year. Retail loans
increased by 43.62% to `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 diversiﬁ cation 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 `113,737 crores and investments in government and approved securities, held mainly for
SLR requirement, increased by 23.89% to `72,518 crores. Other investments, including corporate debt securities, increased by
18.93% to `41,219 crores. As on 31st March 2013, the total assets of the Bank’s overseas branches stood at `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 11,245, 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 ofﬁ ces at Shanghai, Dubai and Abu Dhabi.

CAPITAL & RESERVES

ENHANCING SHAREHOLDER VALUE

180

140

100

160

120

64.31

50.27

81.61

102.20

118.85

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 Qualiﬁ ed Institutional Placement (QIP) and a preferential
allotment of equity shares to the promoters of the Bank.
The Bank mobilised an aggregate of `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 `1,390 per share.
During the year, the Bank also raised capital of `2,500 crores by way of sub-ordinated bonds (unsecured redeemable non-
convertible debentures) qualifying as Tier II capital. These measures have signiﬁ cantly 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 `467.95
crores, as compared to `413.20 crores last year. The shareholding pattern of the Bank as of 31st March 2013 was as under:

Earning Per Share (Diluted) `

Dividend (%)

2009-10

2011-12

2009-10

2011-12

2008-09

2010-11

2012-13

2010-11

Sr. No.
i.
ii.
iii.
iv.
v.
vi.
vii.

Name of Shareholders

Administrator of the Speciﬁ ed Undertaking of the Unit Trust of India (SUUTI)
Life Insurance Corporation of India (LIC) (1)
General Insurance Corporation and four PSU insurance companies
Overseas investors (including FIIs/OCBs/NRIs)
Foreign Direct Investment (GDR issue)
Other Indian ﬁ nancial institutions/mutual funds/banks
Others
Total

% of Paid-up Capital
20.78
9.26
3.84
41.13
8.16
4.50
12.33
100.00

(1) As per Benpos dated 31st March 2013, save and except 43,335,460 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 `118.85 from `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 `18.00 per equity
share, compared to `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 reﬂ ects our conﬁ dence 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
Speciﬁ ed 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 Paciﬁ c, 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 ﬁ nancing 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 ﬁ led
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 ﬁ nancial statements of the seven subsidiaries have not been

attached to the accounts of the Bank for the ﬁ nancial 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 Ofﬁ ce of the Bank. These
documents will also be available for examination by shareholders of the Bank at its Registered Ofﬁ ce. The documents related
to individual subsidiaries will similarly be available for examination at the respective registered ofﬁ ces of the companies. In line
with the Accounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of India, the consolidated ﬁ nancial
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 ﬁ nancial 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 ﬁ ve occasions. Under the ﬁ rst 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: 1,118,925 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 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 conﬁ rms that:

(cid:2)

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

(cid:2) 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 Proﬁ t and Loss of the Bank
for the ﬁ nancial year ended 31st March 2013.

Proper and sufﬁ cient 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.

(cid:2)

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 Ofﬁ ce 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 ﬁ nancial 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,
ﬁ nancial 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
Date : 24th April, 2013

Sanjiv Misra
Chairman

ANNEXURE

STATUTORY DISCLOSURES REGARDING ESOP
(FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31st MARCH 2013)

Options Granted

Options Exercised & Shares Allotted*

Options lapsed/cancelled

Total Options (in force) as on 31st March, 2013

Options Vested
Money realised by exercise of options (` in lacs)

* One (1) share would arise on exercise of one (1) stock option

Other details are as under:

Pricing Formula

Variation in terms of ESOP

Details of options granted:

42,407,590

27,190,658

4,351,907

10,865,025

5,372,105

83,801.94

Fixed Price i.e. The average daily high – low price of the shares
of the Bank traded during the 52 weeks preceding the date
of grant at that stock exchange which has had the maximum
trading volume of the Bank’s share during that period.

For options granted on and after 10th June 2005, the exercise
price considered is the closing market price as on the day
preceding the date of the grant at that stock exchange which
has had the maximum trading volume of the Bank’s share.

None

(cid:2) Employee wise details of grants to Senior managerial

Managing Director & CEO : 675,000 options

personnel

Executive Director
& Head (Corporate Centre): 403,880 options **

Executive Director
& Head (Corporate Banking): 290,000 options **

(cid:2) Employees who were granted, during any one year,
options amounting to 5% or more of the options granted
during the year

Managing Director & CEO : 200,000 options

(cid:2)

Identiﬁ ed employees who were granted options, during
any one year, equal or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the
Bank under the grant

None

Diluted Earnings Per Share pursuant to issue of shares on
exercise of options calculated in accordance with Accounting
Standard (AS) 20 ‘Earnings Per Share’

`118.85 per share

Weighted average exercise price of Options whose:

(cid:2) Exercise price equals market price

Weighted average exercise price of the stock options granted
during the year is `1,086.65.

(cid:2) Exercise price is greater than market price

(cid:2) Exercise price is less than market price

Nil

** Represent options granted prior to appointment as Executive Director

Weighted average fair value of Options whose:

(cid:2) Exercise price equals market price

Weighted average fair value of the stock options granted
during the year is `387.24.

(cid:2) Exercise price is greater than market price

(cid:2) Exercise price is less than market price

Fair Value Related Disclosure

Nil

(cid:2) Increase in the employee compensation cost computed
at fair value over the cost computed using intrinsic cost
method

(cid:2) Net Proﬁ t, if the employee compensation cost had been

computed at fair value

(cid:2) Basic EPS, if the employee compensation cost had been

computed at fair value

(cid:2) Diluted EPS, if the employee compensation cost had been

computed at fair value

`117.08 crores

`5,062.35 crores

`116.97 per share

`116.16 per share

Signiﬁ cant Assumptions used to estimate fair value

(cid:2) Risk free interest rate

(cid:2) Expected life

(cid:2) Expected Volatility

(cid:2) Dividend Yield

(cid:2) Price of the underlying share in the market at the time of

option grant

8.14% to 8.33%

2 to 4 years

35.92% to 50.25%

1.20%

`1,086.65

MANAGEMENT’S DISCUSSION AND ANALYSIS

MACRO-ECONOMIC ENVIRONMENT

Fiscal 2012-13 saw Gross Domestic Product (GDP) growth falling to 5.0% from 6.2% in the previous year. Persisting high inﬂ ation,
macro-economic imbalances, including ﬁ scal and current account deﬁ cits resulted in a tight monetary policy stance for much
part of the year. Investment dropped sharply due to high interest rates and project implementation bottlenecks resulting in the
growth slowdown. A decline in the country’s exports – the result of declining domestic competitiveness and a slowing global
economy, together with high imports has led to deterioration in the Current Account Deﬁ cit (CAD). Reduced capital inﬂ ows
also led to a sharp depreciation of the Rupee.

Subsidies rose to 2.6% in ﬁ scal 2012-13 from 1.4% of GDP in the previous year, with both the ﬁ scal deﬁ cit and inﬂ ation remaining
at elevated levels. As part of the process of reforms and with a view to restoring investor conﬁ dence, the government has taken
a number of measures since September 2012 including the partial de-regulation of diesel prices, capping of subsidies of LPG
and liberalisation of FDI in multi-brand retail and aviation. The government has made ﬁ scal discipline a key objective and the
deﬁ cit for ﬁ scal 2013-14 has been budgeted at 4.8% of GDP, lower than 5.2% declared for the previous year.

Credit growth fell to less than 15% and in the absence of fresh investments and monetary policy easing in ﬁ scal 2013-14 may
slow down further. Deposit growth in the banking sector, which remains the primary channel of ﬁ nancial intermediation, also
witnessed a slowdown in ﬁ scal 2012-13. Aggregate deposits outstanding were `67.51 lac crores as on 22nd March 2013 growing
14.3% year-on-year while non-food bank credit grew 14% to `51.66 lac crores.

Prospects for Fiscal 2013-14

Moderate global economic recovery and measures to revive domestic growth are likely to improve economic conditions and
sentiment in India in ﬁ scal 2013-14. Core inﬂ ation is likely to decline gradually and remain range-bound thereafter. India’s
Current Account Deﬁ cit (CAD) is likely to reduce gradually as a result of the measures initiated by the government and the RBI.
Improvement in exports will act as a further impetus to domestic growth. The steps taken to revive investment, including monetary
policy easing and liquidity infusion and progressive infrastructure de-bottlenecking is likely to increase capacity expansion. Recent
measures by the government, including actions by the Cabinet Committee on Investments (CCI) and prospective award of road
contracts is likely to boost the projects being implemented. As a result, GDP may potentially rise to around 6% in ﬁ scal 2013-14.

With households re-allocating their savings from physical to ﬁ nancial assets and with improvement in ﬁ nancial performance by
corporates, higher foreign capital inﬂ ows as well as better cash management by the government, it is hoped that there will be
an increase in ﬁ nancial savings that would support deposit growth and improve systemic liquidity. For ﬁ scal 2013-14, we expect
deposit growth to be 14-15% and non-food bank credit to be around 15-16%. The challenging conditions have enabled Indian
corporates to become more competitive and efﬁ cient that will help them beneﬁ t from a cyclical upturn.

OVERVIEW OF FINANCIAL AND BUSINESS PERFORMANCE

In a year in which the banking sector in the country has
faced increasing strain, from tight liquidity conditions,
hardening interest rates, slowdown in capital
expenditure, rising delinquencies and high incidence
of assets being restructured, the Bank has reported
a strong performance, sustained by its fundamental
strengths - a sound infrastructure in the form of a
well laid-out retail franchise and a large number of
corporate relationships.

3.33

3.75

3.65

3.59

3.53

9,666

8,018

6,563

5,004

3,686

The Bank has registered robust growth in both business
and revenues. The total assets of the Bank as on
31st March 2013 were `340,561 crores, increasing
19.23% over the year, with the total deposits of the
Bank rising 14.77% to `252,614 crores and the total
advances rising 16.03% to `196,966 crores as on
31st March 2013. During the year, the total income of the Bank increased 23.05% to `33,734 crores, while operating revenue
increased 20.68% to `16,217 crores. The net proﬁ t rose 22.09% to `5,179 crores from `4,242 crores in the previous year.

Net Interest Income (` in crores)

Net Interest Margins (%)

2011-12 2012-13

2008-09

2010-11

2009-10

2010-11

2009-10

2008-09

46.73

43.15

41.54

41.10

LOW COST OF FUNDS

6.50

6.55

6.28

The Bank continued to create shareholder value, as a result of
which the diluted earnings per share for the year increased to
`118.85 from `102.20 last year, while the book value per share
increased to `707.50 from `551.99 last year.

44.38

5.20

4.96

CAPITAL MANAGEMENT

The Bank has consistently provided superior returns to its
shareholders by using capital efﬁ ciently in supporting business
growth. The capital management framework is driven by the
objective of ensuring an appropriate mix of business, with
optimal allocation of capital.

2010-11

2011-12 2012-13

2008-09 2009-10

Demand Deposits as % Share of Total Deposits

Investor interest in the Bank continued to be strong, from
both domestic and foreign institutional entities. In order to
strengthen its core capital base, the Bank raised equity capital
aggregating `5,537.47 crores during the year through a Qualiﬁ ed Institutional Placement and a preferential allotment of shares
to its promoters. The Bank also raised Tier II Capital of `2,500 crores in the form of sub-ordinated bonds (unsecured redeemable
non-convertible debentures) to augment the overall capital base.

2011-12 2012-13

Cost of Funds (%)

2010-11

The Bank has implemented the Revised Framework of the International Convergence of Capital Measurement and Capital
Standards in 2008. In terms of RBI guidelines on Basel II, the capital charge for credit and market risk for the ﬁ nancial year
ended 31st March 2013 is required to be maintained at the higher levels as required under Basel II or 80% of the minimum
capital requirement computed under Basel I. In terms of regulatory guidelines on Basel II, the Bank has computed capital charge
for operational risk under the Basic Indicator Approach and the capital charge for credit risk under the Standardised Approach.
As on 31st March 2013, the Bank’s Capital Adequacy Ratio (CAR) under Basel II was 17.00% against 13.66% on 31st March
2012 and the minimum regulatory requirement of 9%. Of this, the Tier I Capital Adequacy Ratio was 12.23%, while the
Tier II Capital Adequacy Ratio was 4.77%. The following table sets forth the capital, risk-weighted assets and capital adequacy
ratios computed as on 31st March 2013 and 31st March 2012 in accordance with the applicable RBI guidelines under Basel II.

AS ON 31ST MARCH

Tier I Capital – Shareholders’ Funds

Tier II Capital

Out of which

- Bonds qualifying as Tier II capital

- Upper Tier II capital

- Other eligible for Tier II capital

(` in crores)

2013

2012

31,596.80

21,886.11

12,334.32

9,758.84

10,036.66

1,446.53

851.13

7,737.52

1,374.74

646.58

Total Capital qualifying for computation of Capital Adequacy Ratio

43,931.12

31,644.95

Total Risk-Weighted Assets and Contingencies

Total Capital Adequacy Ratio (CAR)
Out of above
- Tier I Capital

- Tier II Capital

258,355.49

231,711.39

17.00%

13.66%

12.23%

4.77%

9.45%

4.21%

During the year, the RBI issued guidelines on implementation of Basel III capital regulation in India. These guidelines are to be
implemented beginning 1st April 2013 in a phased manner and will stand fully implemented as on 31st March 2018. These
guidelines cover the new capital regulations and the liquidity risk management framework. The Bank has taken appropriate steps
to ensure adoption of these guidelines within the timeframe stipulated by RBI. The liquidity guidelines have been integrated
into the asset liability management framework of the Bank through suitable amendments in order to ensure adherence to RBI
guidelines on monitoring and management of liquidity including liquidity ratios.

BUSINESS OVERVIEW

An overview of various business segments along with the performance during 2012-13 and their future strategies is presented
below.

RETAIL BANKING

The Bank aims to increase its share in the ﬁ nancial services sector by continuing to
build a strong retail franchise. The segment continues to be one of the key drivers
of the Bank’s growth strategy, encompassing a wide range of products delivered
through multiple channels to customers. The Bank offers a complete suite of products
across deposits, loans, investment solutions, payments and cards and is committed
to developing long-term relationships with its customers by providing high-quality
services.

The Bank pursues an effective customer segmentation strategy, the success of which
is reﬂ ected in the fact that Savings Bank deposits grew at a Compounded Annual
Growth Rate (CAGR) of 26.13% over the last ﬁ ve years. During the year, Savings
Bank deposits grew 23.44% to `63,778 crores from `51,668 crores last year. On
a daily average basis, Savings Bank deposits grew 20.26% to `52,243 crores. The
Bank has also maintained its approach in
increasing the proportion of Retail Term
Deposits. On the 31st March 2013, retail
term deposits grew 24.37% year-on-year to
`59,531 crores, constituting 42.37% of total
term deposits, compared to 37.20% last year.

RETAIL ASSETS

(` in crores)

37,570

53,960

20,821

27,759

16,052

Likewise, the Bank continued to focus on
increasing its share of retail loans in total
advances. The retail loans of the Bank grew
43.62% to `53,960 crores as on 31st March
2013 from `37,570 crores last year. Retail
loans constituted 27.40% of the Bank’s total
advances as on 31st March 2013, compared
to 22.13% last year of which secured loans
accounted for 87%. The distribution of speciﬁ c
portfolios within the Retail loan segment as on 31st March 2013 was as follows: home
loans - 65%, loans against property - 7%, auto loans - 14%, personal loans and credit
cards - 9%.

2008-09 2009-10 2010-11

2011-12 2012-13

RETAIL ASSETS

RETAIL LIABILITIES

63,778

51,668

40,850

33,862

25,822

2008-09 2009-10 2010-11

2011-12 2012-13

SB DEPOSITS (` in crores)

14%

65%

Personal Loans

Credit Cards

Auto loans

Housing loans

Loans against Property

Others

The Bank sources retail loans through 120 Asset Sales Centres operating out of 96 cities with standardised appraisal and
oversight mechanisms. Retail loans are also originated from 1,183 branches through which one-third of incremental retail
loans are currently sourced. The cards business is an integral part of the Bank’s retail strategy with ever-increasing numbers
of transactions moving to the electronic mode. The Bank is one of the largest debit card issuers in the country, with a base of
142.9 lacs, which rose from 124.99 lacs at the end of last year. With more than a million cards in force, the Bank is now the
sixth largest credit card issuer in the country. The Bank has also emerged as one of the largest acquirers in the country with an
installed base of 2.16 lac point-of-sale terminals. During the year, the Bank also launched mobile POS.

To Indians living and working overseas, the Bank offers a complete suite of banking and investment products under its NRI
Services. The Bank has 49 branches authorised to issue Portfolio Investment Scheme (PIS) permissions to NRIs/PIOs who wish to
trade in the Indian secondary markets through registered stock brokers on recognised stock exchanges. To support the business,
the Bank has launched a 24x7 integrated helpdesk for NRI customers with the facility of toll-free numbers from key geographies.
As on 31st March 2013, the Bank’s aggregate NRI deposits (Savings + Term Deposits) stood at `13,104 crores against `8,624
crores last year. The Bank also offers products in the area of retail forex and remittances, including travel currency cards, inward
and outward wire transfers, travellers cheques and foreign currency notes, remittance facilities through online portals as well
as through collaboration with correspondent banks, exchange houses and money transfer operators. The Bank continued to

have a market leadership position in Travel Currency Cards with 11 currency options other than INR being offered. The Bank
is planning to introduce two new currency options New Zealand Dollar (NZD) and Thai Baht (THB). Additionally, the Bank also
launched a multi-currency card speciﬁ cally aimed at corporates and business travellers. The aggregate load value on Travel
Currency Cards crossed USD 3 billion during the year.

‘Axis Bank Privée’, a business vertical offers private banking solutions to meet the personalised investment needs of high net
worth individuals as well as the corporate advisory needs of families in business. Axis Bank Privée brings solutions offered by
various business groups (retail and corporate) within the Bank and various group entities under one integrated platform.

The Bank also distributes third party products such as mutual funds, Bancassurance products (life and general insurance), online
trading and gold coins through its branches. The Bank is one of the leading banking distributors of mutual funds in India and
distributes mutual fund products of all major asset management companies. These products are sold through the Bank’s branch
distribution network based on client requirements. The Bank also distributes life insurance products of Max Life Insurance
Company and during the year, it sold more than 1.86 lac policies with a premium mobilisation of `790.62 crores. During the
year, the Bank entered into an arrangement with Tata AIG General Insurance Company Limited to distribute general insurance
products. The Bank offers online trading services to its customers in collaboration with Axis Capital Ltd. (a 100% subsidiary
of the Bank) under the name Axis Direct, an enhanced and simpliﬁ ed Online Trading platform which is now available to NRI
customers. During the year, 148,390 online trading accounts were opened, taking the total number online trading accounts
to 297,069 as on 31st March 2013. The Bank also sold gold and silver bars to retail and corporate customers under the brand
‘Mohur’ through its branches.

During the year, the Bank added 325 branches spread across 279 centres. The Bank added 1,321 ATMs during the year to reach
a network size of 11,245 as on 31st March 2013 compared to 9,924 ATMs last year. The Bank has deployed 550 Automated
Deposit Machines (for cash deposits into customer accounts) and has extended this facility 24X7 in certain branches which have
integrated self-service lobbies. Besides the ATM network, internet banking, mobile banking and phone banking have developed
as important alternate channels of the Bank.

CORPORATE CREDIT

In the backdrop of a subdued macro-economic environment, capital expenditure by corporates remained lacklustre during
the year. Loans for working capital and the drawdown on committed sanctions in existing projects under implementation
contributed to the growth in corporate credit during the year. The corporate credit portfolio of the Bank comprising advances
to large and mid-corporates (including infrastructure) grew 7.89% to `98,239 crores from `91,053 crores last year. This includes
advances at overseas branches amounting to `29,972 crores (equivalent to USD 5.52 billion) comprising mainly the portfolio
of Indian corporates and their subsidiaries as also trade ﬁ nance. The advances at overseas branches accounted for 15.22% of
total advances. The Bank’s infrastructure business includes project and bid advisory services, project lending, debt syndication,
project structuring and due diligence, securitisation and structured ﬁ nance.

The Bank has introduced a relationship model, focusing on cross-selling a wide range of products to corporates. Fee-based
business through loan syndication, trade ﬁ nance and treasury business continued to grow. The Bank’s sectoral approach to
credit continued to achieve greater efﬁ ciency with increased attention on identifying sector-speciﬁ c opportunities. Portfolio
composition is being continuously monitored by tracking industry, group and company-speciﬁ c exposure limits. The internal
and external rating of the credit facilities of customers is undertaken and monitored on ongoing basis with the entire lending
portfolio of the Bank being internally rated.
The mid-corporate group continues to be an important business franchise of the Bank with an asset book of `20,010 crores
as on 31st March 2013, registering a growth of 15.23% over last year. In view of the macro economic scenario, exposure was
conﬁ ned to industries with a positive outlook only after evaluation of relevant credit risk factors with the objective of booking
better-rated exposures.

TREASURY

The Bank has an integrated Treasury, which covers both domestic and global markets and funds the balance sheet across
geographies. It plays an important role in the sovereign debt markets and participates in primary auctions of RBI. It also actively
participates in the secondary government securities and corporate debt market. Over the last few years, the Bank has emerged
as one of the leading banks providing foreign exchange and trade ﬁ nance services. Through its various verticals, the Treasury
serves customers across various industries, segments and regions. The foreign exchange and money market group under Treasury

is an active participant in the inter-bank/ﬁ nancial institutions space. It also maintains proprietary positions to generate trading
income for the Bank. An active Balance Sheet Management group within Treasury takes care of asset-liability mismatches and
interest rate sensitivities of the Bank’s portfolio. The interest rates and derivatives group provides derivative solutions to customers
for its balance sheet and currency exposures. The Global Financial Institutions Division (GFID) group in Treasury is responsible
for fostering business relationships with ﬁ nancial institutions across geographies and undertakes foreign currency fund raising.

The Bank continued to be a dominant player in placement and syndication of Rupee denominated debt. During the year, the
Bank arranged debt aggregating to `145,461 crores and retained its top position in arranging Rupee denominated debt for the
ﬁ fth consecutive calendar year as per Bloomberg and also as per PRIME Database for the nine months ended December 2012.
During the calendar year 2012, the Bank won the Best Domestic Bond House in India by The Asset Triple A Country Awards by
Asset Magazine, India Bond House by the IFR Asia, and Deal Maker of the year by Business World Magazine.

BUSINESS BANKING

Business Banking offers transactional banking services, leveraging upon the Bank’s network and technology. Its initiatives focus
on procurement of low-cost funds by offering a range of current account products and cash management solutions across all
business segments covering corporates, institutions, central and state government ministries and undertakings as well as small
and retail business customers. Product offerings of this business segment aim at providing customised transactional banking
solutions to fulﬁ l customer’s business requirement. Cross-sell of transactional banking products, product innovation and a
customer-centric approach have succeeded in growing current account balances and realisation of transaction banking fees.
As on 31st March 2013, balances in current accounts increased by 21.55% and stood
at `48,322 crores compared to `39,754 crores last year. On a daily average basis,
current accounts balances grew by 4.73% to `28,698 crores compared to `27,403
crores last year.

CMS GROWTH

15,818

11,548

In the cash management services (CMS) business, the Bank focuses on offering
customised service to its customer to cater to speciﬁ c corporate requirements and
improve the existing product line to offer enhanced features to customers. The Bank is
also focusing on host-to-host integration for both collections and payments, such as IT
integration between corporates and the Bank for seamless transactions and information
ﬂ ow. The Bank provides comprehensive structured MIS reports on a periodic basis, for
better accounting and reporting. CMS continued to constitute an important source of
fee income and contributed signiﬁ cantly to generate low cost funds. The Bank is one
of the top CMS providers in the country with the number of locations covered under
CMS increased to 890 from 801 last year. The number of CMS clients has grown to
15,818 from 11,548 last year.

8,465

6,614

4,852

2008-09 2009-10 2010-11

2011-12 2012-13

No. of CMS Clients

The Bank has been acting as an agency bank for transacting government business to various central government ministries,
departments, state governments and union territories. The Bank accepts income and other direct taxes through 406 authorised
branches at 225 locations and central excise and service taxes though 56 authorised branches at 14 locations including e-payments.
The Bank also handles the disbursement of civil pension through all its branches and defence pension through 151 authorised
branches. In addition, the Bank provides collection and payment services to four central government ministries/departments and
13 state governments and union territories. The Bank is associated with 11 state governments towards undertaking Electronic
Beneﬁ t Transfer (EBT) projects for disbursement of government beneﬁ ts (wages under MGNREGS and Social Security Pension
(SSP)) through direct credit to beneﬁ ciary bank accounts under smart card based IT enabled ﬁ nancial inclusion model. The total
government business throughput during the year was `92,680 crores.

The Bank is a SEBI-registered custodian and offers custodial services to both domestic and offshore customers. As on 31st March
2013, the Bank held assets worth approximately `12,511 crores under its custody, registering a growth of 6% over last year.

INVESTMENT BANKING

The Bank’s investment banking business comprises equity capital markets, mergers and acquisitions and private equity syndication.
The Bank is a SEBI registered Category-1 Merchant Banker and has been active in advising Indian corporates in raising equity
through Pre-IPOs, IPOs/FPOs, QIPs, Rights issue etc. The Bank has built strong relationships with Indian companies, becoming an
effective bridge between such corporates and FIIs, DIIs and domestic retail investors. During the year, the Bank closed 2 IPOs of

non-convertible debentures aggregating over `800 crores and managed buyback of shares transaction aggregating `50 crores.
The private equity advisory team handles mandates on behalf of SME and mid-corporate clients for helping them to raise equity.

Pursuant to the receipt of necessary approvals from various regulatory authorities, the demerger of certain ﬁ nancial services
business undertaken by Enam Securities Private Ltd. (ESPL) to the Bank’s wholly owned subsidiary Axis Capital Ltd. (formerly
Axis Securities and Sales Ltd.) has been concluded on 20th October 2012 and thus the Investment Banking business of the Bank
is now being carried out from Axis Capital Ltd.

LENDING TO SMALL AND MEDIUM ENTERPRISES

The Small and Medium Enterprises (SME) business has been identiﬁ ed as one of the growth areas for the Bank. The business
approach towards this segment, which is expected to contribute signiﬁ cantly to economic growth in future, is based upon
building relationships and nurturing the entrepreneurial talent. The Bank extends working capital, project ﬁ nance as well as
trade ﬁ nance facilities to SMEs. The relationship-based approach enables the Bank to deliver value through the entire life cycle
of SMEs, creating enormous goodwill and stickiness. It also provides cross-sell opportunities and helps the Bank fulﬁ ls its priority
sector obligations. The Bank has segmented its SME business in three groups: Medium Enterprises (MEG), Small Enterprises (SEG)
and Supply Chain Finance (SCF). The Bank has set up 32 SME Centres and 9 SME Cells across the country to service customers
effectively to cover 870 branches. The Bank has implemented a Loan Origination System (LOS) for SEG and SCF business segments
to track applications, automate credit process and improve turn-around time. During the year, advances to SME increased by
25.75% to `29,922 crores from `23,795 crores last year and constituted 15.19% of the Bank’s total advances as compared
to 14.02% at the end of last year. The Bank has continued to improve its risk management capabilities in the SME business.

Micro and Small Enterprises (MSE) constitute an important segment of SME business. During the year, the Bank launched two
new products ‘Micro Power’ for providing ﬁ nance to enterprises which are Micro enterprises as per the MSMED Act, 2006 and
‘Service Power’ for providing ﬁ nance to enterprises which are either a Micro or Small Enterprise as per the MSMED Act, 2006.
Apart from the ﬁ nancial products and services offered to this segment, the Bank has initiated an awards program ‘Business Gaurav
Awards’, to recognise top performing MSMEs. The second edition of the Business Gaurav SME Awards was held in November
2012. The awards received an enthusiastic response with over 7,200 business entities nominating themselves for the awards.
34 winners were felicitated across 14 sectors. The awards also saw release of the publication – ‘Leading SMEs of India 2012’.

AGRICULTURE

The Bank has identiﬁ ed agricultural lending as an area of potential growth and offers a diverse range of lending solutions
to the farming clientele and other stakeholders in the agriculture value chain. Activity and geography speciﬁ c products and
product variants were introduced to effectively reach out to the various value-chain participants and to meet their credit
requirements. In order to provide a strategic focus to agricultural lending, the Bank has adopted a cluster-centric approach for
agricultural lending in areas where the Bank believes agriculture is intensive and where a potential market exists. The business
architecture for agriculture business is decentralised with Agriculture Business Centres (ABCs) at various locations across the
country spearheading the business. To increase the focus on unbanked and under banked areas, 3 new ABCs were formed
during the year at Guwahati (Assam), Bhubaneswar (Odisha) and Patna (Bihar). The branches and agriculture clusters follow a
hub-and-spoke model with branches being the sole touch point for farmers. As of 31st March 2013, the agriculture business is
operated through 759 branches attached to 93 agricultural clusters, which are controlled by 20 ABCs. To achieve the objectives
of increasing the business reach, consistent growth of portfolio and maintaining quality of assets, business, credit, operations
and collections functions in this business are handled independently.

Apart from lending to farmers, the Bank also actively participates in awareness campaigns and forming farmer’s clubs in many
of its upcountry branches in co-ordination with National Bank for Agriculture and Rural Development (NABARD). The Bank allies
with reputed corporates in agro based industries to provide value to the farmers. The Bank will continue to increase its reach in
rural and semi-urban areas by increasing the number of agriculture clusters and ABCs as per requirement and bring more and
more branches under agriculture lending.

The Bank also supports the weaker sections of society through its lending to Micro Finance Institutions (MFIs). To improve
credit delivery to the target customers through smart use of technology, the Bank in the current year has started Axis Sahyog,
a social collateral lending initiative wherein economically active weaker section individuals are provided with micro loans for
agriculture and micro enterprises. Biometric enabled IT architecture is used for enrolment and for authorising transactions.
Presently, Axis Sahyog has been implemented in two states : Bihar and Madhya Pradesh. The Bank also uses the services of
institutional Business Correspondents for sourcing and servicing micro loans in a southern state. The Bank pioneered ﬁ rst ever

listing of Multi Originator Securitisation (MOSEC) transaction of microloans in the country. This initiative will go a long way in
developing an alternate source of funding for the microﬁ nance sector.
As on 31st March 2013, the Bank’s outstanding loans in the agricultural sector was `14,845 crores, constituting 7.54% of the
Bank’s total advances.

Financial inclusion

The Bank regards ﬁ nancial inclusion not merely as a corporate social responsibility initiative but as an integral component of
its rural strategy. The ﬁ nancial inclusion initiatives of the Bank are aimed at enabling customers in rural markets to use formal
banking channels for their banking needs such as savings, payments, credit and insurance. Apart from savings, payments are
the major requirement of such customers due to migration of workforce. The Bank offers no-frills accounts, tailor-made ﬁ xed
deposits and recurring deposit products to meet the savings requirements of customers. As on 31st March 2013, the Bank had
opened 61.61 lac no-frills accounts covering 42,338 villages.

The Bank has been in the forefront of several innovations in this space. It has tied-up with leading telecom companies to provide
savings and remittance facilities using the mobile phone and their distribution outlets in key domestic payment corridors. The
Bank is also a leading player in the remittance market, enabling migrant workers in urban areas remit money to their families
in the hinterland. The Bank endeavours to meet the entire set of ﬁ nancial needs of its customers, including micro-lending,
‘Chhota-deposits’ and micro-insurance (under life and general insurance categories).

The Bank also actively participates in electronic/direct beneﬁ t transfer for disbursal of beneﬁ ts under various government schemes
using smart cards and biometric authentication technology. The Bank has made signiﬁ cant investments in technology, and is
integrated with the Aadhar platform through NPCI to enable transfer of Aadhar based social welfare beneﬁ ts.

The Bank has launched several programmes to deliver micro-loans to rural customers through its business correspondents in
Tamil Nadu, Bihar and Madhya Pradesh. It has also tied up with leading corporates to deliver credit to their end consumers
through their rural supply chain partners.

INTERNATIONAL BANKING

The international operations of the Bank have generally catered to Indian corporates who have expanded their business overseas.
The overseas network of the Bank currently spans the major ﬁ nancial hubs in Asia. The Bank now has a foreign network of four
branches at Singapore, Hong Kong, DIFC-Dubai and Colombo (Sri Lanka), and three representative ofﬁ ces at Shanghai, Dubai
and Abu Dhabi, besides strategic alliances with banks and exchange houses in the Gulf Co-operation Council (GCC) countries.
While branches at Singapore, Hong Kong, DIFC-Dubai and Colombo enable the Bank to partner with Indian corporates doing
business globally and primarily offer corporate banking, trade ﬁ nance, treasury and risk management solutions, the Bank also
offers retail liability products from its branches at Hong Kong and Colombo. The representative ofﬁ ces and strategic alliances
with banks and exchange houses in the GCC countries cater to the large Indian diaspora and promote the Bank’s NRI products.
With management of liquidity being a major challenge in the present global markets, the Bank consciously restrained its asset
growth at the overseas centres to report an asset size of USD 6.84 billion as at 31st March 2013 vis-à-vis USD 6.35 billion as at
31st March 2012. Further, interactions are also in progress with China Banking Regulatory Commission (CBRC) for upgrade of
the Shanghai Representative Ofﬁ ce into a branch.

RISK MANAGEMENT

The objective of risk management is to balance the trade-off between risk and return and ensure optimum risk-adjusted return
on capital. It entails independent identiﬁ cation, measurement and management of risks across the various businesses of the
Bank. Risk is managed through a framework of policies and principles approved by the Board of Directors supported by an
independent risk function which ensures that the Bank operates within its risk appetite. The risk management function in the
Bank strives to proactively anticipate vulnerabilities at the transaction as well as at the portfolio level, through quantitative or
qualitative examination of the embedded risks. The Bank continues to focus on reﬁ ning and improving its risk measurement
systems not only to ensure compliance with regulatory requirements, but also to ensure better risk-adjusted return and optimal
capital utilization, keeping in view business objectives.

The overall risk appetite of the Bank is deﬁ ned by its Board of Directors. Further, the Individual Capital Adequacy Assessment
Process (ICAAP) of the Bank assesses all the signiﬁ cant risks associated with various businesses. The independent risk management
structure within the Bank is responsible for managing the credit, market, liquidity, operational and group risks. The risk
management processes are guided by well-deﬁ ned policies appropriate for the various risk categories viz. credit risk, market

risk, operational risk, liquidity risk, counterparty risk, country risk and group risk supplemented by periodic validations of the
methods used and monitoring through the sub-committees of the Board. The Risk Management Committee (RMC), which is
a sub-committee of the Board, approves policies related to risk and reviews various aspects of risk arising from the businesses
undertaken by the Bank. The Committee of Directors and the Audit Committee of the Board supervises certain functions and
operations of the Bank, which ultimately enhances the risk and control governance framework within the Bank. Various senior
management credit and investment committees, Credit Risk Management Committee (CRMC), Asset-Liability Committee (ALCO),
and Operational Risk Management Committee (ORMC) operate within the broad policy framework of the Bank.

Credit Risk

Credit risk is the risk of ﬁ nancial loss if a client, issuer of securities that the Bank holds or any other counterparty fails to meet
its contractual obligations. Credit risk arises from all transactions that give rise to actual, contingent or potential claims against
any counterparty, borrower or obligor. The goal of credit risk management is to maximise the Bank’s risk-adjusted rate of return
on capital by maintaining a healthy asset portfolio and managing the credit risk inherent in individual exposures as well at the
portfolio level. The emphasis is placed, both on evaluation and containment of risk at the individual exposures and analysis of
the portfolio behaviour.

The Bank has structured and standardised credit approval processes including a well-established procedure of comprehensive
credit appraisal. Every extension of credit facility or material change to a credit facility to any counterparty requires credit approval
at the appropriate authority level. Internal risk rating remains the foundation of the credit assessment process which provides
standardisation and objectivity to the process. All sanctioning processes including the delegation of powers are linked to the
ratings and the sizes of the exposure. The monitoring frequency applicable to the exposure also depends on the rating of the
exposure. Individual borrower exposure ceilings linked to the internal rating and sector speciﬁ c caps are laid down in the Credit
Policy to avoid concentration risk. For the retail portfolio including small businesses and small agriculture borrowers, the Bank uses
different product-speciﬁ c scorecards. Both credit and market risk expertise are combined to manage risks arising out of traded
credit products such as bonds and market related off-balance sheet transactions. Model validation is carried out periodically by
objectively assessing its discriminatory power, calibration accuracy and stability of ratings both by the Risk Department as well
as independently by a Validation Committee.

The Bank continuously monitors portfolio concentrations by segment, borrower, groups, industry and geography, where applicable.
Portfolio level delinquency matrices are tracked at frequent intervals with focus on detection of early warning signals of stress.

Key sectors are analysed in detail to suggest strategies for business, considering both risks and opportunities. Such analysis is
reviewed by the Credit Risk Management Committee to arrive at the appropriate industry ceilings as well as deﬁ ne the origination
and account management strategy for the sector. The Risk Management Committee of the Board periodically reviews the impact
of the stress scenarios resulting from various scenarios like increased provisioning requirements, rating downgrades, or drop in
the asset values in case of secured exposures, on the portfolio. The portfolio level risk analytics provide insight into the capital
allocation required to absorb unexpected losses at a deﬁ ned conﬁ dence level.

Market Risk

The market risk management framework of the Bank aims at maximising the risk-adjusted rate of return by providing inputs
regarding the extent of market risk exposures, the performance of portfolios vis-à-vis the risk exposure and comparable
benchmarks. Market risk is the risk of losses in ‘on and off-balance sheet’ positions arising from the movements in market price
as well as the volatilities of those changes, which may impact the Bank’s earnings and capital. The risk may pertain to interest
rate related instruments (interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Market
Risk for the Bank emanates from its trading and investment activities, which are undertaken both for the customers and on a
proprietary basis. The Bank adopts a comprehensive approach to market risk management for its banking book as well as trading
book for both its domestic and overseas operations. The market risk management framework of the Bank provides necessary
inputs regarding the extent of market risk exposures, the performance of portfolios vis-à-vis the risk exposure and comparable
benchmarks which assists in maximising the risk-adjusted rate of return of the Bank’s trading and investment portfolio.

Market risk management is guided by well laid policies, guidelines, processes and systems for the identiﬁ cation, measurement,
monitoring and reporting of exposures against various risk limits set in accordance with the risk appetite of the Bank. Treasury
Mid-Ofﬁ ce independently monitors the Bank’s investment and trading portfolio in terms of risk limits stipulated in the Market
Risk Management Policy and reports deviations, if any, to the appropriate authorities as laid down in the policy. The procedures
for the measurement of various types of market risks by the Treasury Mid-Ofﬁ ce are well-documented. The Bank utilises both

statistical as well as non-statistical measures for the market risk management of its trading and investment portfolios. The
statistical measures include Value at Risk (VaR), stress tests, back tests and scenario analysis while position limits, marked-to-
market (MTM), stop-loss limits, alarm limits, gaps and sensitivities (duration, PVBP, option greeks) are used as non-statistical
measures of market risk management.

Historical simulation and its variants are used to compute VaR for the trading portfolio which is calculated at a 99% conﬁ dence
level for a one-day holding period over a time horizon of 250 days. VaR models for different portfolios are back-tested on an
ongoing basis and the results are used to maintain and improve the efﬁ cacy of the model. VaR measurements are supplemented
with a series of stress tests and sensitivity analysis as per a well laid stress testing framework.

Liquidity Risk

The Bank’s Asset Liability Management Policy lays down a broad framework for liquidity risk management to ensure that the
Bank is in a position to meet its daily liquidity obligations as well as to withstand a period of liquidity stress from, bank-wide
factors, market-wide factors or a combination of them.

The liquidity proﬁ le of the Bank is analysed on a static as well as on a dynamic basis by using the gap analysis technique
supplemented by monitoring of key liquidity ratios and conduct of liquidity stress tests periodically. The liquidity position is
monitored for both domestic as well as overseas operations. The Bank has laid down liquidity risk policies for its overseas
branches in line with host country regulations and the asset-liability management framework as stipulated for domestic
operations. Periodical liquidity positions and liquidity stress results of overseas branches are reviewed by the Bank’s ALCO along
with domestic positions.

Operational Risk

Operational risks may emanate from inadequate and/or missing controls in internal processes, people, and systems or from
external events or a combination of all the four. The Bank has in place an Operational Risk Management (ORM) policy to manage
the operational risk in an effective, efﬁ cient and proactive manner. The policy aims at assessing and measuring the magnitude
of risks, monitoring and mitigating them through well-deﬁ ned framework and governance structure.

The Risk Management Committee (RMC) of the Board at the apex level is the policy making body. The RMC is supported by
the Operational Risk Management Committee (ORMC), responsible for the implementation of the Operational Risk framework
of the Bank and the management of operational risks across the Bank. A sub-committee of the ORMC, Sub-ORMC has been
constituted to assist the ORMC in discharging its functions by deliberating the operational risk issues in detail and escalating
the critical issues to ORMC.

All new products and processes are subjected to rigorous risk evaluation by the Bank’s Product Management Committee and
Change Management Committee. Similarly, outsourcing arrangements are examined and approved by the Bank’s Outsourcing
Committee. The IT Security Committee of the Bank provides directions for mitigating operational risk in the information
systems. The Bank is in the process of setting up a comprehensive Operational Risk Measurement System (ORMS) through the
implementation of a software solution.

Recognising its responsibility to ensure continuity of service to its large customer base, the Bank has in placed a well-deﬁ ned
Business Continuity Framework. The effectiveness of the approved Business Continuity Plan (BCP) framework is tested selectively
to ensure readiness to meet various contingency scenarios. The learning from the BCP exercises are used as inputs to further
reﬁ ne the framework.

OPERATIONS

Over the past few years, the Bank has carried out separation of the production and distribution functions, with centralised
transaction processing and customer databases becoming increasingly centralised and product sales and customer handling
(the distribution technology) primarily carried out at the branches. The business process re-engineering has enabled reduction
of transaction costs besides ensuring smoothness in operations and increasing productivity. To bring about greater precision in
the management of operations, processes were constantly reﬁ ned during the year on a continual basis from the perspective
of implementation of best practices, risk identiﬁ cation and containment. Operational instructions were issued on a continual
basis and efforts are made to introduce risk-free working at branches.

Retail Banking Operations

Retail Banking Operations (RBO) provides seamless service to retail customers while ensuring secure and compliant systems for risk

containment and regulatory compliance. The oversight function in the Bank has been further strengthened through centralised
monitoring of the working of the branches in respect of KYC, AML, other regulatory compliances, cash management, clearing
operations and internal housekeeping resulting in better compliance and higher operational efﬁ ciencies. During the year, the
Bank continued to move more operations to centralised hubs thereby reducing operational activities at branches. The Bank has
also invested in de-duplication in customer acquisition, thereby improving online monitoring. An automated system to identify
existing customer base, highlight exceptions and manage activity ﬂ ow has now been successfully implemented. Increased
emphasis has been laid out on service quality covering the entire operations area. The Bank has also implemented a robust
system of identiﬁ cation and remedy of customer-service deﬁ ciencies through root cause analysis and trend of customer requests
and escalated complaints. During the year, the Bank has set up a 24x7 dedicated contact centre for NRI customers, as well as a
dedicated contact centre for retail asset customers. The Bank’s existing liabilities contact centre offers services in 11 languages.

Wholesale Banking Operations

Wholesale Banking Operations (WBO) function is responsible for providing best in class service to non-retail customers of the
Bank through four verticals: Corporate Banking Operations, Treasury Operations, Trade and Forex Operations and Centralised
Collection and Payment Hub.

The Corporate Banking Operations (CBO) ensures delivery, control, monitoring and administration of credit facilities of large
corporates, mid corporates, SME and corporate agriculture segments. It also processes domestic trade ﬁ nance, channel ﬁ nance
and micro ﬁ nance transactions. CBO operates through Corporate Banking Branches (CBBs)/Credit Management Centres (CMCs)
located at 8 major centres, 56 Mini-Credit Management Centres (MCMCs) at Tier II cities, and Corporate Credit Operations
Hub (CCOH) at Hyderabad and Gurgaon. Treasury Operations involves the settlement and accounting of treasury-related
transactions and operates the centralised electronic payment hubs for RTGS and NEFT. The Trade and Forex Operations (TFO)
handles remittances and trade ﬁ nance transaction processing on behalf of distribution channels dealing in trade ﬁ nance and
foreign exchange through 200 ‘B’ category branches and state-of-the-art centralised knowledge processing centres located
at Mumbai and Hyderabad. TFO is also responsible for ensuring compliance of regulatory and internal guidelines in respect
of foreign exchange transactions of the Bank. The Centralised Collections and Payment Hub (CCPH) handles payments and
collections, and operates through 2 units located at Mumbai and Hyderabad. Further, in order to extend operational support
and customer hand-holding at the local level, 11 Transaction Banking Centres (TBCs) have been set-up during the year, which
are manned by skilled resources, thereby ensuring efﬁ cient service delivery coupled with control over operations.

The Bank’s payment service is one of the key differentiating services for all customer segments. In order to enhance speed,
scalability and straight through processing by technological advancement, the Bank has launched a plan of introducing an
Enterprise Payment Hub (EPH) to handle all types of payment services through a centralised and channel agnostic processing
engine. This will enhance customer experience across all customer segments and take care of growing volumes, minimise manual
processing, reduce operational risk and avoid duplication in infrastructure.

INFORMATION TECHONOLOGY

Technology is one of the key enablers for business and for delivering customised ﬁ nancial solutions. The Bank continued to focus
on introducing innovative banking services through investments in scalable, robust and function-rich technology platforms to
enable delivery of efﬁ cient and seamless services across multiple channels for customer convenience and cost reduction. The
Bank has also focused on improving the governance process in IT. During the year, the Bank has received certiﬁ cation of ISO
27001:2005 by BSI (ANAB accredited) for complying with the standards of Information Security Management System for its
data centres located in Navi Mumbai and Bengaluru. The Bank has also successfully completed migration of its data centre to a
co-hosted location during the year. The new premises offer a category IV data center that complies with the highest benchmarking
standards applicable to data centres promising built-in redundancy of infrastructure. A robust Project Management framework is
used to ensure that investments in IT are based on good gate-keeping principles and result in appropriate payback in value terms.

The Bank has made signiﬁ cant progress in implementing the recommendations of the RBI Working Group issued in April
2011 on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds. The Bank is committed
to implementing the recommendations on the various subject areas indicated in the guidelines. The broad measures taken in
respect of the various areas included conducting a detailed gap analysis to implement the controls/suggestions contained in the
guidelines, examining each recommendation closely and taking decisions either to acquire a solution or implement procedural
controls. The Bank has put in place the appropriate organisational framework as recommended in the guidelines. Several
information security solutions have either been implemented or ﬁ nalised for implementation to protect customer data, prevent

external attacks as well as strengthening internal controls. Policies and procedures of the Bank have also been reviewed and
suitably modiﬁ ed. The progress in each area of the recommendations has been closely monitored by the top management and
the status of implementation has been reported to the Board and RBI at regular intervals.

COMPLIANCE

The Bank continued to vigorously pursue its commitment in adhering to the highest standards of compliance. The compliance
function in the Bank plays a pivotal role in ensuring that the overall business of the Bank is conducted in accordance with
regulatory prescriptions. The Compliance function facilitates improvement in the compliance culture in the Bank through various
enablers like dissemination of regulatory changes and spreading compliance knowledge through training, newsletters and
other means of communication and direct interaction. To ensure that all the businesses of the Bank are aware of compliance
requirements, the compliance function is involved in vetting of new products and processes, evaluating adequacy of internal
controls and examining systemic correction required, based on its analysis and interpretation of the regulatory doctrine and the
deviations observed during compliance monitoring and testing programmes. This function also ensures that internal policies
address the regulatory requirements, besides vetting processes for their robustness and regulatory compliances.

For more focused management of compliance risk, the Bank is in an advanced stage of implementing an Enterprise-wide
Governance Risk and Compliance Framework, an online tool, which would address operational, compliance and ﬁ nancial
reporting risks and help in bringing efﬁ ciency in processes and improvement in compliance levels. Signiﬁ cant aspects of the
Bank’s compliance culture are the Whistleblower Policy and zero tolerance for fraud, corruption and ﬁ nancial irregularities.

INTERNAL AUDIT

The Bank’s internal audit function performs an independent and objective evaluation of the adequacy and efﬁ ciency of internal
controls on an ongoing basis to ensure that operating units adhere to compliance requirements and internal guidelines. The
Internal Audit function undertakes a comprehensive risk-based audit of all operating units. An Audit Plan is drawn up on the
basis of a risk-proﬁ ling of auditee units. Accordingly, the Bank undertakes internal audit of the operating units at a frequency
synchronised to the risk proﬁ le of each unit in line with the spirit of guidelines relating to Risk-Based Internal Audit (RBIA). The
scope of risk-based internal audit, besides examining the adequacy and effectiveness of internal control systems and external
compliance, also evaluates the risk residing at the auditee units. The RBIA approach has been thoughtfully structured taking
into account RBI guidelines and international best practices. To complement the Internal Audit function, the Bank has put in
place a strong Concurrent Audit system.

To ensure independence of the Audit function and in line with the best corporate governance practices, the Internal Audit
department functions independently under the supervision of the Audit Committee of the Board, which reviews performance of
the internal audit department and effectiveness of controls laid down by the Bank and compliance with regulatory guidelines.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As an integral part of society, the Bank is aware of its corporate social responsibilities and has been engaged in community and
social investments. For this purpose, the Bank has set up a Trust – the Axis Bank Foundation (ABF) to channel its philanthropic
initiatives. The Foundation has committed itself to participate in various socially relevant endeavours with a special focus on
providing sustainable livelihoods, poverty alleviation, education of the underprivileged, healthcare etc. The Bank has decided to
contribute upto one percent of its net proﬁ t annually to the Foundation under its CSR initiatives. The Foundation is constantly
engaged in identifying the right target group and ensuring that support reaches the ultimate beneﬁ ciary. Presently, the Foundation
is running 40 programs across 163 districts in 19 states, targeting 7,27,059 beneﬁ ciaries.

The Foundation has been providing support to various initiatives in education, targeting underprivileged children. Presently, 23
programs are running in the ﬁ eld of education covering 33 districts in 13 states promoting supplementary education, education
for the mentally/physically challenged, hearing impaired, visually challenged etc. During the year, the Foundation has disbursed
`6.23 crores for various education programs. The Foundation also works for providing highway trauma care and rural medical
relief. The Foundation has been working with Lifeline Foundation since 2007 for supporting the highway rescue projects in the
states of Maharashtra, Kerala, Gujarat and Rajasthan. It has provided aid to around 7,500 critical accident victims and more than
15,000 minor accident victims. The Foundation aims to provide one million livelihoods to the underprivileged in some of the
most backward regions of the country by 2017, 50% of the beneﬁ ciaries being women. The Foundation has so far partnered
with 17 NGOs to provide sustainable livelihoods and has launched projects in partnership with these NGOs in the states of
West Bengal, Odisha, Tamil Nadu, Maharashtra, Jharkhand, Chhattisgarh, Bihar, Uttar Pradesh and Madhya Pradesh. These
programs aim at alleviating poverty and help in providing sustainable livelihood options. Presently, 17 programs are running in

the ﬁ eld of livelihood covering 136 districts in 17 states. During the year, an amount of `31.09 crores was disbursed towards
various livelihood programs.

The Foundation is also actively involved in implementing several initiatives in Green Banking. In line with the Bank’s initiative in
Green Banking with the theme of ‘Reduce, Reuse and Recycle’, the Foundation has initiated the process of collecting all the dry
waste, generated in the Corporate Ofﬁ ce and seventeen ofﬁ ces of the Bank in Mumbai and recycle it into notebooks, notepads
and envelopes. This initiative was launched in August 2011, has helped recycle around 87,206 kilograms since inception. The
Foundation also has an Ofﬁ cer Engagement Program, which encourages ofﬁ cers of the Bank to get involved in various volunteering
activities. The Bank launched an employee payroll program titled ‘Axis Cares’. As on 31st March 2013, 7,524 ofﬁ cers of the Bank
have enrolled for Axis Cares with a monthly collection of `14.64 lacs. The funds collected under this initiative are utilised for the
programs of the Foundation and the details of utilisation are shared with the ofﬁ cers every month. Under the aegis of ‘Basket
of Hope’, the Foundation organises collection drives for clothes, books and toys for distribution to the needy. The Foundation
has also launched a new initiative titled ‘Gift of Life’. During the year, 27 blood donation drives have been organised across the
country, through which 1,934 units of blood has been collected. Exhibitions of various NGOs are held at the Corporate Ofﬁ ce
and other ofﬁ ces of the Bank, to provide a platform to these NGOs for exhibiting their products and popularise their work.
Conducting the exhibitions has also promoted volunteering among our ofﬁ cers with NGO partners. During the ﬁ nancial year,
56 such exhibitions have been organised which has helped these NGOs to generate sales over `14.40 lacs.

HUMAN RESOURCES

The Human Resources (HR) function is instrumental in creating and developing human capital in alignment with the Bank’s vision.
Talent Management with particular focus on grooming future leaders, learning and development and employee engagement
have been the key focus areas in the Bank’s HR objectives.

The Bank has built a learning infrastructure to ensure availability of skilled and
empowered workforce. The Learning Maps aligned to the overall development plan of
employees are designed to facilitate learning process across all levels through a blended
learning approach of classroom programmes, external programmes, certiﬁ cation
programmes as well as e-learning modules. The Bank also creates alternate talent
pipelines by entering into arrangements with Training and Education Institutes and
continues to maintain a strong employer brand in the ﬁ nancial services sector especially
on the campuses of the premier business schools of the country. Apart from having a
strong presence in the talent market, the Bank also believes in maintaining a strong
image internally by keeping its workforce engaged at all levels.

34.90%

INTELLECTUAL CAPITAL

0.02%1.89%

6.82%

1.49%

54.88%

To inculcate and live its motto of ‘One Bank, One Axis’ and foster a spirit of
connectedness, the Bank hosts several employee engagement programmes and
channels to connect its thinly-spread employee population across a widely dispersed
geographical network. Through these platforms, employees can share their unique
experiences, facilitate best practice sharing, cast their opinion and feedback about the Bank’s products and services. The Bank
also offers avenues for several employee health and wellness initiatives throughout our network.

Graduates/Post Graduate

Bankers/Law Prof.

CA/CS/ICWA/CFA

MBA/Masters

Engg/Tech

Doctorate

The Bank has been conducting its annual Employee Engagement Study to capture, analyse and draw action plans to enhance
the engagement quotient. A third-party framework, benchmarked as one of the best, is used for administering and analysing
the results of the study, with focus on measuring and improving employee engagement quotient. Taking concrete steps based
on the study ﬁ ndings helps in building a stronger and more engaged workforce.

The Bank seeks regular feedback from employees on the policies and practices to ensure that it is in consonance with employee
empowerment. Incidentally, the focus areas for the Bank’s performance management system are Ownership, Continuous Process
and Humane Touch, which are driven by strengthening the culture of performance feedback (both formal and informal). In addition
to performance, the personal development plan of an employee includes a feedback on behavioural competencies for growth.

Axis Leadership Practices (ALPs) are deﬁ ned for employees at different levels of the hierarchy to promote desired behaviour
and to facilitate an objective assessment. The ALPs form a framework for all the people processes in the Bank. These are an
integral part of processes like Talent Acquisition, Performance Management System, Promotion, Talent Appreciation, Leadership
Development and Feedback. The Bank has partnered with the best in class leadership trainers of the country to provide key

position holders and unit heads the fundamentals of managing self and team leadership
though a series of ‘Inspired Leadership’ workshops. The Bank has also launched an in-
house multi-rater feedback tool ‘ALP Compass’, based on the Axis Leadership Practices.

PROFILE BY AGE

3.31%

0.66%

The strength of the workforce was 37,901 at the end of the year as compared to 31,738
last year. A young workforce with an average age of 29 years and the Bank’s policy
of being an equal opportunity employer continues to signiﬁ cantly contribute towards
emergence of the Axis Bank brand. The Bank inspires everyone to excel and contribute
to, irrespective of gender, race or age, and this echoes in all HR initiatives undertaken.
The Bank is also a socially responsible employer. Apart from housing its own NGO ‘Axis
Bank Foundation’, the Bank has partnered with Teach for India for promoting the noble
objective of providing education to underprivileged children.

The Bank continues to strive towards realisation of its vision of being the preferred
ﬁ nancial service provider excelling in customer delivery through insight, empowered
employees and smart use of technology.

28.10%

67.93%

Below 30 Years

Above 30 yrs to 40 yrs

Above 40 yrs to 50 yrs

Above 50 yrs to 60 yrs

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF

AXIS BANK LIMITED

Report on the Financial Statements

We have audited the accompanying ﬁ nancial statements of AXIS BANK LIMITED (“the Bank”), which comprise the Balance
Sheet as at 31 March, 2013, the Proﬁ t and Loss Account and the Cash Flow Statement of the Bank for the year then ended
and a summary of the signiﬁ cant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Bank’s Management is responsible for the preparation of these ﬁ nancial statements that give a true and fair view of
the ﬁ nancial position, ﬁ nancial performance and cash ﬂ ows of the Bank in accordance with the provisions of Section 29 of
the Banking Regulation Act, 1949, Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 in so
far as they apply to the banks and the Guidelines issued by Reserve Bank of India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the preparation and presentation of the ﬁ nancial statements
that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these ﬁ nancial statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require
that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the ﬁ nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the ﬁ nancial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the ﬁ nancial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers the internal control relevant to the Bank’s preparation and fair presentation of the ﬁ nancial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall
presentation of the ﬁ nancial statements.

We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid ﬁ nancial
statements give the information required by the Banking Regulation Act, 1949; the Companies Act, 1956 in the manner so
required for banking companies and the Guidelines issued by Reserve Bank of India from time to time and give a true and fair
view in conformity with the accounting principles generally accepted in India:

(a)

in the case of the Balance Sheet, of the state of affairs of the Bank as at 31 March, 2013;

(b)

in the case of the Proﬁ t and Loss Account, of the proﬁ t of the Bank for the year ended on that date; and

(c)

in the case of the Cash Flow Statement, of the cash ﬂ ows of the Bank for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 227(3) of the Companies Act, 1956 and Section 30 of the Banking Regulation Act, 1949, we

report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes of our audit and found them to be satisfactory.

(b)

In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the Bank.

be submitted by the Branches.

(d)

In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our
examination of those books.

(e) The Balance Sheet, the Proﬁ t and Loss Account and the Cash Flow Statement dealt with by this Report are in

agreement with the books of account.

(f)

In our opinion, the Balance Sheet, the Proﬁ t and Loss Account and the Cash Flow Statement comply with the
Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 in so far as they apply to banks.

2. On the basis of the written representations received from the Directors as on 31 March, 2013 taken on record by the
Board of Directors, we report that none of the Directors is disqualiﬁ ed as on 31 March, 2013 from being appointed as a
director in terms of Section 274(1)(g) of the Companies Act, 1956.

3. We report that during the course of our audit we have visited 98 Branches. Since the key operations of the Bank are
completely automated with the key applications integrated to the core banking systems, the audit is carried out centrally
at the Head Ofﬁ ce as all the necessary records and data required for the purposes of our audit are available therein and
the Branches are not required to submit any ﬁ nancial returns.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)

Z. F. Billimoria
Partner
(Membership No. 42791)
Date : 24th April, 2013
Place : Mumbai

AXIS BANK LIMITED - BALANCE SHEET

BALANCE SHEET AS AT 31 MARCH, 2013

CAPITAL AND LIABILITIES

Capital

Reserves & Surplus

Deposits

Borrowings

Other Liabilities and Provisions

TOTAL

ASSETS

Cash and Balances with Reserve Bank of India

Balances with Banks and Money at Call and Short Notice

Investments

Advances

Fixed Assets

Other Assets

TOTAL

Contingent Liabilities

Bills for Collection

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

Schedule No.

4,679,545

4,132,039

326,399,054

223,953,384

2,526,135,881

2,201,043,033

439,510,984

340,716,721

108,881,120

86,432,757

3,405,606,584

2,856,277,934

147,920,883

107,029,214

56,428,716

32,309,943

1,137,375,370

931,920,859

1,969,659,574

1,697,595,386

23,556,420

22,593,250

70,665,621

64,829,282

3,405,606,584

2,856,277,934

5,481,158,951

4,802,373,747

278,948,780

346,346,043

Signiﬁ cant Accounting Policies and Notes to Accounts

17 & 18

Schedules referred to above form an integral part of the Balance Sheet

In terms of our report attached.

For Axis Bank Ltd.

For Deloitte Haskins & Sells
Chartered Accountants

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

AXIS BANK LIMITED - PROFIT & LOSS ACCOUNT

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2013

INCOME
Interest earned
Other income
TOTAL
EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
TOTAL

III NET PROFIT FOR THE YEAR (I - II)

Balance in Proﬁ t & Loss Account brought forward from previous year

IV AMOUNT AVAILABLE FOR APPROPRIATION
V APPROPRIATIONS :

Transfer to Statutory Reserve
Transfer to Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Proposed dividend (includes tax on dividend)
Balance in Proﬁ t & Loss Account carried forward
TOTAL

VI EARNINGS PER EQUITY SHARE

(Face value `10/- per share) (Rupees)
Basic
Diluted
Signiﬁ cant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Proﬁ t and Loss Account

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

Schedule No.

13
14

271,825,744
65,511,063
337,336,807

219,946,474
54,202,163
274,148,637

15
16
18 (2.1.1)

18 (2.2.1)
18 (2.2.2)
18 (2.2.5)

18 (2.2.3)

175,163,111
69,142,375
41,236,992
285,542,478
51,794,329
73,294,476
125,088,805

12,948,583
534,571
1,414,579
26,084
9,872,364
100,292,624
125,088,805

139,769,024
60,070,995
31,886,564
231,726,583
42,422,054
49,697,707
92,119,761

10,605,513
-
519,047
-
7,700,725
73,294,476
92,119,761

119.67
118.85

102.94
102.20

In terms of our report attached.

For Axis Bank Ltd.

For Deloitte Haskins & Sells
Chartered Accountants

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

AXIS BANK LIMITED - CASH FLOW STATEMENT

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2013

Cash ﬂ ow from operating activities

Net proﬁ t before taxes

Adjustments for:

Depreciation on ﬁ xed assets

Depreciation on investments

Amortisation of premium on Held to Maturity investments

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

75,526,929

62,878,354

3,517,343

3,422,363

(1,039,359)

674,599

580,985

627,967

Provision for Non Performing Assets (including bad debts)

11,792,245

8,604,298

Provision on standard assets

Provision for wealth tax

(Proﬁ t)/Loss on sale of ﬁ xed assets (net)

Provision for country risk

Provision for restructured assets

Provision for other contingencies

Adjustments for:

(Increase)/Decrease in investments

(Increase)/Decrease in advances

Increase/(Decrease) in deposits

(Increase)/Decrease in other assets

Increase/(Decrease) in other liabilities & provisions

Direct taxes paid

Net cash ﬂ ow from operating activities

Cash ﬂ ow from investing activities

Purchase of ﬁ xed assets

1,966,686

1,503,036

3,800

3,600

44,662

(203,026)

(96,300)

48,100

1,039,492

888,600

3,837,828

(198,354)

97,267,925

78,155,923

(95,527,142)

(165,599,005)

(284,769,149)

(282,226,283)

325,092,849

308,665,023

(3,340,140)

(15,673,352)

14,760,950

1,757,949

(26,294,900)

(23,349,523)

27,190,393

(98,269,268)

(4,718,705)

(3,843,375)

(Increase)/Decrease in Held to Maturity investments

(109,099,212)

(47,204,626)

(Increase)/Decrease in Investment in Subsidiaries

Proceeds from sale of ﬁ xed assets

(718,875)

(900,000)

193,531

762,243

Proceeds from transfer of net assets acquired under demerger to subsidiary

2,741,502

Net cash used in investing activities

(111,601,759)

(51,185,758)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2013

Cash ﬂ ow from ﬁ nancing activities

Proceeds from issue of subordinated debt, perpetual debt & upper Tier II
instruments (net of repayment)

Increase/(Decrease) in borrowings (excluding subordinated debt,
perpetual debt & upper Tier II instruments)

Proceeds from issue of share capital

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

19,654,731

35,808,360

79,139,533

42,229,536

426,605

26,581

Proceeds from share premium (net of share issue expenses)

56,227,263

1,336,820

Payment of dividend

Net cash generated from ﬁ nancing activities

Effect of exchange ﬂ uctuation translation reserve

Net increase in cash and cash equivalents

(7,702,164)

(6,697,611)

147,745,968

72,703,686

1,675,840

2,003,938

65,010,442

(74,747,402)

Cash and cash equivalents at the beginning of the year

139,339,157

214,086,559

Cash and cash equivalents at the end of the year

204,349,599

139,339,157

Note :

1. Cash and cash equivalents comprise of cash on hand (including foreign currency notes), balances with Reserve Bank of

India, balances with banks and money at call & short notice (Refer Schedules 6 and 7 of the Balance Sheet).

In terms of our report attached.

For Axis Bank Ltd.

For Deloitte Haskins & Sells
Chartered Accountants

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

AXIS BANK LIMITED - SCHEDULES

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 1 - CAPITAL

Authorised Capital
850,000,000 (Previous year - 500,000,000) Equity Shares of `10/- each
Issued, Subscribed and Paid-up capital
467,954,468 (Previous year - 413,203,952) Equity Shares of `10/- each fully paid-up
[Refer Schedule 18.1b]

SCHEDULE 2 - RESERVES AND SURPLUS

Statutory Reserve

Opening Balance

Additions during the year

II.

Share Premium Account

Opening Balance

Additions during the year

Less: Share issue expenses [Refer Schedule 18 (2.1.29)]

III.

Investment Reserve Account

Opening Balance

Additions during the year

IV. General Reserve

Opening Balance

Additions during the year

V. Capital Reserve

Opening Balance

Additions during the year [Refer Schedule 18.1a and Schedule 18 (2.2.1)]

VI. Foreign Currency Translation Reserve [Refer Schedule 17 (4.5)]

Opening Balance

Additions during the year

VII. Reserve Fund

Opening Balance

Additions during the year [Refer Schedule 18 (2.2.2)]

VIII. Balance in Proﬁ t & Loss Account

TOTAL

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

8,500,000

5,000,000

4,679,545

4,132,039

38,425,863

27,820,350

12,948,583

10,605,513

51,374,446

38,425,863

101,387,610

100,050,790

56,626,088

1,336,820

(398,826)

157,614,872

101,387,610

534,571

3,543,100

3,534,600

8,500

3,543,100

5,424,982

4,905,935

4,035,182

9,460,164

519,047

5,424,982

1,877,353

1,675,840

3,553,193

(126,585)

2,003,938

1,877,353

26,084

100,292,624

73,294,476

326,399,054

223,953,384

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 3 - DEPOSITS

Demand Deposits

(i) From banks

(ii) From others

II.

Savings Bank Deposits

III. Term Deposits

(i) From banks

(ii) From others

TOTAL

Deposits of branches in India

II. Deposits of branches outside India

TOTAL

SCHEDULE 4 - BORROWINGS

Borrowings in India

(i) Reserve Bank of India

(ii) Other banks #

(iii) Other institutions & agencies **

II.

Borrowings outside India $

TOTAL

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

29,255,626

20,980,835

453,965,348

376,559,884

637,777,349

516,679,577

151,218,877

100,943,739

1,253,918,681

1,185,878,998

2,526,135,881

2,201,043,033

2,386,893,082

2,094,495,868

139,242,799

106,547,165

2,526,135,881

2,201,043,033

1,150,000

22,367,200

4,472,000

144,085,033

121,210,990

273,058,751

213,883,731

439,510,984

340,716,721

Secured borrowings included in I & II above
-
# Borrowings from other banks include Subordinated Debt of `557.60 crores (previous year `359.60 crores) in the nature
of Non-Convertible Debentures, Perpetual Debt of Nil (previous year Nil) and Upper Tier II instruments of `59.10 crores
(previous year `59.10 crores) [Also refer Notes 18 (2.1.2) & 18 (2.1.3)]

** Borrowings from other institutions & agencies include Subordinated Debt of `10,071.70 crores (previous year `8,391.70
crores) in the nature of Non-Convertible Debentures, Perpetual Debt of `214.00 crores (previous year `214.00 crores)
and Upper Tier II instruments of `248.40 crores (previous year `248.40 crores) [Also refer Notes 18 (2.1.2) & 18 (2.1.3)]

$ Borrowings outside India include Perpetual Debt of `249.71 crores (previous year `234.03 crores) and Upper Tier II
instruments of `1,139.03 crores (previous year `1,067.24 crores) [Also refer Note 18 (2.1.3)]

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

II.

Bills payable

Inter-ofﬁ ce adjustments (net)

III.

Interest accrued

IV. Proposed dividend (includes tax on dividend)

V. Contingent provision against standard assets

VI. Others (including provisions)

TOTAL

35,288,164

30,853,220

8,267,309

6,478,322

9,852,151

7,681,950

9,766,369

7,799,683

45,707,127

33,619,582

108,881,120

86,432,757

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I.
II.

Cash in hand (including foreign currency notes)
Balances with Reserve Bank of India :
(i)
(ii)
TOTAL

in Current Account
in Other Accounts

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

40,538,842

35,957,442

107,382,041
-
147,920,883

71,071,772
-
107,029,214

SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
I.

In India
(i) Balance with Banks

(a)
(b)

in Current Accounts
in Other Deposit Accounts
(ii) Money at Call and Short Notice

(a) With banks
(b) With other institutions

TOTAL
II. Outside India

in Current Accounts
(i)
(ii)
in Other Deposit Accounts
(iii) Money at Call & Short Notice
TOTAL
GRAND TOTAL (I+II)

SCHEDULE 8 - INVESTMENTS
Investments in India in -
I.
(i) Government Securities ## **
(ii) Other approved securities
(iii) Shares
(iv) Debentures and Bonds
(v)
(vi) Others (Mutual Fund units, CD/CP, NABARD deposits, PTC etc.) @
Total Investments in India
Investments outside India in -
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/or joint ventures abroad (amount less than `1,000 for current

Investment in Subsidiaries/Joint Ventures

II.

3,353,513
9,491,675

3,516,323
6,146,450

-
-
12,845,188

-
-
9,662,773

11,440,321
13,474,234
18,668,973
43,583,528
56,428,716

7,666,358
3,845,537
11,135,275
22,647,170
32,309,943

722,498,592
-
7,549,074
260,744,089
4,214,375
133,587,622
1,128,593,752

584,162,116
-
7,399,921
231,507,877
3,495,500
98,082,541
924,647,955

2,683,274

1,170,306

year and previous year)

-
6,102,598
7,272,904
931,920,859
## Includes securities costing `4,766.66 crores (previous year `4,427.15 crores) pledged for availment of fund transfer facility,

(iii) Others
Total Investments outside India
GRAND TOTAL (I+II)

-
6,098,344
8,781,618
1,137,375,370

clearing facility and margin requirements

** Inclusive of Repo Lending of `7,350.00 crores (previous year `3,675.00 crores) and net of Repo borrowing of Nil (previous

year `3,140.76 crores) under the Liquidity Adjustment Facility in line with the RBI requirements

@ Includes priority sector shortfall deposits `6,980.42 crores (previous year `5,100.53 crores) and PTC’s `1,471.03 crores

(previous year `204.67 crores) net of depreciation, if any

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 9 - ADVANCES

(i)

Bills purchased and discounted *

(ii) Cash credits, overdrafts and loans repayable on demand @

(iii) Term loans #

TOTAL

(i)

Secured by tangible assets $

(ii) Covered by Bank/Government Guarantees &&

(iii) Unsecured

TOTAL

Advances in India

(i) Priority Sector

(ii) Public Sector

(iii) Banks

(iv) Others

TOTAL

II. Advances Outside India

(i) Due from banks

(ii) Due from others -

(a) Bills purchased and discounted

(b) Syndicated loans

TOTAL

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

56,079,021

39,089,332

546,437,284

468,608,528

1,367,143,269

1,189,897,526

1,969,659,574

1,697,595,386

1,613,648,122

1,417,163,384

18,089,151

50,233,791

337,922,301

230,198,211

1,969,659,574

1,697,595,386

484,982,533

484,792,379

39,189,817

32,535,626

449,490

3,477,937

1,143,709,623

923,767,773

1,668,331,463

1,444,573,715

10,371,975

1,127,900

2,687,649

6,438,231

109,487,196

108,035,085

178,781,291

137,420,455

301,328,111

253,021,671

GRAND TOTAL (CI+CII)
Net of borrowings under Bills Rediscounting Scheme `1,000.00 crores (previous year `3,480.00 crores)
*
@ Net of borrowings under Inter Bank Participation Certiﬁ cate `205.89 crores (previous year `60.36 crores)

1,969,659,574

1,697,595,386

Net of borrowings under Inter Bank Participation Certiﬁ cate `10,256.09 crores (previous year `7,968.24 crores)

Includes advances against book debts

&& Includes advances against L/Cs issued by banks

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

SCHEDULE 10 - FIXED ASSETS

Premises

Gross Block

At cost at the beginning of the year

Additions during the year

Deductions during the year

TOTAL

Depreciation

As at the beginning of the year

Charge for the year

Deductions during the year

Depreciation to date

Net Block

II. Other ﬁ xed assets (including furniture & ﬁ xtures)

Gross Block

At cost at the beginning of the year

Additions during the year

Deductions during the year

TOTAL

Depreciation

As at the beginning of the year

Charge for the year

Deductions during the year

Depreciation to date

Net Block

III. CAPITAL WORK-IN-PROGRESS (including capital advances)

GRAND TOTAL (I+II+III)

SCHEDULE 11 - OTHER ASSETS

II.

Inter-ofﬁ ce adjustments (net)

Interest Accrued

III. Tax paid in advance/tax deducted at source (net of provisions)

IV. Stationery and stamps

V. Non banking assets acquired in satisfaction of claims

VI. Others #

TOTAL
# Includes deferred tax assets of `1,374.77 crores (previous year `1,027.45 crores)

9,001,944

9,117,340

39,131

96,841

(212,237)

9,041,075

9,001,944

262,236

147,275

409,511

198,381

146,310

(82,455)

262,236

8,631,564

8,739,708

26,834,786

25,147,573

4,136,185

3,265,751

(566,132)

(1,578,538)

30,404,839

26,834,786

13,688,918

11,561,967

3,370,068

3,276,053

(327,940)

(1,149,102)

16,731,046

13,688,918

13,673,793

13,145,868

1,251,063

707,674

23,556,420

22,593,250

27,143,759

24,194,553

270,351

1,185,052

11,221

209,600

12,623

262,681

43,030,690

39,174,373

70,665,621

64,829,282

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 12 - CONTINGENT LIABILITIES

II.

Claims against the Bank not acknowledged as debts

Liability for partly paid investments

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

1,667,558

2,602,138

III.

Liability on account of outstanding forward exchange and derivative contracts :

(a) Forward Contracts

2,320,162,574

2,009,254,981

(b)

Interest Rate Swaps, Currency Swaps, Forward Rate Agreement

& Interest Rate Futures

TOTAL (a+b+c)

IV. Guarantees given on behalf of constituents

In India

Outside India

V. Acceptances, endorsements and other obligations

VI. Other items for which the Bank is contingently liable

GRAND TOTAL (I+II+III+IV+V+VI)

2,210,541,350

1,752,490,787

80,228,625

130,543,459

4,610,932,549

3,892,289,227

517,036,841

467,505,902

111,222,144

98,612,604

228,015,939

302,612,607

12,283,920

38,751,269

5,481,158,951

4,802,373,747

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2013

SCHEDULE 13 - INTEREST EARNED

II.

Interest/discount on advances/bills

Income on investments

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

191,662,356

153,793,526

77,469,805

63,942,666

III.

Interest on balances with Reserve Bank of India and other inter-bank funds

1,112,621

984,267

IV. Others

TOTAL

SCHEDULE 14 - OTHER INCOME

II.

Commission, exchange and brokerage

Proﬁ t/(Loss) on sale of investments (net)

III. Proﬁ t/(Loss) on sale of ﬁ xed assets (net)

IV. Proﬁ t on exchange/derivative transactions (net)

Income earned by way of dividends etc. from

subsidiaries/companies and/or joint venture abroad/in India

VI. Miscellaneous income

[including recoveries on account of advances/investments written off in earlier years
`268.51 crores (previous year `291.84 crores) and net loss on account of portfolio
sell downs/securitisation `5.88 crores (previous year net loss of `1.60 crores)]
TOTAL

SCHEDULE 15 - INTEREST EXPENDED

II.

Interest on deposits

Interest on Reserve Bank of India/Inter-bank borrowings

III. Others

TOTAL

SCHEDULE 16 - OPERATING EXPENSES

II.

Payments to and provisions for employees

Rent, taxes and lighting

III.

Printing and stationery

IV. Advertisement and publicity

V. Depreciation on bank’s property

VI. Directors’ fees, allowance and expenses

VII. Auditors’ fees and expenses

VIII. Law charges

IX. Postage, telegrams, telephones etc.

X. Repairs and maintenance

XI.

Insurance

XII. Other expenditure

TOTAL

1,580,962

1,226,015

271,825,744

219,946,474

50,251,479

43,417,022

5,863,030

(44,662)

728,329

203,026

6,640,744

6,739,668

15,000

11,250

2,785,472

3,102,868

65,511,063

54,202,163

150,155,486

121,836,378

4,596,175

2,319,578

20,411,450

15,613,068

175,163,111

139,769,024

23,769,825

20,801,677

7,506,045

6,564,159

1,003,940

1,196,483

934,980

881,458

3,517,343

3,422,363

15,355

11,088

8,397

9,267

179,019

182,725

2,791,263

2,586,992

5,858,902

5,294,832

2,622,194

2,312,956

20,670,918

17,071,189

69,142,375

60,070,995

17 Signiﬁ cant accounting policies for the year ended 31 March, 2013

Background

Axis Bank Limited (‘the Bank’) was incorporated in 1993 and provides a complete suite of corporate and retail banking
products.

Basis of preparation

The ﬁ nancial statements have been prepared and presented under the historical cost convention on the accrual basis
of accounting, and comply with the generally accepted accounting principles, statutory requirements prescribed under
the Banking Regulation Act, 1949, the circulars and guidelines issued by the Reserve Bank of India (‘RBI’) from time to
time and the Accounting Standards notiﬁ ed under the Companies (Accounting Standards) Rules, 2006, to the extent
applicable and current practices prevailing within the banking industry in India.

Use of estimates

The preparation of the ﬁ nancial statements in conformity with the generally accepted accounting principles requires the
Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses and disclosure of contingent liabilities at the date of the ﬁ nancial statements. Actual results could differ
from those estimates. The Management believes that the estimates used in the preparation of the ﬁ nancial statements
are prudent and reasonable. Any revisions to the accounting estimates are recognised prospectively in the current and
future periods.

Signiﬁ cant accounting policies

4.1

Investments

Classiﬁ cation

In accordance with the RBI guidelines, investments are classiﬁ ed at the date of purchase as:

•

Held for Trading (‘HFT’);

Available for Sale (‘AFS’); and

Held to Maturity (‘HTM’).

Investments that are held principally for sale within a short period are classiﬁ ed as HFT securities. As per the RBI
guidelines, HFT securities, which remain unsold for a period of 90 days are reclassiﬁ ed as AFS securities as on that date.

Investments that the Bank intends to hold till maturity are classiﬁ ed under the HTM category.

All other investments are classiﬁ ed as AFS securities.

However, for disclosure in the Balance Sheet, investments in India are classiﬁ ed under six categories - Government
Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
Others.

Investments made outside India are classiﬁ ed under three categories – Government Securities, Subsidiaries and/or Joint
Ventures abroad and Others.

Transfer of security between categories

Transfer of security between categories of investments is accounted as per the RBI guidelines.

Acquisition cost

Costs including brokerage, commission pertaining to investments, paid at the time of acquisition, are charged to the
Proﬁ t and Loss Account.

Broken period interest is charged to the Proﬁ t and Loss Account.

Cost of investments is computed based on the weighted average cost method.

Valuation

Investments classiﬁ ed under the HTM category are carried at acquisition cost unless it is more than the face value, in
which case the premium is amortised over the period remaining to maturity. In terms of RBI guidelines, discount on
securities held under HTM category is not accrued and such securities are held at the acquisition cost till maturity.

Investments classiﬁ ed under the AFS and HFT categories are marked to market. The market/fair value of quoted
investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the scrip as available from the trades/
quotes on the stock exchanges or prices declared by Primary Dealers Association of India (‘PDAI’) jointly with Fixed
Income Money Market and Derivatives Association of India (‘FIMMDA’), periodically. Net depreciation, if any, within
each category of each investment classiﬁ cation is recognised in the Proﬁ t and Loss Account. The net appreciation if any,
under each category of each investment classiﬁ cation is ignored. The book value of individual securities is not changed
consequent to the periodic valuation of investments.

Treasury Bills, Exchange Funded Bills, Commercial Paper and Certiﬁ cate of Deposits being discounted instruments, are
valued at carrying cost.

Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.

Market value of investments where current quotations are not available, is determined as per the norms prescribed by
the RBI as under:

•

in case of unquoted bonds, debentures and preference shares where interest/dividend is received regularly (i.e. not
overdue beyond 90 days), the market price is derived based on the YTM for Government Securities as published by
FIMMDA/PDAI and suitably marked up for credit risk applicable to the credit rating of the instrument. The matrix
for credit risk mark-up for each categories and credit ratings along with residual maturity issued by FIMMDA is
adopted for this purpose;

in case of bonds and debentures (including Pass Through Certiﬁ cates) where interest is not received regularly (i.e.
overdue beyond 90 days), the valuation is in accordance with prudential norms for provisioning as prescribed by
RBI;

equity shares, for which current quotations are not available or where the shares are not quoted on the stock
exchanges, are valued at break-up value (without considering revaluation reserves, if any) which is ascertained
from the company’s latest Balance Sheet. In case the latest Balance Sheet is not available, the shares are valued at
`1 per company;

units of Venture Capital Funds (‘VCF’) held under AFS category where current quotations are not available are
marked to market based on the Net Asset Value (‘NAV’) shown by VCF as per the latest audited ﬁ nancials of the
fund. In case the audited ﬁ nancials are not available for a period beyond 18 months, the investments are valued
at `1 per VCF. Investment in unquoted VCF after 23 August, 2006 are categorised under HTM category for the
initial period of three years and valued at cost as per RBI guidelines;

investments in Credit Linked Notes (‘CLNs’), are valued based on current quotations where the same are available.
In the absence of quotes, the same are valued based on internal valuation methodology using appropriate mark-up
and other estimates such as price of the underlying Foreign Currency Convertible Bond (‘FCCB’), rating category of
the CLN etc. and

security receipts are valued as per the NAV obtained from the issuing Reconstruction Company/Securitisation
Company.

Investments in subsidiaries/joint ventures are categorised as HTM and assessed for impairment to determine permanent
diminution, if any, in accordance with the RBI guidelines.

Realised gains on investments under the HTM category are recognised in the Proﬁ t and Loss Account and subsequently
appropriated to Capital Reserve account in accordance with the RBI guidelines. Losses are recognised in the Proﬁ t and
Loss Account.

All investments are accounted for on settlement date except investments in equity shares which are accounted for on
trade date as the corporate actions are effected in equity on the trade date.

Repurchase and reverse repurchase transactions

Repurchase and reverse repurchase transactions [excluding those conducted under the Liquid Adjustment Facility (‘LAF’)
with RBI] are accounted as collateralised borrowing and lending respectively. Such transactions done under LAF are
accounted as outright sale and outright purchase respectively. However, depreciation in their value, if any, compared to
their original cost, is recognised in the Proﬁ t and Loss Account.

Policy for Short Sale

In accordance with RBI guidelines, the Bank undertakes short sale transactions in Central Government dated securities.
The short positions are reﬂ ected in ‘Securities Short Sold (‘SSS’) A/c’, speciﬁ cally created for this purpose. Such short
positions are categorised under HFT category. These positions are marked-to-market along with the other securities
under HFT portfolio and the resultant mark-to-market gains/losses are accounted for as per the relevant RBI guidelines
for valuation of investments discussed earlier.

4.2 Advances

Advances are classiﬁ ed into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of speciﬁ c provisions made towards NPAs and ﬂ oating provisions. Further, NPAs are classiﬁ ed into sub-standard,
doubtful and loss assets based on the criteria stipulated by the RBI. Provisions for NPAs are made for sub-standard
and doubtful assets at rates as prescribed by the RBI with the exception for agriculture advances and schematic retail
advances. In respect of schematic retail advances, provisions are made in terms of a bucket-wise policy upon reaching
speciﬁ ed stages of delinquency (90 days or more of delinquency) under each type of loan, which satisﬁ es the RBI
prudential norms on provisioning. Provisions in respect of agriculture advances classiﬁ ed into sub-standard and doubtful
assets are made at rates which are higher than those prescribed by the RBI.

In addition to the above, the Bank on a prudential basis, makes provision for expected losses against advances or other
exposures to speciﬁ c assets/industry/sector either on a case-by-case basis or for a group of assets, based on speciﬁ c
information or general economic environment. These are classiﬁ ed as contingent provision and included under Schedule
5 - Other Liabilities in the Balance Sheet.

Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines. NPAs are
identiﬁ ed by periodic appraisals of the loan portfolio by the Management.

Amounts recovered against debts written off are recognised in the Proﬁ t and Loss account.

For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which requires
the diminution in the fair value of the assets to be provided at the time of restructuring.

A general provision @ 0.25% in case of direct advances to agricultural and SME sectors, 1% in respect of advances
classiﬁ ed as commercial real estate, 2% in respect of housing loans at teaser rates, 2.75% (previous year 2%) in respect
of certain class of restructured assets and 0.40% for all other advances is made as prescribed by the RBI. In case of
overseas branches, general provision on standard advances is maintained at the higher of the levels stipulated by the
respective overseas regulator or RBI.

Under its home loan portfolio, the Bank offers housing loans with certain features involving waiver of Equated Monthly
Installments (‘EMIs’) of a speciﬁ c period subject to fulﬁ lment of a set of conditions by the borrower. The Bank makes
provision on an estimated basis against the probable loss that could be incurred in future on account of waivers to
eligible borrowers in respect of such loans. This provision is classiﬁ ed under Schedule 5 – Other Liabilities in the Balance
Sheet.

4.3 Country risk

In addition to the provisions required to be held according to the asset classiﬁ cation status, provisions are held for
individual country exposure (other than for home country as per the RBI guidelines). The countries are categorised into
seven risk categories namely insigniﬁ cant, low, moderate, high, very high, restricted and off-credit and provision is made
on exposures exceeding 180 days on a graded scale ranging from 0.25% to 100%. For exposures with contractual
maturity of less than 180 days, 25% of the normal provision requirement is held. If the country exposure (net) of the
Bank in respect of each country does not exceed 1% of the total funded assets, no provision is maintained on such
country exposure.

4.4 Securtisation

The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose Vehicle
(‘SPV’). In most cases, post securtisation, the Bank continues to service the loans transferred to the assignee/SPV. The
Bank also provides credit enhancement in the form of cash collaterals and/or by subordination of cash ﬂ ows to Senior
Pass Through Certiﬁ cate (‘PTC’) holders. In respect of credit enhancements provided or recourse obligations (projected
delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale
in accordance with AS 29, Provisions, Contingent Liabilities and Contingent Assets as notiﬁ ed under the Companies
(Accounting Standards) Rules, 2006.

In accordance with RBI guidelines of 7 May 2012, on ‘Guidelines on Securitisation of Standard Assets’, gain on
securtisation transaction is recognised over the period of the underlying securities issued by the SPV as prescribed under
RBI guidelines. Loss on securtisation is immediately debited to the Proﬁ t and Loss Account.

4.5 Foreign currency transactions

In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the Balance
Sheet date at rates notiﬁ ed by Foreign Exchange Dealers Association of India (‘FEDAI’). All proﬁ ts/losses resulting from
year end revaluations are recognised in the Proﬁ t and Loss Account.

Financial statements of foreign branches classiﬁ ed as non-integral foreign operations are translated as follows:

•

Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
rates notiﬁ ed by FEDAI at the year end.

Income and expenses are translated at the rates prevailing on the date of the transactions.

All resulting exchange differences are accumulated in a separate ‘Foreign Currency Translation Reserve’ till the
disposal of the net investments.

Outstanding forward exchange contracts (excluding currency swaps undertaken to hedge foreign currency assets/
liabilities and funding swaps which are not revalued) and spot exchange contracts are revalued at year end exchange
rates notiﬁ ed by FEDAI for speciﬁ ed maturities and at interpolated rates for contract of interim maturities. The resulting
gains or losses on revaluation are included in the Proﬁ t and Loss Account in accordance with RBI/FEDAI guidelines. The
forward exchange contracts of longer maturities where exchange rates are not notiﬁ ed by FEDAI are revalued at the
forward exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised
in the Proﬁ t and Loss Account.

Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding swaps is
recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap period.

Contingent liabilities on account of foreign exchange contracts/options, guarantees, acceptances, endorsements and
other obligations denominated in foreign currencies are disclosed at closing rates of exchange notiﬁ ed by FEDAI.

4.6 Derivative transactions

Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent liabilities.
The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative contracts are
revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Proﬁ t and Loss
Account and correspondingly in other assets or other liabilities respectively. For hedge transactions, the Bank identiﬁ es
the hedged item (asset or liability) at the inception of transaction itself. The effectiveness is ascertained at the time
of inception of the hedge and periodically thereafter. Hedge swaps are accounted for on accrual basis except in case
of swaps designated with an asset or liability that is carried at market value or lower of cost or market value in the
ﬁ nancial statements. In such cases the swaps are marked to market with the resulting gain or loss recorded as an
adjustment to the market value of designated asset or liability. The premium on option contracts is accounted for as per
FEDAI guidelines. Pursuant to the RBI guidelines any receivables under derivative contracts comprising of crystallised
receivables as well as positive Mark to Market (MTM) in respect of future receivables which remain overdue for more
than 90 days are reversed through the Proﬁ t and Loss account and are held in separate Suspense account.

Currency futures contracts are marked to market using daily settlement price on a trading day, which is the closing price
of the respective futures contracts on that day. While the daily settlement price is computed based on the last half an
hour weighted average price of such contract, the ﬁ nal settlement price is taken as the RBI reference rate on the last
trading day of the futures contract or as may be speciﬁ ed by the relevant authority from time to time. All open positions
are marked to market based on the settlement price and the resultant marked to market proﬁ t/loss is daily settled with
the exchange.

Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price of each
individual option provided by the exchange.

4.7 Revenue recognition

Interest income is recognised on an accrual basis except interest income on non-performing assets, which is recognised
on receipt in accordance with AS-9, Revenue Recognition as notiﬁ ed under the Companies (Accounting Standards)
Rules, 2006 and the RBI guidelines.

Fees and commission income is recognised when due, except for guarantee commission which is recognised pro-rata
over the period of the guarantee.

Arrangership/syndication fee is accounted for on completion of the agreed service and when right to receive is
established.

Dividend is accounted on an accrual basis when the right to receive the dividend is established.

Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.

Gain or loss arising on sale of NPAs is accounted as per the guidelines prescribed by the RBI, which require provisions to
be made for any deﬁ cit (where sale price is lower than the net book value), while surplus (where sale price is higher than
the net book value) is ignored.

4.8 Fixed assets and depreciation

Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes
freight, duties, taxes and incidental expenses related to the acquisition and installation of the asset.

Capital work-in-progress includes cost of ﬁ xed assets that are not ready for their intended use and also includes advances
paid to acquire ﬁ xed assets.

Depreciation is provided on the straight-line method from the date of addition. The rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 are considered as the minimum rates. If the Management’s estimate of the
useful life of a ﬁ xed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is
shorter, then depreciation is provided at a higher rate based on the Management’s estimate of the useful life/remaining
useful life. Pursuant to this policy, depreciation has been provided using the following estimated useful lives:

Asset
Owned premises
Assets given on operating lease
Computer hardware including printers
Application software
Vehicles
EPABX, telephone instruments
CCTV and video conferencing equipment
Mobile phone
Locker cabinets/cash safe/strong room door
Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment
UPS, VSAT, fax machines
Cheque book/cheque encoder, currency counting machine, fake note detector
Assets at staff residence
All other ﬁ xed assets

Estimated useful life
61 years
20 years
3 years
5 years
4 years
8 years
3 years
2 years
16 years
5 years
5 years
5 years
3 years
10 years

All ﬁ xed assets individually costing less than `5,000 are fully depreciated in the year of installation.

Depreciation on assets sold during the year is recognised on a pro-rata basis to the Proﬁ t and Loss Account till the date
of sale.

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an
asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value
in use. In assessing value in use, the estimated future cash ﬂ ows are discounted to their present value at the weighted
average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life.

Proﬁ t on sale of premises is appropriated to Capital Reserve Account in accordance with RBI instructions.

4.9 Lease transactions

Assets given on operating lease are capitalised at cost. Rentals received by the Bank are recognised in the Proﬁ t and Loss
Account on accrual basis.

Leases where the lessor effectively retains substantially all the risks and beneﬁ ts of ownership over the lease term are
classiﬁ ed as operating lease. Lease payments for assets taken on operating lease are recognised as an expense in the
Proﬁ t and Loss Account on a straight-line basis over the lease term.

4.10 Retirement and other employee beneﬁ ts

Provident Fund

Retirement beneﬁ t in the form of provident fund is a deﬁ ned beneﬁ t plan wherein the contributions are charged to
the Proﬁ t and Loss Account of the year when the contributions to the fund are due. Further, an actuarial valuation is
conducted by an independent actuary to determine the deﬁ ciency, if any, in the interest payable on the contributions as
compared to the interest liability as per the statutory rate.

Gratuity

conducted by an independent actuary using the Projected Unit Credit Method as at 31 March each year. In respect
of employees at overseas branches (other than expats) liability with regard to gratuity is provided on the basis of a
prescribed method as per local laws, wherever applicable.

Leave Encashment

Short term compensated absences are provided for based on estimates. The Bank provides leave encashment beneﬁ t
(long term), which is a deﬁ ned beneﬁ t scheme based on actuarial valuation conducted by an independent actuary. The
actuarial valuation is carried out as per the Projected Unit Credit Method as at 31 March each year.

Superannuation

Employees of the Bank are entitled to receive retirement beneﬁ ts under the Bank’s Superannuation scheme either under
a cash-out option through salary or under a deﬁ ned contribution plan. Through the deﬁ ned contribution plan, the Bank
contributes annually a speciﬁ ed sum of 10% of the employee’s eligible annual basic salary to LIC, which undertakes to
pay the lumpsum and annuity beneﬁ t payments pursuant to the scheme. Superannuation contributions are recognised
in the Proﬁ t and Loss Account in the period in which they accrue.

Actuarial gains/losses are immediately taken to the Proﬁ t and Loss Account and are not deferred.

4.11 Debit/Credit card reward points

The Bank estimates the probable redemption of debit and credit card reward points using an actuarial method at the
Balance Sheet date by employing an independent actuary. Provision for the said reward points is then made based on
the actuarial valuation report as furnished by the said independent actuary.

4.12 Taxation

Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined in
accordance with the Income tax Act, 1961. Deferred income taxes reﬂ ects the impact of current year timing differences
between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet
date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income
levied by same governing taxation laws.

Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufﬁ cient future taxable
income will be available against which such deferred tax assets can be realised. The impact of changes in the deferred
tax assets and liabilities is recognised in the Proﬁ t and Loss Account.

Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s judgement
as to whether realisation is considered as reasonably certain. Deferred tax assets are recognised on carry forward of
unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax asset can be realised
against future proﬁ ts.

4.13 Share issue expenses

Share issue expenses are adjusted from Share Premium Account in terms of Section 78 of the Companies Act, 1956.

4.14 Earnings per share

The Bank reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notiﬁ ed by the
Companies (Accounting Standards) Rules, 2006. Basic earnings per share is computed by dividing the net proﬁ t after tax
by the weighted average number of equity shares outstanding for the year.

Diluted earnings per share reﬂ ect the potential dilution that could occur if securities or other contracts to issue equity
shares were exercised or converted during the year. Diluted earnings per share is computed using the weighted average
number of equity shares and dilutive potential equity shares outstanding at the year end.

4.15 Employee stock option scheme

The 2001 Employee Stock Option Scheme (‘the Scheme’) provides for grant of stock options on equity shares of the
Bank to employees and Directors of the Bank and its subsidiaries. The Scheme is in accordance with the Securities and
Exchange Board of India (SEBI) (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999. The Bank follows the intrinsic value method to account for its stock based employee compensation plans as per
the Guidance Note on ‘Accounting for Employee Share-based Payments’ issued by the ICAI. Options are granted at an
exercise price, which is equal to/less than the fair market price of the underlying equity shares. The excess of such fair
market price over the exercise price of the options as at the grant date is recognised as a deferred compensation cost
and amortised on a straight-line basis over the vesting period of such options.

The fair market price is the latest available closing price, prior to the date of grant, on the stock exchange on which the
shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock exchange where
there is highest trading volume on the said date is considered.

4.16 Provisions, contingent liabilities and contingent assets

A provision is recognised when the Bank has a present obligation as a result of past event where it is probable that
an outﬂ ow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
Provisions are not discounted to its present value and are determined based on best estimate required to settle the
obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reﬂ ect the current
best estimates.

A disclosure of contingent liability is made when there is:

•

a possible obligation arising from a past event, the existence of which will be conﬁ rmed by occurrence or non
occurrence of one or more uncertain future events not within the control of the Bank; or

a present obligation arising from a past event which is not recognised as it is not probable that an outﬂ ow of
resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be
made.

When there is a possible obligation or a present obligation in respect of which the likelihood of outﬂ ow of resources is
remote, no provision or disclosure is made.

Contingent assets are not recognised in the ﬁ nancial statements. However, contingent assets are assessed continually
and if it is virtually certain that an inﬂ ow of economic beneﬁ ts will arise, the asset and related income are recognised in
the period in which the change occurs.

18 Notes forming part of the ﬁ nancial statements for the year ended 31 March, 2013

(Currency: In Indian Rupees)

a) On 17 November, 2010, the Board of Directors of the Bank had approved the acquisition of certain ﬁ nancial
services businesses 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 modiﬁ cations were
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 now comprises of (a) a
demerger of the ﬁ nancial services businesses (“the business”) 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 ﬁ nancial 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 30 March, 2012, conveyed it’s no objection to the Scheme. Further,
on 27 April, 2012, the Board of Directors of the Bank approved the reassessment of the valuation of the ESPL
business at `1,396 crores and consequently, in consideration for the demerger of the ﬁ nancial services business
of ESPL, the Bank was required to issue shares in the ratio of 5 equity shares of the Bank of the face value of
`10 each for every 1 equity share of `10 each held by the shareholders of ESPL. The sale of the ﬁ nancial services
businesses was to be simultaneously undertaken from the Bank to ASSL for a cash consideration of `274.15
crores only.

On 18 October, 2012, the Bank received the necessary approvals under applicable law from various regulatory
authorities to the revised Scheme of Arrangement in respect of the demerger of the ﬁ nancial services businesses
from ESPL to the Bank and simultaneous sale of such businesses to ASSL (now known as Axis Capital Limited
(“ACL”)), a wholly owned subsidiary of the Bank, with effect from 1 April, 2010 and consequently, the Bank has
issued 12,090,000 equity shares of the face value of `10 each to the shareholders of ESPL amounting to `12.09
crores and accounted for the net assets of ESPL of `274.15 crores at book value. Further, as advised by RBI, an
amount of `262.06 crores being the difference between the value of the net assets acquired from ESPL and the
shares issued has been transferred to the capital reserve.

There was a simultaneous transfer of the business by the Bank to ACL and a consideration of `274.15 crores
was received against the transfer of the net assets of equivalent value. The appointed date under the Scheme is
1 April, 2010.

During the year, the Bank raised additional equity capital through a Qualiﬁ ed Institutional Placement (QIP) of
34,000,000 shares and a preferential allotment of 5,837,945 shares at a price of `1,390.00 per share. As a
consequence, the paid-up share capital of the Bank has increased by `39.84 crores and the reserves of the Bank
have increased by `5,457.76 crores after charging of issue related expenses. The funds mobilised from the equity
raising (through QIP and Preferential issue) were utilised for enhancing the capital adequacy ratio and for general
corporate purposes.

Statutory disclosures as per RBI

2.1.1

‘Provisions and contingencies’ recognised in the Proﬁ t and Loss Account include:

For the year ended
Provision for income tax
- Current tax for the year
- Deferred tax for the year

Provision for wealth tax
Provision for non-performing assets
(including bad debts written off and write backs)

31 March, 2013

(` in crores)
31 March, 2012

2,720.58
(347.32)
2,373.26
0.38

2,256.23
(210.60)
2,045.63
0.36

1,179.22

860.43

For the year ended
Provision for restructured assets
Provision towards standard assets
Provision for depreciation in value of investments
Provision for country risk
Provision for other contingencies
Total

31 March, 2013
103.95
196.68
(103.94)
(9.63)
383.78
4,123.70

(` in crores)
31 March, 2012
88.86
150.30
58.10
4.81
(19.83)
3,188.66

2.1.2 The capital adequacy ratio of the Bank, calculated as per the RBI guidelines (Basel II requirement being higher) is set

out below:

Capital adequacy
Tier I
Tier II
Total capital
Total risk weighted assets and contingents
Capital ratios
Tier I
Tier II
CRAR
Amount raised by issue of Innovative Perpetual Debt Instruments (IPDI)
Amount raised by issue of Upper Tier II instruments
Amount of Subordinated Debt raised as Tier II capital (details given below)

31 March, 2013

(` in crores)
31 March, 2012

31,596.80
12,334.32
43,931.12
258,355.49

12.23%
4.77%
17.00%
-
-
`2,500 crores

21,886.11
9,758.84
31,644.95
231,711.39

9.45%
4.21%
13.66%
-
-
`3,425 crores

During the year ended 31 March, 2013, the Bank raised subordinated debt of `2,500 crores, the details of which are
set out below:

Date of allotment
31 December, 2012

Period
120 months

Coupon
9.15%

Amount
`2,500.00 crores

During the year ended 31 March, 2012, the Bank raised subordinated debt of `3,425 crores, the details of which are
set out below:

Date of allotment
1 December, 2011
20 March, 2012

Period
120 months
120 months

Coupon
9.73%
9.30%

Amount
`1,500.00 crores
`1,925.00 crores

During the year ended 31 March, 2013, the Bank redeemed subordinated debt of `622 crores, the details of which are
set out below:

Date of maturity
20 June, 2012
25 July, 2012
21 September, 2012

Period
117 months
84 months
117 months

Coupon
9.30%
8.67%
8.95%

Amount
`62.00 crores
`500.00 crores
`60.00 crores

During the year ended 31 March, 2012, the Bank redeemed subordinated debt of `5 crores, the details of which are
set out below:

Date of maturity
26 April, 2011

Period
93 months

Coupon
6.70%

2.1.3 The Bank has not raised any hybrid capital during the years ended 31 March, 2013 and 31 March, 2012.

Amount
`5.00 crores

2.1.4 The key business ratios and other information is set out below:

As at

31 March, 2013

31 March, 2012

Interest income as a percentage to working funds#

Non-interest income as a percentage to working funds#

Operating proﬁ t as a percentage to working funds#

Return on assets (based on working funds) #

Business (deposits less inter bank deposits plus advances) per employee**

Proﬁ t per employee**

8.90

2.15

3.05

8.71

2.15

2.94

1.70
`12.15 crores
`0.15 crore

1.68
`12.76 crores
`0.14 crore

Net non performing assets as a percentage of net customer assets*

0.32

0.25

# Working funds represent average of total assets as reported to RBI in Form X under Section 27 of the Banking

Regulation Act, 1949 during the year

Net Customer assets include advances and credit substitutes

Productivity ratios are based on average employee numbers for the year

2.1.5 The provisioning coverage ratio of the Bank computed in terms of the RBI guidelines as on 31 March, 2013 was 79.15%

(previous year 80.91%).

2.1.6 Asset Quality

Net non-performing assets to net advances is set out below:

Net non-performing assets as a percentage of net advances

ii) Movement in gross non-performing assets is set out below:

31 March, 2013

31 March, 2012

0.36

0.27

(` in crores)

31 March, 2013

Advances Investments

Others*

Total

Gross NPAs as at the beginning of the year

Intra Category Transfer

Additions (fresh NPAs) during the year

Sub-total (A)

Less:-

(i) Upgradations

(ii) Recoveries (excluding recoveries made from

upgraded accounts)

(iii) Write-offs

Sub-total (B)

Gross NPAs as at the end of the year (A-B)

1,720.23

18.75

2,015.13

3,754.11

79.46

(18.75)

3.12

63.83

329.15

253.90

799.65

1,382.70

2,371.41

1.21

52.33

53.54

10.29

6.61

1,806.30

5.11

11.72

2,023.36

3,829.66

329.15

255.11

851.98

1,436.24

11.72

2,393.42

Gross NPAs as at the beginning of the year
Intra Category Transfer

Additions (fresh NPAs) during the year

Sub-total (A)
Less:-

(i) Upgradations
(ii) Recoveries (excluding recoveries made from

upgraded accounts)

(iii) Write-offs

Sub-total (B)

Gross NPAs as at the end of the year (A-B)

(` in crores)

31 March, 2012

Advances Investments
12.43
-
67.81

1,586.99
(5.29)
1,772.81

Others*
-
5.29
1.32

Total
1,599.42
-
1,841.94

3,354.51

80.24

6.61

3,441.36

744.99

223.41

665.88

1,634.28

1,720.23

0.78

79.46

6.61

744.99

224.19

665.88

1,635.06

1,806.30

*represents amount outstanding under application money classiﬁ ed as non-performing asset

iii)

Movement in net non-performing assets is set out below:

Opening balance at the beginning of the year

Additions during the year*

Reductions during the year
Interest Capitalisation – Restructured NPA
Accounts

Closing balance at the end of the year

31 March, 2013

Advances Investments

455.58

834.07

(565.06)

(20.46)

704.13

15.94

(15.68)

2.81

(3.07)

Others
1.12

(1.12)

(` in crores)

Total

472.64

817.27

(562.25)

(23.53)

704.13

*includes transfer from non-performing investments to non-performing loans amounting to `18.75 crores

Opening balance at the beginning of the year

Additions during the year

Reductions during the year
Interest Capitalisation – Restructured NPA
Accounts

Closing balance at the end of the year

31 March, 2012

Advances Investments
-

410.35

1,000.15

(947.51)

(7.41)
455.58

15.94

-
15.94

Others

1.12

-
1.12

iv) Movement in provisions for non-performing assets is set out below:

31 March, 2013

Opening balance at the beginning of the year

Provisions made during the year
Transfer from restructuring provision

Write-offs/(write back) of excess provision
Closing balance at the end of the year

Advances Investments
63.52

1,254.91

1,185.92

13.89
(817.64)

1,637.08

0.05

-
(56.35)

7.22

Others
5.49
6.23
-

(` in crores)

Total

410.35

1,017.21

(947.51)

(7.41)
472.64

(` in crores)

Total
1,323.92

1,192.20

13.89
(873.99)

11.72

1,656.02

Opening balance at the beginning of the year

Provisions made during the year

Transfer to restructuring provision

Write-offs/(write back) of excess provisions
Closing balance at the end of the year

31 March, 2012

Advances Investments
12.43

1,174.31

Others
-

768.75

(1.38)

(686.77)
1,254.91

51.87

(0.78)
63.52

5.49

-
5.49

(` in crores)

Total
1,186.74

826.11

(1.38)

(687.55)
1,323.92

Total exposure to top four non-performing assets is given below:

Total exposure to top four NPA accounts

31 March, 2013
938.23

(` in crores)
31 March, 2012
582.10

vi) Non-performing assets as percentage of total assets in that sector is set out below:

Sr. No. Sector

1.
2.
3.
4.

Agriculture and allied activities
Industry (Micro & Small, Medium and Large)
Services*
Personal loans

31 March, 2013
%
2.36
1.09
1.60
0.64

31 March, 2012
%
2.33
0.75
0.96
0.81

* includes 0.01% (previous year 0.01%) NPAs in respect of commercial real estate and 0.08% (previous year
0.16%) in respect of trade segment

2.1.7 Movement in ﬂ oating provision is set out below:

For the year ended
Opening balance at the beginning of the year
Provisions made during the year
Draw down made during the year
Closing balance at the end of the year

31 March, 2013
3.25
-
-
3.25

(` in crores)
31 March, 2012
3.25
-
-
3.25

The Bank has not made any draw down out of the ﬂ oating provision during the current and the previous year.

2.1.8 Provision on Standard Assets

Provision towards Standard Assets [includes `18.47 crores (previous year
`21.61 crores) of standard provision on derivative exposures]

2.1.9 Details of Investments are set out below:

i) Value of Investments:

1) Gross value of Investments

In India
a)
b) Outside India

(i) Provision for Depreciation

a)
In India
b) Outside India

(ii) Provision for Non-Performing Investments

a)
In India
b) Outside India

31 March, 2013

(` in crores)
31 March, 2012

976.64

779.96

31 March, 2013

(` in crores)
31 March, 2012

113,127.94
840.43

92,875.81
707.35

(261.34)
37.73

(7.22)
-

(348.00)
20.45

(63.01)
(0.51)

3) Net value of Investments

In India
a)
b) Outside India

(ii) Movement of provisions held towards depreciation on investments:

Opening balance
Add: Provisions made during the year
Less: Write-offs/write back of excess provisions during the year
Closing balance

2.1.10 A summary of lending to sensitive sectors is set out below:

As at

A. Exposure to Real Estate Sector

Direct Exposure

(i) Residential mortgages

- of which housing loans eligible for inclusion in priority sector
advances

(ii) Commercial real estate

(iii) Investments in Mortgage Backed Securities (MBS) and other

securitised exposures -

a. Residential

b. Commercial real estate

Indirect Exposure

Fund based and non-fund based exposures on National Housing Bank
(NHB) and Housing Finance Companies (HFCs)

Total Exposure to Real Estate Sector

B. Exposure to Capital Market

Direct investments in equity shares, convertible bonds, convertible
debentures and units of equity-oriented mutual funds the corpus of
which is not exclusively invested in corporate debt

Advances against shares/bonds/debentures or other securities or on
clean basis to individuals for investment in shares (including IPOs/
ESOPs), convertible bonds, convertible debentures and units of
equity-oriented mutual funds

Advances for any other purposes where shares or convertible bonds
or convertible debentures or units of equity-oriented mutual funds
are taken as primary security

Advances for any other purposes to the extent secured by the collateral
security of shares or convertible bonds or convertible debentures or
units of equity-oriented mutual funds i.e. where primary security
other than shares/convertible bonds/convertible debentures/units of
equity-oriented mutual funds does not fully cover the advances

31 March, 2013

31 March, 2012

112,859.38
878.16

92,464.80
727.29

31 March, 2013
327.55
-
103.94
223.61

(` in crores)
31 March, 2012
269.45
105.97
47.87
327.55

(` in crores)

31 March, 2013

31 March, 2012

41,550.75

30,774.98

13,312.69

11,356.68

10,248.76

11,292.31

9,113.26

62,020.69

10,663.10

52,730.39

1,205.59

1,326.85

1.73

2.48

1,249.18

448.09

1,171.95

1.55

As at

Secured and unsecured advances to stockbrokers and guarantees
issued on behalf of stockbrokers and market makers

Loans sanctioned to corporates against the security of shares/bonds/
debentures or other securities or on clean basis for meeting promoter’s
contribution to the equity of new companies in anticipation of raising
resources

Bridge loans to companies against expected equity ﬂ ows/issues

Underwriting commitments taken up in respect of primary issue of
shares or convertible bonds or convertible debentures or units of
equity-oriented mutual funds

Financing to stock brokers for margin trading

10. All exposures to Venture Capital Funds (both registered and

unregistered)

Total exposure to Capital Market (Total of 1 to 10)

(` in crores)

31 March, 2013

31 March, 2012

2,603.33

2,521.87

22.90

3.38

303.11

2.00

106.78

6,364.84

140.90

4,746.85

2.1.11 During the year ended 31 March, 2013 & 31 March, 2012 there are no unsecured advances for which intangible

securities such as charge over the rights, licenses, authority, etc. has been taken as collateral by the Bank.

2.1.12 Details of Non-SLR investment portfolio are set out below:

Issuer composition as at 31 March, 2013 of non-SLR investments*:

No.

Issuer

Total
Amount

Extent of
private
placement

Extent of
“below
investment
grade”
securities

(` in crores)

Extent of
“unrated”
securities

Extent of
“unlisted”
securities

(1)

(2)

(3)

(4)

(5)

(6)

ii.

iii.

iv.

vi.

vii.

viii

Public Sector Units

Financial Institutions

Banks

6,045.10

5,275.03

10,621.91

4,984.86

9,145.77

1,126.60

Private Corporates

17,859.44

15,143.54

1,274.01

142.67

Subsidiaries/Joint Ventures

421.44

Others

1,785.74

1,508.48

Provision held towards
depreciation on investments

Provision held towards non
performing investments

(223.59)

(7.22)

(7)

44.78

6,980.42

4,343.95

3,152.90

421.44

1,599.99

Total

41,487.68

32,620.86

1,274.01

142.67

16,543.48

Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.

Issuer composition as at 31 March, 2012 of non-SLR investments*:

No.

Issuer

(1)

(2)

Public Sector Units

Financial Institutions

Banks

ii.

iii.

iv.

vi.

vii.

viii

Total
Amount

Extent of
private
placement

Extent of
“below
investment
grade”
securities

(` in crores)

Extent of
“unrated”
securities

Extent of
“unlisted”
securities

(3)

3,220.12

9,681.20

5,160.69

(4)

2,202.86

7,824.38

2,531.39

(5)

(6)

167.00

(7)

10.00

5,100.53

4,427.19

743.69

349.55

290.71

Private Corporates

16,270.98

13,134.49

486.34

175.59

Subsidiaries/Joint Ventures

Others

Provision held towards
depreciation on investments

Provision held towards non
performing investments

349.55

412.65

(255.79)

(63.52)

349.55

258.17

Total

34,775.88

26,300.84

653.34

175.59

10,921.67

Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.

* Excludes investments in non-SLR government securities amounting to `127.91 crores (Previous year `156.68 crores)

ii)

Non-performing non SLR investments is set out below:

Opening balance

Additions during the year

Reductions during the year

Closing balance

Total provisions held

31 March, 2013

31 March, 2012

(` in crores)

79.46

3.12

12.43

67.81

(72.29)*

(0.78)

10.29

7.22

79.46

63.52

*includes transfer from non-performing investments to non-performing loans amounting to `18.75 crores

2.1.13 Details of securities sold/purchased (in face value terms) during the years ended 31 March, 2013 and 31 March, 2012

under repos/reverse repos (excluding LAF transactions):

Year ended 31 March, 2013

Minimum
outstanding
during the year

Maximum
outstanding
during the year

Daily Average
outstanding
during the year

(` in crores)

As at
31 March, 2013

Securities sold under repos

i. Government Securities

119.35

0.62 -

ii. Corporate debt Securities

Securities purchased under reverse repos

i. Government Securities

6,036.59

416.78 -

ii. Corporate debt Securities

Year ended 31 March, 2012

Securities sold under repos

Minimum
outstanding
during the year

Maximum
outstanding
during the year

Daily Average
outstanding
during the year

(` in crores)

As at
31 March, 2012

i. Government Securities

- 122.15 26.31 -

ii. Corporate debt Securities

Securities purchased under reverse repos

i. Government Securities

1,952.36

105.45 -

ii. Corporate debt Securities

2.1.14 Details of ﬁ nancial assets sold to Securitisation/Reconstruction companies for Asset Reconstruction:

31 March, 2013

31 March, 2012

(` in crores)

Number of accounts*

Book value of loan asset securitised*

Aggregate value (net of provisions) of accounts sold

Aggregate consideration

Additional consideration realised in respect of accounts transferred in
earlier years

Aggregate gain/loss over net book value

* Excludes 30 accounts already written-off from books amounting to `93.15 crores (Previous year 71 accounts

amounting to `277.73 crores)

2.1.15 During the years ended 31 March, 2013 and 31 March, 2012 there were no Non-Performing Financial Assets Purchased

or Sold (excluding accounts previously written off) by the Bank.

2.1.16 Details of securitisation transactions undertaken by the Bank are as follows:

Particulars

31 March, 2013

31 March, 2012

(` in crores)

No. of SPVs sponsored by the bank for securitisation transactions

Total amount of securitised assets as per books of the SPVs sponsored
by the bank

Total amount of exposures retained by the bank to comply with MRR
as on the date of balance sheet

a) Off-balance sheet exposures

First loss

Others

b) On-balance sheet exposures

First loss

Others

S.
No.

Particulars

31 March, 2013

31 March, 2012

(` in crores)

Amount of exposures to securitisation transactions other than MRR

a) Off-balance sheet exposures

Exposure to own securitisations

First loss

Loss

ii)

Exposure to third party securitisations

First loss

Others

b) On-balance sheet exposures

Exposure to own securitisations

First loss

Loss

ii)

Exposure to third party securitisations

First loss

Others

2.1.17 The information on concentration of deposits is given below:

Total deposits of twenty largest depositors

Percentage of deposits of twenty largest depositors to total deposits

2.1.18 The information on concentration of advances* is given below:

Total advances to twenty largest borrowers

Percentage of advances to twenty largest borrowers
to total advances of the Bank

(` in crores)

31 March, 2013

31 March, 2012

35,083.32

13.89

31,117.71

14.14

(` in crores)

31 March, 2013

31 March, 2012

39,764.46

40,359.18

10.59

11.87

* Advances represent credit exposure (funded and non-funded) including derivative exposure as deﬁ ned by RBI

2.1.19 The information on concentration of exposure* is given below:

(` in crores)

31 March, 2013

31 March, 2012

Total exposure to twenty largest borrowers/customers

48,982.01

45,791.99

Percentage of exposures to twenty largest borrowers/customers
to total exposure on borrowers/customers

11.82

12.29

* Exposure includes credit exposure (funded and non-funded), derivative exposure and investment exposure (including

underwriting and similar commitments)

2.1.20 During the year ended 31 March, 2013 and 31 March, 2012, the Bank’s credit exposure to single borrower and group

borrowers was within the prudential exposure limits prescribed by RBI.

2.1.21 Details of Risk Category wise Country Exposure:

Risk Category

Insigniﬁ cant
Low
Moderate
High
Very High
Restricted
Off-Credit
Total

Exposure (Net) as at
31 March, 2013
553.49
11,220.91
2,290.54
2,369.79
761.53
0.17
-
17,196.43

Provision Held as at
31 March, 2013
-
-
-
-
-
-
-
-

Exposure (Net) as at
31 March, 2012
1,877.46
13,397.86
2,667.73
702.55
518.24
0.07
0.06
19,163.97

(` in crores)
Provision Held as at
31 March, 2012
-
9.63
-
-
-
-
-
9.63

2.1.22 A maturity pattern of certain items of assets and liabilities at 31 March, 2013 and 31 March, 2012 is set out below:

Year ended 31 March, 2013

1 day

2 days to

8 days to

15 days to

29 days

Over 3

Over 6

Over 1

Over 3

(` in crores)
Total

Over 5

7 days

14 days

28 days

and upto

months

year and

years and

years

3 months

and upto

upto 3

upto 5

Deposits

2,738.92

10,164.38

5,246.82

6,590.52

26,258.30

6 months
28,536.37

1 year
35,326.44

years
33,216.55

years
22,444.23

82,091.06

252,613.59

Advances

Investments

Borrowings
Foreign

Currency

Assets
Foreign

Currency

Liabilities

2,317.44

1,959.35

1,777.23

2,438.04

10,197.27

11,220.30

12,348.87

45,312.01

26,146.22

83,249.23

196,965.96

6,816.23
65.02

9,369.90
568.94

2,850.59
386.33

2,496.50
786.68

8,249.24
3,918.49

9,327.98
4,049.95

11,780.01
6,605.00

20,263.99
7,605.93

9,049.77
9,370.80

33,533.33
10,593.96

113,737.54
43,951.10

1,927.10

2,779.48

403.75

4,388.79

7,679.14

4,063.19

3,013.13

6,743.88

7,194.70

9,655.30

47,848.46

141.57

2,206.50

317.82

1,426.23

4,823.23

5,423.32

12,361.81

7,496.34

9,070.70

4,340.63

47,608.15

Year ended 31 March, 2012

(` in crores)

1 day

2 days to

8 days to

15 days to

29 days

Over 3

Over 6

Over 1

Over 3

Over 5

Total

7 days

14 days

28 days

and upto

months

year and

years and

years

3 months

and upto

upto 3

upto 5

Deposits

1,959.72

7,135.57

7,596.24

7,681.44

23,774.95

6 months
25,808.43

1 year
53,359.17

years
18,231.86

years
13,844.74

60,712.18

220,104.30

Advances

Investments

Borrowings
Foreign

Currency

Assets
Foreign

Currency

Liabilities

2,707.12

1,219.95

1,152.06

1,532.15

9,362.88

10,988.78

11,477.47

39,002.39

23,791.70

68,525.04

169,759.54

1,815.57
-

4,967.79
464.44

3,691.25
1,907.21

5,874.62
1,420.21

13,506.00
2,800.74

7,463.40
4,317.12

15,172.80
2,221.73

13,743.18
3,504.87

6,997.13
6,597.90

19,960.35
10,837.45

93,192.09
34,071.67

1,432.15

1,956.25

629.68

670.58

2,949.75

2,497.41

2,139.05

6,067.84

5,943.49

8,192.57

32,478.77

731.15

3,662.42

2,378.68

2,289.33

5,357.83

4,265.14

4,882.35

2,781.96

6,165.64

4,655.76

37,170.26

Classiﬁ cation of assets and liabilities under the different maturity buckets is based on the same estimates and
assumptions as used by the Bank for compiling the return submitted to the RBI, which has been relied upon by the
auditors. Maturity proﬁ le of foreign currency assets and liabilities is excluding forward contracts.

2.1.23 Details of loan assets subjected to restructuring during the year ended 31 March, 2013 are given below:

(` in crores)

Under SME Debt Restructuring Mechanism (II)
Total

Doubtful

Standard

Loss

Type of Restructuring
Asset Classiﬁ cation

Restructured accounts
as on April 1 of the FY
(Opening Balance)

Movement in balance for
accounts appearing under
opening balance1

Fresh Restructuring during
the year2,3

Upgradation to
restructured standard
category during the FY

Restructured Standard
Advances which cease to
attract higher provisioning
and/or additional risk
weight at the end of FY
Downgradation of
restructured accounts
during the FY4

Write-offs of restructured
accounts during the FY5,6

Restructured accounts as
on March 31 of the FY
(closing ﬁ gures)

No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
No. of borrowers
Amount Outstanding – Restructured facility
Amount Outstanding – Other facility
Provision thereon

Type of Restructuring (Contd. from above)
Asset Classiﬁ cation

Restructured accounts
as on April 1 of the FY
(Opening Balance)

Movement in balance for
accounts appearing under
opening balance1

Fresh Restructuring during
the year2, 3

Upgradation to restructured
standard category during
the FY

Restructured Standard
Advances which cease to
attract higher provisioning
and/or additional risk
weight at the end of FY
Downgradation of
restructured accounts
during the FY4

Write-offs of restructured
accounts during the FY5,6

Restructured accounts as
on March 31 of the FY
(closing ﬁ gures)

Under CDR Mechanism (I)

Standard

Sub-
Standard

Doubtful

Loss

Total

17
1,040.37
21.97
144.55
-
162.01
4.57
(57.95)
17
1,430.47
23.22
139.68
1
84.33
-
17.22
(2)
(77.69)
(2.40)
(10.26)
(3)
(176.52)
-
(21.02)
-
-
-
30
2,462.97
47.36
212.22

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

3
88.89
22.24
10.65
-
-
-
3
88.89
22.24
10.65

1
4.19
-
-
-
0.11
-
-
1
66.92
-
3.12
(1)
(84.33)
-
(17.22)

1
84.33
-
17.22
-
-
-
2
71.22
-
3.12

Others (III)

21
61.05 1,105.61
31.41
9.44
144.55
-
-
-
162.12
-
4.57
-
(57.95)
-
-
18
- 1,497.39
23.22
-
142.80
-
-
-
-
-
-
-
-
-
(2)
(77.69)
(2.40)
(10.26)
2
55.00
22.24
6.85
-
(28.94)
-
39
90.41 2,713.49
79.04
9.44
225.99
-

1
58.30
-
-
-
(28.94)
-
4

Sub-
Standard
1
0.03
-
-
-
-
-
-
-
-
-
-
-
-
-
-

-
3.00
-
-
-
-
-
1
3.03
-
-

7
92.54
6.09
3.51
(1)
(1.50)
0.44
(1.40)
2
55.63
-
6.60
-
-
-
-
(1)
(2.63)
(2.66)
-
-
-
-
-
-
-
-
7
144.04
3.87
8.71

Standard

256
1,044.90
54.93
4.44
(23)
(193.54)
10.41
26.74
1,168
975.28
18.17
30.01
-
-
-
-
(5)
(5.43)
(3.71)
(0.05)
(84)
(60.71)
(2.69)
(0.07)
-
-
-
1,312
1,760.50
77.11
61.07

Sub-
Standard
18
24.18
1.49
0.20
(3)
0.65
(0.71)
(0.09)
-
-
-
-
-
-
-
-

99
(12.81)
2.43
(0.02)
(22)
(0.83)
(0.28)
92
11.19
2.93
0.09

Doubtful

Loss

Total

Standard

15
2.65
-
-
(4)
(0.88)
-
-
-
-
-
-
-
-
-
-

7
24.25
0.51
0.10
(1)
(0.01)
-
17
26.01
0.51
0.10

-
-
-
(2.21)
-
-
-
-
-
-
-
-
-
-

301
83.06 1,154.79
56.42
4.64
(30)
(195.98)
9.70
26.65
1,168
975.28
18.17
30.01
-
-
-
-
(5)
(5.43)
(3.71)
(0.05)
30
1.64
0.33
0.01
(25)
(113.89)
(0.28)
1,439
18.71 1,816.41
80.63
0.08
61.26
-

8
50.91
0.08
-
(2)
(113.05)
-
18

280
2,177.81
82.99
152.50
(24)
(33.03)
15.42
(32.61)
1,187
2,461.38
41.39
176.29
1
84.33
-
17.22
(8)
(85.75)
(8.77)
(10.31)
(87)
(237.23)
(2.69)
(21.09)
-
-
-
1,349
4,367.51
128.34
282.00

Sub-
Standard
19
24.21
1.49
0.20
(3)
0.65
(0.71)
(0.09)
-
-
-
-
-
-
-
-

102
79.08
24.67
10.63
(22)
(0.83)
(0.28)
96
103.11
25.17
10.74

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

1
0.03
-
-
-
-
-
1
0.03
-
-

9
24.89
5.29
-
(3)
(2.78)
(1.10)
-
-
-
-
-
-
-
-
-

17
117.46
11.38
3.51
(4)
(4.28)
(0.66)
(1.40)
2
55.63
-
6.60
-
-
-
-
(1)
(2.63)
(2.66)
-
3
2
6.53
3.50
2.50
2.50
-
-
(3)
(3)
(1.15)
(1.15)
(2.85)
(2.85)
14
5
171.56
24.46
7.71
3.84
-
8.71
(` in crores)

Loss

Total

16
6.84
-
-
(4)
(0.77)
-
-
1
66.92
-
3.12
(1)
(84.33)
-
(17.22)

9
108.61
0.51
17.32
(1)
(0.01)
-
20
97.26
0.51
3.22

339
169.00 2,377.86
99.21
14.73
152.70
-
(34)
(3)
(38.14)
(4.99)
13.61
(1.10)
(32.70)
-
-
1,188
- 2,528.30
41.39
-
179.41
-
-
-
-
-
-
-
-
-
(8)
(85.75)
(8.77)
(10.31)
35
63.17
25.07
6.86
(28)
(143.98)
(3.13)
1,492
133.58 4,701.46
167.38
13.36
295.96
-

11
112.71
2.58
-
(5)
(143.14)
(2.85)
27

Total (I + II+ III)
Doubtful

Amount outstanding under restructuring facilities and other facilities is as on 31 March, 2013
1Includes accounts closed during the year on account of payment of outstanding facilities by the borrower
2Amount reported here represents outstanding as on 31 March, 2013. Actual amount subjected to restructuring determined as on the date of approval of restructuring proposal is `2,110.09 crore for
the FY 2012-13
3Includes accounts on account of re-work of restructuring and these accounts are not included in opening balance of standard restructured accounts
4Includes accounts which were not attracting higher provisioning and/or additional risk weight at the beginning of FY
5Includes accounts partially written-off during the year
6Amount outstanding under restructuring facilities and other facilities is as on the date of write-off in the books

2.1.24 Disclosure in respect of Interest Rate Swaps (IRS), Forward Rate Agreement (FRA) and Cross Currency Swaps (CCS)

outstanding is set out below:

Sr.
No.
i)
ii)

iii)
iv)

Items

Notional principal of swap agreements
Losses which would be incurred if counterparties failed to fulﬁ ll their
obligations under the agreements
Collateral required by the Bank upon entering into swaps
Concentration of credit risk arising from the swaps
Maximum single industry exposure with Banks
(previous year with Banks)
- Interest Rate Swaps/FRAs
- Cross Currency Swaps
Fair value of the swap book (hedging & trading)
- Interest Rate Swaps/FRAs
- Currency Swaps

The nature and terms of the IRS as on 31 March, 2013 are set out below:

As at
31 March, 2013
221,054.14

(` in crores)
As at
31 March, 2012
175,249.08

1,697.05
364.53

1,799.58
260.61

2,288.76
615.67

2,334.72
461.46

261.50
334.55

315.89
167.84

(` in crores)

Nature
Hedging
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading

Nos.
38
50
65
143
220
12
3
3
884
924
203
100
1
1
1
2,648

Notional Principal Benchmark

10,938.43 LIBOR
1,799.10 INBMK
3,867.00 INBMK
8,096.09 LIBOR
11,656.12 LIBOR
835.99 LIBOR
81.43 LIBOR
81.43 LIBOR
79,333.63 MIBOR
77,695.32 MIBOR
8,045.00 MIFOR
4,222.00 MIFOR

150.00 OTHERS
447.85 LIBOR
447.85 LIBOR

207,697.24

Terms
Fixed receivable v/s ﬂ oating payable
Fixed receivable v/s ﬂ oating payable
Floating receivable v/s ﬁ xed payable
Fixed receivable v/s ﬂ oating payable
Floating receivable v/s ﬁ xed payable
Floating receivable v/s ﬂ oating payable
Pay cap
Receive cap
Fixed receivable v/s ﬂ oating payable
Floating receivable v/s ﬁ xed payable
Fixed receivable v/s ﬂ oating payable
Floating receivable v/s ﬁ xed payable
Fixed payable v/s ﬁ xed receivable
Pay cap/receive ﬂ oor
Pay ﬂ oor/receive cap

The nature and terms of the IRS as on 31 March, 2012 are set out below:

(` in crores)

Nos.

1,058

1,020

154

112

Notional Principal Benchmark

Terms

450.00 MIBOR

Fixed receivable v/s ﬂ oating payable

65,107.82 MIBOR

60,976.02 MIBOR

6,161.00 MIFOR

4,402.00 MIFOR

2,560.10 INBMK

4,628.00 INBMK

Fixed receivable v/s ﬂ oating payable

Fixed payable v/s ﬂ oating receivable

Fixed receivable v/s ﬂ oating payable

Fixed payable v/s ﬂ oating receivable

Fixed receivable v/s ﬂ oating payable

Fixed payable v/s ﬂ oating receivable

6,410.25 LIBOR

Fixed receivable v/s ﬂ oating payable

Nature

Hedging

Trading

Hedging

(` in crores)

Nature

Trading

Nos.

122

180

Notional Principal Benchmark

Terms

6,120.15 LIBOR

Fixed receivable v/s ﬂ oating payable

8,473.81 LIBOR

Fixed payable v/s ﬂ oating receivable

150.00 OTHERS

Fixed payable v/s ﬁ xed receivable

419.72 LIBOR

401.91 LIBOR

Pay cap/receive ﬂ oor

Pay ﬂ oor/receive cap

Floating payable v/s ﬂ oating receivable

2,817

166,680.50

The nature and terms of the FRA’s as on 31 March, 2013 are set out below:

(` in crores)

Nature

Hedging

Nos.

Notional Principal Benchmark

Terms

2,171.40 LIBOR

Fixed receivable v/s ﬂ oating payable

2,171.40

The nature and terms of the FRA’s as on 31 March, 2012 are set out below:

(` in crores)

Nature

Trading

Nos.

Notional Principal Benchmark

Terms

203.50 LIBOR

508.75 LIBOR

712.25

Fixed receivable v/s ﬂ oating payable

Fixed payable v/s ﬂ oating receivable

The nature and terms of the CCS as on 31 March, 2013 are set out below:

(` in crores)

Nature

Hedging

Trading

Nos.

Notional Principal Benchmark

Terms

174

79.29 Principal &

Fixed payable v/s ﬁ xed receivable

Coupon Swap

274.12 LIBOR

Fixed receivable v/s ﬂ oating payable

2,720.49 LIBOR

4,006.36 LIBOR

Fixed receivable v/s ﬂ oating payable

Floating receivable v/s ﬁ xed payable

48.86 LIBOR/INBMK

Floating receivable v/s ﬂ oating payable

270.43 Principal only

Fixed receivable

3,785.95 Principal only

Fixed payable

11,185.50

Agreements with Banks/Financial Institutions and corporates are under approved credit lines.

The nature and terms of the CCS as on 31 March, 2012 are set out below:

Nature
Hedging

Hedging

Trading
Trading

Nos.
1

34
24

Notional Principal Benchmark

70.21 Principal & Coupon

Swap

Terms
Fixed payable v/s ﬁ xed receivable

254.38 Principal & Coupon

Fixed receivable v/s ﬂ oating payable

Swap
2,675.41 LIBOR
2,133.64 LIBOR

Fixed payable v/s ﬂ oating receivable
Fixed receivable v/s ﬂ oating payable

(` in crores)

Nature
Trading
Trading
Trading
Trading
Trading
Trading

Nos.
1
4
25
1
1
22

114

Notional Principal Benchmark

45.79 LIBOR/INBMK
215.17 Principal Only
982.84 Principal Only
76.31 Principal Only
76.31 Principal Only

1,326.27 Principal & Coupon

Swap

7,856.33

Terms
Floating receivable v/s ﬂ oating payable
Fixed receivable
Fixed payable
Floating payable
Floating receivable
Fixed payable v/s ﬁ xed receivable

Agreements with Banks/Financial Institutions and corporates are under approved credit lines.

Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2013 are set out below:

Sr. No.
i)

Particulars
Notional principal amount of exchange traded interest rate derivatives
undertaken during the year

ii)

iii)

iv)

Notional principal amount of exchange traded interest rate derivatives
outstanding as on 31 March, 2013

Notional principal amount of exchange traded interest rate derivatives
outstanding as on 31 March, 2013 and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives
outstanding as on 31 March, 2013 and “not highly effective”

(` in crores)
As at 31 March, 2013

N.A.

Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2012 are set out below:

Sr. No.
i)

Particulars
Notional principal amount of exchange traded interest rate derivatives
undertaken during the year
91 day T-Bill - July 11

ii)

iii)

iv)

Notional principal amount of exchange traded interest rate derivatives
outstanding as on 31 March, 2012

Notional principal amount of exchange traded interest rate derivatives
outstanding as on 31 March, 2012 and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives
outstanding as on 31 March, 2012 and “not highly effective”

(` in crores)
As at 31 March, 2012

5.04
5.04

N.A.

The Bank has not undertaken any transactions in Credit Default Swaps (CDS) during the year ended 31 March, 2013.

2.1.25 Disclosure on risk exposure in Derivatives

Qualitative disclosures:

(a) Structure and organisation for management of risk in derivatives trading, the scope and nature of
risk measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating
risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:

Derivatives are ﬁ nancial instruments whose characteristics are derived from an underlying asset, or from interest
and exchange rates or indices. The Bank undertakes Over The Counter (OTC)and Exchange Traded derivative
transactions for Balance Sheet management and also for proprietary trading/market making whereby the Bank

offers derivative products to the customers to enable them to hedge their earnings risks within the prevalent
regulatory guidelines.

Proprietary trading includes Interest Rate Futures, Currency Futures and Rupee Interest Rate Swaps under different
benchmarks (viz. MIBOR, MIFOR and INBMK), and Currency Options for USD/INR pair (both OTC and exchange
traded). The Bank also undertakes transactions in Cross Currency Swaps, Principal Only Swaps, Coupon Only
Swaps and Long Term Forex Contracts (LTFX) for hedging its Balance Sheet and also offers them to its customers.
These transactions expose the Bank to various risks, primarily credit, market and operational risk. The Bank has
adopted the following mechanism for managing risks arising out of the derivative transactions.

There is a functional separation between the Treasury Front Ofﬁ ce, Risk and Treasury Back Ofﬁ ce to undertake
derivative transactions. The derivative transactions are originated by Treasury Front Ofﬁ ce, which ensures
compliance with the trade origination requirements as per the Bank’s policy and the RBI guidelines. The Market
Risk Group within the Bank’s Risk Department independently identiﬁ es, measures and monitors the market risks
associated with derivative transactions and apprises the Asset Liability Management Committee (ALCO) and
the Risk Management Committee of the Board (RMC) on the compliance with the risk limits. The Treasury Back
Ofﬁ ce undertakes activities such as trade conﬁ rmation, settlement, ISDA documentation, accounting and other
MIS reporting.

The derivative transactions are governed by the derivative policy, market risk management policy, hedging policy
and the suitability and appropriateness policy of the Bank as well as by the extant RBI guidelines. The Bank
has also put in place a detailed process ﬂ ow for customer derivative transactions for effective management of
operational risk/reputation risk.

Various risk limits are set up and actual exposures are monitored vis-à-vis the limits. These limits are set up taking
into account market volatility, business strategy and management experience. Risk limits are in place for risk
parameters viz. PV01, VaR, Stop Loss, Delta, Gamma and Vega. Actual positions are monitored against these
limits on a daily basis and breaches, if any, are reported promptly. Risk assessment of the portfolio is undertaken
periodically. The Bank ensures that the Gross PV01 (Price value of a basis point) position arising out of all non-
option rupee derivative contracts are within 0.25% of net worth of the Bank as on Balance Sheet date.

Hedging transactions are undertaken by the Bank to protect the variability in the fair value or the cash ﬂ ow of the
underlying Balance Sheet item. These deals are accounted on an accrual basis except the swap designated with
an asset/liability that is carried at market value or lower of cost or market value. In that case, the swap is marked
to market with the resulting gain or loss recorded as an adjustment to the market value of designated asset or
liability. These transactions are tested for hedge effectiveness and in case any transaction fails the test, the same
is re-designated as a trading deal with the approval of the competent authority and appropriate accounting
treatment is followed.

(b) Accounting policy for recording hedge and non-hedge transactions, recognition of income, premiums

and discounts, valuation of outstanding contracts

The Hedging Policy approved by the RMC governs the use of derivatives for hedging purpose. Subject to the
prevailing RBI guidelines, the Bank deals in derivatives for hedging ﬁ xed rate and ﬂ oating rate coupon or foreign
currency assets/liabilities. Transactions for hedging and market making purposes are recorded separately. For
hedge transactions, the Bank identiﬁ es the hedged item (asset or liability) at the inception of the transaction
itself. The effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. Hedge
derivative transactions are accounted for in accordance with the hedge accounting principles. Derivatives for
market making purpose are marked to market and the resulting gain/loss is recorded in the Proﬁ t and Loss
Account. The premium on option contracts is accounted for as per FEDAI guidelines. Derivative transactions
are covered under International Swaps and Derivatives Association (ISDA) master agreements with respective
counterparties. The exposure on account of derivative transactions is computed as per the RBI guidelines and is
marked against the credit limits approved for the respective counterparties.

Derivative transactions comprise of swaps and options which are disclosed as contingent liabilities. The swaps
are categorised as trading or hedging and all the options are categorised as the trading book. Trading swaps/
options are revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the
Proﬁ t and Loss Account and correspondingly in other assets or other liabilities respectively. Hedged swaps are
accounted for as per the RBI guidelines. Pursuant to the RBI guidelines, any receivables (crystallised receivables
and positive MTM) under derivatives contracts, which remain overdue for more than 90 days, are reversed
through the Proﬁ t and Loss Account and are held in a separate Suspense account.

Collateral requirements for derivative transactions are laid down as part of credit sanction terms on a case by
case basis. Such collateral requirements are determined, based on usual credit appraisal process. The Bank retains
the right to terminate transactions as a risk mitigation measure in certain cases.

The credit risk in respect of customer derivative transactions is sought to be mitigated through a laid down policy
on sanction of Loan Equivalent Risk (LER) limits, monitoring mechanism for LER limits and trigger events for
escalation/margin calls/termination.

Quantitative Disclosure:

As at 31 March, 2013

Currency Derivatives

Forward
Contracts

CCS

Options

(` in crores)

Interest rate
Derivatives

13,218.41
353.41
218,797.85 10,832.09

-
8,022.86

13,109.83
196,758.81

328.93
-
7,764.61

338.93
-
1,835.46

-
(13.64)
130.78

-
(108.35)
2,743.39

0.24
2.38

9.49
191.19

-
1.34

307.66
417.04

Sr. No.

Particulars

3
4

Derivatives (Notional Principal Amount)
a) For hedging
b) For trading
Marked to Market Positions #
a) Asset (+)
b) Liability (-)
Credit Exposure @
Likely impact of one percentage change in
interest rate (100*PV01) (as at 31 March, 2013)
a) on hedging derivatives
b) on trading derivatives
Maximum and Minimum of 100*PV01
observed during the year
a) on hedging

I) Minimum
II) Maximum

b) on Trading

I) Minimum
II) Maximum

-
1.31

1.57
6.60

9.49
12.82

62.22
193.67

-
-

0.21
6.78

275.34
353.77

242.62
419.32

# Only on trading derivatives and represents net position
@ Includes accrued interest

As at 31 March, 2012

Currency Derivatives

Forward
Contracts

CCS

Options

(` in crores)

Interest rate
Derivatives

6,737.20

324.59

6,860.25

194,188.30

7,531.74

12,511.44

160,532.50

158.08

184.07

6.10

36.69

7,696.90

1,213.66

264.01

2,776.65

Sr. No.

Particulars

Derivatives (Notional Principal Amount)

a) For hedging

b) For trading

Marked to Market Positions #

a) Asset (+)

b) Liability (-)

Credit Exposure @

Likely impact of one percentage change in
interest rate (100*PV01) (as at 31 March, 2012)

a) on hedging derivatives

b) on trading derivatives

0.14

1.66

12.53

48.73

1.69

283.14

72.38

Maximum and Minimum of 100*PV01 observed
during the year

a) on hedging

I) Minimum

II) Maximum

b) on Trading

I) Minimum

II) Maximum

0.86

0.01

3.16

0.02

12.66

0.02

88.77

1.26

7.17

127.34

286.69

2.14

92.70

# Only on trading derivatives and represents net position
@ Includes accrued interest

Pursuant to RBI guidelines, the Bank has started dealing in Exchange Traded Currency Options. The outstanding
notional principal amount of these derivatives as at 31 March, 2013 was `Nil crores (previous year `542.91 crores) and
the mark-to-market value was `Nil crores (previous year `5.67 crores)

2.1.26 No penalty/strictures have been imposed on the Bank during the year ended 31 March, 2013.

During the previous year ended 31 March, 2012, RBI levied a penalty of `0.15 crores on the Bank for non-compliance
of certain instructions relating to derivative transactions. The Bank has paid the penalty of `0.15 crores on 5 May, 2011.

2.1.27 Disclosure of Customer Complaints

a.
b.
c.
d.

No. of complaints pending at the beginning of the year
No. of complaints received during the year
No. of complaints redressed during the year
No. of complaints pending at the end of the year

31 March, 2013
2,188
197,733
198,164
1,757

31 March, 2012
2,198
279,586
279,596
2,188

The above information does not include complaints redressed within 1 working day and is as certiﬁ ed by the
Management and relied upon by the auditors.

2.1.28 Disclosure of Awards passed by the Banking Ombudsman

No. of unimplemented awards at the beginning of the year

No. of awards passed by the Banking Ombudsman during the year

No. of awards implemented during the year

No. of unimplemented awards at the end of the year

31 March, 2013
-

31 March, 2012
-

*under appeal

The above information is as certiﬁ ed by the Management and relied upon by the auditors.

2.1.29 Draw Down from Reserves

The Bank has not undertaken any drawdown from reserves during the year, except towards issue expenses incurred
for the equity raising through the QIP and Preferential issue, which have been adjusted against the share premium
account.

2.1.30 Letter of Comfort

The Bank has not issued any Letter of Comfort (LoC) on behalf of its subsidiaries.

2.1.31 Disclosure on Remuneration

Qualitative disclosures

Information relating to the composition and mandate of the Remuneration Committee

The HR and Remuneration Committee of the Board oversees the framing, review and implementation of the
compensation policy of the Bank on behalf of the Board. The Committee works in close coordination with the
Risk Management Committee of the Bank, in order to achieve effective alignment between remuneration and
risks.

As on 31 March, 2013, the HR and Remuneration Committee comprises of the following non-executive
independent directors.

Shri Prasad R. Menon - Chairman (with effect from 17 January 2013)

Shri K. N. Prithiviraj

Shri V. R. Kaundinya

Prof. Samir K. Barua

The HR and Remuneration Committee of the Board, functions with the following main objectives:

To review and recommend to the Board for approval, the overall remuneration philosophy and policy of
the Bank, including the level and structure of ﬁ xed pay, variable pay, perquisites, bonus pool, stock-based
compensation to employees of the Bank, and any other form of compensation as may be included from
time to time.

To review and recommend to the Board for approval, an increase in manpower cost budget of the Bank
as a whole, at an aggregate level, for the next year.

To review and recommend to the Board for approval, the talent management and succession policy and
process in the Bank for ensuring business continuity, especially at the level of Managing Director and
Chief Executive Ofﬁ cer (MD & CEO), the other Whole-time Directors, senior managers one level below
the Board position and other key roles.

To review organisation health through feedback from employee surveys conducted on a regular basis.

To review the Code of Conduct and HR strategy, policy and performance appraisal process within the
Bank, as well as any fundamental changes in organisation structure which could have wide ranging or
high risk implications.

To review and recommend to the Board for approval, the creation of new positions at the level of Executive
Director and above.

To review appointments, promotions and exits of senior managers, one level below the Board position.

To set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, the other
Whole-time Directors and Executive Directors for the ﬁ nancial year and for the medium to long term.

To review the performance of the MD & CEO, other Whole-time Directors and Executive Directors at the
end of each year.

To recommend to the Board the remuneration package for the MD & CEO, the other Whole-time Directors
and the senior managers one level below the Board.

To recommend to the Board the compensation payable to the Chairman of the Bank.

Information relating to the design and structure of remuneration processes and the key features and
objectives of remuneration policy

Objectives of the Remuneration Policy

Competitiveness in talent market: Benchmarking with peer group for relevant talent pools.

Pay for job through ﬁ xed pay: To position the median level ﬁ xed pay in the Bank to the median of the
market of respective businesses.

Pay for performance to drive meritocracy through variable pay: By positioning median total pay to median
of the market and high performers to the top quartile of the market by using variable pay with appropriate
risk-adjusted metrics.

Employee Stock Options for long-term value creation: In order to align executive decision making with
long-term value creation, a signiﬁ cant part of executive compensation is delivered through long-term
incentives in the form of ESOPs, which vests over a period of 3 years.

Beneﬁ ts and perquisites are offered to employees to remain aligned with market practices and provide
ﬂ exibility.

Affordability: Pay to reﬂ ect productivity improvements to retain cost-income competitiveness.

Apart from the above, the compensation structure for MD & CEO & Whole-time Directors (WTDs) is aligned to
RBI’s guidelines for sound compensation practices (effective FY 2012-13) and addresses the general principles of:

Effective and independent governance and monitoring of compensation.

Alignment of compensation with prudent risk-taking through well designed and consistent compensation
structures.

Clear and timely disclosure to facilitate supervisory oversight by all stakeholders.

Accordingly, the Compensation Policy for MD & CEO and WTDs seeks to:

Ensure that the compensation, in terms of structure and total amount, is in line with the best practices,
as well as competitive vis-à-vis that of peer banks.

Establish the linkage of compensation with individual performance as well as achievement of the
corporate objectives of the Bank.

Include a signiﬁ cant variable pay component tied to the achievement of pre-established objectives in line
with Bank’s scorecard while ensuring that the compensation is aligned with prudent risk taking.

Encourage attainment of long term shareholder returns through inclusion of equity linked long-term
incentives as part of compensation.

Design & Structure of Remuneration process

Compensation is structured in terms of ﬁ xed pay, variable pay and employee stock options (for selective
employees), with the last two being strongly contingent on employee performance. The compensation policy of
the Bank is approved by the HR and Remuneration Committee. Additional approval from Shareholders and RBI
is obtained speciﬁ cally for compensation of MD & CEO and WTD’s.

c) Description of the ways in which current and future risks are taken into account in the remuneration

process

Categorization of employees under Risk alignment of compensation framework

The MD & CEO, WTD’s and employees in the Grade of Vice President and above engaged in the functions of Risk
Control and Compliance are included in the policy of risk alignment of compensation.

Performance Parameters aligned to relevant risk measures

The following relevant risk measures are included in the scorecards of MD & CEO and WTDs

•

NPA – net slippages

Ratio of Risk Weighted Assets to Total Assets

Liquidity Coverage Ratio

Inclusion of the above measures ensure that performance parameters are aligned to risk measures at the time of
performance evaluation

Deferral of Variable Pay

To ensure that risk measures do not focus only on achieving short term goals; variable payout is deferred, if it
exceeds 40% of the ﬁ xed pay.

Other Risk Takers

For other staff (including risk takers) a policy on similar lines is proposed to be put in place in future.

d) Description of the ways in which the Bank seeks to link performance during a performance

measurement period with levels of remuneration

The Bank’s performance management and compensation philosophies are structured to support the achievement
of the Bank’s on-going business objectives by rewarding achievement of objectives linked directly to its strategic
business priorities. These strategic priorities are cascaded through annualised objectives to the employees.

The Bank follows the balanced scorecard approach in designing its performance management system. Adequate
attention is given to robust goal setting process to ensure alignment of individual objectives to support the
achievement of business strategy, ﬁ nancial and non-ﬁ nancial goals across and through the organization. The
non-ﬁ nancial goals for employees includes customer service, process improvement, adherence to risk and
compliance norms, self-capability development and behaviours such as integrity and team management.

Appraisals are conducted annually and initiated by the self-appraisal of an employee. The immediate supervisor
reviews the appraisal ratings in a joint consultation meeting with the employee and assigns the performance
rating. The ﬁ nal rating is discussed by a Moderation Committee comprising of senior ofﬁ cials of the Bank.
Both relative and absolute individual performance is considered in the moderation process. Individual ﬁ xed pay
increases, variable pay and ESOPs are linked to the ﬁ nal performance ratings. In addition, the ﬁ xed pay increase
is also inﬂ uenced by an employee’s position in the salary range.

Bank’s policy on deferral and vesting of variable remuneration and Bank’s policy and criteria for
adjusting deferred remuneration before vesting and after vesting

The policy for risk alignment of compensation effective from ﬁ nancial year 2012-13 provides for the deferral of
variable pay for MD & CEO and WTD’s.

The following clauses with regard to deferral are included in the policy:

•

If the variable pay exceeds 40% of the ﬁ xed pay, 45% of the variable pay is deferred proportionately over
a period of three years.

The deferred variable pay amount of reference year is held back in case of any misrepresentation or gross
inaccuracy resulting in a wrong risk assessment.

Also, a sharp fall in proﬁ t, say to the extent of 30% of the reference year triggers further examination of
the causes and the HR and Remuneration Committee thereafter takes decision on holding back or release
of deferred variable pay.

Description of the different forms of variable remuneration (i.e. Cash, Shares, ESOPs and other forms)
that the Bank utilises and the rationale for using these different forms

Different forms of variable remuneration are as mentioned below:

•

Variable Pay: Variable Pay is linked to corporate performance, business performance and individual
performance and ensures differential pay based on the performance levels of employees.

ESOPs: ESOPs are given to selective set of employees at senior levels based on their level of performance.
ESOP scheme has an inbuilt deferral vesting design which helps in retention of employees along with
providing an opportunity of long term wealth creation for the employees.

Quantitative disclosures

The quantitative disclosures pertaining to the MD & CEO and WTDs identiﬁ ed as risk takers for the ﬁ nancial year 2012-
13 are given below.

i) Number of meetings held by the Remuneration Committee during the

ﬁ nancial year

ii) Remuneration paid to its members (sitting fees)

Number of employees having received a variable remuneration award during
the ﬁ nancial year

Number and total amount of sign-on awards made during the ﬁ nancial year

Details of guaranteed bonus, if any, paid as joining/sign on bonus

Details of severance pay, in addition to accrued beneﬁ ts, if any

Total amount of outstanding deferred remuneration, split into cash, shares
and share-linked instruments and other forms

Total amount of deferred remuneration paid out in the ﬁ nancial year

Breakdown of amount of remuneration awards for the ﬁ nancial year to show
ﬁ xed and variable, deferred and non-deferred

Total amount of outstanding deferred remuneration and retained remuneration
exposed to ex-post explicit and/or implicit adjustments

Total amount of reductions during the ﬁ nancial year due to ex-post explicit
adjustments

Total amount of reductions during the ﬁ nancial year due to ex-post implicit
adjustments

31 March, 2013

6
`340,000

N.A.

N.A.
Fixed- `3.76 crores**
Variable- `0.38 crores*
Deferred - Nil
Non-Deferred - `0.38 crores*

N.A.

* pertains to FY 2011-12 paid to MD & CEO

** includes basic salary, leave fare concession, house rent allowance, superannuation allowance and contribution

towards provident fund

2.1.32 Bancassurance Business

Details of income earned from Bancassurance business are as under:

Sr. No. Nature of Income*

31 March, 2013

31 March, 2012

(` in crores)

For selling life insurance policies

For selling non-life insurance policies

For selling mutual fund products

Others (selling of gold coins, wealth advisory,
RBI and other bonds etc.)

Total

336.76

19.41

79.99

74.45

510.61

258.62

31.33

57.66

24.67

372.28

*includes receipts on account of marketing activities undertaken on behalf of bank assurance partners

2.1.33 The Bank has not sponsored any special purpose vehicle which is required to be consolidated in the consolidated

ﬁ nancial statements as per accounting norms.

2.1.34 Amount of total assets, non-performing assets and revenue of overseas branches is given below:

Particulars

Total assets

Total NPAs

Total revenue

(` in crores)

31 March, 2013

31 March, 2012

37,151.94

219.29

2,161.26

32,302.40

0.51

1,628.02

2.1.35 During the year ended 31 March, 2013 and 31 March, 2012, the value of sales/transfers of securities to/from HTM
category (excluding one-time transfer of securities and sales to RBI under OMO auctions) was within 5% of the book
value of investments held in HTM category at the beginning of the year.

2.2 Other disclosures

2.2.1 During the year, the Bank has appropriated `141.46 crores (previous year `38.22 crores), net of taxes and transfer to
statutory reserve to the Capital Reserve, being the gain on sale of HTM investments in accordance with RBI guidelines.
During the previous year ended 31 March, 2012, as advised by the RBI, the Bank appropriated `13.68 crores, net of
taxes and transfer to statutory reserve, being the proﬁ t earned on sale of premises to the Capital Reserve.

2.2.2 During the year, the Bank has appropriated an amount of `2.61 crores to Reserve Fund account in accordance with

guidelines issued by Central Bank of Sri Lanka in respect of Sri Lanka branch operations.

2.2.3 Earnings Per Share (‘EPS’)

The details of EPS computation is set out below:

Basic and Diluted earnings for the year (Net proﬁ t after tax) (` in crores)

5,179.43 4,242.21

Basic weighted average no. of shares (in crores)

43.28

41.21

31 March, 2013

31 March, 2012

Add: Equity shares for no consideration arising on grant of stock options
under ESOP (in crores)

Diluted weighted average no. of shares (in crores)
Basic EPS (`)
Diluted EPS (`)
Nominal value of shares (`)

0.30

43.58

119.67

118.85

10.00

0.30

41.51

102.94

102.20

10.00

Dilution of equity is on account of 2,975,646 (previous year 2,991,727) stock options.

2.2.4 Employee Stock Options Scheme (‘the Scheme’)

In February 2001, pursuant to the approval of the shareholders at the Extraordinary General Meeting, the Bank approved
an Employee Stock Option Scheme. Under the Scheme, the Bank is authorised to issue upto 13,000,000 equity shares
to eligible employees. Eligible employees are granted an option to purchase shares subject to vesting conditions. The
options vest in a graded manner over 3 years. The options can be exercised within 3 years from the date of the vesting.
Further, over the period June 2004 to June 2010, pursuant to the approval of the shareholders at Annual General
Meetings, the Bank approved an ESOP scheme for additional options aggregating 27,517,400. Within the overall
ceiling of 40,517,400 stock options approved for grant by the shareholders as stated earlier, the Bank is also authorised
to issue options to employees and directors of the subsidiary companies.

39,891,590 options have been granted under the Scheme till the previous year ended 31 March, 2012.

On 27 April, 2012, the Bank granted 2,343,500 stock options (each option representing entitlement to one equity
share of the Bank) to its employees including the MD & CEO and 172,500 stock options to employees of Axis Asset
Management Company Limited, a subsidiary of the Bank. These options can be exercised at a price of `1,086.65 per
option.

Stock option activity under the Scheme for the year ended 31 March, 2013 is set out below:

Options
outstanding

Range of exercise
prices (`)

Weighted
average
exercise
price (`)

Weighted average
remaining
contractual life
(Years)

Outstanding at the beginning of the year

11,428,248

319.00 to 1,447.55

965.90

2.79

Granted during the year

2,516,000

1,086.65

Forfeited during the year

(175,698)

319.00 to 1,447.55

1,144.00

Expired during the year

(80,954)

319.00 to 824.40

568.70

Exercised during the year

(2,822,571)

319.00 to 1,447.55

594.48

Outstanding at the end of the year

10,865,025

468.90 to 1,447.55

1,090.43

Exercisable at the end of the year

5,372,105

468.90 to 1,447.55

941.06

The weighted average share price in respect of options exercised during the year was `1,217.66.

Stock option activity under the Scheme for the year ended 31 March, 2012 is set out below:

2.69

1.57

Options
outstanding

Range of exercise
prices (`)

Weighted
average
exercise
price (`)

Weighted average
remaining
contractual life
(Years)

Outstanding at the beginning of the year

11,122,518

232.10 to 1,245.45

712.90

2.86

Granted during the year

3,268,700

1,447.55

Forfeited during the year

(243,596)

232.10 to 1,447.55

960.75

Expired during the year

(61,265)

232.10 to 468.90

406.46

Exercised during the year

(2,658,109)

232.10 to 1,159.30

512.92

Outstanding at the end of the year

11,428,248

319.00 to 1,447.55

965.90

Exercisable at the end of the year

4,983,892

319.00 to 1,245.45

717.76

The weighted average share price in respect of options exercised during the year was `1,200.12.

2.79

1.53

Fair Value Methodology

On applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’ the
impact on reported net proﬁ t and EPS would be as follows:

Net Proﬁ t (as reported) (` in crores)

Add: Stock based employee compensation expense
included in net income (` in crores)

Less: Stock based employee compensation expense determined under fair
value based method (proforma) (` in crores)
Net Proﬁ t (Proforma) (` in crores)
Earnings per share: Basic (in ` )

As reported

Proforma
Earnings per share: Diluted (in `)

As reported

Proforma

31 March, 2013

31 March, 2012

5,179.43

4,242.21

(117.08)

5,062.35

(147.16)

4,095.05

119.67

116.97

118.85

116.16

102.94

99.37

102.20

98.65

The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with
the following assumptions:

Dividend yield

Expected life

Risk free interest rate

Volatility

31 March, 2013

31 March, 2012

1.20%

2-4 years

1.23%

2-4 years

8.14% to 8.33%

8.05% to 8.10%

35.92% to 50.25% 39.43% to 53.33%

Volatility is the measure of the amount by which a price has ﬂ uctuated or is expected to ﬂ uctuate during a period.
The measure of volatility used in the Black-Scholes options pricing model is the annualised standard deviation of the
continuously compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility
of the stock prices on the National Stock Exchange, over a period prior to the date of grant, corresponding with the
expected life of the options has been considered.

The weighted average fair value of options granted during the year ended 31 March, 2013 is `387.24 (previous year
`559.31).

2.2.5 Dividend paid on shares issued on exercise of stock options

The Bank may allot shares between the Balance Sheet date and record date for the declaration of dividend pursuant to
the exercise of any employee stock options. These shares will be eligible for full dividend for the year ended 31 March,
2013, if approved at the ensuing Annual General Meeting. Dividend relating to these shares has not been recorded in
the current year.

Appropriation to proposed dividend during the year ended 31 March, 2013 includes dividend of `2.02 crores (previous
year `1.88 crores) paid pursuant to exercise of 1,086,994 employee stock options after the previous year end but
before the record date for declaration of dividend for the year ended 31 March, 2012.

2.2.6 Segmental reporting

The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking and
Other Banking Business. These segments have been identiﬁ ed based on the RBI’s revised guidelines on Segment
Reporting issued on 18 April, 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The principal activities of
these segments are as under.

Segment

Treasury

Retail Banking

Corporate/Wholesale Banking

Principal Activities

Treasury operations include investments in sovereign and corporate debt, equity
and mutual funds, trading operations, derivative trading and foreign exchange
operations on the proprietary account and for customers and central funding.

Constitutes lending to individuals/small businesses subject to the orientation,
product and granularity criterion and also includes low value individual exposures
not exceeding the threshold limit of `5 crores as deﬁ ned by RBI. Retail Banking
activities also include liability products, card services, internet banking, ATM
services, depository, ﬁ nancial advisory services and NRI services.

Includes corporate relationships not included under Retail Banking, corporate
advisory services, placements and syndication, management of public issue,
project appraisals, capital market related services and cash management services.

Other Banking Business

Includes para banking activities like third party product distribution and other
banking transactions not covered under any of the above three segments.

Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and interest
income on the investment portfolio. The principal expenses of the segment consist of interest expense on funds
borrowed from external sources and other internal segments, premises expenses, personnel costs, other direct
overheads and allocated expenses.

Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given to customers
falling under this segment and fees arising from transaction services and merchant banking activities such as syndication
and debenture trusteeship. Revenues of the Retail Banking segment are derived from interest earned on loans classiﬁ ed
under this segment and fees for banking and advisory services, ATM interchange fees and cards products. Expenses of
the Corporate/Wholesale Banking and Retail Banking segments primarily comprise interest expense on deposits and
funds borrowed from other internal segments, infrastructure and premises expenses for operating the branch network
and other delivery channels, personnel costs, other direct overheads and allocated expenses.

Segment income includes earnings from external customers and from funds transferred to the other segments.
Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any, for
that segment. Segment-wise income and expenses include certain allocations. Inter segment interest income and
interest expense represent the transfer price received from and paid to the Central Funding Unit (CFU) respectively.
For this purpose, the funds transfer pricing mechanism presently followed by the Bank, which is based on historical
matched maturity and internal benchmarks, has been used. Operating expenses other than those directly attributable
to segments are allocated to the segments based on an activity-based costing methodology. All activities in the Bank
are segregated segment-wise and allocated to the respective segment.

Segmental results are set out below:

31 March, 2013

(` in crores)

Treasury

Corporate/
Wholesale
Banking

Retail
Banking

Other
Banking
Business

Total

Segment Revenue

Gross interest income (external customers)

6,969.72

13,081.18

7,131.67

27,182.57

Other income

1,581.20

2,843.97

1,610.88

515.06

6,551.11

Total income as per Proﬁ t and Loss Account

8,550.92

15,925.15

8,742.55

515.06

33,733.68

Add/(less) inter segment interest income

33,112.64

3,371.64

9,374.05

45,858.33

Total segment revenue

41,663.56

19,296.79

18,116.60

515.06

79,592.01

Less: Interest expense (external customers)

10,389.84

285.85

6,840.62

Less: Inter segment interest expense

29,937.22

10,113.35

5,807.76

17,516.31

45,858.33

Less: Operating expenses

446.02

1,621.19

4,709.94

137.09

6,914.24

Operating proﬁ t

890.48

7,276.40

758.28

377.97

9,303.13

Less: Provision for non-performing assets/others

(94.48)

1,614.12

230.42

0.38

1,750.44

Segment result

Less: Provision for tax

Extraordinary proﬁ t/loss

Net Proﬁ t

Segment assets

Unallocated assets

Total assets

Segment liabilities

Unallocated liabilities

Total liabilities

Net assets

984.96

5,662.28

527.86

377.59

7,552.69

2,373.26

5,179.43

135,490.74

128,119.81

75,260.84

247.45

339,118.84

1,441.82

340,560.66

126,806.66

63,289.17 116,295.95

31.20 306,422.98

8,684.08

64,830.64 (41,035.11)

216.25

33,107.86

1,029.82

307,452.80

Capital expenditure for the year

Depreciation on ﬁ xed assets for the year

20.79

17.52

99.37

288.91

83.71

243.38

8.46

7.12

417.53

351.73

(` in crores)

31 March, 2012

Treasury

Corporate/
Wholesale
Banking

Retail
Banking

Other
Banking
Business

Total

Segment Revenue

Gross interest income (external customers)

5,992.51

11,292.20

4,709.94

21,994.65

Other income

1,003.66

2,800.89

1,238.86

376.81

5,420.22

Total income as per Proﬁ t and Loss Account

6,996.17

14,093.09

5,948.80

376.81

27,414.87

Add/(less) inter segment interest income

28,992.40

3,093.62

7,274.96

0.15

39,361.13

Total segment revenue

35,988.57

17,186.71

13,223.76

376.96

66,776.00

Less: Interest expense (external customers)

8,747.14

214.71

5,015.05

13,976.90

Less: Inter segment interest expense

25,817.89

9,335.77

4,207.43

0.04

39,361.13

Less: Operating expenses

Operating proﬁ t

Less: Provision for non-performing assets/others

Segment result

Less: Provision for tax

Extraordinary proﬁ t/loss

Net Proﬁ t

Segment assets

Unallocated assets

Total assets

Segment liabilities

Unallocated liabilities

Total liabilities

Net assets

426.36

997.18

160.78

1,735.51

3,759.65

85.58

6,007.10

5,900.72

241.63

291.34

7,430.87

735.59

246.30

0.36

1,143.03

836.40

5,165.13

(4.67)

290.98

6,287.84

2,045.63

4,242.21

108,394.17

117,647.10

58,258.41

168.65 284,468.33

1,159.46

285,627.79

116,445.51

51,261.01

94,305.75

19.49

262,031.76

(8,051.34)

66,386.09 (36,047.34)

149.16

22,808.54

787.49

262,819.25

Capital expenditure for the year

Depreciation on ﬁ xed assets for the year

20.30

20.67

97.03

98.75

213.74

217.54

5.19

5.28

336.26

342.24

Geographic Segments

Domestic

International

Total

31 March,
2013

31 March,
2012

31 March,
2013

31 March,
2012

31 March,
2013

31 March,
2012

31,572.42

25,786.85

2,161.26

1,628.02

33,733.68

27,414.87

303,408.72

253,325.39

37,151.94

32,302.40

340,560.66

285,627.79

Revenue

Assets

(` in crores)

2.2.7 Related party disclosure

The related parties of the Bank are broadly classiﬁ ed as:

Promoters

The Bank has identiﬁ ed the following entities as its Promoters:

•

Administrator of the Speciﬁ ed Undertaking of the Unit Trust of India (UTI-1)

Life Insurance Corporation of India (LIC)

General Insurance Corporation and four Government-owned general insurance companies - New India
Assurance Co. Limited, National Insurance Co. Limited, United India Insurance Co. Limited and The
Oriental Insurance Co. Limited.

Key Management Personnel

•

Mrs. Shikha Sharma (Managing Director & Chief Executive Ofﬁ cer)

Mr. Somnath Sengupta [Executive Director & Head (Corporate Centre)] with effect from 15 October,
2012

Mr. V. Srinivasan [Executive Director & Head (Corporate Banking)] with effect from 15 October, 2012

Relatives of Key Management Personnel

Mr. Sanjaya Sharma, Mrs. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj,
Dr. Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Mrs. Chaitaly Sengupta, Ms. Renukona
Sengupta, Mr. Niloy Sengupta, Mrs. Gayathri Srinivasan, Mrs. Vanjulam Varadarajan, Mr. V. Satish, Mrs. Camy
Satish, Ms. Ananya Srinivasan, Ms. Anagha Srinivasan, Mr. Kuppusamy, Mrs. Komalavalli, Mrs. Ranganayagi, Mr.
Srinivasa Raghavan, Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr. S. Narayanan, Mr. S. Ranganathan and
Mr. R. Narayan.

Subsidiary Companies

•

Axis Capital Limited (formerly Axis Securities & Sales Limited)

Axis Private Equity Limited

Axis Trustee Services Limited

Axis Asset Management Company Limited

Axis Mutual Fund Trustee Limited

Axis U.K. Limited

Axis Finance Private Limited (formerly Enam Finance Private Limited) (with effect from 8 February, 2013)

Step down Subsidiary Companies (with effect from 1 April 2012)

•

Axis Finance Private Limited (formerly Enam Finance Private Limited) (upto 7 February, 2013)

Axis Securities Limited (formerly Enam Securities Direct Private Limited)

Enam International Limited

Enam Securities Europe Limited

Associate

•

Bussan Auto Finance India Private Limited

The above investment does not fall within the deﬁ nition of a Joint Venture as per AS-27, Financial
Reporting of Interest in Joint Ventures, notiﬁ ed under the Companies (Accounting Standards) Rules,
2006, and the said accounting standard is thus not applicable. However, pursuant to RBI guidelines,
the Bank has classiﬁ ed the same as investment in joint ventures in the Balance Sheet. Such investment
has been accounted as an Associate in Consolidated Financial Statements as per AS-23, Accounting
for Investments in Associates in Consolidated Financial Statements, notiﬁ ed under the Companies
(Accounting Standards) Rules, 2006. Based on RBI guidelines, details of transactions with Associates are
not disclosed since there is only one entity/party in this category.

The details of transactions of the Bank with its related parties during the year ended 31 March, 2013 are given below:
(` in crores)

Items/Related Party

Promoters

Key
Management
Personnel

Relatives
of Key
Management
Personnel

Subsidiaries

Step down
Subsidiaries

Total

Dividend paid

Dividend received

Interest paid

Interest received

Investment of the Bank

Investment of related party in the Bank

Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank

Redemption of subordinated debt

Purchase of investments

Sale of investments

Management contracts

Contribution to employee beneﬁ t fund

Purchase of ﬁ xed assets

Sale of ﬁ xed assets

Non-funded commitments

Advance granted (net)

Advance repaid

Receiving of services

Rendering of services

Consideration received towards demerger

Consideration paid towards acquisition of
subsidiary

Other reimbursements from related party

Other reimbursements to related party

247.25

768.37

0.02

811.47

1,000.00

90.00

1,442.84

14.58

0.06

15.51

60.79

2.07

0.02

0.16

0.10

4.60

4.25

0.14

0.03

1.50

13.54

0.03

25.00

8.91

1.17

201.73

22.97

274.15

90.40

10.13

0.97

1.73

0.01

4.35

0.08

0.09

247.27

1.50

783.83

0.16

25.00

816.07

1,000.00

90.00

1,442.84

13.16

14.58

1.17

4.41

15.65

262.60

25.13

274.15

90.40

10.13

0.97

The balances payable to/receivable from the related parties of the Bank as on 31 March, 2013 are given below:

Items/Related Party

Promoters

Key
Management
Personnel

Relatives
of Key
Management
Personnel

Borrowings from the Bank

Deposits with the Bank

Placement of deposits

Advances

Investment of the Bank

Investment of related party in the Bank

Non-funded commitments

9,915.42

0.16

28.13

158.52

3.07

4.23

2.04

0.08

0.51

(` in crores)

Subsidiaries

Step down
Subsidiaries

Total

434.32

30.15 10,384.63

382.44

4.35

0.16

30.17

382.44

158.60

7.42

Items/Related Party

Promoters

(` in crores)

Subsidiaries

Step down
Subsidiaries

Total

Key
Management
Personnel

Relatives
of Key
Management
Personnel

Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank

3,817.30

Advance for rendering of services

Other receivables

Other payables

49.92*

23.30

3,817.30

49.92

23.30

The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
2013 are given below:

Items/Related Party

Promoters

Key
Management
Personnel

Borrowings from the Bank
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment of related party in the Bank
Non-funded commitments
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank
Other receivables
Other payables

-
9,915.42
0.16
46.54
-
158.52
3.07

3,817.30
-
-

-
9.01
-
2.16
-
0.08
-

-
-
-

Relatives
of Key
Management
Personnel
-
3.91
-
-
-
-
-

-
-
-

Subsidiaries

(` in crores)
Total

Step down
Subsidiaries

-
464.43
-
23.93
382.44
-
16.00

-
49.92
35.06

-
35.79 10,428.56
0.16
78.59
382.44
158.60
23.42

-
5.96
-
-
4.35

-
-
-

3,817.30
49.92
35.06

The details of transactions of the Bank with its related parties during the year ended 31 March, 2012 are given below:

Items/Related Party

Promoters

214.22
-
540.45
0.02
-
-

-
-
-
244.81
-

Key
Management
Personnel

0.06
-
0.01
0.01
-
1.84

-
-
-
-
5.51

Relatives
of Key
Management
Personnel
-
-
0.03
-
-
-

-
-
-
-
-

(` in crores)

Subsidiaries

Total

-
1.13
7.72
-
90.00
-

-
-
-
-
6.90

214.28
1.13
548.21
0.03
90.00
1.84

-
-
-
244.81
12.41

Items/Related Party

Promoters

Contribution to employee beneﬁ t fund
Purchase of ﬁ xed assets
Sale of ﬁ xed assets
Non-funded commitments
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Other reimbursements from related party
Other reimbursements to related party

13.75
-
-
-
0.64
-
51.49
1.65
-
1.02

Key
Management
Personnel

-
-
-
-
-
0.03
-
-
-
-

Relatives
of Key
Management
Personnel
-
-
-
-
-
-
-
-
-
-

(` in crores)

Subsidiaries

Total

-
-
-
16.00
-
-
140.95
12.54
10.29
1.68

13.75
-
-
16.00
0.64
0.03
192.44
14.19
10.29
2.70

The balances payable to/receivable from the related parties of the Bank as on 31 March, 2012 are given below:

Items/Related Party

Promoters

-
5,693.55
0.16
43.65
-
154.44
3.01

2,837.30
-
-
-

Key
Management
Personnel

-
0.31
-
0.24
-
0.02
-

-
-
-
-

Relatives
of Key
Management
Personnel
-
0.26
-
-
-
-
-

Subsidiaries

(` in crores)
Total

-
116.62
-
-
310.55
-
16.00

-
5,810.74
0.16
43.89
310.55
154.46
19.01

-
-
-
-

-
-
34.51*
21.16

2,837.30
-
34.51
21.16

The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
2012 are given below:

Items/Related Party

Promoters

Key
Management
Personnel

-
5,693.55
0.16
48.22
-
155.12
3.01

2,837.30
-
-

-
1.24
-
0.27
-
0.05
-

-
-
-

Relatives
of Key
Management
Personnel
-
2.70
-
-
-
-
-

-
-
-

Subsidiaries

(` in crores)
Total

-
185.02
-
-
310.55
-
16.00

-
34.51
22.77

-
5,882.51
0.16
48.49
310.55
155.17
19.01

2,837.30
34.51
22.77

Details of transactions with Axis Mutual Fund and Axis Infrastructure Fund-I, the funds ﬂ oated by Axis Asset
Management Company Ltd. and Axis Private Equity Ltd., the Bank’s subsidiaries have not been disclosed since these
entities do not qualify as Related Parties as deﬁ ned under the Accounting Standard 18, Related Party Disclosure, as
notiﬁ ed under the Companies (Accounting Standards) Rules, 2006 and as per RBI guidelines.

* During the year ended 31 March, 2012, the Bank entered into an arrangement with Axis Asset Management
Company Ltd. (Axis AMC), the Bank’s subsidiary, in terms of which payment of brokerage in respect of distribution of
certain schemes is scheduled over a period of 3 years. This change, however, has no effect on the accounting policy of
the Bank, as such brokerage income is recognised by the Bank as and when the same is due. Other receivables include
such brokerage recoverable from Axis AMC as on the reporting date.

2.2.8 Leases

Disclosure in respect of assets given on operating lease

The Bank has not given any assets on operating lease.

Disclosure in respect of assets taken on operating lease

Operating lease comprises leasing of ofﬁ ce premises/ATMs, cash deposit machines, staff quarters, electronic data
capturing machines and IT equipment.

Future lease rentals payable as at the end of the year:

- Not later than one year

- Later than one year and not later than ﬁ ve years

- Later than ﬁ ve years

Total of minimum lease payments recognised in the Proﬁ t and Loss Account
for the year

Total of future minimum sub-lease payments expected to be received under
non-cancellable subleases

Sub-lease payments recognised in the Proﬁ t and Loss Account for the year

The Bank has sub-leased certain of its properties taken on lease.

There are no provisions relating to contingent rent.

31 March, 2013

31 March, 2012

(` in crores)

575.90

1,689.30

816.07

465.15

1,371.51

722.72

602.76

560.41

0.60

0.30

1.08

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
There are no undue restrictions or onerous clauses in the agreements.

2.2.9 Other Fixed Assets (including furniture & ﬁ xtures)

The movement in ﬁ xed assets capitalised as application software is given below:

Particulars

At cost at the beginning of the year

Additions during the year

Deductions during the year

Accumulated depreciation as at 31 March

Closing balance as at 31 March

Depreciation charge for the year

31 March, 2013

31 March, 2012

(` in crores)

378.88

78.73

(0.21)

(311.30)

146.10

53.45

330.28

57.01

(8.41)

(258.01)

120.87

54.70

2.2.10 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:
(` in crores)

As at

31 March, 2013

31 March, 2012

Deferred tax assets on account of provisions for loan losses

Deferred tax assets on account of amortisation of HTM investments

Deferred tax assets on account of provision for employee beneﬁ ts

Deferred tax assets on account of other contingencies

Deferred tax assets

Deferred tax liabilities on account of depreciation on ﬁ xed assets

Deferred tax liabilities

Net Deferred tax assets

2.2.11 Employee Beneﬁ ts

Provident Fund

924.57

192.52

106.76

176.43

743.17

184.09

82.60

40.65

1,400.28

1,050.51

25.51

23.06

1,374.77

1,027.45

The contribution to the employee’s provident fund amounted to `80.78 crores (previous year `67.88 crores) for the
year.

The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable to
pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’
Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the
deﬁ ciency shall be made good by the Bank. Based on an actuarial valuation conducted by an independent actuary,
there is no deﬁ ciency as at the Balance Sheet date. The principal assumptions used by the actuary are as under.

Discount rate for the term of the obligation
Average historic yield on the investment portfolio
Discount rate for the remaining term to maturity of the investment portfolio
Expected investment return
Guaranteed rate of return

Superannuation

31 March, 2013
7.90%
9.13%
7.94%
9.09%
8.50%

31 March, 2012
8.35%
9.09%
8.45%
8.99%
8.25%

The Bank contributed `14.35 crores (previous year `13.89 crores) to the employees’ superannuation plan for the year.

Leave Encashment

The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the Bank
is given below:

Privileged leave

Sick leave

Total actuarial liability

Assumptions

Discount rate

Salary escalation rate

Gratuity

31 March, 2013

31 March, 2012

(` in crores)

313.92

22.80

336.72

252.40

20.26

272.66

7.90% p.a.

7.00% p.a.

8.35% p.a.

6.00% p.a.

The following tables summarise the components of net beneﬁ t expenses recognised in the Proﬁ t and Loss Account and
funded status and amounts recognised in the Balance Sheet for the Gratuity beneﬁ t plan.

Proﬁ t and Loss Account

Net employee beneﬁ t expenses (recognised in payments to and provisions for employees)

Current Service Cost

Interest on Deﬁ ned Beneﬁ t Obligation

Expected Return on Plan Assets

Net Actuarial Losses/(Gains) recognised in the year

Past Service Cost

Total included in “Employee Beneﬁ t Expense”

Actual Return on Plan Assets

Balance Sheet

Details of provision for gratuity

Fair Value of Plan Assets

Present Value of Funded Obligations

Net Asset/(Liability)

Amounts in Balance Sheet

Liabilities

Assets

Net Asset/(Liability)

Changes in the present value of the deﬁ ned beneﬁ t obligation are as follows:

Change in Deﬁ ned Beneﬁ t Obligation

Opening Deﬁ ned Beneﬁ t Obligation

Current Service Cost

Interest Cost

Actuarial Losses/(Gains)

Past service cost

Beneﬁ ts Paid

Closing Deﬁ ned Beneﬁ t Obligation

Changes in the fair value of plan assets are as follows:

Change in the Fair Value of Assets

Opening Fair Value of Plan Assets

Expected Return on Plan Assets

Actuarial Gains/(Losses)

Contributions by Employer

Beneﬁ ts Paid

Closing Fair Value of Plan Assets

31 March, 2013

31 March, 2012

(` in crores)

16.98

8.70

(7.25)

16.80

5.50

40.73

9.32

11.61

5.49

(4.83)

23.74

(3.72)

32.29

5.30

31 March, 2013

31 March, 2012

(` in crores)

146.22

(137.60)

8.62

97.91

(93.40)

4.51

31 March, 2013

31 March, 2012

(` in crores)

93.40

16.98

8.70

18.87

5.50

(5.85)

137.60

60.65

11.61

5.49

24.22

(3.72)

(4.85)

93.40

31 March, 2013

31 March, 2012

(` in crores)

97.91

7.25

2.07

44.84

(5.85)

146.22

63.43

4.83

0.48

34.02

(4.85)

97.91

Experience adjustments

31 March,
2013

31 March,
2012

31 March,
2011

31 March,
2010

(` in crores)
31 March,
2009

Deﬁ ned Beneﬁ t Obligations
Plan Assets
Surplus/(Deﬁ cit)
Experience Adjustments on Plan Liabilities
Experience Adjustments on Plan Assets

137.60
146.22
8.62
4.58
2.07

93.40
97.91
4.51
27.08
0.48

60.65
63.43
2.78
1.40
(0.78)

42.56
43.97
1.41
1.16
0.46

36.37
29.75
(6.62)
3.38
(0.73)

Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets

Government securities
Bonds, debentures and other ﬁ xed income instruments
Money market instruments
Equity shares
Others

Principal actuarial assumptions at the Balance Sheet date:

Discount Rate

Expected Rate of Return on Plan Assets

Salary Escalation Rate

Employee Turnover
- 21 to 30 (age in years)

- 31 to 44 (age in years)

- 45 to 59 (age in years)

31 March, 2013
%
40.87
38.48
18.45
2.20
-

31 March, 2012
%
42.81
43.85
9.89
2.31
1.14

31 March, 2013

31 March, 2012

7.90% p.a.

7.50% p.a.

7.00% p.a.

20.14%

10.00%

1.00%

8.35% p.a.

7.50% p.a.

6.00% p.a.

20.41%

10.00%

1.00%

The estimates of future salary increases considered in actuarial valuation take account of inﬂ ation, seniority, promotion
and other relevant factors.

The expected rate of return on plan assets is based on the average long-term rate of return expected on investments
of the Fund during the estimated term of the obligations.

As the contribution expected to be paid to the plan during the annual period beginning after the balance sheet date
is based on various internal/external factors, a best estimate of the contribution is not determinable.

The above information is as certiﬁ ed by the actuary and relied upon by the auditors.

2.2.12 Provisions and contingencies

a) Movement in provision for frauds included under other liabilities is set out below:

Opening balance at the beginning of the year

Additions during the year

Reductions on account of payments during the year

Reductions on account of reversals during the year

Closing balance at the end of the year

31 March, 2013

31 March, 2012

(` in crores)

17.35

4.57

(5.57)

(2.38)

13.97

4.99

12.40

(0.02)

17.35

b) Other liabilities include provision for debit/credit card reward points, the movement of which is set out below:

Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year

c) Movement in provision for other contingencies is set out below:

Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year

31 March, 2013
43.28
28.03
(3.42)
67.89

31 March, 2013
0.81
561.55
(180.57)
381.79

(` in crores)
31 March, 2012
25.01
20.28
(2.01)
43.28

(` in crores)
31 March, 2012
36.44
0.38
(36.01)
0.81

The above provision includes contingent provision for advances/other exposures, legal cases and other contingencies.

2.2.13 Unclaimed Shares

Details of unclaimed shares as of 31 March, 2013 and 31 March, 2012 are as follows:

Aggregate number of shareholders at the beginning of the year
Total outstanding shares in Unclaimed Suspense Account at the beginning of
the year
Number of shareholders who approached to issuer for transfer of shares from
Unclaimed Suspense Account during the year
Number of shareholders to whom shares were transferred from Unclaimed
Suspense Account during the year
Aggregate number of shareholders at the end of the year
Total outstanding shares in Unclaimed Suspense Account at the end of the year

31 March, 2013
29

31 March, 2012
38

3,600

4,900

-
29
3,600

9
29
3,600

2.2.14 Small and Micro Industries

Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2 October,
2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been
no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays in such
payments. The above is based on the information available with the Bank which has been relied upon by the auditors.

2.2.15 Description of contingent liabilities

Claims against the Bank not acknowledged as debts

These represent claims ﬁ led against the Bank in the normal course of business relating to various legal cases
currently in progress. These also include demands raised by income tax and other statutory authorities and
disputed by the Bank.

Liability on account of forward exchange and derivative contracts

based on a differential interest rate on a notional amount for an agreed period. A foreign currency option is an
agreement between two parties in which one grants to the other the right to buy or sell a speciﬁ ed amount
of currency at a speciﬁ c price within a speciﬁ ed time period or at a speciﬁ ed future time. An Exchange Traded
Currency Option contract is a standardised foreign exchange derivative contract, which gives the owner the right,
but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed
exchange rate on a speciﬁ ed date on the date of expiry. Currency Futures contract is a standardised, exchange-
traded contract, to buy or sell a certain underlying currency at a certain date in the future, at a speciﬁ ed price.

Guarantees given on behalf of constituents

As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their credit
standing. Guarantees represent irrevocable assurances that the Bank will make payments in the event of the
customer failing to fulﬁ ll its ﬁ nancial or performance obligations.

Acceptances, endorsements and other obligations

These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the Bank’s
customers that are accepted or endorsed by the Bank.

e) Other items

Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts
remaining to be executed on capital account and commitments towards underwriting and investment in equity
through bids under Initial Public Offering (IPO) of corporates as at the year end.

2.2.16 Previous year ﬁ gures have been regrouped and reclassiﬁ ed, where necessary to conform to current year’s presentation.

For Axis Bank Ltd.

Sanjiv Misra
Chairman

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

AUDITORS’ CERTIFICATE

TO THE MEMBERS OF
AXIS BANK LIMITED

We have examined the compliance of conditions of corporate governance by AXIS BANK LIMITED (“the Bank”) for the
year ended 31st March, 2013, as stipulated in clause 49 of the Listing Agreement of the said Bank with the stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was
limited to procedures and implementation thereof, adopted by the Bank for ensuring the compliance of the conditions of
the corporate governance. It is neither an audit nor an expression of opinion on the ﬁ nancial statements of the Bank.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Bank
has complied with the conditions of corporate governance as stipulated in the abovementioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Bank nor the efﬁ ciency or
effectiveness with which the Management has conducted the affairs of the Bank.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)

Z. F. Billimoria
Partner
(Membership No.42791)

Date : 24th April, 2013
Place: Mumbai

CORPORATE GOVERNANCE

(Forming Part of the Directors’ Report for the year ended 31st March 2013)

Philosophy on Code of Governance

The Bank’s policy on Corporate Governance has been:

II.

To enhance the long term interest of its shareholders, provide good management, adopt prudent risk management
techniques and comply with the required standards of capital adequacy, thereby safeguarding the interest of its
other stakeholders such as depositors, creditors, customers, suppliers and employees.

To identify and recognise the Board of Directors and the Management of the Bank as the principal instruments
through which good corporate governance principles are articulated and implemented. To also identify and
recognise accountability, transparency and equality of treatment for all stakeholders, as central tenets of good
corporate governance.

Board of Directors

The composition of the Board of Directors of the Bank is governed by the Companies Act, 1956, the Banking Regulation
Act, 1949 and Clause 49 of the Listing Agreement. The Bank’s Board comprises a combination of executive and non-
executive Directors. The Board presently consists of 14 Directors and its mix provides a combination of professionalism,
knowledge and experience required in the banking business. There are 7 independent Directors constituting one-half of
the Board’s membership with Shri S. B. Mathur designated as the Lead Independent Director. The Board is responsible
for the management of the Bank’s business. The functions, responsibilities, role and accountability of the Board are well
deﬁ ned. In addition to monitoring corporate performance, the Board also carries out functions such as taking care of all
the statutory agenda, approving the Business Plan and all major policies, reviewing and approving the annual budgets
and borrowing limits and ﬁ xing exposure limits. It ensures that the Bank keeps shareholders informed about plans,
strategies and performance. The detailed reports of the Bank’s performance are periodically placed before the Board.

The composition of the Bank’s Board includes the representatives of the Administrator of the Speciﬁ ed Undertaking
of the Unit Trust of India (SUUTI) and the Life Insurance Corporation of India, the Bank’s promoters. The following
members constitute the Board:

Sanjiv Misra

Shikha Sharma
K. N. Prithviraj
V. R. Kaundinya
S. B. Mathur
Prasad R. Menon
R.N. Bhattacharyya
Samir K. Barua
A. K. Dasgupta
Som Mittal
Ireena Vittal
Rohit Bhagat
Somnath Sengupta
V. Srinivasan

Chairman
Promoter – Nominee of SUUTI
Managing Director & CEO
Promoter – Nominee of SUUTI
Independent
Independent
Independent
Promoter – Nominee of SUUTI
Independent
Promoter – Nominee of the Life Insurance Corporation of India
Independent
Independent
Independent
Executive Director and Head (Corporate Centre)
Executive Director and Head (Corporate Banking)

Dr. Adarsh Kishore (Chairman & Director upto 7th March 2013), Smt. Shikha Sharma, Smt. Rama Bijapurkar (Director upto
16th January 2013), Shri K. N. Prithviraj, Shri V. R. Kaundinya, Shri Prasad R. Menon, Shri R. N. Bhattacharyya, Prof. Samir
K. Barua and Shri A. K. Dasgupta attended the last Annual General Meeting held on 22nd June 2012 at Ahmedabad.

In all, 11 meetings of the Board were held during the year on 26th April 2012, 27th April 2012, 17th May 2012, 22nd June
2012, 17th July 2012, 15th October 2012, 16th October 2012, 3rd November 2012, 17th December 2012, 15th January 2013
and 16th January 2013.

Dr. Adarsh Kishore, Smt. Shikha Sharma, Shri K. N. Prithviraj, Shri R. N. Bhattacharyya and Shri A. K. Dasgupta attended
all the eleven meetings. Shri S. B. Mathur and Shri Prasad R. Menon attended nine meetings. Smt. Rama Bijapurkar,
Shri V. R. Kaundinya and Prof. Samir K. Barua attended eight meetings. Shri Somnath Sengupta and Shri V. Srinivasan
attended all the six meetings for which they were eligible. Shri Som Mittal attended ﬁ ve meetings. Smt. Ireena Vittal
attended all the three meetings for which she was eligible. Shri M. V. Subbiah attended one meeting for which he was
eligible.

The Directors of the Bank also hold positions as directors as on 31st March 2013, in other companies as per the details
given below:

SANJIV MISRA

Sr. No. Name of the Company/Institution
1.
2.

BSE Limited
Akzo Nobel India Limited

ii.

SHIKHA SHARMA

Nature of Interest
Director/Chairman – Audit Committee
Director/Chairman – Shareholders Grievance
Committee/ Member – Audit Committee

Sr. No. Name of the Company/Institution

Nature of Interest

Axis Asset Management Company Limited

Axis Bank UK Limited*

Axis Capital Limited

Axis Private Equity Limited

iii.

K. N. PRITHVIRAJ

Sr. No. Name of the Company/Institution
1.
2.
3.
4.
5.
6.
7.

UTI Infrastructure Technology & Services Limited
Surana Industries Limited
Surana Mines and Minerals Limited, Singapore*
Dwarikeshwar Sugars Industries Limited
Falcon Tyres Limited
Daiwa Trustee Company (India) Pvt. Limited
PNB Investment Services Limited

8.
9.
10.
11.

Brickwork Ratings (India) Pvt. Limited
Speciﬁ ed Undertaking of the Unit Trust of India
Eurasia Investment Advisors Pvt. Limited
National Financial Holdings Limited

iv. V. R. KAUNDINYA

Sr. No. Name of the Company/Institution

Advanta India Limited

Advanta Seeds Limited

Warrantify Oy*

* Foreign Company

Chairperson

Director

Nature of Interest
Chairman
Director/Member – Audit Committee
Director/Member – Audit Committee
Director/Chairman – Audit Committee
Director/Member – Audit Committee
Director
Director/Member – Audit Committee/Member –
HR Committee
Director/Member – Audit Committee
Administrator & Member of Board of Advisors
Director
Director

Nature of Interest

Managing Director & CEO

Director

S. B. MATHUR

Sr. No. Name of the Company/Institution
IDFC Trustee Company Limited
1.
Cholamandalam MS General Insurance Company
2.
Limited
DCM Sriram Industries Limited
Havells India Limited
Housing Development Infrastructure Limited
Hindustan Oil Exploration Company Limited
Infrastructure Leasing and Financial Services Limited
ITC Limited
National Collateral Management Services Co. Limited
National Stock Exchange of India Limited
Ultratech Cement Limited
Janalakshmi Financial Services Private Limited
Munich Re India Services Private Limited
J.M. Financial Asset Reconstruction Company Private
Limited
India Mortgage Guarantee Corporation Pvt. Limited
Mindas Corporation Limited

3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

15.
16.

Nature of Interest
Chairman
Chairman/Member – Audit Committee

Director/Member – Audit Committee
Director/Member – Audit Committee
Director
Director/Member – Audit Committee
Director
Director/Chairman – Audit Committee
Director
Director
Director
Director
Director
Director

Nominee Director of National Housing Bank
Director/Member – Audit Committee

vi.

PRASAD R. MENON

Sr. No. Name of the Company/Institution

Nature of Interest

NELCO Limited

Tata Consulting Engineers Limited

Chairman/Chairman – Nominations, HR &
Remuneration Committee/Chairman – Executive
Committee of the Board

Chairman/Member – Remuneration & Nomination
Committee/Chairman – Executive Committee of
the Board

Tata Power Solar Systems Limited

Chairman/Member – Audit Committee

Tata Chemicals Limited

Tata Projects Limited

Tata Industries Limited

SKF India Limited

Director/Member – Executive Committee of the
Board/Chairman – SHES Committee

Director/Member – Remuneration Committee/
Member – Audit Committee/Member – Safety
Committee

Director/Member – Audit Committee

TCE QSTP-LLC Doha, Qatar*

Director

* Foreign Company

vii. R. N. BHATTACHARYYA - NIL

viii. SAMIR K. BARUA

Sr. No. Name of the Company/Institution

Nature of Interest

2.
3.

Coal India Limited

Torrent Power Limited
IOT Infrastructure and Energy Services Limited

Oil and Natural Gas Corporation Limited

Director/Chairman – HRM Committee/Chairman
–Remuneration Committee/Member – Audit
Committee

Director/Member – Audit Committee
Director/Member – Audit Committee

Non-ofﬁ cial Part-time Director/Chairman – HRM
Committee/Member – Audit & Ethics Committee/
Member – Project Appraisal Committee/Member
– Shareholders’/Investors’ Grievance Committee/
Member – Health, Safety & Environment
Committee/Member – Financial Management
Committee

Axis Capital Limited

Director

ix. A. K. DASGUPTA

Sr. No. Name of the Company/Institution

Nature of Interest

ABB Limited

SOM MITTAL

Director/Member – Audit Committee

Sr. No. Name of the Company/Institution

Nature of Interest

National Institute for Smart Government

Director

National Research Development Corporation

Non-ofﬁ cial Part-time Director

Media Lab Asia

Data Security Council of India

Director

xi.

IREENA VITTAL

Sr. No. Name of the Company/Institution

Nature of Interest

Titan Industries Limited

Director

xii. ROHIT BHAGAT

Sr. No. Name of the Company/Institution

Tandem Habit Fund Partner SPV, LLC*

Tandem Habit Fund Partners, LLC*

Nature of Interest

Managing Member

xiii. SOMNATH SENGUPTA

Sr. No. Name of the Company/Institution

Nature of Interest

Axis Bank UK Limited*

* Foreign Company

Director/Member-Committee of Directors/
Member-Audit and Compliance Committee

xiv. V. SRINIVASAN

Sr. No. Name of the Company/Institution

Nature of Interest

Axis Trustee Services Limited

Axis Finance Private Limited

Axis Bank UK Limited*

Axis Capital Limited

* Foreign Company

Chairman

Chairman/Member – Audit Committee/Member
– Credit Committee/Member – Nomination
Committee

Director/Chairman-Human Resources,
Remuneration & Negotiation Committee/
Member-Committee of Directors/Member-Risk
Management Committee

Director/Member – Audit Committee/Member
– Risk Committee/Member – Remuneration
Committee

The business of the Board is also conducted through the following Committees constituted by the Board to deal with
speciﬁ c matters and delegated powers for different functional areas:

Committee of Directors

K. N. Prithviraj – Chairman
Shikha Sharma
S. B. Mathur
Prasad R. Menon
R. N. Bhattacharyya
Somnath Sengupta
V. Srinivasan

b) Audit Committee

S. B. Mathur – Chairman
K. N. Prithviraj
V. R. Kaundinya
Samir K. Barua

Risk Management Committee

Sanjiv Misra

Shikha Sharma

K. N. Prithviraj

Samir K. Barua

Ireena Vittal

Shareholders/Investors Grievance Committee

S. B. Mathur – Chairman
R. N. Bhattacharyya
Somnath Sengupta

e) HR and Remuneration Committee

Prasad R. Menon – Chairman
K. N. Prithviraj
V. R. Kaundinya
Samir K. Barua

Nomination Committee

S. B. Mathur – Chairman
V. R. Kaundinya
Samir K. Barua

Special Committee of the Board of Directors for Monitoring of Large Value Frauds

Shikha Sharma – Chairperson
V. R. Kaundinya
R. N. Bhattacharyya
Samir K. Barua
A. K. Dasgupta

Customer Service Committee

Shikha Sharma
Samir K. Barua
Ireena Vittal

Committee of Whole-Time Directors

Shikha Sharma – Chairperson
Somnath Sengupta
V. Srinivasan

Acquisitions, Divestments and Mergers Committee

Prasad R. Menon – Chairman
Shikha Sharma
K. N. Prithviraj
S. B. Mathur
Ireena Vittal

IT Strategy Committee

Som Mittal – Chairman
Shikha Sharma
Prasad R. Menon
Somnath Sengupta

The functions of the Committees are discussed below:

Committee of Directors

The Committee of Directors exercises powers delegated to it by the Board relating to loans, credit policy, credit
portfolio, monitoring of exposures (both credit and investment), expenditures, investment, branch expansion,
compliance with the statutory and regulatory framework, proposals relating to the Bank’s operations covering all
departments and business segments and important issues relating to day to day affairs/problems and to take such
steps as may be deemed necessary for the smooth functioning of the Bank.

The Committee of Directors also exercises functions relating to all routine matters other than the strategic matters
and review of policies other than strategic policies like Credit Policy, Investment Policy and other policies which
the Committee of Directors may consider necessary or Reserve Bank of India (RBI) may speciﬁ cally require to be
reviewed by the Board.

Meetings and Attendance during the year:

10 meetings of the Committee of Directors were held during the year on 30th April 2012, 26th May 2012,
25th June 2012, 1st August 2012, 31st August 2012, 27th September 2012, 6th November 2012, 17th December 2012,
1st February 2013 and 15th March 2013. Smt. Shikha Sharma attended all the ten meetings. Shri S. B. Mathur and
Shri K. N. Prithviraj attended nine meetings. Shri R. N. Bhattacharyya attended all the nine meetings for which
he was eligible. Shri Prasad R. Menon attended seven meetings. Shri V. Srinivasan attended both the meetings
for which he was eligible. Shri Somnath Sengupta could not attend any meeting out of two meetings for which
he was eligible.

b) Audit Committee

The Audit Committee of the Board of Directors functions with the following main objectives:

ii.

iii.

iv.

vi.

To provide direction and to oversee the operation of the audit function.

To review the internal audit system with special emphasis on its quality and effectiveness.

To review internal and concurrent audit reports of large branches with a focus on all major areas of
housekeeping, particularly inter branch adjustment accounts, arrears in the balancing of the books and
un-reconciled entries in inter-bank and Nostro accounts and frauds.

To discuss matters related to frauds.

To discuss and follow up for audit issues related to Long Form Audit Report.

To discuss and follow up for issues related to RBI Inspection Report(s).

vii.

To review the system of appointment and remuneration of concurrent auditors and external auditors.

viii.

To oversee the Bank’s ﬁ nancial reporting process and the disclosure of its ﬁ nancial information to ensure
that the ﬁ nancial statements are correct, sufﬁ cient and credible.

ix.

xi.

To recommend to the Board, the appointment, re-appointment, and if required, the replacement or removal
of the Statutory Auditor and the ﬁ xation of their audit fees.

To approve payments to Statutory Auditors for any other services rendered by them.

To review, with the management, the annual ﬁ nancial statements before submission to the Board for its
approval with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement in the Board’s report in

terms of clause (2AA) of section 217 of the Companies Act, 1956.

Changes, if any, in accounting policies & practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment by the management.

Signiﬁ cant adjustments made in the ﬁ nancial statements arising out of audit ﬁ ndings.

Compliance with listing and other legal requirements relating to ﬁ nancial statements.

Disclosure of any related party transactions.

Qualiﬁ cations in the draft audit report.

xii.

To review, with the management, the quarterly ﬁ nancial statements before submission to the Board for its
approval.

xiii. To review, with the management, the statement of uses/application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those
stated in the offer document/prospectus/notice and the report submitted by the agency monitoring the
utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board
for taking steps in the matter.

xiv. To review, with the management, performance of statutory and internal auditors, and adequacy of the

internal control systems.

xv.

To obtain and review quarterly/half yearly reports of the Compliance Ofﬁ cer appointed in the Bank in terms
of RBI instructions.

xvi. To review the adequacy of internal audit function, if any, including the structure of the internal audit
department, stafﬁ ng, seniority of the ofﬁ cial heading the department, reporting structure, coverage and
frequency of internal audit.

xvii. To discuss with internal auditors any signiﬁ cant audit ﬁ ndings and follow up thereon.

xviii. To review the ﬁ ndings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
matter to the Board.

xix. To discuss with Statutory Auditors, before the commencement of audit, the nature and scope of audit as

also conduct post-audit discussion to ascertain any area of concern.

xx.

To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors.

xxi. To review the functioning of the Whistleblower Mechanism.

xxii. To approve the appointment of the Chief Financial Ofﬁ cer before ﬁ nalisation of the same by the management.
The Audit Committee, while approving the appointment, shall assess the qualiﬁ cations, experience &
background etc. of the candidate.

xxiii. Carrying out any other function as is mentioned in terms of reference of the Audit Committee.

Meetings and Attendance during the year:

12 meetings of the Audit Committee were held during the year on 26th April 2012, 26th May 2012, 2nd July 2012,
17th July 2012, 16th August 2012, 17th September 2012, 15th October 2012, 29th November 2012, 17th December
2012, 15th January 2013, 1st February 2013 and 15th March 2013. Shri S. B. Mathur and Shri K. N. Prithviraj
attended all the twelve meetings. Prof. Samir K. Barua attended ten meetings. Shri V. R. Kaundinya attended
eight meetings.

c) Risk Management Committee

The Risk Management Committee of the Board of Directors functions with the following main objectives:

To perform the role of Risk Management in pursuance of the Risk Management Guidelines issued periodically
by RBI and Board.

ii.

To oversee and advise to the Board on:

Deﬁ ning risk appetite, tolerance thereof and review the same, as appropriate.

Systems of risk management framework, internal control and compliance to identify, measure,
aggregate, control and report key risks.

Alignment of business strategy with the Board’s risk appetite; and

d. Maintenance and development of a supportive culture, in relation to the management of risk,
appropriately embedded through procedures, training and leadership actions so that all employees
are alert to the wider impact on the whole organisation of their actions and decisions.

iii.

iv.

To advise the Board on all high level risk matters.

To require regular risk management reports from management which enable the Committee to assess the
risks involved in the Bank’s business and how they are controlled and monitored by management, and give
clear focus to current and forward-looking aspects of risk exposure.

To review the effectiveness of the Bank’s internal control and risk management framework, in relation to its
core strategic objectives, and to seek such assurance as may be appropriate.

vi.

To review the Asset Liability Management (ALM) of the Bank on a regular basis.

vii.

To consider any major regulatory issues that may have bearing on the risks and risk appetite of the Bank.

viii. To provide to the Board with such additional assurance as it may require regarding the quality of risk

information submitted to it.

ix.

To decide the policy and strategy for integrated risk management containing various risk exposures of the
Bank including the credit, market, liquidity, operational and reputation risk; and

To review risk return proﬁ le of the Bank, capital adequacy based on the risk proﬁ le of the Bank’s balance
sheet, Basel-II implementation, assessment of Pillar II risk under Internal Capital Adequacy Assessment
Process (ICAAP), business continuity plan and disaster recovery plan, key risk indicators and signiﬁ cant risk
exposures.

Meetings and Attendance during the year:

5 meetings of the Risk Management Committee were held during the year on 6th April 2012, 21st June 2012,
17th July 2012, 7th December 2012 and 8th February 2013. Dr. Adarsh Kishore, Smt. Shikha Sharma and Prof. Samir
K. Barua attended all the ﬁ ve meetings. Shri K. N. Prithviraj attended three meetings. Smt. Ireena Vittal attended
one meeting for which she was eligible.

Shareholders/Investors Grievance Committee

The primary objective of the Shareholders/Investors Grievance Committee is to look into redressal of shareholders’
and investors’ grievances relating to non-receipt of dividend, refund orders, shares sent for transfer, non-receipt of
Annual Report and other similar grievances.

Meetings and Attendance during the year:

the year on
4 meetings of
17th May 2012, 16th July 2012, 3rd November 2012 and 16th January 2013. Dr. Adarsh Kishore, Shri S. B. Mathur and
Shri R. N. Bhattacharyya attended all the four meetings.

the Shareholders/Investors Grievance Committee were held during

The details of the status of the references/complaints received for the year are given in the following statement:

Status of the References/Complaints from 1st April 2012 to 31st March 2013

Sr. No. Nature of Reference/Complaints

Received

Disposed Off

Pending

10.

11.

12.

13.

Change of Address

Bank Mandates

ECS

Nomination

Non-receipt of Share Certiﬁ cates

Correction of names

Stock Exchange queries

NSDL/CDSL Queries

SEBI

Receipt of dividend warrant for revalidation

Non-receipt of Dividend

Non-receipt of Annual Report

Transfers

458

292

306

1170

324

458

292

306

1170

324

Shri P. J. Oza, Company Secretary, is the Compliance Ofﬁ cer for SEBI/Stock Exchange related issues.

e) HR and Remuneration Committee

The HR and Remuneration Committee of the Board of Directors functions with the following main objectives:

ii.

iii.

To review and recommend to the Board for approval the overall remuneration philosophy and policy of
the Bank, including the level and structure of ﬁ xed pay, variable pay, perquisites, bonus pool, stock-based
compensation to employees of the Bank, and any other form of compensation as may be included from time
to time. This was to be undertaken keeping in mind the strategic objectives, market environment and the
regulatory framework as may exist from time to time.

To review and recommend to the Board for approval, the total increase in manpower cost budget of the
Bank as a whole, at an aggregate level, for the next year.

To review and recommend to the Board for approval the talent management and succession policy and
process in the Bank for ensuring business continuity, especially at the level of Managing Director and Chief
Executive Ofﬁ cer (MD & CEO), the other Whole-time Directors, senior managers one level below the Board
position and other key roles.

iv.

To review organisation health through feedback from employee surveys conducted on a regular basis.

To review the Code of Conduct and HR strategy, policy and performance appraisal process within the Bank,
as well as any fundamental changes in organisation structure which could have wide ranging or high risk
implications.

vi.

To review and recommend to the Board for approval the creation of new positions at the level of Executive
Director and above.

vii.

To review appointments, promotions and exits of senior managers one level below the Board position.

viii. To set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, the other Whole-

time Directors and Executive Directors for the ﬁ nancial year and over the medium to long term.

ix.

To review the performance of the MD & CEO, other Whole-time Directors and Executive Directors at the end
of each year.

To recommend to the Board the remuneration package for the MD & CEO, the other Whole-time Directors
and senior managers one level below the Board.

xi.

To recommend to the Board the compensation payable to the Chairman of the Bank.

Meetings and Attendance during the year:

6 meetings of HR and Remuneration Committee were held during the year on 10th April 2012, 20th April 2012,
29th May 2012, 17th July 2012, 26th September 2012 and 15th January 2013. Smt. Rama Bijapurkar and Shri Prasad
R. Menon attended all the six meetings. Shri K. N. Prithviraj attended ﬁ ve meetings. Dr. R. H. Patil (expired on
12th April 2012) could not attend one meeting for which he was eligible. The members of the Risk Management
Committee were invited to attend the meeting of HR & Remuneration Committee held on 20th April 2012.

Remuneration Policy

The compensation philosophy of the Bank aims to attract, retain and motivate professionals in order to enable the
Bank to attain its strategic objectives and develop a strong performance culture in the competitive environment
in which it operates. To achieve this, the Bank follows the principles of competitiveness in talent market, pay for
job through ﬁ xed pay, pay for performance to drive meritocracy through variable pay, Employee stock options
for long-term value creation and aligning the beneﬁ ts and perquisites with market practices and affordability.
The compensation structure for Managing Director & CEO, and Whole-Time Directors (WTDs) is aligned to RBI’s
guidelines for sound compensation practices and addresses the general principles of effective and independent
governance and monitoring of compensation, alignment of compensation with prudent risk-taking through well
designed and consistent compensation structures and clear and timely disclosure to facilitate supervisory oversight
by all stakeholders.

Remuneration of Directors

Dr. Adarsh Kishore was appointed as Chairman of the Bank for a period of three years w.e.f. 8th March 2010.
His term came to an end on 7th March 2013. The details of remuneration of Dr. Adarsh Kishore during the
year under review are:

Salary of `1,25,000 per month. The Bank has received approval of RBI, shareholders and of the Central
Government under the provisions of Section 309(4) of the Companies Act, 1956 for payment of salary to
Dr. Adarsh Kishore.

Expenses for maintenance of ofﬁ ce `1,25,000 per month. Approval of the Board, Reserve Bank of India, the
shareholders and the Central Government have been obtained for the same.

ii.

The Speciﬁ ed Undertaking of the Unit Trust of India had vide its letter dated 10th January 2013 nominated
Dr. Sanjiv Misra as the Non-Executive Chairman of the Bank in place of Dr. Adarsh Kishore whose term
ended on 7th March 2013. The Board of Directors of the Bank has at its meeting held on 16th January 2013,
appointed him as an Additional Director and also subject to approval of Reserve Bank of India, Government
of India, the shareholders and such other approvals to the extent required, appointed Dr. Sanjiv Misra as the
Non-Executive Chairman of the Bank for a period of 3 years effective 8th March 2013. RBI vide its letter dated
6th March 2013 approved the appointment of Dr. Sanjiv Misra as the Non-Executive Chairman of the Bank as
also for the payment of remuneration to him with effect from 8th March 2013. The following remuneration
has been approved by Reserve Bank of India to be paid to Dr. Sanjiv Misra effective 8th March 2013:

1. Salary of `15 lacs per annum.

2. Expenses for maintenance of ofﬁ ce `1,25,000 per month.

The Board has also approved providing a furnished ofﬁ ce including all equipments to Dr. Sanjiv Misra upto a
total cost of `7.50 lacs (one-time expense). The Bank has received RBI approval for payment of remuneration
to Dr. Sanjiv Misra and has applied to the Central Government for its approval under the provisions of
Section 309(4) of the Companies Act, 1956, which is awaited. The approval of the shareholders is being
sought in the ensuing Annual General Meeting to be held on 19th July 2013.

iii.

Smt. Shikha Sharma was re-appointed as the Managing Director & CEO of the Bank for a period of three
years w.e.f. 1st June 2012. The approval of the shareholders to the appointment of Smt. Shikha Sharma as the
Managing Director & CEO and payment of remuneration was obtained in the Annual General Meeting held
on 22nd June 2012. The details of remuneration paid to Smt. Shikha Sharma during the year under review are
given below in sub-para vii.

Smt. Shikha Sharma was granted 1,00,000, 1,75,000, 2,00,000 and 2,00,000 options under the Employee
Stock Option Plan Grant IX B (13th July 2009), Grant X (20th April 2010), Grant XI (22nd April 2011) and Grant
XII (27th April 2012) respectively. From these tranches, 2,65,000 options were vested up to 31st March 2013
and 35,000 options have been exercised by Smt. Shikha Sharma till 31st March 2013.

iv.

Shri Somnath Sengupta was appointed as the Executive Director of the Bank and he took charge with effect
from 15th October 2012. The term of Shri Somnath Sengupta is up to 31st May 2015, the last day of the month
in which he reaches the age of superannuation. The approval of the shareholders to the appointment of
Shri Somnath Sengupta as the Executive Director and payment of remuneration was obtained in the Annual
General Meeting held on 22nd June 2012. The details of remuneration paid to Shri Somnath Sengupta during
the year under review are given below in sub-para vii.

Shri Somnath Sengupta was granted 4,03,880 options in total under various tranches under the Employee
Stock Option Plan. All the above options were granted to him before he became Executive Director of the
Bank. From these tranches, 2,31,380 options were vested out of which 1,34,621 options were exercised up
to 31st March 2013 and 96,759 options were unexercised. 1,72,500 options were unvested as on 31st March
2013.

Shri V. Srinivasan was appointed as the Executive Director of the Bank and he took charge with effect from
15th October 2012. The term of Shri V. Srinivasan is for a period of three years i.e. up to 14th October 2015.
The approval of the shareholders to the appointment of Shri V. Srinivasan as the Executive Director and
payment of remuneration was obtained in the Annual General Meeting held on 22nd June 2012. The details
of remuneration paid to Shri V. Srinivasan during the year under review are given below in sub-para vii.

Shri V. Srinivasan was granted 2,90,000 options in total under various tranches under the Employee Stock
Option Plan. All the above options were granted to him before he became Executive Director of the Bank.
From these tranches, 1,17,500 options were vested out of which 22,500 options were exercised up to
31st March 2013 and 95,000 options were unexercised. 1,72,500 options were unvested as on
31st March 2013.

vi.

In accordance with the present regulations of RBI, the Bank does not grant ESOPs to Non-Executive Directors.

vii.

The details of remuneration paid to the Whole-time Directors during 2012-13 are as under:

Smt. Shikha
Sharma
1.4.2012 to 31.3.2013

1,54,98,000
10,00,000

Shri Somnath
Sengupta
15.10.2012 to
31.3.2013
51,54,452
2,31,185

(In `)
Shri V. Srinivasan

15.10.2012 to
31.3.2013
58,12,213
2,31,185

59,52,000
38,01,667
29,416
6,622
12% of basic pay with
equal contribution by
the Bank or as may be
decided upon by the
Board/Trustees from time
to time
One month’s salary for
each completed year of
service or part thereof

10% of Basic Pay p.a.

-
32,36,940*
43,322
28,087
12% of basic pay with
equal contribution by
the Bank or as may be
decided upon by the
Board/Trustees from
time to time
One month’s salary for
each completed year of
service or part thereof
(on pro-rata basis)
10% of Basic Pay p.a.

-
41,51,280*
26,415
15,225
12% of basic pay with
equal contribution by
the Bank or as may be
decided upon by the
Board/Trustees from
time to time
One month’s salary for
each completed year of
service or part thereof
(on pro-rata basis)
10% of Basic Pay p.a.

For the Period

Salary (Basic)
Leave Fare Concession
facility
House Rent Allowance
Variable pay
Medical
Utility Reimbursement
Provident Fund

Gratuity

Superannuation
Allowance

* Pertains to FY11-12 which was paid to them prior to their appointment as Executive Directors effective
15.10.2012.

Perquisites (evaluated as per Income Tax Rules, wherever applicable, or otherwise at actual cost to the Bank)
such as the beneﬁ t of the Bank’s furnished accommodation, electricity, water and furnishings, club fees,
personal accident insurance, loans, use of car and telephone at residence, medical reimbursement, travelling
and halting allowances, newspapers and periodicals, and others were provided in accordance with the Rules
of the Bank.

viii. All Directors of the Bank, except for Smt. Shikha Sharma, Shri Somnath Sengupta and Shri V. Srinivasan, were
paid sitting fees of `20,000 for every meeting of the Board and also for every meeting of the Committees
attended by them. Reimbursement of expenses, if any, for travel to and from the places of their residence
to the venue of the meeting, lodging and boarding when attending the meeting, being on actual basis, is
made directly by the Bank to the service providers. During the year, sitting fees of `53,80,000 was paid to
the Directors of the Bank.

100

Sitting Fees

The details of sitting fees paid to the Directors during 2012-13 are as follows:

Sr. No. Name of Director
Dr. Adarsh Kishore
1.
Smt. Rama Bijapurkar
2.
Shri M. V. Subbiah
3.
Shri K. N. Prithviraj
4.
Shri V. R. Kaundinya
5.
Shri S. B. Mathur
6.
Shri Prasad R. Menon
7.
Shri R. N. Bhattacharyya
8.
Prof. Samir K. Barua
9.
Shri A. K. Dasgupta
10.
Shri Som Mittal
11.
Smt. Ireena Vittal
12.
TOTAL

Sitting Fees (`)
5,00,000
3,80,000
20,000
8,80,000
4,60,000
8,00,000
6,20,000
5,40,000
6,00,000
2,80,000
2,00,000
1,00,000
53,80,000

None of the non-whole time Directors was holding any share of the Bank as on 31st March 2013.

Nomination Committee

The Nomination Committee of the Board of Directors functions with the following main objectives:

ii.

iii.

iv.

To undertake a process of due diligence to determine the suitability of any person for appointment/
continuing to hold appointment as a director on the Board, based upon qualiﬁ cation, expertise, track record,
integrity and other ‘ﬁ t and proper’ criteria.

To examine the vacancies that will come up at the Board on account of retirement or otherwise.

To evaluate the skills that exist, and those that are absent but needed at the Board level, and search for
appropriate candidates who have the proﬁ le to provide such skill sets.

To create a recommendatory list of Directors for deliberation and decision-making at the Board-level.

To review the composition of Committees of the Board, and identify and recommend to the Board, the
Directors who can best serve as members of each Board Committee.

Meetings and Attendance during the year:

5 meetings of Nomination Committee were held during the year on 20th April 2012, 29th August 2012, 3rd November
2012, 29th November 2012 and 15th January 2013. Shri S. B. Mathur and Smt. Rama Bijapurkar attended all the ﬁ ve
meetings. Shri V. R. Kaundinya attended four meetings.

g) Special Committee of the Board of Directors for Monitoring of Large Value Frauds

The major functions of the Special Committee are to monitor and review all the frauds of `1 crore and above, so
as to:

Identify the systemic lacunae, if any, which facilitated perpetration of the fraud and put in place measures to
plug the same.

ii.

Identify the reasons for delay, if any, in detection and reporting to top management of the Bank and RBI.

iii. Monitor progress of CBI/Police investigation and recovery position.

iv.

Ensure that staff accountability is examined at all levels in all the cases of frauds and staff related action, if
required, is completed quickly without loss of time.

Review the efﬁ cacy of the remedial action taken to prevent recurrence of frauds, such as, strengthening of
internal controls.

vi.

Put in place other measures as may be considered relevant to strengthen preventive measures against frauds.

101

Meetings and Attendance during the year:

3 meetings of Special Committee of the Board of Directors for Monitoring of Large Value Frauds were held during
the year on 16th July 2012, 7th December 2012 and 15th March 2013. Smt. Shikha Sharma, Shri R. N. Bhattacharyya
and Shri A. K. Dasgupta attended all the three meetings. Prof. Samir K. Barua attended two meetings. Shri V. R.
Kaundinya attended one meeting.

Customer Service Committee

The Customer Service Committee of the Board of Directors functions with the following main objectives:

ii.

iii.

iv.

vi.

Overseeing the functioning of the Bank’s internal committee set-up for customer service.

To review the level of customer service in the Bank including customer complaints and the nature of their
resolution.

Provide guidance in improving the customer service level.

Review any award by the Banking Ombudsman to any customer on a complaint ﬁ led with the Ombudsman.

To ensure that the Bank provides and continues to provide, best-in-class service across all its category of
customers which will help the Bank in protecting and growing its brand equity.

The Committee could address the formulation of a Comprehensive Deposit Policy, incorporating the issues
such as the treatment of death of a depositor for operations of his/her account, the product approval
process, the annual survey of depositor satisfaction and the triennial audit of such services.

vii.

To examine any other issues having a bearing on the quality of customer service rendered.

viii. To ensure implementation of directives received from RBI with respect to rendering services to customers of

the Bank.

Meetings and Attendance during the year:

4 meetings of the Customer Service Committee were held during the year on 22nd June 2012, 26th September
2012, 7th December 2012 and 8th February 2013. Dr. Adarsh Kishore, Smt. Shikha Sharma and Prof. Samir K. Barua
attended all the four meetings. Smt. Ireena Vittal attended one meeting for which she was eligible.

Committee of Whole-Time Directors

The Committee of Whole-time Directors exercises powers delegated to it by the Board, for managing the affairs of
the Bank, for review and efﬁ cient control of various operational areas such as treasury, branch banking etc., and
for ensuring speedy disposal of matters requiring immediate approval.

The Committee consists of all Whole-time Directors of the Bank.

Meetings during the year:

6 meetings of the Committee of Whole-time Directors were held during the year on 29th October 2012,
22nd November 2012, 17th December 2012, 14th January 2013, 25th February 2013 and 25th March 2013.

Acquisitions, Divestments and Mergers Committee

The main function of the Committee is to discuss and consider any idea or proposal for merger and acquisition.
This Committee will consider and give its in-principle approval in the matter and the proposal will then be placed
before the Board of Directors for its ﬁ nal decision.

Meetings and Attendance during the year:

4 meetings of Acquisitions, Divestments and Mergers Committee were held during the year on 24th April 2012,
27th April 2012, 26th September 2012 and 29th November 2012. Smt. Shikha Sharma, Shri K. N. Prithviraj and Shri
Prasad R. Menon attended all the four meetings. Shri V. R. Kaundinya attended two meetings. Shri S. B. Mathur
attended one meeting. Smt. Rama Bijapurkar could not attend any meeting. Shri V. R. Kaundinya also attended
one meeting through tele-conference.

102

IT Strategy Committee

The IT Strategy Committee functions with the following main objectives:

ii.

iii.

iv.

Approving IT strategy and policies.

Ensuring that management has an effective strategic planning process in place.

Ensuring that the business strategy is aligned with the IT strategy.

Ensuring that the IT organizational structure serves business requirements and direction.

Oversight over implementation of processes and practices that ensures IT delivers value to businesses.

vi. Monitoring the method that management uses to determine the IT resources needed to achieve strategic

goals and provide high-level direction for sourcing and use of IT resources.

vii.

Ensuring proper balance of IT investments for sustaining the Bank’s growth.

viii. Assess exposure to IT risks and its controls and evaluating effectiveness of management’s monitoring of IT

risks.

ix. Assessing management’s performance in implementing IT strategies.

Assessing if IT architecture has been designed to derive maximum business value.

xi.

Reviewing IT performance measurement and contribution to businesses.

xii. Approving capital and revenue expenditure in respect of IT procurements.

Meetings and Attendance during the year:

5 meetings of IT Strategy Committee were held during the year on 27th April 2012, 17th July 2012, 13th September
2012, 28th December 2012 and 22nd March 2013. Shri Som Mittal and Shri Prasad R. Menon attended all the ﬁ ve
meetings. Smt. Shikha Sharma attended four meetings. Shri Somnath Sengupta attended one meeting for which
he was eligible.

3. General Body Meetings:

The last three Annual General Meetings were held as follows:

Annual General
Meeting

Date and Day

Time

Location

16th

17th

18th

8.6.2010 - Tuesday

10.00 a.m.

Bhaikaka Bhavan, Ellisbridge, Ahmedabad – 380 006

17.6.2011 - Friday

10.00 a.m.

22.06.2012 - Friday

10.00 a.m.

J. B. Auditorium, Ahmedabad
Management Association, AMA Complex, ATIRA,
Dr. Vikram Sarabhai Marg, Ahmedabad – 380 015

103

The special resolutions passed during the last three Annual General Meetings/Postal Ballot were as under:

Annual General
Meeting

Date of Annual
General Meeting

Special Resolutions

16th

8.6.2010

• Resolution No. 5 - Appointment of Statutory Auditors under Section

224A of the Companies Act, 1956.

•

Resolution No. 14 - Approval of the shareholders of the Bank pursuant
to Section 81 of the Companies Act, 1956 authorising the Board of
Directors of the Bank to issue, offer and allot equity stock options
under the Employees Stock Option Scheme of the Bank.

• Resolution No. 15 - Approval of the shareholders of the Bank pursuant
to Section 81(1A) of the Companies Act, 1956 authorising the Board
of Directors of the Bank to create, offer, issue and allot equity stock
options to the permanent employees of the subsidiaries of the
Bank, present and future, including any Director of the Subsidiary
Companies, under the Employees Stock Option Scheme of the Bank.

17th

18th

17.6.2011

• Resolution No. 5 - Appointment of Statutory Auditors under Section

224A of the Companies Act, 1956.

22.6.2012

• Resolution No. 5 - Appointment of Statutory Auditors under Section

224A of the Companies Act, 1956.

Resolution passed
through Postal Ballot

Date of Scrutinizer’s
Report - 28.1.2013

•

Special Resolution for alteration of articles relating to increase in
authorised share capital from `500 crores to `850 crores*.

•

Special Resolution for raising of Tier I capital**.

* A total of 3,963 number of valid ballots were received and 99.17% of votes were cast in favour of the resolution and
0.83% against the resolution.

** A total of 3,884 number of valid ballots were received and 98.83% of votes were cast in favour of the resolution and
1.17% against the resolution.

The Bank had provided the members e-voting facility in respect of the above resolution passed through postal ballot.

No Resolution in the notice of the proposed Nineteenth Annual General Meeting is proposed to be passed by Postal
Ballot.

4. Dividend History of Last Five Years

Sr. No.

Financial Year

Rate of Dividend

ii.

iii.

iv.

2007-08

2008-09

2009-10

2010-11

2011-12

Unclaimed Dividends:

60% (`6.00 per share)
100% (`10.00 per share)
120% (`12.00 per share)
140% (`14.00 per share)
160% (`16.00 per share)

Date of Declaration
(AGM)

Date of Payment
(Date of Dividend
Warrant)

6.6.2008

1.6.2009

8.6.2010

17.6.2011

22.6.2012

7.6.2008

2.6.2009

9.6.2010

18.6.2011

23.6.2012

All shareholders whose dividends are unpaid have been intimated individually to claim their dividends. Under the
Transfer of Unclaimed Dividend Rules, it would not be possible to claim the dividend amount once deposited in Investors’
Education & Protection Fund (IEPF). Shareholders are, therefore, again requested to claim their unpaid dividend, if not
already claimed.

104

Transfer to Investor Protection Fund:

Pursuant to Section 205C of the Companies Act, 1956, dividends that are unclaimed for a period of seven years are
transferred to the Investors’ Education and Protection Fund administered by the Central Government. Listed in the table
below are the dates of dividend declaration since 2005-06 and the corresponding dates when unclaimed dividends are
due to be transferred to the Central Government.

Year

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

5. Disclosures

Dividend-Type

Date of Declaration

Due Date of Transfer

Final

2.6.2006

1.6.2007

6.6.2008

1.6.2009

8.6.2010

17.6.2011

22.6.2012

2.7.2013

1.7.2014

6.7.2015

1.7.2016

8.7.2017

17.7.2018

22.7.2019

•

There were no transactions of a material nature undertaken by the Bank with its promoters, directors or the
management, their subsidiaries or relatives that may have a potential conﬂ ict with the interests of the Bank.

There are no instances of non-compliance by the Bank, penalties and strictures imposed by Stock Exchanges and
SEBI/other statutory authorities on any matter related to capital markets during the last three years other than the
following:

A penalty of `2 lacs was imposed by SEBI vide its adjudication order dated 10th March 2011. It was passed
with respect to the Debenture Trustee activity carried out by the Bank. The Bank had ﬁ led an appeal against
the said order with the Securities Appellate Tribunal. After taking note of the responses and submissions
made by the Bank and on the background that there was no loss caused to any Investor, the Hon’ble Tribunal
dismissed the appeal by upholding the Adjudication Ofﬁ cer’s Order with a special mention that the breaches
of SEBI Regulations did not appear to be intentional and lenient view needs to be taken. The Bank has since
paid the penalty as directed by SEBI.

ii.

SEBI has conveyed to the Bank its displeasure in not exercising the required level of diligence in preventing
certain errors during the IPO of Orient Green Power Company Limited wherein the Bank had acted as a
merchant banker.

iii. During the buyback of shares by India Infoline Limited, wherein the Bank acted as a merchant banker, SEBI
has warned the Bank to be more careful in exercising due diligence while drafting public announcements in
future.

iv.

vi.

During the current ﬁ nancial year 2012-13, there are 2 instances wherein penalty of `150/- and `50/- was
imposed by National Securities Depository Limited (NSDL) on the Bank for data entry errors while capturing
PAN details in demat accounts in NSDL system.

The inspection of depository services (CDSL & NSDL) was conducted by Securities and Exchange Board
of India (SEBI) in June, 2012. Subsequently, SEBI vide their letter dated 6th November 2012 has issued
administrative warning to the Bank for delay in redressal of investor grievances and for submitting wrong
information in reply to pre-inspection questionnaire.

SEBI (through its Adjudicating Ofﬁ cer) vide its letter reference no. EAD-5/PG/SPV/22106/2012 dated
3rd October 2012 had issued notice to the Bank informing that the Adjudicating Ofﬁ cer has been appointed
to inquire into and adjudge under Sections 15G and 15HB of the SEBI Act, the alleged violation of various
provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992, SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997, the SEBI (Merchant Bankers) Regulations, 1992, while acting as the

105

Manager to the open offers of KSK Energy Ventures Limited and Bombay Rayon Fashions Limited. The Bank
has submitted its preliminary response to the Show cause Notice on 11th January 2013, wherein it has refuted
the various violation charges levelled against it. In the personal hearing held on 5th February 2013, the
Bank has once again reiterated its above stand. The adjudicating ofﬁ cer vide order dated 28th March 2013
indicated that no charges were established under SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997. No penalty was levied on the Bank.

vii. National Securities Clearing Corporation Limited (NSCCL) has levied a penalty of `40,507.81 in September

2012 on account of short reporting of margin in currency segment of NSE.

• Whistleblower Policy: A central tenet in the Bank’s Policy on Corporate Governance is commitment to ethics,
integrity, accountability and transparency. To ensure that the highest standards are maintained in these aspects
on an on-going basis and to provide safeguards to various stakeholders (including shareholders, depositors and
employees) the Bank has formulated a ‘Whistleblower Policy’. The Policy provides employees with the opportunity
to address serious concerns arising from irregularities, malpractices and other misdemeanours committed by the
Bank’s personnel by approaching a Committee set-up for the purpose (known as the Whistleblower Committee).
In case senior management commits the offences, the Policy enables the Bank’s staff to report the concerns
directly to the Audit Committee of the Board. The Policy is intended to encourage employees to report suspected
or actual occurrence of illegal, unethical or inappropriate actions, behaviour or practices by staff without fear of
retribution. The employees use this Policy regularly as a tool to voice their concerns on irregularities, malpractices
and other misdemeanours. To ensure smooth ﬂ ow and management of complaints under Whistleblower policy,
a new web-based application - ‘Corporate Whistleblower’ has been set up which also provides an option for
anonymous reporting thereby enabling the employees to lodge their complaints online over a secure platform
without fear of revelation of identity. This would create a business culture of honesty, integrity and compliance
and would encourage employees to speak up so that preventive action is initiated. It is hereby afﬁ rmed that the
Bank has not denied personal access to the Audit Committee of the Board and that the Policy contains provisions
protecting Whistleblowers from unfair termination and other unfair prejudicial and employment practice. The
Whistleblower Policy is required to be reviewed by the Audit Committee of the Board.

•

The Bank has complied with the mandatory requirements regarding the Board of Directors, Audit Committee
and other Board Committees and other disclosures as required under the provisions of Clause 49 of the Listing
Agreement. The Bank has also complied with non-mandatory requirements like formation of HR & Remuneration
Committee and Nomination Committee, sending half-yearly results to each shareholder, the performance
evaluation of all Directors under ‘Fit & Proper’ Criteria laid down by RBI, unqualiﬁ ed ﬁ nancial statements and
establishment of a Whistleblower Policy.

6. Means of Communication

•

Quarterly/Half-yearly results are communicated through newspaper advertisements, press releases and by posting
information on the Bank’s web site. Also, Half-yearly results are generally forwarded to each shareholder through
post and also by email along with a letter from the Managing Director & CEO.

The results are generally published in the Economic Times and Gujarat Samachar or Sandesh or Divya Bhaskar.

Address of our ofﬁ cial website is www.axisbank.com where the information is displayed.

Generally, after the half-yearly and the annual results are approved by the Board, formal presentations are made
to analysts by the management and the same is also placed on the Bank’s website.

The Management’s Discussion and Analysis Report for the year 2012-13 is part of the Annual Report.

General Shareholder Information

•

AGM: Date, time and venue

- 19th July 2013 – 10.00 A.M.

At J. B. Auditorium
Ahmedabad Management Association
AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad – 380 015.

106

•

Financial Year/Calendar

- 1st April 2013 to 31st March 2014. The meetings to consider quarterly results
for the quarter ending June 2013, September 2013 and December 2013 are
proposed to be held during second half of July 2013, October 2013 and
January 2014. The meeting to consider audited annual accounts and Q4 results
is proposed to be held during the second half of April 2014.

•

Date of Book Closure

- 9th July 2013 to 19th July 2013 (both days inclusive)

The Dividend would be paid to the shareholders whose names stand on the
Register of Members on the close of business hours of 8th July 2013.

•

Dividend Payment Date

- The despatch of the dividend warrants/ECS credit would commence on
20th July 2013 and is expected to be completed on or before 26th July 2013.

•

The Bank’s shares are listed on the following Stock Exchanges:

ii.

The BSE Limited, P. J. Towers, Dalal Street, Mumbai – 400 001.

The National Stock Exchange of India Limited, Exchange Plaza, Plot No. C/1, “G” Block, Bandra-Kurla
Complex, Bandra (East), Mumbai – 400 051.

•

The Bank’s Global Depositary Receipts (GDRs) are listed and traded on the London Stock Exchange, 10 Paternoster
Square, London EC4M 7LS, UK.

•

Listing of equity shares/GDRs on Stock Exchanges (with stock code):

Name of Stock Exchange

The BSE Limited

The National Stock Exchange of India Limited

London Stock Exchange

Stock Code

532215

AXISBANK

AXB

The annual fees for ﬁ nancial year 2013-14 have been paid to all the Stock Exchanges where the shares are listed.
ISIN for equity shares
Name of Depositories

:
:

INE 238A01026
i. National Securities Depository Limited
ii. Central Depository Services (India) Limited
US05462W1099

ISIN for GDRs

• Market Price Data: The price of the Bank’s Share - High, Low during each month in the last ﬁ nancial year on NSE

was as under:

MONTH

April 2012

May 2012

June 2012

July 2012

August 2012

September 2012

October 2012

November 2012

December 2012

January 2013

February 2013

March 2013

HIGH (`)

1,226.50

1,127.65

1,072.00

1,081.40

1,122.00

1,174.50

1,246.15

1,324.60

1,379.00

1,516.05

1,515.00

1,427.70

LOW (`)

1,076.15

922.00

944.10

991.70

988.55

927.25

1,008.50

1,177.00

1,304.50

1,343.05

1,333.95

1,277.05

107

•

The Bank’s share price has moved in accordance with the movement of NIFTY. It touched a high of `1,516.05 in
January 2013 and low of `922.00 in May 2012 on the National Stock Exchange.

Performance in comparison to NIFTY

1,600

1,400

1,200

1,000

800

600

400

200

7,000

6,000

5,000

4,000

3,000

2,000

1,000

NIFTY

Axis Bank

Apr-12

M ay-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

M ar-13

•

The high and low closing prices of the Bank’s GDRs traded during the last ﬁ nancial year on the London Stock
Exchange are given below:

MONTH

April 2012

May 2012

June 2012

July 2012

August 2012

September 2012

October 2012

November 2012

December 2012

January 2013

February 2013

March 2013

HIGH (USD)

LOW (USD)

23.89

21.29

19.72

19.53

21.25

21.80

23.66

24.81

26.08

28.78

28.67

26.55

20.40

16.82

16.97

18.00

17.90

16.65

20.40

21.66

23.31

24.10

24.63

23.35

•

Registrar and Share Transfer Agents:

M/s. Karvy Computershare Private Limited
Unit : Axis Bank Limited
Plot No. 17 to 24, Vittalrao Nagar
Madhapur, Hyderabad – 500 081
Phone No. 040-23420815 to 23420824
Fax No. 040-23420814
Email: einward.ris@karvy.com
Contact Persons: Shri V. K. Jayaraman, GM (RIS)/Ms. Varalakshmi, Sr. Manager (RIS)

108

•

Share Transfer System

A Share Committee consisting of President (Law) and the Company Secretary of the Bank has been formed to
look after the matters relating to the transfer of shares, issue of duplicate share certiﬁ cates in lieu of mutilated
share certiﬁ cates, and other related matters. The resolutions passed by the Share Committee are conﬁ rmed at
subsequent Board meetings. The Bank’s Registrar and Share Transfer Agents, M/s Karvy Computershare Private
Limited, Hyderabad looks after the work relating to transfers.

The Bank ensures that all transfers are effected within a period of 15 days from the date of their lodgement.

The equity shares of the Bank are to be compulsorily traded in Demat form by all investors. The Bank has entered
into agreements with the National Securities Depository Limited (NSDL) and the Central Depository Services (India)
Limited (CDSL) so as to provide the members an opportunity to hold and trade shares of the Bank in electronic
form.

The number of equity shares of Axis Bank transferred/processed during the last three years (excluding electronic
transfer of shares in dematerialised form) is given below:

Number of transfer deeds
Number of shares transferred

2010-11
623
42,200

2011-12
421
32,601

2012-13
324
18,100

As required under Clause 47(c) of the listing agreement, a practicing Company Secretary has examined the records
relating to share transfer deeds, memorandum of transfers, registers, ﬁ les and other related documents on a half-
yearly basis and has certiﬁ ed compliance with the provisions of the above clause of the listing agreement. The
certiﬁ cates are forwarded to BSE and NSE where the Bank’s equity shares are listed and also placed before the
Shareholders/Investors Grievance Committee.

As required by SEBI, a Share Capital Audit is conducted on a quarterly basis by a practicing Company Secretary, for
the purpose of, inter alia, reconciliation of the total admitted equity share capital with the depositories and in the
physical form with the total issued/paid-up equity capital of Axis Bank Limited. Certiﬁ cates issued in this regard are
placed before the Shareholders/Investors Grievance Committee and forwarded to BSE and NSE, where the equity
shares of Axis Bank Limited are listed.

Shareholders of Axis Bank with more than one per cent holding at 31

st March 2013

Name of Shareholder

No. of Shares % to total No. of shares

Administrator of the Speciﬁ ed Undertaking of the Unit Trust of
India (SUUTI)

Life Insurance Corporation of India*

The Bank of New York Mellon – as depositary for the equity shares
representing the underlying shares to the Global Depositary
Receipts (GDRs) issued to the investors overseas

9,72,24,373

4,33,35,460

3,81,91,452

Europaciﬁ c Growth Fund

1,75,68,985

HSBC Bank (Mauritius) Limited A/C Cinnamon Capital Limited

1,68,60,155

Genesis Indian Investment Company Limited - General Sub Fund

ICICI Prudential Life Insurance Company Limited

General Insurance Corporation of India

American Funds Insurance Series International Fund

Centaura Investments (Mauritius) Pte Ltd

87,16,992

81,92,627

78,21,990

49,61,634

48,03,544

20.78

9.26

8.16

3.75

3.60

1.86

1.75

1.67

1.06

1.03

* As per Benpos dated 31st March 2013, save and except 4,33,35,460 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.

109

•

Distribution of shareholding as on 31st March 2013
Total nominal value `
Nominal value of each equity share `
Total number of equity shares
Distinctive numbers

:
:
:
:

Shareholding of
Nominal Value

Shareholders

Up to
5,001
10,001
20,001
30,001
40,001
50,001
100,001
Total

Numbers

5,000
10,000
20,000
30,000
40,000
50,000
100,000
Above

1,52,233
3,686
1,483
504
241
176
402
986
1,59,711

% to total
Shareholders
95.32
2.31
0.93
0.31
0.15
0.11
0.25
0.62
100.00

4,67,95,44,680
10
46,79,54,468
1 to 46,79,54,468

Share Amount
Nominal Value
In ` % to total Capital

10,31,21,190
2,69,99,480
2,14,53,260
1,25,97,330
84,61,320
80,24,870
2,85,50,710
4,47,03,36,520
4,67,95,44,680

2.20
0.58
0.46
0.27
0.18
0.17
0.61
95.53
100.00

As on 31st March 2013, out of total equity shares of the Bank, 46,41,25,455 shares representing 99.18% of the
total shares have been dematerialised.

The Bank has issued in the course of international offerings to the investors overseas, securities linked to ordinary
shares in the form of Global Depositary Receipts (GDRs) during March/April 2005, July 2007 and September 2009
and the GDRs have been listed and traded on the London Stock Exchange. The Bank has simultaneously issued
the underlying shares to the Global Depositary Receipts (GDRs) to the investors overseas. The underlying equity
shares have been listed and permitted to be traded on the NSE and BSE. The number of outstanding GDRs as on
31st March, 2013 were 3,81,91,452.

The Bank has not issued any ADRs/Warrants or any other convertible instruments, the conversion of which will
have an impact on equity shares.

Branch Locations – Given elsewhere

Address for Correspondence:

•

The Company Secretary
Axis Bank Limited
Registered Ofﬁ ce
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad – 380 006
Phone No. :
:
Fax No.
:
Email

079-26409322
079-26409321
p.oza@axisbank.com/sanjeev.kapoor@axisbank.com/rajendra.swaminarayan@axisbank.com

Compliance with the Code of Conduct - FY 2012-13

I conﬁ rm that for the year under review all Directors and members of the Senior Management have afﬁ rmed compliance with
the Code of Conduct of the Bank.

Shikha Sharma
Managing Director & CEO

24th April 2013

110

AXIS BANK LIMITED GROUP - AUDITORS’ REPORT

INDEPENDENT AUDITORS’ REPORT

TO THE BOARD OF DIRECTORS
OF AXIS BANK LIMITED

Report on the Consolidated Financial Statements
We have audited the accompanying consolidated ﬁ nancial statements of AXIS BANK LIMITED (“the Bank”), its subsidiaries
(the Bank and its subsidiaries constitute “the group”), which comprise the Consolidated Balance Sheet as at 31 March, 2013,
the Consolidated Proﬁ t and Loss Account and the Consolidated Cash Flow Statement for the year then ended and a summary
of the signiﬁ cant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
The Bank’s Management is responsible for the preparation of these consolidated ﬁ nancial statements that give a true and fair
view of the consolidated ﬁ nancial position, consolidated ﬁ nancial performance and consolidated cash ﬂ ows of the Group in
accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation
and maintenance of internal controls relevant to the preparation and presentation of the consolidated ﬁ nancial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated ﬁ nancial statements based on our audit. We conducted our
audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards
require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated ﬁ nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated
ﬁ nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the consolidated ﬁ nancial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers the internal control relevant to the Bank’s preparation and presentation of the consolidated ﬁ nancial
statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by
the Management, as well as evaluating the overall presentation of the consolidated ﬁ nancial statements.
We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated
ﬁ nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(a)
(b)
(c)
Other Matter
We did not audit the ﬁ nancial statements of 9 subsidiaries, whose ﬁ nancial statements reﬂ ect total assets (net) of `431.71
crores as at 31 March, 2013, total revenues of `294.56 crores and net cash ﬂ ows amounting to `64.65 crores for the year
ended on that date, as considered in the consolidated ﬁ nancial statements. The consolidated ﬁ nancial statements also include
the Group’s share of net proﬁ t of `1.22 crores for the year ended 31 March, 2013, as considered in the consolidated ﬁ nancial
statements, in respect of an associate, whose ﬁ nancial statements have not been audited by us. These ﬁ nancial statements
have been audited by other auditors whose reports have been furnished to us by the Management and our opinion, in so
far as it relates to the amounts and disclosures included in respect of these subsidiaries and associates, is based solely on the
reports of the other auditors.
Our report is not qualiﬁ ed in respect of this matter.

in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31 March, 2013;
in the case of the Consolidated Proﬁ t and Loss Account, of the proﬁ t of the Group for the year ended on that date; and
in the case of the Consolidated Cash Flow Statement, of the cash ﬂ ows of the Group for the year ended on that date.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No: 117365W)

Z. F. Billimoria
Partner
(Membership No. 42791)

Date : 24th April, 2013
Place: Mumbai

111

AXIS BANK LIMITED GROUP - BALANCE SHEET

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

Schedule No.

CAPITAL AND LIABILITIES

Capital

Reserves & Surplus

Minority Interest

Deposits

Borrowings

Other Liabilities and Provisions

TOTAL

ASSETS

Cash and Balances with Reserve Bank of India

Balances with Banks and Money at Call and Short Notice

Investments

Advances

Fixed Assets

Other Assets

TOTAL

Contingent Liabilities

Bills for Collection

4,679,545

4,132,039

326,904,199

222,685,105

125,337

2,521,491,177

2,199,876,805

441,050,984

340,716,721

111,326,074

86,754,428

3,405,577,316

2,854,165,098

147,921,100

107,029,222

57,078,130

32,313,084

1,133,780,559

929,214,413

1,969,901,405

1,697,595,386

23,873,291

22,841,378

73,022,831

65,171,615

3,405,577,316

2,854,165,098

5,481,234,674

4,802,382,789

278,948,780

346,346,043

Signiﬁ cant Accounting Policies and Notes to Accounts

17 & 18

Schedules referred to above form an integral part of the Consolidated Balance Sheet

In terms of our report attached.

For Axis Bank Ltd.

For Deloitte Haskins & Sells
Chartered Accountants

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

112

AXIS BANK LIMITED GROUP - PROFIT & LOSS ACCOUNT

CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2013

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

Schedule No.

INCOME
Interest earned
Other income
TOTAL
EXPENDITURE
Interest expended
Operating expenses
Provisions and contingencies
TOTAL

III NET PROFIT FOR THE YEAR

Minority interest
Share in Proﬁ t/(Loss) of Associate

13
14

15
16
18 (2.1.1)

IV CONSOLIDATED NET PROFIT ATTRIBUTABLE TO GROUP

Balance in Proﬁ t & Loss Account brought forward from previous year
Proﬁ t of business acquired under demerger
V AMOUNT AVAILABLE FOR APPROPRIATION
VI APPROPRIATIONS :

18.1a

Transfer to Statutory Reserve
Transfer to Reserve Fund u/s 45 IC of RBI Act, 1934
Transfer to Investment Reserve
Transfer to Capital Reserve
Transfer to General Reserve
Transfer to Reserve Fund
Proposed dividend (includes tax on dividend)
Balance in Proﬁ t & Loss Account carried forward
TOTAL

18 (2.1.6)

272,019,752
68,328,045
340,347,797

175,133,879
71,405,164
41,470,830
288,009,873
52,337,924
(2,473)
12,193
52,347,644
72,004,480
1,123,298
125,475,422

12,948,583
81,100
534,571
1,414,579
141,678
26,084
9,874,798
100,454,029
125,475,422

VII EARNINGS PER EQUITY SHARE

18 (2.1.4)

(Face value `10/- per share) (Rupees)
Basic
Diluted
Signiﬁ cant Accounting Policies and Notes to Accounts
Schedules referred to above form an integral part of the Consolidated Proﬁ t and Loss Account

17 & 18

120.95
120.12

219,948,991
54,871,922
274,820,913

139,691,770
60,998,947
31,945,090
232,635,807
42,185,106
-
12,683
42,197,789
48,644,522
-
90,842,311

10,605,513
-
-
519,047
10,721
-
7,702,550
72,004,480
90,842,311

102.40
101.66

In terms of our report attached.

For Deloitte Haskins & Sells
Chartered Accountants

For Axis Bank Ltd.

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

113

AXIS BANK LIMITED GROUP - CASH FLOW STATEMENT

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2013

Cash ﬂ ow from operating activities

Net proﬁ t before taxes

Adjustments for:

Depreciation on ﬁ xed assets

Depreciation on investments

Amortisation of premium on Held to Maturity investments

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

76,243,422

62,699,932

3,587,667

3,481,517

(982,186)

674,599

580,985

627,967

Provision for Non Performing Assets (including bad debts)

11,791,902

8,604,298

Provision on standard assets

Provision for wealth tax

(Proﬁ t)/loss on sale of ﬁ xed assets (net)

Provision for country risk

Provision for restructured assets

Provision for other contingencies

Adjustments for:

(Increase)/Decrease in investments

(Increase)/Decrease in advances

Increase/(Decrease) in deposits

(Increase)/Decrease in other assets

Increase/(Decrease) in other liabilities & provisions

Direct taxes paid

Net cash ﬂ ow from operating activities

Cash ﬂ ow from investing activities

1,966,379

1,503,036

3,800

44,308

(96,300)

1,039,492

3,600

(191,093)

48,100

888,600

3,839,773

(198,354)

98,112,856

78,048,588

(94,626,080)

(165,820,597)

(284,638,942)

(282,226,283)

321,779,561

308,212,491

(2,927,589)

(15,613,749)

14,693,370

1,790,934

(26,659,402)

(23,434,170)

25,733,774

(99,042,786)

Purchase of ﬁ xed assets

(4,838,186)

(3,965,641)

(Increase)/Decrease in Held to Maturity investments

(108,709,212)

(47,204,626)

Proceeds from sale of ﬁ xed assets

Net cash used in investing activities

226,674

763,001

(113,320,724)

(50,407,266)

114

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2013

Cash ﬂ ow from ﬁ nancing activities

Proceeds from issue of subordinated debt, perpetual debt & upper Tier II
instruments (net of repayment)

Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt
& upper Tier II instruments)

Proceeds from issue of share capital

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

19,654,731

35,808,360

80,679,532

42,229,537

426,605

26,581

Proceeds from share premium (net of share issue expenses)

56,329,659

1,336,820

Payment of dividend

Increase in minority interest

(7,901,877)

(6,699,437)

125,337

Net cash generated from ﬁ nancing activities

149,313,987

72,701,861

Effect of exchange ﬂ uctuation translation reserve

1,677,300

2,003,938

Net cash and cash equivalents on business acquired under demerger

2,252,587

Net increase in cash and cash equivalents

65,656,924

(74,744,253)

Cash and cash equivalents at the beginning of the year

139,342,306

214,086,559

Cash and cash equivalents at the end of the year

204,999,230

139,342,306

Note :

1. Cash and cash equivalents comprise of cash on hand (including foreign currency notes), balances with Reserve Bank of

India, balances with banks and money at call & short notice (Refer Schedules 6 and 7 of the Balance Sheet).

In terms of our report attached.

For Axis Bank Ltd.

For Deloitte Haskins & Sells
Chartered Accountants

Sanjiv Misra
Chairman

Z. F. Billimoria
Partner

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

115

AXIS BANK LIMITED GROUP - SCHEDULES

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 1 - CAPITAL

SCHEDULE 2 - RESERVES AND SURPLUS

II.

Statutory Reserve
Opening Balance
Additions during the year

Share Premium Account
Opening Balance
Additions during the year
Less: Share issue expenses

III.

Investment Reserve Account
Opening Balance
Additions during the year

IV. General Reserve

Opening Balance
Additions during the year

V. Capital Reserve

Opening Balance
Additions during the year [Refer Schedule 18.1a]

VI. Foreign Currency Translation Reserve [Refer Schedule 17 (4.5)]

Opening Balance
Additions during the year

VII. Reserve Fund

Opening Balance
Additions during the year [Refer Schedule 18.1c]

VIII. Reserve Fund u/s 45 IC of RBI Act, 1934

Opening Balance
Additions during the year

IX. Balance in Proﬁ t & Loss Account

TOTAL

116

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

8,500,000

5,000,000

4,679,545

4,132,039

38,425,863
12,948,583
51,374,446

27,820,350
10,605,513
38,425,863

101,387,610
56,626,088
(296,429)
157,717,269

100,050,790
1,336,820
-
101,387,610

-
534,571
534,571

3,564,817
141,678
3,706,495

5,424,982
4,035,182
9,460,164

1,877,353
1,672,688
3,550,041

-
26,084
26,084

-
-
-

3,545,596
19,221
3,564,817

4,905,935
519,047
5,424,982

(126,585)
2,003,938
1,877,353

-
-
-

-
81,100
81,100
100,454,029
326,904,199

-
-
-
72,004,480
222,685,105

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 2A - MINORITY INTEREST

I. Minority Interest

Opening Balance

Increase during the year

Closing Minority Interest

SCHEDULE 3 - DEPOSITS

I. Demand Deposits

(i)

From banks

(ii) From others

II.

Savings Bank Deposits

III. Term Deposits

(i) From banks

(ii) From others

TOTAL

I. Deposits of branches in India

II. Deposits of branches outside India

TOTAL

SCHEDULE 4 - BORROWINGS

Borrowings in India

(i) Reserve Bank of India

(ii) Other banks #

(iii) Other institutions & agencies **

II.

Borrowings outside India $

TOTAL

Secured borrowings included in I & II above

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

125,337

29,255,626

20,980,835

452,753,586

376,461,674

637,777,349

516,679,577

151,218,877

100,943,739

1,250,485,739

1,184,810,980

2,521,491,177

2,199,876,805

2,382,248,378

2,093,329,640

139,242,799

106,547,165

2,521,491,177

2,199,876,805

22,367,200

1,150,000

4,472,000

145,625,033

121,210,990

273,058,751

213,883,731

441,050,984

340,716,721

Borrowings from other banks include Subordinated Debt of `557.60 crores (previous year `359.60 crores) in the
nature of Non-Convertible Debentures, Perpetual Debt of Nil (previous year Nil) and Upper Tier II instruments of
`59.10 crores (previous year `59.10 crores) [Also refer Notes 18 (2.1.2) & 18 (2.1.3)]

** Borrowings from other institutions & agencies include Subordinated Debt of `10,071.70 crores (previous year
`8,391.70 crores) in the nature of Non-Convertible Debentures, Perpetual Debt of `214.00 crores (previous year
`214.00 crores) and Upper Tier II instruments of `248.40 crores (previous year `248.40 crores) [Also refer Notes 18
(2.1.2) & 18 (2.1.3)]

Borrowings outside India include Perpetual Debt of `249.71 crores (previous year `234.03 crores) and Upper Tier II
instruments of `1,139.03 crores (previous year `1,067.24 crores) [Also refer Note 18 (2.1.3)]

117

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

II.

Bills payable

Inter-ofﬁ ce adjustments (net)

III.

Interest accrued

IV. Proposed dividend (includes tax on dividend)

V. Contingent provision against standard assets

VI. Others (including provisions)

TOTAL

SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

35,288,164

30,853,220

8,343,254

6,478,322

9,852,151

7,681,950

9,766,994

7,799,683

48,075,511

33,941,253

111,326,074

86,754,428

Cash in hand (including foreign currency notes)

40,539,059

35,957,450

II.

Balances with Reserve Bank of India :

(i)

in Current Account

(ii) in Other Accounts

TOTAL

SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE

In India

(i) Balance with Banks

(a)

in Current Accounts

(b) in Other Deposit Accounts

(ii) Money at Call and Short Notice

(a) With banks

(b) With other institutions

TOTAL

II. Outside India

(i)

in Current Accounts

(ii) in Other Deposit Accounts

(iii) Money at Call & Short Notice

TOTAL

GRAND TOTAL (I+II)

118

107,382,041

71,071,772

147,921,100

107,029,222

3,473,308

3,516,323

9,853,149

6,146,450

13,326,457

9,662,773

11,608,466

7,669,498

13,474,234

3,845,538

18,668,973

11,135,275

43,751,673

22,650,311

57,078,130

32,313,084

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 8 - INVESTMENTS

Investments in India in -

(i) Government Securities ## **

(ii) Other approved securities

(iii) Shares

(iv) Debentures and Bonds

(v) Investment in Joint Ventures $

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

722,498,592

584,162,116

7,549,074

7,399,921

260,744,089

231,507,877

367,217

355,024

(vi) Others (Mutual Fund units, CD/CP, NABARD deposits, PTC etc.) @

133,809,991

98,516,571

Total Investments in India

II.

Investments outside India in -

1,124,968,963

921,941,509

(i) Government Securities (including local authorities)

2,683,274

1,170,306

(ii) Subsidiaries and/or joint ventures abroad (amount less than `1,000 for

previous year) [Refer Schedule 17.2b]

(iii) Others

Total Investments outside India

GRAND TOTAL (I+II)

29,978

6,098,344

6,102,598

8,811,596

7,272,904

1,133,780,559

929,214,413

Includes securities costing `4,766.66 crores (previous year `4,427.15 crores) pledged for availment of fund transfer
facility, clearing facility and margin requirements.

Inclusive of Repo Lending of `7,350.00 crores (previous year `3,675.00 crores) and net of Repo borrowing of NIL
(previous year `3,140.76 crores) under the Liquidity Adjustment Facility in line with the RBI requirements.

Represents investment accounted as an Associate in line with AS-23, Accounting for Investments in Associates in
Consolidated Financial Statements, as notiﬁ ed under the Companies (Accounting Standards) Rules, 2006 [Refer
Schedule 17.2d].

@ Includes priority sector shortfall deposits `6,980.42 crores (previous year `5,100.53 crores) and PTC’s `1,471.03 crores
(previous year `204.67 crores) net of depreciation, if any.

119

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 9 - ADVANCES

(i)

Bills purchased and discounted *

56,079,021

39,089,332

(ii) Cash credits, overdrafts and loans repayable on demand @

546,679,115

468,608,528

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

(iii) Term loans #

TOTAL

(i)

Secured by tangible assets $

(ii) Covered by Bank/Government Guarantees &&

(iii) Unsecured

TOTAL

Advances in India

(i) Priority Sector

(ii) Public Sector

(iii) Banks

(iv) Others

TOTAL

II. Advances Outside India

(i) Due from banks

(ii) Due from others -

(a) Bills purchased and discounted

(b) Syndicated loans

TOTAL

GRAND TOTAL (CI+CII)

1,367,143,269

1,189,897,526

1,969,901,405

1,697,595,386

1,613,889,953

1,417,163,384

18,089,151

50,233,791

337,922,301

230,198,211

1,969,901,405

1,697,595,386

484,982,533

484,792,379

39,189,817

32,535,626

449,490

3,477,937

1,143,951,454

923,767,773

1,668,573,294

1,444,573,715

10,371,975

1,127,900

2,687,649

6,438,231

109,487,196

108,035,085

178,781,291

137,420,455

301,328,111

253,021,671

1,969,901,405

1,697,595,386

* Net of borrowings under Bills Rediscounting Scheme `1,000.00 crores (previous year `3,480.00 crores)

@ Net of borrowings under Inter Bank Participation Certiﬁ cate `205.89 crores (previous year `60.36 crores)

# Net of borrowings under Inter Bank Participation Certiﬁ cate `10,256.09 crores (previous year `7,968.24 crores)

Includes advances against book debts

&& Includes advances against L/Cs issued by banks

120

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

SCHEDULE 10 - FIXED ASSETS

Premises

Gross Block

At cost at the beginning of the year

Additions during the year

Deductions during the year

TOTAL

Depreciation

As at the beginning of the year

Charge for the year

Deductions during the year

Depreciation to date

Net Block

II. Other ﬁ xed assets (including furniture & ﬁ xtures)

Gross Block

At cost at the beginning of the year

Additions on demerger

Additions during the year

Deductions during the year

TOTAL

Depreciation

As at the beginning of the year

Additions on demerger

Charge for the year

Deductions during the year

Depreciation to date

Net Block

III. CAPITAL WORK-IN-PROGRESS (including capital advances)

GRAND TOTAL (I+II+III)

SCHEDULE 11 - OTHER ASSETS

II.

Inter-ofﬁ ce adjustments (net)

Interest Accrued

III.

Tax paid in advance/tax deducted at source (net of provisions)

IV. Stationery and stamps

V. Non banking assets acquired in satisfaction of claims

VI. Others #

TOTAL

# Includes deferred tax assets of `1,378.09 crores (previous year `1,027.44 crores)

9,001,944

9,117,340

39,131

9,041,075

96,841

(212,237)

9,001,944

262,236

147,275

409,511

198,381

146,310

(82,455)

262,236

8,631,564

8,739,708

27,125,650

25,442,102

82,684

4,173,021

3,300,281

(640,598)

(1,616,733)

30,740,757

27,125,650

13,822,155

11,661,494

30,307

3,440,392

3,335,207

(369,616)

(1,174,546)

16,923,238

13,822,155

13,817,519

13,303,495

1,424,208

798,175

23,873,291

22,841,378

27,157,882

24,194,449

581,969

11,221

209,600

1,280,325

12,623

262,681

45,062,159

39,421,537

73,022,831

65,171,615

121

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2013

SCHEDULE 12 - CONTINGENT LIABILITIES

II.

Claims against the Group not acknowledged as debts

Liability for partly paid investments

As at
31-03-2013
(` in Thousands)

As at
31-03-2012
(` in Thousands)

1,676,197

2,602,142

III.

Liability on account of outstanding forward exchange and derivative contracts :

(a) Forward Contracts

2,320,162,574

2,009,254,981

(b) Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest

Rate Futures

TOTAL (a+b+c)

IV. Guarantees given on behalf of constituents

In India

Outside India

V. Acceptances, endorsements and other obligations

VI. Other items for which the Group is contingently liable

GRAND TOTAL (I+II+III+IV+V+VI)

2,210,541,350

1,752,490,787

80,228,625

130,543,459

4,610,932,549

3,892,289,227

517,036,841

467,505,902

111,222,144

98,612,604

228,015,939

302,612,607

12,351,004

38,760,307

5,481,234,674

4,802,382,789

122

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2013

SCHEDULE 13 - INTEREST EARNED

Interest/discount on advances/bills
Income on investments
Interest on balances with Reserve Bank of India and other inter-bank funds

I.
II.
III.
IV. Others
TOTAL

SCHEDULE 14 - OTHER INCOME

Commission, exchange and brokerage
Proﬁ t/(Loss) on sale of investments (net)
Proﬁ t/(Loss) on sale of ﬁ xed assets (net)

I.
II.
III.
IV. Proﬁ t on exchange/derivative transactions (net)
Income earned by way of dividends etc. from
V.
subsidiaries/companies and/or joint venture abroad/in India

VI. Miscellaneous Income

[including recoveries on account of advances/investments written off in earlier
years `268.51 crores (previous year `291.84 crores) and net loss on account of
portfolio sell downs/securitisation `5.88 crores (previous year net loss of `1.60
crores)]
TOTAL

SCHEDULE 15 - INTEREST EXPENDED

Interest on deposits
Interest on Reserve Bank of India/Inter-bank borrowings

I.
II.
III. Others

TOTAL

SCHEDULE 16 - OPERATING EXPENSES

Payments to and provisions for employees
I.
Rent, taxes and lighting
II.
III.
Printing and stationery
IV. Advertisement and publicity
V. Depreciation on Group’s property
VI. Directors’ fees, allowance and expenses
VII. Auditors’ fees and expenses
VIII. Law charges
IX. Postage, telegrams, telephones etc.
X. Repairs and maintenance
XI.
XII. Other expenditure

Insurance

TOTAL

Year ended
31-03-2013
(` in Thousands)

Year ended
31-03-2012
(` in Thousands)

191,712,828
77,469,806
1,112,621
1,724,497
272,019,752

153,793,526
63,942,667
984,267
1,228,531
219,948,991

52,655,041
6,346,482
(44,308)
6,640,573

44,156,852
750,000
191,092
6,739,668

-
2,730,257

-
3,034,310

68,328,045

54,871,922

150,002,762
4,596,175
20,534,942
175,133,879

121,759,124
2,319,578
15,613,068
139,691,770

26,753,665
7,666,611
1,030,852
1,238,348
3,587,667
18,240
15,851
179,019
2,869,492
5,960,356
2,626,618
19,458,445
71,405,164

22,540,184
6,685,783
950,424
903,390
3,481,517
10,202
12,044
182,725
2,622,730
5,382,245
2,315,133
15,912,570
60,998,947

123

17 Signiﬁ cant accounting policies for the year ended 31 March, 2013

(Currency: In Indian Rupees)

Principles of Consolidation

The consolidated ﬁ nancial statements comprise the ﬁ nancial statements of Axis Bank Limited (‘the Bank’) and its
subsidiaries, which together constitute ‘the Group’.

The Bank consolidates its subsidiaries in accordance with AS-21, Consolidated Financial Statements notiﬁ ed under
the Companies (Accounting Standards) Rules, 2006, on a line-by-line basis by adding together the like items of
assets, liabilities, income and expenditure. All signiﬁ cant inter-company accounts and transactions are eliminated on
consolidation. Further, the Bank accounts for investments in associates in accordance with AS-23, Accounting for
Investments in Associates in Consolidated Financial Statements, notiﬁ ed under the Companies (Accounting Standard)
Rules, 2006, by the equity method of accounting.

Basis of preparation

The ﬁ nancial statements have been prepared and presented under the historical cost convention on the accrual
basis of accounting, and comply with the generally accepted accounting principles, statutory requirements
prescribed under the Banking Regulation Act, 1949, the circulars and guidelines issued by the Reserve Bank
of India (‘RBI’) from time to time and the Accounting Standards notiﬁ ed under the Companies (Accounting
Standards) Rules, 2006, to the extent applicable and current practices prevailing within the banking industry in
India.

The consolidated ﬁ nancial statements present the accounts of Axis Bank Limited with its following subsidiaries
and associates:

Name

Relation

Country of
Incorporation

Ownership
Interest

Axis Capital Ltd. (Formerly Axis Securities & Sales Ltd.)

Subsidiary

Axis Private Equity Ltd.

Axis Trustee Services Ltd.

Axis Mutual Fund Trustee Ltd.

Axis Asset Management Company Ltd.

Axis Finance Private Ltd. (Formerly Enam Finance Private
Ltd.)

Axis U.K. Ltd.

Bussan Auto Finance India Private Ltd.

(see ‘d’ below)

* with effect from 8 March, 2013

Subsidiary

Subsidiary*

Subsidiary

Associate

India

U.K.

India

100.00%

75.00%

100.00%

26.00%

The consolidated ﬁ nancial statements also include the results of Axis Securities Ltd. and Enam Securities Europe
Ltd., the step down subsidiaries of the Bank. The ﬁ nancial statements of Enam International Ltd., a step down
subsidiary of the Bank, have not been consolidated since the company is under voluntary dissolution as on
31 March, 2013.

The audited ﬁ nancial statements of the above subsidiaries (including step down subsidiaries) and the unaudited
ﬁ nancial statements of the associate have been drawn up to the same reporting date as that of the Bank, i.e.
31 March, 2013.

This investment does not fall within the deﬁ nition of a Joint Venture as per AS-27, Financial Reporting of Interest
in Joint Ventures, notiﬁ ed under the Companies (Accounting Standards) Rules, 2006, and the said accounting
standard is thus not applicable. However, pursuant to RBI guidelines, the Bank has classiﬁ ed the same as

124

investment in joint ventures in the balance sheet. Such investment has been accounted as an Associate in line
with AS-23, Accounting for Investment in Associates in Consolidated Financial Statements notiﬁ ed under the
Companies (Accounting Standards) Rules, 2006.

Use of estimates

Signiﬁ cant accounting policies

4.1

Investments

Axis Bank Ltd.

Classiﬁ cation

In accordance with the RBI guidelines, investments are classiﬁ ed at the date of purchase as:

• Held for Trading (‘HFT’);

• Available for Sale (‘AFS’); and

• Held to Maturity (‘HTM’).

Investments that the Bank intends to hold till maturity are classiﬁ ed under the HTM category.

All other investments are classiﬁ ed as AFS securities.

Investments made outside India are classiﬁ ed under three categories – Government Securities, Subsidiaries
and/or Joint Ventures abroad and Others.

Transfer of security between categories

Transfer of security between categories of investments is accounted as per the RBI guidelines.

Acquisition cost

Costs including brokerage, commission pertaining to investments, paid at the time of acquisition, are charged
to the Proﬁ t and Loss Account.

Broken period interest is charged to the Proﬁ t and Loss Account.

Cost of investments is computed based on the weighted average cost method.

Valuation

Investments classiﬁ ed under the HTM category are carried at acquisition cost unless it is more than the face
value, in which case the premium is amortised over the period remaining to maturity. In terms of RBI guidelines,
discount on securities held under HTM category is not accrued and such securities are held at the acquisition cost
till maturity.

125

Investments classiﬁ ed under the AFS and HFT categories are marked to market. The market/fair value of quoted
investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the scrip as available from the
trades/quotes on the stock exchanges or prices declared by Primary Dealers Association of India (‘PDAI’) jointly
with Fixed Income Money Market and Derivatives Association of India (‘FIMMDA’), periodically. Net depreciation,
if any, within each category of each investment classiﬁ cation is recognised in the Proﬁ t and Loss Account. The net
appreciation if any, under each category of each investment classiﬁ cation is ignored. The book value of individual
securities is not changed consequent to the periodic valuation of investments.

Treasury Bills, Exchange Funded Bills, Commercial Paper and Certiﬁ cate of Deposits being discounted instruments,
are valued at carrying cost.

Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.

Market value of investments where current quotations are not available, is determined as per the norms
prescribed by the RBI as under:

•

in case of unquoted bonds, debentures and preference shares where interest/dividend is received regularly
(i.e. not overdue beyond 90 days), the market price is derived based on the YTM for Government Securities
as published by FIMMDA/PDAI and suitably marked up for credit risk applicable to the credit rating of the
instrument. The matrix for credit risk mark-up for each categories and credit ratings along with residual
maturity issued by FIMMDA is adopted for this purpose;

in case of bonds and debentures (including Pass Through Certiﬁ cates) where interest is not received regularly
(i.e. overdue beyond 90 days), the valuation is in accordance with prudential norms for provisioning as
prescribed by RBI;

equity shares, for which current quotations are not available or where the shares are not quoted on the
stock exchanges, are valued at break-up value (without considering revaluation reserves, if any) which is
ascertained from the company’s latest Balance Sheet. In case the latest Balance Sheet is not available, the
shares are valued at Re 1 per company;

units of Venture Capital Funds (‘VCF’) held under AFS category where current quotations are not available
are marked to market based on the Net Asset Value (‘NAV’) shown by VCF as per the latest audited ﬁ nancials
of the fund. In case the audited ﬁ nancials are not available for a period beyond 18 months, the investments
are valued at Re 1 per VCF. Investment in unquoted VCF after 23 August, 2006 are categorised under HTM
category for the initial period of three years and valued at cost as per RBI guidelines;

investments in Credit Linked Notes (‘CLNs’), are valued based on current quotations where the same are
available. In the absence of quotes, the same are valued based on internal valuation methodology using
appropriate mark-up and other estimates such as price of the underlying Foreign Currency Convertible Bond
(‘FCCB’), rating category of the CLN etc. and

security receipts are valued as per the NAV obtained from the issuing Reconstruction Company/Securitisation
Company.

Investments in joint ventures are categorised as HTM and assessed for impairment to determine permanent
diminution, if any, in accordance with the RBI guidelines.

Realised gains on investments under the HTM category are recognised in the Proﬁ t and Loss Account and
subsequently appropriated to Capital Reserve account in accordance with the RBI guidelines. Losses are
recognised in the Proﬁ t and Loss Account.

All investments are accounted for on settlement date except investments in equity shares which are accounted
for on trade date as the corporate actions are effected in equity on the trade date.

Repurchase and reverse repurchase transactions

126

under LAF are accounted as outright sale and outright purchase respectively. However, depreciation in their
value, if any, compared to their original cost, is recognised in the Proﬁ t and Loss Account.

Policy for Short Sale

In accordance with RBI guidelines, the Bank undertakes short sale transactions in Central Government dated
securities. The short positions are reﬂ ected in ‘Securities Short Sold (‘SSS’) A/c’, speciﬁ cally created for this
purpose. Such short positions are categorised under HFT category. These positions are marked-to-market along
with the other securities under HFT portfolio and the resultant mark-to-market gains/losses are accounted for as
per the relevant RBI guidelines for valuation of investments discussed earlier.

Subsidiaries

Investments which are readily realisable and intended to be held for not more than one year from the date on
which such investments are made, are classiﬁ ed as current investments. All other investments are classiﬁ ed as
long term investments.

Current investments are carried in the ﬁ nancial statements at lower of cost and fair value determined on an
individual investment basis. Any reduction in the carrying amount and any reversal of such reductions are
charged or credited to the Proﬁ t and Loss Account.

Long term investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the
value of such investments.

4.2 Advances

Axis Bank Ltd.

Advances are classiﬁ ed into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are
stated net of speciﬁ c provisions made towards NPAs and ﬂ oating provisions. Further, NPAs are classiﬁ ed into sub-
standard, doubtful and loss assets based on the criteria stipulated by the RBI. Provisions for NPAs are made for
sub-standard and doubtful assets at rates as prescribed by the RBI with the exception for agriculture advances
and schematic retail advances. In respect of schematic retail advances, provisions are made in terms of a bucket-
wise policy upon reaching speciﬁ ed stages of delinquency (90 days or more of delinquency) under each type
of loan, which satisﬁ es the RBI prudential norms on provisioning. Provisions in respect of agriculture advances
classiﬁ ed into sub-standard and doubtful assets are made at rates which are higher than those prescribed by the
RBI.

In addition to the above, the Bank on a prudential basis, makes provision for expected losses against advances or
other exposures to speciﬁ c assets/industry/sector either on a case-by-case basis or for a group of assets, based on
speciﬁ c information or general economic environment. These are classiﬁ ed as contingent provision and included
under Schedule 5 - Other Liabilities in the Balance Sheet.

Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines.
NPAs are identiﬁ ed by periodic appraisals of the loan portfolio by the Management.

Amounts recovered against debts written off are recognised in the Proﬁ t and Loss Account.

For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which
requires the diminution in the fair value of the assets to be provided at the time of restructuring.

A general provision @ 0.25% in case of direct advances to agricultural and SME sectors, 1% in respect of
advances classiﬁ ed as commercial real estate, 2% in respect of housing loans at teaser rates, 2.75% (previous
year 2%) in respect of certain class of restructured assets and 0.40% for all other advances is made as prescribed
by the RBI. In case of overseas branches, general provision on standard advances is maintained at the higher of
the levels stipulated by the respective overseas regulator or RBI.

127

Bank makes provision on an estimated basis against the probable loss that could be incurred in future on account
of waivers to eligible borrowers in respect of such loans. This provision is classiﬁ ed under Schedule 5 – Other
Liabilities in the balance sheet.

4.3 Country risk

Axis Bank Ltd.

In addition to the provisions required to be held according to the asset classiﬁ cation status, provisions are held
for individual country exposure (other than for home country as per the RBI guidelines). The countries are
categorised into seven risk categories namely insigniﬁ cant, low, moderate, high, very high, restricted and off-
credit and provision is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to 100%.
For exposures with contractual maturity of less than 180 days, 25% of the normal provision requirement is held.
If the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded
assets, no provision is maintained on such country exposure.

4.4 Securtisation

Axis Bank Ltd.

The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose
Vehicle (‘SPV’). In most cases, post securtisation, the Bank continues to service the loans transferred to the
assignee/SPV. The Bank also provides credit enhancement in the form of cash collaterals and/or by subordination
of cash ﬂ ows to Senior Pass Through Certiﬁ cate (‘PTC’) holders. In respect of credit enhancements provided or
recourse obligations (projected delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/
disclosure is made at the time of sale in accordance with AS-29, Provisions, Contingent Liabilities and Contingent
Assets as notiﬁ ed under the Companies (Accounting Standards) Rules, 2006.

In accordance with RBI guidelines of 7 May, 2012 on ‘Guidelines on Securitisation of Standard Assets’, gain on
securtisation transaction is recognised over the period of the underlying securities issued by the SPV as prescribed
under RBI guidelines. Loss on securtisation is immediately debited to the Proﬁ t and Loss Account.

4.5 Foreign currency transactions

Axis Bank Ltd.

In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the
Balance Sheet date at rates notiﬁ ed by Foreign Exchange Dealers Association of India (‘FEDAI’). All proﬁ ts/losses
resulting from year end revaluations are recognised in the Proﬁ t and Loss Account.

Financial statements of foreign branches classiﬁ ed as non-integral foreign operations are translated as follows:

• Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at

closing rates notiﬁ ed by FEDAI at the year end.

•

Income and expenses are translated at the rates prevailing on the date of the transactions.

• All resulting exchange differences are accumulated in a separate ‘Foreign Currency Translation Reserve’ till

the disposal of the net investments.

Outstanding forward exchange contracts (excluding currency swaps undertaken to hedge foreign currency
assets/liabilities and funding swaps which are not revalued) and spot exchange contracts are revalued at year
end exchange rates notiﬁ ed by FEDAI for speciﬁ ed maturities and at interpolated rates for contract of interim
maturities. The resulting gains or losses on revaluation are included in the Proﬁ t and Loss Account in accordance
with RBI/FEDAI guidelines. The forward exchange contracts of longer maturities where exchange rates are not
notiﬁ ed by FEDAI are revalued at the forward exchange rates implied by the swap curves in respective currencies.
The resultant gains or losses are recognised in the Proﬁ t and Loss Account.

128

Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding
swaps is recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap
period.

Contingent liabilities on account of foreign exchange contracts/options, guarantees, acceptances, endorsements
and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notiﬁ ed by
FEDAI.

Subsidiaries

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies as at the Balance Sheet date are translated at
the closing rate on that date. Non-monetary items, which are measured in terms of historical cost denominated
in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items,
which are measured at fair value or other similar valuation denominated in a foreign currency, are translated
using the exchange rate at the date when such value was determined. The exchange differences, if any, either
on settlement or translation are recognised in Proﬁ t and Loss Account.

4.6 Derivative transactions

Axis Bank Ltd.

Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent
liabilities. The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative
contracts are revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised
in the Proﬁ t and Loss Account and correspondingly in other assets or other liabilities respectively. For hedge
transactions, the Bank identiﬁ es the hedged item (asset or liability) at the inception of transaction itself. The
effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. Hedge swaps are
accounted for on accrual basis except in case of swaps designated with an asset or liability that is carried at
market value or lower of cost or market value in the ﬁ nancial statements. In such cases the swaps are marked
to market with the resulting gain or loss recorded as an adjustment to the market value of designated asset
or liability. The premium on option contracts is accounted for as per FEDAI guidelines. Pursuant to the RBI
guidelines any receivables under derivative contracts comprising of crystallised receivables as well as positive
Mark to Market (MTM) in respect of future receivables which remain overdue for more than 90 days are reversed
through the Proﬁ t and Loss Account and are held in separate Suspense account.

Currency futures contracts are marked to market using daily settlement price on a trading day, which is the
closing price of the respective futures contracts on that day. While the daily settlement price is computed based
on the last half an hour weighted average price of such contract, the ﬁ nal settlement price is taken as the RBI
reference rate on the last trading day of the futures contract or as may be speciﬁ ed by the relevant authority from
time to time. All open positions are marked to market based on the settlement price and the resultant marked
to market proﬁ t/loss is daily settled with the exchange.

Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price
of each individual option provided by the exchange.

4.7 Revenue recognition

Axis Bank Ltd.

Interest income is recognised on an accrual basis except interest income on non-performing assets, which
is recognised on receipt in accordance with AS-9, Revenue Recognition as notiﬁ ed under the Companies
(Accounting Standards) Rules, 2006 and the RBI guidelines.

Fees and commission income is recognised when due, except for guarantee commission which is recognised
pro-rata over the period of the guarantee.

Arrangership/syndication fee is accounted for on completion of the agreed service and when right to receive is
established.

129

Dividend is accounted on an accrual basis when the right to receive the dividend is established.

Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.

Gain or loss arising on sale of NPAs is accounted as per the guidelines prescribed by the RBI, which require
provisions to be made for any deﬁ cit (where sale price is lower than the net book value), while surplus (where
sale price is higher than the net book value) is ignored.

Subsidiaries

Revenue is recognised to the extent that it is probable that the economic beneﬁ ts will ﬂ ow to the Company and
the revenue can be reliably measured. Fee income is recognised on the basis of accrual when all the services are
performed.

Interest income is recognised on an accrual basis.

Dividend income is recognised when the right to receive payment is established by the Balance Sheet date.

Axis Capital Limited

Business sourcing and resource management fee is recognised on accrual basis when all the services are
performed.

Brokerage income in relation to stock broking activity is recognised on a trade date basis. Gains/losses on dealing
in securities are recognised on a trade date basis.

Income from Super Value Plan to the extent of account opening fees is recognised upfront and balance is
amortised over the validity of plan. Income from other existing prepaid plans is recognised on utilisation of
complementary turnover limit or validity of plan, whichever is earlier.

Revenue from issue management, loan syndication, ﬁ nancial advisory services is recognised based on the stage
of completion of assignments and terms of agreement with the client.

Selling commissions/brokerage generated from primary market operations i.e. procuring subscriptions from
investors for public offerings of companies, mutual funds, etc. are recorded on determination of the amount
due to the Company, once the allotment of securities are completed.

Axis Private Equity Limited

Management Fee is recognised on accrual basis.

Axis Trustee Services Limited

Trusteeship fees are recognised, on a straight line basis, over the period when services are performed. Initial
acceptance fee is recognised as and when the ‘Offer Letter’ for the services to be rendered is accepted by the
customer.

Axis Asset Management Company Limited

Management fees are recognised on accrual basis at speciﬁ c rates, applied on the average daily net assets of
each scheme. The fees charged are in accordance with the terms of scheme information documents of respective
schemes and are in line with the provisions of SEBI (Mutual Funds) Regulations, 1996 as amended from time to
time.

Portfolio Management fees are recognised on an accrual basis as per the terms of the contract with the customers.

Marketing Advisory fees and fees received for acting as Point of Service (‘POS’) for CDSL Ventures Ltd., an agency
mandated by the Mutual Fund industry to handle the Know Your Clients (‘KYC’) documentation and necessary
database are recognised on an accrual basis.

Income from sale of investments is determined on weighted average basis and recognised on the trade date
basis.

130

Axis Mutual Fund Trustee Limited

Trustee fee is recognised on accrual basis, at the speciﬁ c rates/amount approved by the Board of Directors of the
Company, within the limits speciﬁ ed under the Deed of Trust, and is applied on the net assets of each scheme of
Axis Mutual Fund.

Income from sale of investments is determined on weighted average basis and recognised on the trade date
basis.

Axis Finance Private Limited

Interest from ﬁ nancing activities is recognised on accrual basis. Other revenue is recognised on accrual basis
when no signiﬁ cant uncertainty exists as to its realisation or collection. Proﬁ t on sale of investment is recognised
on trade date of transaction.

Axis Securities Limited

Brokerage received from secondary market operations is recognised on the trade date of the transaction.

Depository fees are recognised on completion of the transaction.

Portfolio Management fees are accounted on accrual basis as follows:

•

In case of fees based on ﬁ xed percentage of the corpus/ﬁ xed amount, income is accrued at the end of the
quarter/month.

In case of fees, based on the returns of the portfolio, income is accounted on each anniversary as per the
agreement.

4.8 Scheme expenses

Axis Asset Management Company Limited

Fund Expense

Expenses of schemes of Axis Mutual Fund in excess of the stipulated limits as per SEBI (Mutual Fund) Regulations,
1996 and expenses incurred directly (inclusive of advertisement/brokerage expenses) on behalf of schemes of
Axis Mutual Fund are charged to the Proﬁ t and Loss Account.

New fund offer expenses

Expenses relating to new fund offer of Axis Mutual Fund are charged to the Proﬁ t and Loss Account in the year
in which they are incurred.

Brokerage

Upfront brokerage on close ended and ﬁ xed tenure schemes is amortised over the tenure of the respective
scheme and in case of Equity Linked Saving Scheme (ELSS), upfront brokerage is amortised over 3 years. The
unamortised portion of the brokerage is carried forward as prepaid expense. Any other brokerage is expensed
out in the year in which they are incurred.

4.9 Fixed assets and depreciation

Group

Capital work-in-progress includes cost of ﬁ xed assets that are not ready for their intended use and also includes
advances paid to acquire ﬁ xed assets.

131

of the useful life of a ﬁ xed asset at the time of acquisition of the asset or of the remaining useful life on a
subsequent review is shorter, then depreciation is provided at a higher rate based on the Management’s estimate
of the useful life/remaining useful life. Pursuant to this policy, depreciation has been provided using the following
estimated useful lives:

Asset

Owned premises

Assets given on operating lease

Computer hardware including printers

Application software

Vehicles

EPABX, telephone instruments

CCTV and video conferencing equipment

Mobile phone

Locker cabinets/cash safe/strong room door

Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment

UPS, VSAT, fax machines

Cheque book/cheque encoder, currency counting machine, fake note detector

Assets at staff residence

All other ﬁ xed assets

Estimated useful life

61 years

20 years

3 years

5 years

4 years

8 years

3 years

2 years

16 years

5 years

3 years

10 years

All ﬁ xed assets individually costing less than `5,000 are fully depreciated in the year of installation.

Depreciation on assets sold during the year is recognised on a pro-rata basis to the Proﬁ t and Loss Account till
the date of sale.

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling
price and value in use. In assessing value in use, the estimated future cash ﬂ ows are discounted to their present
value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.

Axis Bank Ltd.

Proﬁ t on sale of premises is appropriated to Capital Reserve Account in accordance with RBI instructions.

4.10 Lease transactions

Axis Bank Ltd.

Assets given on operating lease are capitalised at cost. Rentals received by the Bank are recognised in the Proﬁ t
and Loss Account on accrual basis.

Group

Leases where the lessor effectively retains substantially all the risks and beneﬁ ts of ownership over the lease
term are classiﬁ ed as operating lease. Lease payments for assets taken on operating lease are recognised as an
expense in the Proﬁ t and Loss Account on a straight-line basis over the lease term.

132

4.11 Retirement and other employee beneﬁ ts

Provident Fund

Axis Bank Ltd.

Retirement beneﬁ t in the form of provident fund is a deﬁ ned beneﬁ t plan wherein the contributions are charged
to the Proﬁ t and Loss Account of the year when the contributions to the fund are due. Further, an actuarial
valuation is conducted by an independent actuary to determine the deﬁ ciency, if any, in the interest payable on
the contributions as compared to the interest liability as per the statutory rate.

Subsidiaries

Contributions to a recognised Provident Fund scheme, which is a deﬁ ned contribution scheme are accounted for
on an accrual basis and charged to Proﬁ t and Loss Account.

Gratuity

Axis Bank Ltd.

The Bank contributes towards gratuity fund (deﬁ ned beneﬁ t retirement plan) administered by various insurers
for eligible employees. Under this scheme, the settlement obligations remain with the Bank, although various
insurers administer the scheme and determine the contribution premium required to be paid by the Bank. The
plan provides a lump sum payment to vested employees at retirement or termination of employment based on
the respective employee’s salary and the years of employment with the Bank. Liability with regard to gratuity
fund is accrued based on actuarial valuation conducted by an independent actuary using the Projected Unit
Credit Method as at 31 March each year. In respect of employees at overseas branches (other than expats)
liability with regard to gratuity is provided on the basis of a prescribed method as per local laws, wherever
applicable.

Subsidiaries

Gratuity liability is a deﬁ ned beneﬁ t obligation and is provided for on the basis of an actuarial valuation using
Projected Unit Credit Method made at the end of each ﬁ nancial year.

Actuarial gains/losses are immediately taken to the Proﬁ t and Loss Account and are not deferred.

Leave Encashment

Group

Short term compensated absences are provided for based on estimates. The Group provides leave encashment
beneﬁ t (long term), which is a deﬁ ned beneﬁ t scheme based on actuarial valuation conducted by an independent
actuary. The actuarial valuation is carried out as per the Projected Unit Credit Method as at 31 March each year.

Superannuation

Axis Bank Ltd.

Employees of the Bank are entitled to receive retirement beneﬁ ts under the Bank’s Superannuation scheme either
under a cash-out option through salary or under a deﬁ ned contribution plan. Through the deﬁ ned contribution
plan the Bank contributes annually a speciﬁ ed sum of 10% of the employee’s eligible annual basic salary to LIC,
which undertakes to pay the lumpsum and annuity beneﬁ t payments pursuant to the scheme. Superannuation
contributions are recognised in the Proﬁ t and Loss Account in the period in which they accrue.

Actuarial gains/losses are immediately taken to Proﬁ t and Loss Account and are not deferred.

4.12 Long Term Incentive Plan (LTIP)

Axis Asset Management Company Limited

The Company has initiated Axis AMC - Long Term Incentive plan during the ﬁ nancial year. The points granted to
employees as per the guidelines laid down in the plan, are encashable after they are held for a speciﬁ ed period

133

as per the terms of the plan. The Company accounts for the liability arising on points granted proportionately
over the period from the date of grant till the end of the exercise window. The liability is assessed and provided
on the basis of valuation carried out by an independent valuer.

4.13 Debit/Credit card reward points

Axis Bank Ltd.

The Bank estimates the probable redemption of debit and credit card reward points using an actuarial method at
the Balance Sheet date by employing an independent actuary. Provision for the said reward points is then made
based on the actuarial valuation report as furnished by the said independent actuary.

4.14 Taxation

Group

Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are
determined in accordance with the Income tax Act, 1961. Deferred income taxes reﬂ ects the impact of current
year timing differences between taxable income and accounting income for the year and reversal of timing
differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance
Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the
taxes on income levied by same governing taxation laws.

Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufﬁ cient future
taxable income will be available against which such deferred tax assets can be realised. The impact of changes
in the deferred tax assets and liabilities is recognised in the Proﬁ t and Loss Account.

Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s
judgement as to whether realisation is considered as reasonably certain. Deferred tax assets are recognised on
carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax
asset can be realised against future proﬁ ts.

4.15 Share issue expenses

Axis Bank Ltd.

Share issue expenses are adjusted from Share Premium Account in terms of Section 78 of the Companies Act,
1956.

4.16 Earnings per share

Group

The Group reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notiﬁ ed
by the Companies (Accounting Standards) Rules, 2006. Basic earnings per share is computed by dividing the net
proﬁ t after tax by the weighted average number of equity shares outstanding for the year.

Diluted earnings per share reﬂ ect the potential dilution that could occur if securities or other contracts to issue
equity shares were exercised or converted during the year. Diluted earnings per share is computed using the
weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

4.17 Employee stock option scheme

Axis Bank Ltd.

134

Scheme) Guidelines, 1999. The Bank follows the intrinsic value method to account for its stock based employee
compensation plans as per the Guidance Note on ‘Accounting for Employee Share-based Payments’ issued
by the ICAI. Options are granted at an exercise price, which is equal to/less than the fair market price of the
underlying equity shares. The excess of such fair market price over the exercise price of the options as at the
grant date is recognised as a deferred compensation cost and amortised on a straight-line basis over the vesting
period of such options.

The fair market price is the latest available closing price, prior to the date of the grant, on the stock exchange on
which the shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock
exchange where there is highest trading volume on the said date is considered.

4.18 Provisions, contingent liabilities and contingent assets

Group

A provision is recognised when the Group has a present obligation as a result of past event where it is probable
that an outﬂ ow of resources will be required to settle the obligation, in respect of which a reliable estimate can
be made. Provisions are not discounted to its present value and are determined based on best estimate required
to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted
to reﬂ ect the current best estimates.

A disclosure of contingent liability is made when there is:

•

a possible obligation arising from a past event, the existence of which will be conﬁ rmed by occurrence or
non-occurrence of one or more uncertain future events not within the control of the Group; or

a present obligation arising from a past event which is not recognised as it is not probable that an outﬂ ow
of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation
cannot be made.

When there is a possible obligation or a present obligation in respect of which the likelihood of outﬂ ow of
resources is remote, no provision or disclosure is made.

Contingent assets are not recognised in the ﬁ nancial statements. However, contingent assets are assessed
continually and if it is virtually certain that an inﬂ ow of economic beneﬁ ts will arise, the asset and related income
are recognised in the period in which the change occurs.

135

18 Notes forming part of the consolidated ﬁ nancial statements for the year ended

31 March, 2013
(Currency: In Indian Rupees)

a) On 17 November, 2010, the Board of Directors of the Bank had approved the acquisition of certain ﬁ nancial
services businesses 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 modiﬁ cations were
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 now comprises of (a) a
demerger of the ﬁ nancial services businesses (“the business”) 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 ﬁ nancial 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 30 March, 2012, conveyed it’s no objection to the Scheme. Further, on 27 April,
2012, the Board of Directors of the Bank approved the reassessment of the valuation of the ESPL business at
`1,396 crores and consequently, in consideration for the demerger of the ﬁ nancial services business of ESPL, the
Bank was required to issue shares in the ratio of 5 equity shares of the Bank of the face value of `10 each for every
1 equity share of `10 each held by the shareholders of ESPL. The sale of the ﬁ nancial services businesses was to
be simultaneously undertaken from the Bank to ASSL for a cash consideration of `274.15 crores only.

On 18 October, 2012, the Bank received the necessary approvals under applicable law from various regulatory
authorities to the revised Scheme of Arrangement in respect of the demerger of the ﬁ nancial services businesses
from Enam Securities Private Limited (ESPL) to the Bank and simultaneous sale of such businesses to ASSL (now
known as Axis Capital Limited (“ACL”)), a wholly owned subsidiary of the Bank, with effect from 1 April, 2010
and consequently, the Bank has issued 12,090,000 equity shares of the face value of `10 each to the shareholders
of ESPL amounting to `12.09 crores and accounted for the net assets of ESPL of `274.15 crores at book value.
Further, as advised by RBI, an amount of `262.06 crores being the difference between the value of the net assets
acquired from ESPL and the shares issued has been transferred to the capital reserve.

As a part of the acquisition of certain ﬁ nancial services businesses undertaken by Enam Securities Private Limited
(ESPL) by way of a demerger, the Group acquired Axis Finance Private Limited, Enam International Limited and
Enam Securities Europe Limited, certain wholly owned subsidiaries of ESPL resulting in a net increase in total assets
of `58.46 crores as of 31 March, 2013 and net increase in proﬁ t after tax by `5.82 crores for the year ended
31 March, 2013.

b) During the year ended 31 March, 2013, the Bank raised additional equity capital through a Qualiﬁ ed Institutional
Placement (QIP) of 34,000,000 shares and a preferential allotment of 5,837,945 shares at a price of `1,390.00 per
share. As a consequence, the paid-up share capital of the Bank has increased by `39.84 crores and the reserves of
the Bank have increased by `5,457.76 crores after charging of issue related expenses. The funds mobilised from
the equity raising (through QIP and Preferential issue) were utilised for enhancing the capital adequacy ratio and
for general corporate purposes.

c) During the year, the Bank has appropriated an amount of `2.61 crores to Reserve Fund account in accordance

with guidelines issued by Central Bank of Sri Lanka in respect of Sri Lanka branch operations.

136

Other Disclosures

2.1.1

‘Provisions and contingencies’ recognised in the Proﬁ t and Loss Account includes:

For the year ended

Provision for income tax

- Current tax for the year

- Deferred tax for the year

Provision for wealth tax

Provision for non-performing assets
(including bad debts written off and write backs)

Provision for restructured assets

Provision towards standard assets

Provision for depreciation in value of investments

Provision for country risk

Provision for other contingencies

Total

(` in crores)

31 March, 2013

31 March, 2012

2,740.53

(349.73)

2,390.80

2,262.05

(210.57)

2,051.48

0.38 0.36

1,179.19 860.43

103.95 88.86

196.64 150.30

(98.22) 58.10

(9.63) 4.81

383.97 (19.83)

4,147.08

3,194.51

2.1.2 During the year ended 31 March, 2013, the Bank has raised subordinated debt of `2,500 crores, the details of which

are set out below:

Date of allotment

31 December, 2012

Period

120 months

Coupon

9.15%

Amount
`2,500.00 crores

During the year ended 31 March, 2012, the Bank has raised subordinated debt of `3,425 crores, the details of which
are set out below:

Date of allotment

1 December, 2011

20 March, 2012

Period

120 months

Coupon

9.73%

9.30%

Amount
`1,500.00 crores
`1,925.00 crores

During the year ended 31 March, 2013, the Bank redeemed subordinated debt of `622 crores, the details of which are
set out below:

Date of maturity

Period

Coupon

20 June, 2012

25 July, 2012

21 December, 2012

117 months

84 months

117 months

9.30%

8.67%

8.95%

Amount

`62.00 crores

`500.00 crores

`60.00 crores

During the year ended 31 March, 2012, the Bank redeemed subordinated debt of `5 crores, the details of which are
set out below:

Date of maturity

26 April, 2011

Period

93 months

Coupon

6.70%

Amount

`5.00 crores

2.1.3 The Bank has not raised any hybrid capital during the year ended 31 March, 2013 and year ended 31 March, 2012.

137

2.1.4 Earnings Per Share (‘EPS’)

The details of EPS computation is set out below:

As at

31 March, 2013

31 March, 2012

Basic and Diluted earnings for the year (Net proﬁ t after tax)
(` in crores)

Basic weighted average no. of shares (in crores)

Add: Equity shares for no consideration arising on grant of stock options
under ESOP (in crores)

Diluted weighted average no. of shares (in crores)
Basic EPS (`)
Diluted EPS (`)
Nominal value of shares (`)

5,234.76

43.28

4,219.78

41.21

0.30

43.58

120.95

120.12

10.00

0.30

41.51

102.40

101.66

10.00

Dilution of equity is on account of 2,975,646 (previous year 2,991,727) stock options.

2.1.5 Employee Stock Options Scheme (‘the Scheme’)

In February 2001, pursuant to the approval of the shareholders at the Extraordinary General Meeting, the Bank approved
an Employee Stock Option Scheme. Under the Scheme, the Bank is authorised to issue upto 13,000,000 equity shares
to eligible employees. Eligible employees are granted an option to purchase shares subject to vesting conditions. The
options vest in a graded manner over 3 years. The options can be exercised within 3 years from the date of the vesting.
Further, over the period June, 2004 to June, 2010, pursuant to the approval of the shareholders at Annual General
Meetings, the Bank approved an ESOP scheme for additional options aggregating 27,517,400. Within the overall
ceiling of 40,517,400 stock options approved for grant by the shareholders as stated earlier, the Bank is also authorised
to issue options to employees and directors of the subsidiary companies.

39,891,590 options have been granted under the Scheme till the previous year ended 31 March, 2012.

Stock option activity under the Scheme for the year ended 31 March, 2013 is set out below:

Options
outstanding

Range of exercise
prices (`)

Weighted
average
exercise
price (`)

Weighted average
remaining
contractual life
(Years)

Outstanding at the beginning of the year

11,428,248

319.00 to 1,447.55

965.90

2.79

Granted during the year

2,516,000

1,086.65

Forfeited during the year

(175,698)

319.00 to 1,447.55

1,144.00

Expired during the year

(80,954)

319.00 to 824.40

568.70

Exercised during the year

(2,822,571)

319.00 to 1,447.55

594.48

Outstanding at the end of the year

10,865,025

468.90 to 1,447.55

1,090.43

Exercisable at the end of the year

5,372,105

468.90 to 1,447.55

941.06

The weighted average share price in respect of options exercised during the year was `1,217.66.

2.69

1.57

138

Stock option activity under the Scheme for the year ended 31 March, 2012 is set out below:

Options
outstanding

Range of exercise
prices (`)

Weighted
average
exercise
price (`)

Weighted average
remaining
contractual life
(Years)

Outstanding at the beginning of the year

11,122,518

232.10 to 1,245.45

712.90

2.86

Granted during the year

Forfeited during the year

Expired during the year

Exercised during the year

3,268,700

1,447.55

(243,596)

232.10 to 1,447.55

(61,265)

232.10 to 468.90

(2,658,109)

232.10 to 1,159.30

960.75

406.46

512.92

965.90

717.76

2.79

1.53

Outstanding at the end of the year

11,428,248

319.00 to 1,447.55

Exercisable at the end of the year

4,983,892

319.00 to 1,245.45

The weighted average share price in respect of options exercised during the year was `1,200.12.

Fair Value Methodology

On applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’ the
impact on reported net proﬁ t and EPS would be as follows:

Net Proﬁ t (as reported) (` in crores)
Add: Stock based employee compensation expense included in net

income (` in crores)

Less: Stock based employee compensation expense determined under

fair value based method (proforma) (` in crores)

Net Proﬁ t (Proforma) (` in crores)
Earnings per share: Basic (in `)
As reported

Proforma
Earnings per share: Diluted (in `)
As reported

Proforma

31 March, 2013

31 March, 2012

5,234.76

4,219.78

(117.08)

5,117.68

120.95

118.25

120.12

117.43

(147.16)

4,072.62

102.40

98.83

101.66

98.11

The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model, with
the following assumptions:

Dividend yield

Expected life

Risk free interest rate

Volatility

31 March, 2013

31 March, 2012

1.20%

2-4 years

1.23%

2-4 years

8.14% to 8.33% 8.05% to 8.10%

35.92% to 50.25% 39.43% to 53.33%

139

The weighted average fair value of options granted during the year ended 31 March, 2013 is `387.24 (previous year
`559.31).

2.1.6 Dividend paid on shares issued on exercise of stock options

2.1.7 Segmental reporting

The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking, and
Other Banking Business. These segments have been identiﬁ ed and based on RBI’s revised guidelines on Segment
Reporting issued on 18 April, 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The principal activities of
these segments are as under.

Segment

Treasury

Retail Banking

Principal Activities

Treasury operations include investments in sovereign and corporate debt, equity and
mutual funds, trading operations, derivative trading and foreign exchange operations on
the proprietary account and for customers and central funding.

Constitutes lending to individuals/small businesses subject to the orientation, product and
granularity criterion and also includes low value individual exposures not exceeding the
threshold limit of `5 crores as deﬁ ned by RBI. Retail Banking activities also include liability
products, card services, internet banking, ATM services, depository, ﬁ nancial advisory
services and NRI services.

Corporate/Wholesale
Banking

Includes corporate relationships not included under Retail Banking, corporate advisory
services, placements and syndication, management of public issue, project appraisals,
capital market related services and cash management services.

Other Banking Business

Includes para banking activities like third party product distribution and other banking
transactions not covered under any of the above three segments.

Business segments in respect of operations of the subsidiaries (including step down subsidiaries) have been identiﬁ ed
and reported taking into account the customer proﬁ le, the nature of product and services and the organisation
structure.

140

Segment-wise income and expenses include certain allocations. Inter segment interest income and interest expense
represent the transfer price received from and paid to the Central Funding Unit (CFU) respectively. For this purpose,
the funds transfer pricing mechanism presently followed by the Bank, which is based on historical matched maturity
and internal benchmarks, has been used. Operating expenses other than those directly attributable to segments are
allocated to the segments based on an activity-based costing methodology. All activities in the Bank are segregated
segment-wise and allocated to the respective segment.

Segmental results are set out below:

(` in crores)

31 March, 2013

Treasury Corporate/
Wholesale
Banking

Retail
Banking

Other
Banking
Business

Total

Segment Revenue

Gross interest income (external customers)

6,969.72

13,093.12

7,139.11

0.03

27,201.98

Other income

1,610.93

3,000.09

1,653.78

568.00

6,832.80

Total income as per Proﬁ t and Loss Account

8,580.65

16,093.21

8,792.89

568.03

34,034.78

Add/(less) inter segment interest income

33,112.64

3,371.64

9,374.05

45,858.33

Total segment revenue

41,693.29

19,464.85

18,166.94

568.03

79,893.11

Less: Interest expense (external customers)

10,389.84

298.17

6,825.38

Less: Inter segment interest expense

29,937.22

10,113.35

5,807.76

17,513.39

45,858.33

446.02

1,733.43

4,764.98

196.09

7,140.52

Less: Operating expenses

Operating proﬁ t

Less: Provision for non-performing assets/others

(94.48)

1,619.84

920.21

7,319.90

1,014.69

5,700.06

Segment result

Less: Provision for tax

Net Proﬁ t before minority interest and
earnings from Associate

Less: Minority Interest

Add: Share of Proﬁ t in Associate

Extraordinary proﬁ t/loss

Net Proﬁ t

Segment assets

Unallocated assets

Total assets

Segment liabilities

Unallocated liabilities(1)

Total liabilities

Net assets

Capital Expenditure for the year

Depreciation on ﬁ xed assets for the year

(1) Includes minority interest of `12.53 crores

768.82

230.55

538.27

371.94

9,380.87

0.37

1,756.28

371.57

7,624.59

2,390.80

5,233.79

0.25

1.22

5,234.76

135,106.04 128,353.67

75,319.35

302.34 339,081.40

1,476.33

340,557.73

126,702.45

63,506.02 116,098.32

49.97 306,356.76

1,042.60

307,399.36

8,403.59

64,847.65 (40,778.97)

252.37

33,158.37

20.79

17.52

99.48

84.80

291.58

247.74

9.37

8.71

421.22

358.77

141

(` in crores)

31 March, 2012

Treasury Corporate/
Wholesale
Banking

Retail
Banking

Other
Banking
Business

Total

Segment Revenue

Gross interest income (external customers)

5,992.51

11,292.20

4,710.06

0.13

21,994.90

Other income

1,002.54

2,814.12

1,253.31

417.22

5,487.19

Total income as per Proﬁ t and Loss Account

6,995.05

14,106.32

5,963.37

417.35

27,482.09

Add/(less) inter segment interest income

28,992.40

3,093.62

7,274.96

0.15

39,361.13

Total segment revenue

35,987.45

17,199.94 13,238.33

417.50 66,843.22

Less: Interest expense (external customers)

8,747.14

214.71 5,007.33

- 13,969.18

Less: Inter segment interest expense

25,817.89

9,335.77 4,207.43

0.04 39,361.13

Less: Operating expenses

426.36

1,734.11 3,793.66

145.76 6,099.89

Operating proﬁ t

996.06

5,915.35

229.91

271.70

7,413.02

Less: Provision for non-performing assets/others

160.78

735.59

246.30

0.36

1,143.03

Segment result

Less: Provision for tax

Add: Share of Proﬁ t in Associate

Extraordinary proﬁ t/loss

Net Proﬁ t

Segment assets

Unallocated assets

Total assets

Segment liabilities

Unallocated liabilities

Total liabilities

Net assets

835.28

5,179.76

(16.39)

271.34

6,269.99

2,051.48

1.27

4,219.78

108,080.13 117,651.99 58,282.48

232.91 284,247.51

1,169.00

285,416.51

116,445.51

51,260.24 94,207.91

33.40 261,947.06

(8,365.38)

66,391.75 (35,925.43)

199.51

22,681.71

787.74

262,734.80

Capital Expenditure for the year

Depreciation on ﬁ xed assets for the year

20.30

20.67

97.08

215.00

98.77

220.80

7.33

7.91

339.71

348.15

142

Geographic Segments

Domestic

International

Total

31 March,
2013

31 March,
2012

31 March,
2013

31 March,
2012

31 March,
2013

31 March,
2012

(` in crores)

Revenue

Assets

31,873.52

25,854.07

2,161.26

1,628.02

34,034.78

27,482.09

303,396.13

253,105.72

37,161.60

32,310.79

340,557.73

285,416.51

2.1.8 Related party disclosure

The related parties of the Group are broadly classiﬁ ed as:

Promoters

The Bank has identiﬁ ed the following entities as its Promoters:

• Administrator of the Speciﬁ ed Undertaking of the Unit Trust of India (UTI-1)

•

Life Insurance Corporation of India (LIC)

• General Insurance Corporation and four Government-owned general insurance companies - New India
Assurance Co. Limited, National Insurance Co. Limited, United India Insurance Co. Limited and The Oriental
Insurance Co. Limited.

Key Management Personnel

• Mrs. Shikha Sharma (Managing Director & Chief Executive Ofﬁ cer)

• Mr. Somnath Sengupta [Executive Director & Head (Corporate Centre)] with effect from 15 October, 2012

• Mr. V. Srinivasan [Executive Director & Head (Corporate Banking)] with effect from 15 October, 2012

Relatives of Key Management Personnel

Mr. Sanjaya Sharma, Mrs. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj,
Dr. Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Mrs. Chaitaly Sengupta, Ms. Renukona
Sengupta, Mr. Niloy Sengupta, Mrs. Gayathri Srinivasan, Mrs. Vanjulam Varadarajan, Mr. V. Satish, Mrs. Camy
Satish, Ms. Ananya Srinivasan, Ms. Anagha Srinivasan, Mr. Kuppusamy, Mrs. Komalavalli, Mrs. Ranganayagi,
Mr. Srinivasa Raghavan, Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr. S. Narayanan, Mr. S. Ranganathan
and Mr. R. Narayan.

Associate

•

Bussan Auto Finance India Private Limited

Based on RBI guidelines, details of transactions with Associates are not disclosed since there is only one
entity/party in this category. [Refer Schedule 17(2)]

143

The details of transactions of the Bank with its related parties during the year ended 31 March, 2013 are given below:

Items/Related Party

Promoters

Dividend paid
Dividend received
Interest paid
Interest received
Investment of the Bank
Investment of related party in the Bank
Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank
Redemption of Subordinated Debt
Purchase of investments
Sale of investments
Management contracts
Contribution to employee beneﬁ t fund
Purchase of ﬁ xed assets
Sale of ﬁ xed assets
Non-funded commitments
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Other reimbursements from related party
Other reimbursements to related party

247.25
-
768.37
0.02
-
811.47

1,000.00
90.00
-
1,442.84
-
14.58
-
-
0.06
-
15.51
60.79
2.07
-
-

Key
Management
Personnel
0.02
-
0.16
0.10
-
4.60

Relatives of Key
Management
Personnel
-
-
0.03
-
-
-

-
-
-
-
4.25
-
-
-
-
-
0.14
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

(` in crores)

Total

247.27
-
768.56
0.12
-
816.07

1,000.00
90.00
-
1,442.84
4.25
14.58
-
-
0.06
-
15.65
60.79
2.07
-
-

The balances payable to/receivable from the related parties of the Bank as on 31 March, 2013 are given below:

Items/Related Party

Promoters

Key
Management
Personnel
-
4.23
-
2.04
-
0.08
-

Relatives of Key
Management
Personnel
-
0.51
-
-
-
-
-

(` in crores)

Total

-
9,920.16
0.16
30.17
-
158.60
3.07

-
9,915.42
0.16
28.13
-
158.52
3.07

3,817.30
-
-
-

-
-
-
-

3,817.30
-
-
-

144

The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March,
2013 are given below:

Items/Related Party

Promoters

Key
Management
Personnel
-
9.01
-
2.16
-
0.08
-

Relatives of Key
Management
Personnel
-
3.91
-
-
-
-
-

(` in crores)

Total

-
9,928.34
0.16
48.70
-
158.60
3.07

-
9,915.42
0.16
46.54
-
158.52
3.07

3,817.30
-
-

-
-
-

3,817.30
-
-

The details of transactions of the Bank with its related parties during the year ended 31 March, 2012 are given below:

Items/Related Party

Promoters

214.22
-
540.45
0.02
-
-

-
-
-
244.81
-
13.75
-
-
-
0.64
-
51.49
1.65
-
1.02

Key
Management
Personnel

Relatives of Key
Management
Personnel

0.06
-

-
-
0.01 0.03
-
0.01
-
-
-
1.84

-
-
-
-
5.51
-
-
-
-
-
0.03
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

(` in crores)

Total

214.28
-
540.49
0.03
-
1.84

-
-
-
244.81
5.51
13.75
-
-
-
0.64
0.03
51.49
1.65
-
1.02

145

The balances payable to/receivable from the related parties of the Bank as on 31 March, 2012 are given below:

Items/Related Party

Promoters

Borrowings from the Bank

Deposits with the Bank

Placement of deposits

Advances

Investment of the Bank

Investment of related party in the Bank

Non-funded commitments

Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank

Advance for rendering of services

Other receivables

Other payables

5,693.55

0.16

43.65

154.44

3.01

2,837.30

Key
Management
Personnel

Relatives of Key
Management
Personnel

(` in crores)

Total

0.31

0.24

0.02

0.26

5,694.12

0.16

43.89

154.46

3.01

2,837.30

The maximum balances payable to/receivable from the related parties of the Bank during the year ended
31 March, 2012 are given below:

Items/Related Party

Promoters

Key
Management
Personnel

Relatives of Key
Management
Personnel

(` in crores)

Total

Borrowings from the Bank

Deposits with the Bank

Placement of deposits

5,693.55

1.24

2.70

5,697.49

0.16

Advances

48.22

0.27

48.49

Investment of the Bank

Investment of related party in the Bank

155.12

0.05

155.17

Non-funded commitments

3.01

Investment of related party in Subordinated
Debt/Hybrid Capital of the Bank

Other receivables

Other payables

2.1.9 Leases

2,837.30

Disclosure in respect of assets given on operating lease

The Group has not given any asset on operating lease.

Disclosure in respect of assets taken on operating lease

146

Operating lease comprises leasing of ofﬁ ce premises/ATMs, cash deposit machines, staff quarters, electronic data
capturing machines and IT equipment.

Future lease rentals payable as at the end of the year:

- Not later than one year

- Later than one year and not later than ﬁ ve years

- Later than ﬁ ve years

Total of minimum lease payments recognised in the Proﬁ t and Loss
Account for the year

There are no provisions relating to contingent rent.

(` in crores)

31 March, 2013

31 March, 2012

591.44

1,731.72

831.28

473.36

1,393.03

724.95

613.67

570.35

The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.

There are no undue restrictions or onerous clauses in the agreements.

2.1.10 Other Fixed Assets (including furniture & ﬁ xtures)

The movement in ﬁ xed assets capitalised as application software is given below:

Particulars

At cost at the beginning of the year

Additions during the year

Deductions during the year

Accumulated depreciation as at 31 March

Closing balance as at 31 March

Depreciation charge for the year

(` in crores)

31 March, 2013

31 March, 2012

391.34

80.78

(1.22)

341.11

58.64

(8.41)

(318.58)

(262.11)

152.32

56.16

129.23

57.32

2.1.11 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:

(` in crores)

As at

31 March, 2013

31 March, 2012

Deferred tax assets on account of provisions for doubtful debts

Deferred tax assets on account of amortization of HTM investments

Deferred tax assets on account of provision for employee beneﬁ ts

Other deferred tax assets

Deferred tax assets

Deferred tax liability on account of depreciation on ﬁ xed assets

Deferred tax liabilities

Net deferred tax asset

924.57

192.52

106.76

180.43

1,404.28

26.19

743.17

184.09

82.60

40.65

1,050.51

23.07

1,378.09

1,027.44

147

2.1.12 Employee Beneﬁ ts

Group

Provident Fund

The contribution to the employee’s provident fund of the Group amounted to `86.96 crores for the year ended
31 March, 2013 (previous year `71.81 crores)

Axis Bank Ltd.

The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay
interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the Employees’
Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other reason, then the
deﬁ ciency shall be made good by the Bank. Based on an actuarial valuation conducted by an independent actuary,
there is no deﬁ ciency as at the Balance Sheet date for the Bank. The principal assumptions used by the actuary are as
under:

Discount rate for the term of the obligation

Average historic yield on the investment portfolio

Discount rate for the remaining term to maturity of the investment
portfolio

Expected investment return

Guaranteed rate of return

Superannuation

31 March, 2013

31 March, 2012

7.90%

9.13%

7.94%

9.09%

8.50%

8.35%

9.09%

8.45%

8.99%

8.25%

The Bank contributed `14.58 crores to the employee’s superannuation plan for the year ended 31 March, 2013
(previous year `14.07 crores).

Group

Leave Encashment

The actuarial liability of compensated absences of accumulated privileged and sick leaves of the employees of the
Group is given below.

As at 31 March, 2013

Axis Bank Ltd.

Axis Capital Ltd.

313.92

22.80

336.72

0.10

7.90% p.a.

7.00% p.a.

7.80% p.a.

6.00% p.a.

Privileged leave

Sick leave

Total actuarial liability

Assumptions

Discount rate

Salary escalation rate

148

As at 31 March, 2012

Axis Bank Ltd.

Axis Capital Ltd.

252.40

20.26

272.66

0.12

8.35% p.a.

6.00% p.a.

9.20% p.a.

6.00% p.a.

Axis Trustee
Services Ltd.

N.A.

Privileged leave

Sick leave

Total actuarial liability

Assumptions

Discount rate

Salary escalation rate

*amount less than `50,000

Group

Gratuity

The following tables summarize the components of net beneﬁ t expenses recognised in the Proﬁ t and Loss Account and
the funded status and amounts recognised in the Balance Sheet for the Gratuity beneﬁ t plan.

Proﬁ t and Loss Account

Net employee beneﬁ t expenses (recognised in payments to and provisions for employees)

Current Service Cost

Interest on Deﬁ ned Beneﬁ t Obligation

Expected Return on Plan Assets

Net Actuarial Losses/(Gains) recognised in the year

Past Service Cost

Total included in “Employee Beneﬁ t Expense”

Actual Return on Plan Assets

Balance Sheet

Details of provision for gratuity

Present Value of Funded Obligations

Fair Value of Plan Assets

Net Asset/(Liability)

Amounts in Balance Sheet

Liabilities

Assets

Net Asset/(Liability)

(` in crores)

31 March, 2013

31 March, 2012

18.49

9.30

(7.65)

17.89

5.50

43.53

9.63

12.03

5.56

(4.85)

23.91

(3.72)

32.93

5.31

(` in crores)

31 March, 2013

31 March, 2012

(147.25)

152.17

4.92

(3.70)

8.62

4.92

(94.82)

98.21

3.39

(1.12)

4.51

3.39

149

Changes in the present value of the deﬁ ned beneﬁ t obligation are as follows:

Change in Deﬁ ned Beneﬁ t Obligation

Opening Deﬁ ned Beneﬁ t Obligation

Current Service Cost

Interest Cost

Actuarial Losses/(Gains)

Past Service Cost

Liabilities assumed on acquisition

Beneﬁ ts Paid

Closing Deﬁ ned Beneﬁ t Obligation

Changes in the fair value of plan assets are as follows:

(` in crores)

31 March, 2013

31 March, 2012

94.83

18.49

9.29

19.91

5.50

5.85

(6.62)

147.25

61.42

12.03

5.56

24.39

(3.72)

(4.85)

94.83

(` in crores)

31 March, 2013

31 March, 2012

98.21

7.65

2.02

46.08

4.83

(6.62)

152.17

63.62

4.85

0.48

34.12

(4.86)

98.21

(` in crores)

Opening Fair Value of Plan Assets

Expected Return on Plan Assets

Actuarial Gains/(Losses)

Contributions by Employer

Assets acquired on acquisition

Beneﬁ ts Paid

Closing Fair Value of Plan Assets

Experience adjustments

Deﬁ ned Beneﬁ t Obligations

Plan Assets

Surplus/(Deﬁ cit)

Experience Adjustments on Plan
Liabilities

Experience Adjustments on Plan Assets

Axis Bank Ltd.

31 March,
2013

31 March,
2012

31 March,
2011

31 March,
2010

31 March,
2009

147.25

152.17

4.92

4.66

2.07

94.82

98.21

3.39

27.31

0.48

61.43

63.62

2.19

1.55

(0.78)

43.02

44.08

1.06

1.27

0.46

36.49

29.83

(6.66)

3.30

(0.73)

Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets

Government securities
Bonds, debentures and other ﬁ xed income instruments
Money market instruments
Equity shares
Others

150

31 March, 2013
%
40.87
38.48
18.45
2.20
-

31 March, 2012
%
42.81
43.85
9.89
2.31
1.14

Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 21 to 30 (age in years)
- 31 to 44 (age in years)
- 45 to 59 (age in years)

31 March, 2013

31 March, 2012

7.90% p.a.
7.50% p.a.
7.00% p.a.

20.14%

10.00%
1.00%

8.35% p.a.
7.50% p.a.
6.00% p.a.

20.41%

10.00%
1.00%

The estimates of future salary increases considered take into account the inﬂ ation, seniority, promotion and other
relevant factors.

The expected rate of return on plan assets is based on the average long-term rate of return expected on investments
of the Fund during the estimated term of the obligations.

As the contribution expected to be paid to the plan during the annual period beginning after the Balance Sheet date
is based on various internal/external factors, a best estimate of the contribution is not determinable.

The above information is as certiﬁ ed by the actuary and relied upon by the auditors.

Axis Capital Ltd.

The major categories of plan assets* as a percentage of fair value of total
plan assets – Insurer Managed Funds
*composition of plan assets is not available

Principal actuarial assumptions at the balance sheet date:

Discount Rate

Expected rate of Return on Plan Assets

Salary Escalation Rate

Employee Turnover
- 21 to 44 (age in years)

- 45 to 59 (age in years)

31 March, 2013
100.00

31 March, 2012
100.00

31 March, 2013

31 March, 2012

7.80% p.a.

7.50% p.a.

6.00% p.a.

9.20% p.a.

7.50% p.a.

6.00% p.a.

70.00% p.a.

1.00% p.a.

60.00% p.a.

1.00% p.a.

The estimates of future salary increases, considered in actuarial valuation, take account of inﬂ ation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.

The Company expects to contribute `0.50 crore as gratuity in the year 2013-14.

Axis Asset Management Company Ltd.

Principal actuarial assumptions at the balance sheet date:

Discount Rate

Expected rate of Return on Plan Assets

Salary Escalation Rate

Employee Turnover

31 March, 2013

31 March, 2012

7.94% p.a.

8.18% p.a.

N.A.

9.00% p.a.

10.00% p.a.

N.A.

10.00% p.a.

151

Axis Securities Limited

Principal actuarial assumptions at the balance sheet date:

Discount Rate

Expected rate of Return on Plan Assets

Salary Escalation Rate

Employee Turnover

31 March, 2013

7.80% p.a.

N.A.

6.00% p.a.

7.00% p.a.

The estimates of future salary increases considered take into account the inﬂ ation, seniority, promotion and other
relevant factors.

The expected rate of return on plan assets is based on the average long-term rate of return expected on investments
of the Fund during the estimated term of the obligations.

2.1.13 Provisions and contingencies

a) Movement in provision for frauds included under other liabilities is set out below:

Opening balance at the beginning of the year

Additions during the year

Reductions on account of payments during the year

Reductions on account of reversals during the year

Closing balance at the end of the year

(` in crores)

31 March, 2013

31 March, 2012

17.35

4.57

(5.57)

(2.38)

13.97

4.99

12.40

(0.02)

17.35

Other liabilities include provision for debit/credit card reward points, the movement of which is set out below:

Opening provision at the beginning of the year

Provision made during the year

Reductions during the year

Closing provision at the end of the year

c) Movement in provision for other contingencies is set out below:

Opening provision at the beginning of the year

Provision made during the year

Reductions during the year

Closing provision at the end of the year

(` in crores)

31 March, 2013

31 March, 2012

43.28

28.03

(3.42)

67.89

25.01

20.28

(2.01)

43.28

(` in crores)

31 March, 2013

31 March, 2012

0.81

561.55

(180.57)

381.79

36.44

0.38

(36.01)

0.81

The above provision includes contingent provision for advances/other exposures, legal cases and other
contingencies.

152

2.1.14 Description of contingent liabilities:

Claims against the Group not acknowledged as debts

These represent claims ﬁ led against the Group in the normal course of business relating to various legal cases
currently in progress. These also include demands raised by income tax and other statutory authorities and
disputed by the Group.

Liability on account of forward exchange and derivative contracts

The Bank enters into foreign exchange contracts, currency options/swaps, interest rate/currency futures and
forward rate agreements on its own account and for customers. Forward exchange contracts are commitments
to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to
exchange cash ﬂ ows by way of interest/principal in two currencies, based on ruling spot rates. Interest rate swaps
are commitments to exchange ﬁ xed and ﬂ oating interest rate cash ﬂ ows. Interest rate futures are standardised,
exchange-traded contracts that represent a pledge to undertake a certain interest rate transaction at a speciﬁ ed
price, on a speciﬁ ed future date. Forward rate agreements are agreements to pay or receive a certain sum
based on a differential interest rate on a notional amount for an agreed period. A foreign currency option is an
agreement between two parties in which one grants to the other the right to buy or sell a speciﬁ ed amount
of currency at a speciﬁ c price within a speciﬁ ed time period or at a speciﬁ ed future time. An Exchange Traded
Currency Option contract is a standardised foreign exchange derivative contract, which gives the owner the
right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-
agreed exchange rate on a speciﬁ ed date on the date of expiry. Currency Futures contract is a standardised,
exchange-traded contract, to buy or sell a certain underlying currency at a certain date in the future, at a
speciﬁ ed price.

Guarantees given on behalf of constituents

Acceptances, endorsements and other obligations

These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the Bank’s
customers that are accepted or endorsed by the Bank.

Other items for which the Group is contingently liable

153

2.1.15 Statement pursuant to Section 212 of the Companies Act, 1956, relating to subsidiary companies.

In terms of General Circular No. 2/2011 of the Ministry of Corporate Affairs, Government of India dated 8 February,
2011.

(` in crores)

For the year ended 31 March, 2013

Axis
Capital Ltd.

Axis
Private
Equity Ltd.

Axis
Trustee
Services
Ltd.

Axis
Mutual
Fund
Trustee Ltd.

Axis
Asset
Management
Company Ltd.

Capital

Reserves and Surplus

145.00

89.31

15.00

5.30

1.50

27.87

0.05

0.08

174.00

(123.98)

Axis
Finance Private
Ltd. (formerly
Enam Finance
Pvt. Ltd.)

Axis
Securities
Ltd.^

Enam
Securites
Europe
Ltd.^@

5.75

124.78

23.00

(0.23)

8.22

7.30

Axis U.K.
Ltd.@

Total Assets (Fixed Assets +
Investments + Other Assets)

Total Liabilities (Borrowings +
Other Liabilities + Provisions)

Investments

Total Income

Proﬁ t/(Loss) Before Taxation

Provision for Taxation

Proﬁ t/(Loss) After Taxation

Proposed Dividend and Tax
(including cess thereon)

600.27

20.63

39.69

0.15

103.76

17.48

130.82

46.71

15.60

365.96

49.85

393.69

162.79#

6.07

156.72

0.33

9.77

1.87

0.36

1.51

10.32

24.15

18.34

5.90

12.44

2.19

0.02

0.11

0.14

53.74

22.12

60.25

(6.34)

17.48

0.29

16.27

15.46

5.21

10.25

23.94

0.08

13.38

(2.40)

(0.08)

0.01

(0.07)

@ Amount in INR equivalent of GBP (£1 = `82.2275 as on 31 March, 2013)

^ Axis Securities Ltd. and Enam Securities Europe Ltd. are wholly owned subsidiaries of Axis Capital Ltd. (a wholly owned

subsidiary of Axis Bank Ltd.)
amount less than `50,000
includes `130.23 crores of proﬁ t of business acquired under demerger from appointed date i.e. 1 April, 2010 to 31 March,
2012

2.1.16 Comparative Figures

Previous year ﬁ gures have been regrouped and reclassiﬁ ed, where necessary to conform to current year’s presentation.

For Axis Bank Ltd.

Sanjiv Misra
Chairman

K. N. Prithviraj
Director

V. R. Kaundinya
Director

S. B. Mathur
Director

Samir K. Barua
Director

Shikha Sharma
Managing Director & CEO

Somnath Sengupta
Executive Director
& Head (Corporate Centre)

V. Srinivasan
Executive Director
& Head (Corporate Banking)

P. J. Oza
Company Secretary

Sanjeev K. Gupta
President & CFO

Date : 24th April, 2013
Place: Mumbai

154

BUSINESS RESPONSIBILITY REPORT

Section A

General Information

Axis Bank (henceforth referred to as “the Bank”) is a private sector bank which, as on 31st March 2013, has 1,947 domestic
branches including extension counters and 11,245 ATMs spread across the country. The Bank also has branches in Singapore,
Hong Kong, DIFC (Dubai International Financial Centre) and Colombo, as well as representative offices in Shanghai, Dubai and
Abu Dhabi. The Bank has six subsidiaries in India in the financial services sector and one subsidiary in the United Kingdom - Axis
U.K. Limited, which as on 31st March 2013 had not yet commenced operations.

The three major product and service categories offered by the Bank are:

a. Deposits

Loans

Investments and foreign exchange

Corporate Identity Number

L65110GJ1993PLC020769

Name of the Company

Axis Bank Limited

Registered Office

Website

E-mail id

“TRISHUL”, Third Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad - 380 006

www.axisbank.com

brr@axisbank.com

Financial Year reported

2012-13

Sector

Section B

Financial Information

National Industrial Classification 2008
Section K : Financial and Insurance Activities
Code : 64191

The Bank has a balance sheet size of `340,560.66 crores, and paid-up capital of `467.95 crores as on 31st March 2013. The
Bank earned a total income of `33,733.68 crores for the financial year 2012-13 and the profit after tax for the year was
`5,179.43 crores.

The Corporate Social Responsibility (CSR) initiatives of the Bank are channeled through Axis Bank Foundation (ABF), a Trust
which gives strategic direction to the philanthropic activities of the Bank. ABF participates in various socially relevant endeavors
in the fields of education, sustainable livelihoods, public health and medical relief with focus on the underprivileged sections
of society. The Bank contributes upto one per cent of its net profit after tax annually to the Foundation for its CSR initiatives,
and the amount contributed for the year 2012-13 is `42.42 crores.

Details of the initiatives that the Bank has undertaken are detailed in Section E of this report, under “Principle 8 – Impact on
Social and Economic Development”.

Section C

Subsidiaries & Other Entities

The Bank has six subsidiaries in India and one in the UK, which have been set up to look after various banking-related
ancillary functions such as retail asset sales, retail broking, managing equity investments, providing venture capital support
to businesses, trusteeship activities and the mutual fund business. These subsidiaries are relatively small at present and their
involvement in the Bank’s BR initiatives has, therefore, been proportional to their size.

155

Section D

Business Responsibility

Governance

Director responsible for implementation of the BR policy

DIN Number

Name

Designation

02150691

Shri Somnath Sengupta

Executive Director & Head (Corporate Centre)

Business Responsibility Head

DIN Number

Name

Designation

N.A.

Shri C. Babu Joseph

ET & CEO (Axis Bank Foundation)

Telephone number

e-mail id

91-22-2425 2201

brr@axisbank.com

The Sustainability Committee will meet at least half-yearly to evaluate the Bank’s sustainability and CSR policies, programs and
performance.

Scope of the BR Report

The report primarily covers the activities of the Bank during financial year 2012-13, as well as any initiatives that commenced
earlier but have led to outcomes during 2012-13.

This is the first Business Responsibility Report of the Bank and will be published, henceforth, on an annual basis. The report
forms part of Annual Report of the Bank for the financial year 2012-13 which is available at www.axisbank.com under the
Section Shareholders’ Corner.

Principle-wise Policies

Questions

Remarks

Does the Bank have policy/policies for principles laid down
in National Voluntary Guidelines on Social, Environmental
and Economic Responsibilities of Business?

Has the policy been formulated in consultation with the
relevant stakeholders?

Does the policy conform to any national/international
standards?

Has the policy been approved by the Board? If yes, has
it been signed by MD/owner/CEO/appropriate Board
Director?

Does the Bank have a specified committee of the Board/
Director/Official to oversee the implementation of the
policy?

The Bank has drawn up a Sustainable Development
and Corporate Social Responsibility Policy based on the
principles of National Voluntary Guidelines on Social,
Environmental and Economic Responsibilities of Business.

The Policy has been framed taking into account the
expectations of diverse stakeholders, recognizing the
needs of society and the environment.

The Bank’s Sustainable Development and CSR Policy is
based upon the National Voluntary Guidelines on Social,
Environmental and Economic Responsibilities of Business
issued by the Ministry of Corporate Affairs, Government
of India in July 2011.

The Sustainable Development and CSR Policy has been
approved by the Board and signed by the MD & CEO.

The Bank has a Sustainable Development and CSR
Committee to oversee the implementation of the Policy.

Sr.
No.

156

Questions

Sr.
No.

Remarks

Link for the policy to be viewed

www.axisbank.com

Has the policy been formally communicated to all relevant
internal and external stakeholders?

Does the Bank have in-house structure to implement the
policy/policies?

The Bank’s Sustainable Development and CSR Policy is
made available to all internal and external stakeholders
through the Bank’s official website : www.axisbank.com

The Bank has constituted a Sustainable Development and
CSR Committee comprising senior officials of the Bank
to monitor the implementation of the Policy and provide
guidance for fulfillment of the Bank’s social responsibility.
The Committee is headed by the Executive Director &
Head (Corporate Centre.)

Does the Bank have a grievance redressal mechanism
related to the policy/policies to address stakeholders’
grievances related to the policy/policies?

Grievances are to be brought to the notice of the
Business Responsibility Head as mentioned in Section D
- Governance.

Has the Bank carried out independent audit/evaluation
of the working of this policy by an internal or external
agency?

The Bank has
formulated a Sustainable
Development and CSR Policy. The effectiveness of the
Policy will be evaluated in future.

recently

Section E

Principle-wise Performance

Principle 1 - Governance

It has been the endeavor of the Bank to attain corporate governance standards of the highest level. A major part of the
recommendations contained in the Corporate Governance Voluntary Guidelines (2009) issued by the Ministry of Corporate
Affairs have been adopted by the Bank and we are presently evaluating the process and means of implementing any residual
recommendation of the Guidelines.

The Bank has put in place various Codes of Conduct such as Fair Practices Code, Code of Commitment to its Customers, Code
of Right Selling for Liability & Investment Products, Code of Banks’ Commitment to Micro and Small Enterprises and Code of
Conduct for Direct Selling.

The Employees’ Code of Conduct of the Bank lays down expected behaviour from employees of the Bank (including those on
deputation to subsidiaries and other organisations) and covers the aspects of ethics, bribery and corruption. The Code guides
employees to discharge their duties with integrity, honesty, devotion and diligence and to not act in a manner unbecoming
of an employee of the Bank, or in a manner that is likely to tarnish the image of the Bank. Subsidiary companies have also
adopted the Code of Conduct of the Bank for their employees.

The Bank has put in place grievance redressal mechanisms to ensure that customer and employee concerns are addressed
promptly and fairly. The Bank has also put in place a policy and framework to enable responsible and secure whistle blowing,
intended to encourage employees to report suspected or actual occurrence of illegal, unethical or inappropriate action,
behaviour or practices by staff without fear of retribution or reprisal.

Principle 2 – Sustainability of Products and Services

The Bank has recently adopted an “Environment & Social Safeguard Policy” (ESSP), for carrying out environmental and social
due diligence, formulated in compliance with the International Finance Corporation (IFC) Performance Standards. The Bank, by
developing and offering financial products and services that, directly or indirectly, lead to long-term environmental benefit and
social development, is committed to providing banking services to a wider section of population.

Social Commitment

The Bank offers products and services that serve the under-privileged and vulnerable groups, a few of which are listed below:

157

(cid:2) Electronic Benefit Transfer (EBT)

The Bank facilitates the disbursement of Government grants (wages/pension) directly to beneficiaries in unbanked areas,
by opening accounts for beneficiaries and providing Smart Cards to them. This facilitates assimilation of the section of
population in unbanked and under banked areas into the formal banking system.

(cid:2) Remittances

The Bank uses a Banking Correspondent model to facilitate fund transfers by migrant workers in urban areas to their
dependents in their native villages/towns. This is carried out either the same day or the next working day at a nominal cost.

(cid:2) Micro Loans and Insurance

The Bank has recently started disbursing micro loans at the village level in unbanked and under banked areas, with the
first such project in the state of Tamil Nadu, covering more than 100 villages. The objective is to encourage sustainable
economic activity leading to generation of income. The following types of loans are covered under the project.

Joint Liability Group: A group of 5 borrowers is formed and the loan is extended to the individual members. The
liability of repayment is jointly shared by the group members.

b. Micro Enterprise Loans: Loans are granted to individual borrowers engaged in retailing (shopkeepers, hawkers etc.).

c. Micro Cattle Term Loan: These loans are granted for the purchase of cattle.

(cid:2) Micro Insurance

The project to provide affordable insurance has been implemented in the migrant-intensive urban pockets of Delhi,
Chennai and Bengaluru. Two types of insurance are extended by the Bank.

a. Group Term Life Insurance

b. Accidental Insurance

The project provides insurance coverage to the disadvantaged and low-income group of people such as labourers and
artisans at low premium.

Environmental Commitment

The ESSP sets guardrails for environmental and social considerations while appraising and financing projects which may help
prevent or mitigate any adverse impact/risk to the environment or people. Disbursement to a project is made only after
ensuring it has MoEF (Ministry of Environment and Forests)/environmental approvals for the commencement of work. The
Bank has negotiated a Line of Credit of USD 70 million from IFC to facilitate the funding of projects in renewable energy, clean
technology and other energy-efficiency projects.

A snapshot of the funding for implementation of renewable energy projects as on 31st March 2013 is as under:

Wind Power

Solar Power

Biomass

Mini-Hydel

Total

Power Generation
Capacity (MW)

Outstanding
( ` crores)

476

275

908

998

412

228

100

1,738

The Bank has extended corporate banking/credit related services to private companies towards funding or part-funding of
projects for setting up units for solid waste management through processing, conversion and disposal. It is ensured that in the
Bank’s Corporate Office itself waste and sewage generated by the Bank is handled in an environment-friendly manner.

158

Local Procurement

The Bank aims at local procurement, supporting a supply chain that contributes to the economic development of the
communities in which it operates, encouraging procurement from small and medium size enterprises (SMEs).

Principle 3 – Employee Well-being

Employee demographics

GENDER-WISE BREAKUP

Female

Male

The total manpower of the Bank as on 31st March 2013 was 37,901.

19%

Employee Category
Permanent employees
Temporary/contract/casual workforce

Employee Category

Female employees
Disabled employees

Employee Welfare

Number
37,901
-

Number

7,117
108

81%

The employees of the Bank are its most important asset and the organization ensures that it meets its moral, legal, ethical and
humanitarian responsibilities towards them.

Axis Bank group (the Bank and its subsidiaries) does not employ any person below the age of 18 (eighteen) years at the
workplace. No employee of the Bank is made to work against his/her will, or is subject to corporal punishment or to coercion
of any type related to work.

The Bank is an equal opportunity employer and is committed to hiring, developing and promoting individuals who best meet
the requirements of available positions, possess the required competencies, experience and qualifications to carry out the
assigned tasks and have the potential for growth within the organization.

Complaints Regarding Labour Practices

The Bank conducts a number of employee engagement initiatives aimed at promoting employee well-being. It focuses on
effective employee communication, encouraging and facilitating resolution of complaints and grievances, and fostering
bonding between employees and their families. Medical facilities are available at the Corporate Office to ensure that any
health concerns are adequately addressed.

The Bank takes all necessary measures to ensure a harassment-free workplace and has instituted a Complaints Redressal
Committee for redressal of complaints and to prevent sexual harassment.

Employee Associations

While the Bank respects the right of ‘Freedom of Association’ and collective bargaining, there is at present no employees’
union. The Bank ensures that employee grievances are received and addressed through various means such as the Whistle
blower Policy and HResponse (a help desk for employee complaints to HR).

Employee Training Programs

Talent Management, Learning and Development and Employee Engagement have been key focus areas for the Bank. With
an eye towards developing and providing trained manpower through a cost-effective and time-efficient process, the Bank has
created alternate talent pipelines by entering into arrangements with Training and Education Institutes. The Bank has also built
up learning infrastructure to ensure availability of skilled and empowered workforce.

Learning at Axis

The Learning and Development Team at the Bank is geared towards facilitating the learning process across all levels through a
blended learning approach of classroom programs, external programs, certification programs and e-learning modules.

159

The following table indicates the number of employees who have undergone skill upgradation training in the past year.

Skill upgradation

Permanent male employees

Permanent female employees

19,349

4,683

The Bank conducts regular training for safety and security measures like emergency evacuation drills, fire / life safety training,
first-aid training at Corporate Office/other locations. Sessions are also arranged at the branch level through security service
providers.

Leadership Development

As part of the leadership development initiative, the Bank has partnered with best-in-class leadership trainers of the country
to coach key position holders and unit heads in the Bank on fundamentals of managing self and team leadership through a
series of ‘Inspired Leadership’ workshops.

Young Talent Development

Axis Ahead, the Management Trainee program, has been in operation from 2001 and is designed to provide training across
departments and locations for a holistic learning experience to the young managers who join the Bank every year from premier
B-schools across India. The learning is “experiential” in nature and is not limited to job-related skills and competencies alone.

Principle 4 – Responsiveness towards our Stakeholders

With a wide geographical reach and large range of financial products and services, the Bank engages with numerous
stakeholders, including shareholders and investors, customers, employees, suppliers, local communities, regulatory entities,
government and policy makers. The engagement with multiple stakeholders occurs on an ongoing basis through formal and
informal channels. The Bank has also recently launched an online platform called ProgressTogether.in to leverage the power
and reach of social media to build a seamless connect and engagement experience with various stakeholders.

Employee Engagement

The Bank has been conducting its annual Employee Engagement Study for several years, which seeks to capture and analyze
employee concerns and draw up action plans to address them. The Bank uses a third-party framework, globally regarded as
one of the best, for administering and analyzing the results of the study, with a focus on measuring and improving Employee
Engagement Quotient.

Apart from these steps, the Bank undertakes other employee engagement initiatives such as conducting Intra-bank events and
celebrating festivals and special days.

Engagement with marginal groups

The Bank understands that some stakeholder groups may be considered marginal because of their relatively lower numbers,
power, affluence, etc. The Bank has put in place methods and mechanisms to cater to such groups within its capacity as a
financial services provider.

Reaching out to Micro, Small and Medium Enterprises

The Bank is engaged in reaching out to Micro, Small and Medium Enterprises (MSME), which are recognized as playing an
important role in the economic activity of the country. Apart from specialized financial products and services offered to this
segment, the Bank has instituted the “Business Gaurav Awards” (in partnership with Dun & Bradstreet Information Services
India Pvt. Ltd.) to recognize top performing MSMEs. The top performing business entity in each category across 14 sectors is
recognized and awarded.

The Bank is committed towards increased lending to priority sectors and towards this end, the Bank has designed simplified
products for faster credit delivery at concessional pricing.

Principle 5 – Rights of stakeholders

The Bank’s commitment to its stakeholders is manifested through its Sustainable Development and Corporate Social
Responsibility Policy and bears the responsibility of behaving as a conscientious corporate citizen across all geographies and
demographic categories.

160

Customers

The Bank has high standards for its conduct of business, in order to ensure that interactions with all customers are based on
ethics and integrity. The values of the Bank and its Code of Conduct guide business operations and customer relationships.

Supply Chain and Network

The Bank is dependent on numerous partners and suppliers, who help the Bank compete more effectively in the marketplace.
The Bank and its subsidiaries are expected to manage their businesses with high ethical standards and respect for human rights.

Communities

The Bank is mindful of the people and environment that may potentially be affected by its business and aims to be a positive
influence in communities.

Principle 6 – Caring for the Environment

The banking sector has a lower environmental impact than many other sectors of the economy. Nevertheless, there is wholesome
and sincere effort by the Bank to ensure that its operational, procurement and consumption practices are environment-friendly
to the extent possible.

Axis House

At its Corporate Office located in Mumbai, the Bank
has made a significant endeavor in contributing to a
cleaner environment, with Axis House being designed
and constructed as a Platinum LEED-Certified “green
building”.

Listed below are some of the practices followed at Axis
House that lead to a considerably lower impact on the
environment.

•

Renewable energy is generated through solar power
plant

•

Renewable energy is used to power emergency lights

• Use of natural light is maximised

• All light fixtures are energy star-rated

• Motion sensors are installed throughout the building

•

Sewage treatment plant has been installed for re-using waste water

• Urinal and wash basin sensors installed

•

Rainwater harvesting system has been installed

Provision of quality indoor air for safety and comfort

• Dry waste is recycled

• Greenguard compliance certification obtained for furniture/fixtures & chairs.

•

Toxicity levels of carpets, furniture, chairs, paint and adhesives are low, contributing towards a safe and healthy environment
for all occupants

• Chairs and other office furniture are made of components with a high percentage of recycled materials

Green Banking

Over the past two years, the Bank has embedded in its culture, the practices of Green Banking, as part of the endeavor to carry
out its part to protect the environment. In doing so, it has successfully brought the entire Axis Bank family together.

161

A few of the initiatives that have been taken under this program are outlined below.

• Car-pooling initiative has been introduced to reduce carbon footprint

•

The Bank encourages customers to subscribe to the use of e-statements and other electronic formats in its communication1,
significantly reducing paper consumption

• Annual reports are being sent through e-mail: in the previous year, 61% of all shareholders received their annual reports via e-mail
• Dry waste is collected at Axis House for recycling and manufacture of bio-degradable and eco-friendly bags and notepads
• We have moved to e-greetings instead of the normal paper greetings sent earlier

The Bank’s employees are trained and encouraged to follow the principles of Reduce, Reuse and Recycle in all decisions
regarding consumption and which may lead to waste generation. The measures that arise out of these principles pay rich
dividends by ensuring that a healthier environment is left for coming generations. The Bank has ensured that the emissions and
wastes generated from its operations have always remained well within the limits specified by various local and national laws.
The Bank has received no notices from any of the relevant Pollution Control Boards in this regard.

The Bank’s environmental commitment in the lending function has also been outlined in Principle 2.

Solar ATMs

The Bank has recently initiated solar-based UPS for ten ATMs under its Independent ATM Deployment (IAD) model. These ATMs
are deployed by Independent ATM Deployers in Coimbatore circle. The ATM uptime and overall performance of these ATMs is
being analyzed for performance.

Principle 7 – Policy Advocacy

Policy advocacy is any effort to influence public policy by providing information, speaking to decision makers, demonstrating
benefits for policy change and other such activities that encourage the adoption of the desired policy change. Policy advocacy
for the Bank is not just about lobbying with government agencies to secure certain benefits - it is also about taking results and
best practices and sharing them with the industry and larger society.

Indian Banks Association (IBA)
Fixed Income Money Market and Derivatives Association (FIMMDA)
Foreign Exchange Dealers Association of India (FEDAI)

The Bank is a member of various associations, among which are:
•
•
•
• Association of Investment Bankers of India (AIBI)
• Confederation of Indian Industry (CII)

• Associated Chambers of Commerce & Industry of India (ASSOCHAM)

The Bank has been utilizing the collective platforms of such associations/bodies to undertake policy advocacy.

1 Account and credit card statements, welcome letters, Demat statements, loan payment schedules, password generation, duplicate password

and pin generation process, etc.

Principle 8 – Impact on Social and Economic Development

Social initiatives

The Bank carries out its Corporate Social Responsibility (CSR) initiatives under the aegis of the Axis Bank Foundation (ABF),
which was set up in 2006 as a Public Trust. The Bank has been annually contributing upto 1% of its profits after tax to the
Foundation.

As of 31st March 2013, ABF has supported 96 NGOs and amounts disbursed under various programs aggregate to `81.97 crores.

The Bank’s employees are also encouraged to actively participate in the various initiatives and projects undertaken by ABF.

Axis Bank Foundation

During the initial five years, the Foundation’s work was primarily focused on education. ABF partnered with sixty NGOs to
provide equitable education to various underprivileged individuals across the country. ABF also supported public health and
highway trauma care with three NGOs.

In 2011, ABF ventured into providing sustainable livelihoods to the disadvantaged. ABF partnered with seventeen NGOs across
the country, with an ambitious target of providing one million sustainable livelihoods by 2017.

162

Today ABF makes a significant difference in the lives of people across 163 districts in 19 states through 40 different Livelihood
and Education programs.

Our programs

(cid:2)

Education
(cid:2)

Balwadis
Training the Trainers
Supplementary Education

Sustainable Livelihoods
(cid:2)

Agricultural and Extension Services
Skill development
Cooperatives

Public Health and Medical Relief
(cid:2)
Highway Trauma Care

Livelihood Programs:

(cid:2)

Vocational Training
Pure Education

(cid:2)

Artisanal crafts
(cid:2) Other programs

(cid:2)

Rural Medical Relief

Providing sustainable livelihoods is a means to alleviate poverty and bring
about positive changes in the socio-economic conditions of a community
and of the country. Keeping in mind the need to address issues in regard to
employment and employability, ABF focuses on developing and facilitating
sustainable livelihoods.

No. of programs
Number of States covered
Number of Districts covered
Target beneficiaries (upto 2017)

17
17
136
~6,23,000

20%

SPREAD OF EXPENDITURE ON
LIVELIHOOD PROGRAMS

29%

51%

Agriculture

Vocational training

Others

Indicative Project

Project Name
Region
Coverage
Purpose

Target Beneficiaries
Commitment

Education Programs:

Kherwadi Social Welfare Association
West
Maharashtra & Vidarbha
Axis Bank Foundation in association with Kherwadi Social Welfare Association (KSWA) provides
vocational training under various trades to the unmotivated school drop-outs and underprivileged
youth under their “Yuva Parivartan (YP)” initiative.
The target is to reach out to youths through 68 vocational training centres.
68,846
~`25 crores

The Bank believes that education is the key to alleviating poverty,
and works with NGOs for children, making efforts to reach out to as
many people as possible in the education space. It also aims to help
create capabilities in terms of skills and employment opportunities for
disadvantaged/differently-abled people.

SPREAD OF EXPENDITURE ON
EDUCATION PROGRAMS

34%

39%

Supplementary education

No. of programs

Number of States covered

Number of Districts covered

No. of beneficiaries

~60,000

27%

Mentally/physically
challenged beneficiaries

Others

163

Indicative Project

Name of Organization
Region
Coverage

Purpose

Target Beneficiaries
Commitment

Eklavya Foundation
West
5 blocks of Madhya Pradesh
(Shahpur, Hoshangabad, Pipariya, Harda, Dewas)
Supporting the supplementary education of students in Classes 1 to 5 through 150 Shiksha
Protsahan Kendras (SPKs) in 5 blocks of Madhya Pradesh.
Besides the SPKs, Eklavya will work with 27 formal schools by using the Eklavya pedagogy
thereby strengthening their performance and also work towards building partnerships with
other NGOs to replicate the Eklavya model.
5,566
~ `1 crore

Public Health and Medical Relief

The highway trauma care initiative of ABF has assisted ~11,000 major accident victims and ~7,000 minor accident victims till
31st March 2013. The program has a tie up with 289 ambulances, 139 hospitals and 85 police stations. The program covers
~4,200 kms across Rajasthan, Maharashtra, Kerala and Gujarat.

Indicative Project

Name of Organization
Region
Coverage
Purpose
Commitment

Lifeline Foundation
West, North, South
Maharashtra, Rajasthan (Jaipur), Kerala (Cochin) and Gujarat
Supporting the operation of Lifeline’s Highway Rescue Project
~`0.85 crores

Employee Participation

Besides supporting the philanthropic initiatives of ABF, the Bank also encourages employees to participate and become socially
responsible citizens. ABF has an Officer Engagement Program, which includes a Payroll Program - “Axis Cares” and officers are
also encouraged to get involved in various volunteering activities.

In addition to these, ABF also organizes events like blood donation drives, clothes, books and toys collections, exhibitions of
NGOs, talks by senior executives of the NGO partners, Talking Book Library etc. in order to involve Bank employees across the
country, who are encouraged to actively participate.

•

Events are conducted across Corporate Office, circles and branches. Some events are driven by ABF centrally and others
are decentralized at circle/branch level. Regular suggestions/inputs are given to Circle Heads/Branch Heads to carry out
CSR activities in their geographical area.

Branches provide support to programs that are conducted by ABF in their vicinity.

Branches are encouraged to interact with our NGO partners and explore opportunities for volunteering in the program.

Events
Axis Cares (Payroll program of ABF)

Green Banking initiatives

NGO Exhibitions

164

Particulars
ABF has a donor base of more than 7,500 individuals with a monthly
collection of `14.63 lacs
ABF recycles dry waste into note pads, note books and envelopes
which are used at our Corporate Office and other branch offices.
Till date, more than 100,000 kgs of dry waste has been recycled from
the Corporate Office and 34 branch offices. This dry waste has been
converted into about 12,000 eco-friendly note pads, note books and
envelopes which are used at Corporate Office and branches of the
Bank.
56 exhibitions were held with sale of `13.27 lacs to support NGO
products.

Events
Volunteering Programs - Gift of Life (Blood Donation) 27 blood donation drives have been conducted with ~2,000 units of

Particulars

Basket of Hope (Collection Drives)

Talking Book Library

Other Activities, Events and Inspirational Hours

collection.
Regular health talks are held to create awareness.
Clothes, books and toys are collected during these drives at Axis
House and various branches.
These are donated to NGOs like Goonj and other deserving
organizations. This year, 18 such drives have been conducted and
more than 10,000 kgs of goods were collected and donated.
ABF volunteers record educational material (ICSE syllabus) for visually
challenged students.
16 events have been conducted in the form of NGO interactions,
visits, events, children parties.
10 talks were delivered by senior personnel from NGOs, creating
awareness on the NGO’s profile and work that they do.

Principle 9 – Customer Focus

The Bank considers customer-centricity as the key pillar and guiding principle for delivering a differentiated and unique banking
experience for its customers.

Customer-centricity is one of the core values adopted and practiced by each of the Bank’s employees as part of the corporate
vision of being the preferred financial services provider. As part of a continuing dialogue with its customers, the Bank has
undertaken various customer engagement initiatives such as customer satisfaction surveys, ‘Let’s Talk’ programs etc.

Customer Communication and Appropriate Product Disclosures

The Bank follows the requirements of various codes in this regard:

Code of Commitment
to Customers

A voluntary code which sets minimum standards of banking practices which have to be followed
while dealing with individual customers.

Code of Right Selling

In order to ensure selling of a customized financial product to a client based on his profile and need.
The objective is to ensure that there is complete transparency in all dealings with customers.

Fair Practices Code

The code deals with aspects such as providing comprehensive information including information
about fees and charges if any payable for processing and amount of such fees refundable in case
of non-acceptance of application, prepayment options and other matter which affects the interest
of the borrowers of all categories of loans, irrespective of the amount of loan sought by them.

Consumer Education:

The Bank conducts Van Campaigns across rural markets to enhance financial inclusion and education, and a special education
series called KrishiPragatishaala for farmers, which provides them a platform to interact with agricultural experts and undergo
lessons in enhancing productivity.

Regional Communication:

In a multi-lingual country like India, the Bank believes that it is important to reach out to people in a language they are most
comfortable with. Towards this end, we have mandated the usage of regional language in all our communication across our
offices and branches in the country. The Bank’s existing Liabilities Contact Centre offers services in 11 languages, amongst the
highest in the industry.

Customer Complaints

Pending Complaints
As on 31.3.2012

Complaints received
during 2012-13

Complaints redressed
during 2012-13

Pending Complaints
As on 31.3.2013

2,188

197,733

198,164

1,757

165

These complaints refer to various aspects of the Bank’s operations and include among other issues – systems, processes and
technology, delay/deficiency in service and charges levied by the Bank.

There have been no cases filed relating to unfair trade practices, irresponsible advertising and/or anti-competitive behavior in
the past five years.

Customer Satisfaction Studies

The Bank uses different methods to gauge and understand customer satisfaction levels. A specially constituted Standing
Committee of Customer Service with representatives from various functions of the Bank spearheads targeted customer
engagement activities.

The Customer Transaction Survey is an ongoing survey that is conducted with a sampling of customers to understand their
experience with different aspects of the Bank. These interviews help the Bank have a pulse of its customers and ensure ongoing
customer satisfaction.

The Bank also carries out at a larger scale, an annual process called the Annual Customer Satisfaction Survey. This is carried
out by a third party agency and uses online surveys and face-to-face interviews to solicit feedback from the customers across
product ranges and vintage about their experience with different aspects of banking with Axis Bank. Through the Transaction
and the Annual surveys, the Bank reaches out to close to 55,000 customers.

In addition to these structured survey mechanisms, the Bank also has built a platform called Let’s Talk where it invites customers
to its branches and discusses areas of improvements based on their experience with the Bank. This is a monthly exercise across
all the Bank’s branches in the country and the results are fed back to the Customer Service Committee.

Branches

Customer
Touch Points

ATMs

Mobile Banking

Call
Centre

Point of
Sale

Internet Banking

Traditional Channels

Alternative Channels

The outcome of these surveys are taken to be key inputs for the Bank’s Customer Service Committee, helping it understand
areas where it can bring about structural, organizational or process improvement and, therefore, help achieve its objective of
being a truly customer-centric Bank.

166

DISCLOSURES UNDER THE NEW CAPITAL ADEQUACY FRAMEWORK
(BASEL II GUIDELINES) FOR THE YEAR ENDED 31st MARCH, 2013

I. SCOPE OF APPLICATION

Axis Bank Limited (the ‘Bank’) is a commercial bank, which was incorporated on the 3rd December 1993. The Bank is the
controlling entity for all group entities.

The consolidated ﬁ nancial statements of the Bank comprise the ﬁ nancial statements of Axis Bank Limited and its
subsidiaries (including step-down subsidiaries) that together constitute the ‘Group’. The Bank consolidates its subsidiaries in
accordance with Accounting Standard 21 (AS-21) ‘Consolidated Financial Statements’ issued by the Institute of Chartered
Accountants of India on a line-by-line basis by adding together the like items of assets, liabilities, income and expenditure.
While computing the Bank’s Capital to Risk-weighted Assets Ratio (CRAR), the Bank’s investment in the equity capital of
the wholly-owned subsidiaries is deducted, 50% from Tier-1 Capital and 50% from Tier-2 Capital. The table below lists
Axis Bank’s Subsidiaries (including step-down Subsidiaries)/Associates/Joint ventures consolidated for accounting and their
treatment for capital adequacy purpose.

Sr. No. Name of the entity

Nature of Business

Holding Basis of Consolidation

Axis Capital Ltd.
(Erstwhile Axis Securities
and Sales Ltd.)

Axis Private Equity Ltd.

Investment
institutional
banking,
broking, retail broking and marketing
of retail asset products, credit cards and
other products of the Bank
Managing investments, venture capital
funds and off-shore funds

100% Fully consolidated

Axis Trustee Services Ltd.

Trusteeship services

100% Fully consolidated

Axis Asset Management
Company Ltd.
Axis Mutual Fund Trustee Ltd.

Axis Finance Pvt. Ltd.
(Erstwhile Enam Finance Pvt.
Ltd.)
Axis U.K. Ltd. (1)

Asset management for Axis Mutual Fund

75% Fully consolidated

Trustee company for Axis Mutual Fund

75% Fully consolidated

Non-banking ﬁ nance company

100% Fully consolidated

Banking company

100% Fully consolidated

Axis Securities Ltd..

(2)

Retail broking

Enam Securities Europe Ltd.(2)

To advise and arranging deals in
investments

Fully consolidated

10.

11.

Bussan Auto Finance India Pvt.
Ltd.(3)

Enam International Ltd.

(2) (4)

Non-banking ﬁ nance company

26% Treated as an associate

Arranging credit or deals in investments
and advising on ﬁ nancial products

Not consolidated

Axis U.K. Ltd. had ﬁ led 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.

Step-down subsidiary. 100% of its share capital is owned by Axis Capital Ltd., a wholly owned subsidiary of the Bank.

The investment in Bussan Auto Finance India Private Ltd. is not deducted from the capital funds of the Bank but is
assigned risk-weights as an investment.

The company has given notice of its voluntary dissolution with effect from 17th January 2013. Therefore, its ﬁ nancial
results are not consolidated.

167

There is no deﬁ ciency in capital of any of the subsidiaries of the Bank as on 31

st March 2013. The Bank actively

monitors all its subsidiaries through their respective Boards and provides regular updates to its Board of Directors.

As on 31st March 2013, the Bank has an investment of `57.45 crores in Max Life Insurance Company Limited which
is not deducted from the capital funds of the Bank, but is assigned risk weights as an investment for the purpose of
Basel II, the details of which are given below:

Country of Incorporation :
Ownership Interest

India
less than 3%

The quantitative impact on regulatory capital of using risk weighted investments method versus using the deduction
method at 31st March 2013 is set out in the following table.

Method
Deduction method
Capital @ 9% of risk weighted assets

II. CAPITAL STRUCTURE

Summary

( ` in crores)
Quantitative impact
57.45
10.09

As per RBI’s capital adequacy norms capital funds are classiﬁ ed into Tier-1 and Tier-2 capital. Tier-1 capital of the Bank
consists of equity capital, statutory reserves, other disclosed free reserves, capital reserves and innovative perpetual debt
instruments eligible for inclusion in Tier-1 capital that complies with the requirement speciﬁ ed by RBI. The Tier-2 capital
consists of general provision and loss reserves, upper Tier-2 instruments and subordinate debt instruments eligible for
inclusion in Tier-2 capital. The Bank has issued debt instruments that form a part of Tier-1 and Tier-2 capital. The terms
and conditions that are applicable for these instruments comply with the stipulated regulatory requirements.

Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years. Interest on Tier-1 bonds is
payable either annually or semi-annually. Some of the Tier-1 bonds have a step-up clause on interest payment ranging up
to 100 bps. The Upper Tier-2 bonds have an original maturity of 15 years with a call option after 10 years. The interest on
Upper Tier-2 bonds is payable either annually or semi-annually. Some of the Upper Tier-2 debt instruments have a step-up
clause on interest payment ranging up to 100 bps. The Lower Tier-2 bonds have an original maturity between 5 to 10
years. The interest on lower Tier-2 capital instruments is payable either semi-annually or annually.

RBI through its circular dated 20th January 2011 stipulated that henceforth capital instruments issued with step-up option
will not be eligible for inclusion in the capital funds. Capital issuances with step-up option prior to the release of the
above-mentioned circular would continue to remain eligible for inclusion in regulatory capital. The Bank is in compliance
with this stipulation and the existing Tier-1 and Tier-2 capital instruments with step-up option have been issued prior to
20th January 2011.

Equity Capital

The Bank has authorised share capital of `850.00 crores comprising 850,000,000 equity shares of `10/- each. As on
31st March 2013 the Bank has issued, subscribed and paid-up equity capital of `467.95 crores, constituting 467,954,468
number of shares of `10/- each. The Bank’s shares are listed on the National Stock Exchange and the Bombay Stock
Exchange. The GDRs issued by the Bank are listed on the London Stock Exchange (LSE).

During the year under review, the Bank raised capital in the form of equity and debt to support future growth. It raised
Tier-1 capital in the form of equity capital through a Qualiﬁ ed Institutional Placement (QIP) and a preferential allotment of
equity shares to the promoters of the Bank. The Bank mobilised an aggregate of `5,537.47 crores through these offerings,
by issuing 34,000,000 equity shares through the QIP 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) to maintain their percentage shareholding of the Bank’s promoters
at the pre-QIP offering levels. The equity shares offered under the QIP and preferential allotment were both priced at
`1,390 per share.

During the year, the Bank has also allotted equity shares to employees under its Employee Stock Option Plan.

168

The provisions of the Companies Act, 1956 and other applicable laws and regulations govern the rights and obligations
of the equity share capital of the Bank.

Debt Capital Instruments

The Bank has raised capital through Innovative Perpetual Debt Instrument (IPDI) eligible as Tier-1 Capital and Tier-2 Capital
in the form of Upper Tier-2 and Subordinated bonds (unsecured redeemable non-convertible debentures), details of which
are given below:

Perpetual Debt Instrument

The Bank has raised Perpetual Debt Instruments eligible as Tier-1 Capital, the aggregate value of which as on 31st March
2013 was `463.71crores as stated below:

Date of Allotment

30th September 2006

15th November 2006

Rate of Interest

10.05%

7.167%

Period

Perpetual

Total Perpetual Debt

Amount
`214.00 crores

USD 46 million*

(`249.71 crores)
`463.71 crores

*Converted to INR @ `54.285 to a US Dollar (prevailing exchange rate as on 28th March 2013)

Upper Tier-2 Capital

The Bank has also raised Upper Tier-2 Capital, the aggregate value of which as on 31st March 2013 was `1,446.53 crores
as per the table below:

Date of Allotment
11th August 2006

Date of Redemption
12th August 2021

Rate of Interest
7.25%

24th November 2006
6th February 2007
28th June 2007

24th November 2021
6th February 2022
28th June 2022

9.35%
9.50%
7.125%

Total Upper Tier-2 Capital

Amount
USD 149.91million*
(`813.79 crores)
`200.00 crores
`107.50 crores
USD 59.91 million*
(`325.24 crores)
`1,446.53 crores

*Converted to INR @ `54.285 to a US Dollar (prevailing exchange rate as on 28th March 2013)

Subordinated Debt

As on 31st March 2013, the Bank had an outstanding Subordinated debt (unsecured redeemable non-convertible
debentures) aggregating `10,629.30 crores. Of this, `10,036.66 crores qualiﬁ ed as Lower Tier-2 capital, the details of
which are stated below:

Date of Allotment

Date of Redemption

Rate of Interest

26th July 2003

15th January 2004

22nd March 2006

28th June 2006

30th March 2007

26th April 2013

15th October 2013

22nd June 2013

22nd March 2016

28th September 2013

28th June 2016

30th March 2017

7.00%

6.50%

8.50%

8.32%

8.75%

8.56%

8.95%

9.10%

10.10%

( ` in crores)
Amount

65.00

50.00

125.00

5.00

360.00

10.00

33.50

104.90

250.90

169

Date of Allotment

Date of Redemption

Rate of Interest

7th November 2008

7th November 2018

28th March 2009

16th June 2009

1st December 2011

20th March 2012

28th March 2019

16th June 2019

1st December 2021

20th March 2022

31st December 2012

31st December 2022

Total

11.75%

9.95%

9.15%

9.73%

9.30%

9.15%

Amount

1,500.00

200.00

2,000.00

1,500.00

1,925.00

2,500.00

10,629.30

During the year, subordinated debts (unsecured redeemable non-convertible subordinated debentures) of `2,500 crores
were raised.

Capital Funds

Position as on 31st March 2013

Tier-1 Capital

Of which

- Paid-up Share Capital

- Reserves and surplus (Excluding Foreign Currency Translation Reserve and Investment

Reserve)

- Innovative Perpetual Debt Instruments

- Amount deducted from Tier-1 capital

- Investments in subsidiaries

- Deferred Tax Assets

Tier-2 Capital (net of deductions) (B.1+B.2+B.3-B.4)

Out of above

B.1

Debt Capital Instruments eligible for inclusion as Upper Tier-2 Capital

- Total amount outstanding

- Of which amount raised during the current year

- Amount eligible as capital funds

B.2

Subordinated debt eligible for inclusion in Lower Tier-2 Capital

- Total amount outstanding

- Of which amount raised during the current year

- Amount eligible as capital funds

Other Tier-2 Capital - General provisions and loss reserves

Deductions from Tier-2 Capital

- Investments in Subsidiaries

B.3

B.4

Total Eligible Capital

III. CAPITAL ADEQUACY

( ` in crores)

Amount

31,596.80

467.95

32,231.13

463.71

(191.22)

(1,374.77)

12,334.32

1,446.53

10,629.30

2,500.00

10,036.66

1,042.35

(191.22)

43,931.12

The Bank is subject to the capital adequacy guidelines stipulated by RBI, which are based on the framework of the Basel
Committee on Banking Supervision. As per the capital adequacy guidelines under Basel I, the Bank is required to maintain
a minimum ratio of total capital to risk weighted assets (CRAR) of 9.0%, at least half of which is required to be Tier-1
Capital. As per Basel II guidelines, the Bank is required to maintain a minimum CRAR of 9.0%, with minimum Tier-1
Capital ratio of 6.0%. In terms of RBI guidelines for implementation of Basel II, capital charge for credit and market risk

170

for the ﬁ nancial year ended 31st March 2013 will be required to be maintained at the higher levels implied by Basel II or
80% of the minimum capital requirement computed as per the Basel I framework. For the year ended 31st March 2013,
the minimum capital required to be maintained by the Bank as per Basel II guidelines is higher than that required at 80%
of the capital requirements under Basel I guidelines.

During the year, the Reserve Bank of India had issued guidelines on implementation of Basel III capital regulation in India.
These guidelines are to be implemented beginning 1st April 2013 in a phased manner and are to be fully implemented
as on 31st March 2018. These guidelines cover the new capital regulations and liquidity risk management framework.
The Bank has taken appropriate steps to ensure adoption of these guidelines within the timeframe stipulated by RBI. An
assessment of capital requirements under Basel III has been conducted. The liquidity guidelines have been integrated into
the asset liability management framework of the Bank through suitable amendments in order to ensure adherence to RBI
guidelines on monitoring and management of liquidity including liquidity ratios.

An assessment of the capital requirement of the Bank is carried out through a comprehensive projection of future businesses
that takes cognizance of the strategic intent of the Bank, proﬁ tability of particular businesses and opportunities for
growth. The proper mapping of credit, operational and market risks to this projected business growth enables assignment
of capital that not only adequately covers the minimum regulatory capital requirement but also provides headroom
for growth. The calibration of risk to business is enabled by a strong risk culture in the Bank aided by appropriate,
technology-based risk management systems. As part of the Internal Capital Adequacy Assessment Process (ICAAP), the
Bank also assesses the adequacy of capital under stress. A summary of the Bank’s capital requirement for credit, market
and operational risk and the capital adequacy ratio as on 31st March 2013 is presented below:

Capital Requirements for various Risks

CREDIT RISK

Capital requirements for Credit Risk

- Portfolios subject to standardised approach

- Securitisation exposures

MARKET RISK

Capital requirements for Market Risk

- Standardised duration approach

- Interest rate risk

- Foreign exchange risk (including gold)

- Equity risk

OPERATIONAL RISK

Capital requirements for Operational risk

- Basic indicator approach

Capital Adequacy Ratio of the Bank (%)

Tier-1 CRAR (%)

Consolidated Capital Adequacy Ratio (%)

Consolidated Tier-1 CRAR (%)

( ` in crores)

Amount

19,785.25

1,841.51

1,687.38

30.11

124.02

1,625.23

17.00%

12.23%

17.15%

12.31%

IV. RISK MANAGEMENT: OBJECTIVES AND ORGANIZATION STRUCTURE

The wide variety of businesses undertaken by the Bank requires it to identify, measure, control, monitor and report risks
effectively. The key components of the Bank’s risk management rely on the risk governance architecture, comprehensive
processes and internal control mechanism. The Bank’s risk governance architecture focuses attention on key areas of risk
such as credit, market and operational risk and quantiﬁ cation of these risks wherever possible for effective and continuous
monitoring.

171

Objectives and Policies

The Bank’s risk management processes are guided by well-deﬁ ned policies appropriate for various risk categories,
independent risk oversight and periodic monitoring through the sub-committees of the Board of Directors. The Board sets
the overall risk appetite and philosophy for the Bank. The Committee of Directors, the Risk Management Committee and
the Audit Committee of the Board, which are sub-committees of the Board, review various aspects of risk arising from the
businesses of the Bank. Various senior management committees operate within the broad policy framework as illustrated
below:

The Bank has put in place policies relating to management of credit risk, market risk, operational risk and asset-liability
both for the domestic as well as overseas operations. The overseas policies are drawn based on the risk perceptions of
these economies and the Bank’s risk appetite.

The Bank has formulated a comprehensive Stress Testing policy to measure impact of adverse stress scenarios on the
adequacy of capital.

Structure and Organization

The Risk Department reports to the Executive Director and Head (Corporate Centre) and the Risk Management Committee
of the Board oversees the functioning of the Department. The Department has four separate teams for Credit Risk, Market
Risk, Operational Risk and Financial Crime Management Unit (FCMU) and the head of each team reports to the Chief Risk
Ofﬁ cer.

Chief Risk Officer

Credit Risk

Market Risk

Operational Risk

Financial Crime
Management

Treasury Mid Office

V. CREDIT RISK

Credit risk refers to the deterioration in the credit quality of the borrower or the counter-party adversely impacting the
ﬁ nancial performance of the Bank. The losses incurred by the Bank in a credit transaction could be due to inability or wilful
default of the borrower in honouring the ﬁ nancial commitments to the Bank. The Bank is exposed to credit risk through
lending and capital market activities.

Credit Risk Management Policy

The Board of Directors establishes parameters for risk appetite which are deﬁ ned through strategic businesses plan as well
as the Corporate Credit Policy. Credit Risk Management Policy lays down the roles and responsibilities, risk appetite, key
processes and reporting framework. Corporate credit is managed through rating of borrowers and the transaction and
thorough risk vetting of individual exposures at origination and thorough periodic review after sanctioning. Retail credit to
individuals and small business is managed through deﬁ nition of product criteria, appropriate credit ﬁ lters and subsequent
portfolio monitoring.

172

Credit Rating System

The foundation of credit risk management rests on the internal rating system. Rating linked single borrower exposure
norms, delegation of powers and review frequency have been adopted by the Bank. The Bank has developed rating tools
speciﬁ c to market segments such as large and mid-corporates, SME, ﬁ nancial companies, microﬁ nance companies and
project ﬁ nance to objectively assess underlying risk associated with such exposures.

The credit rating model uses a combination of quantitative inputs and qualitative inputs to arrive at a ‘point-in-time’ view
of the risk proﬁ le of counterparty. Each internal rating grade corresponds to a distinct probability of default over one year.
Expert scorecards are used for various SME schematic products and retail agriculture schemes. Statistical application and
behavioural scorecards have been developed for all major retail portfolios.

The Bank recognises cash margin, central/state government, bank and corporate guarantees, exclusive mortgage of
properties and lease rental securitisation for the purpose of credit enhancement to arrive at a facility rating.

Model validation is carried out annually by objectively assessing the discriminatory power, calibration accuracy and stability
of ratings. The Bank has completed the estimation and validation of PD, LGD and CCF models for corporate and retail
portfolios.

Credit Sanction and Related Processes

The guiding principles behind the credit sanction process are as under:

•

‘Know your Customer’ is a leading principle for all activities.

• The acceptability of credit exposure is primarily based on the sustainability and adequacy of borrower’s normal

business operations and not based solely on the availability of security.

Delegation of sanctioning powers is based on the size and rating of the exposures. The Bank has put in place the following
hierarchical committee structure for credit sanction and review:

• Retail Agriculture Credit Committee (RACC)

• Central Agriculture Business Credit Committee (CABCC)

• Regional Credit Committee (RCC)

• Central Ofﬁ ce Credit Committee (COCC)

• Committee of Executives (COE)

• Senior Management Committee (SMC)

• Committee of Directors (COD), a sub-committee of the Board.

All management level sanctioning committees require mandatory presence of a representative from Risk Department for
quorum.

Review and Monitoring

• All credit exposures, once approved, are monitored and reviewed periodically against the approved limits. Borrowers

with lower credit rating are subject to more frequent reviews.

• Credit audit involves independent review of credit risk assessment, compliance with internal policies of the Bank and
with the regulatory framework, compliance of sanction terms and conditions and effectiveness of loan administration.

• Customers with emerging credit problems are identiﬁ ed early and classiﬁ ed accordingly. Remedial action is initiated

promptly to minimize the potential loss to the Bank.

Concentration Risk

The Bank manages concentration risk by means of appropriate structural limits and borrower-wise limits based on credit-
worthiness. Credit concentration in the Bank’s portfolios is monitored for the following:

•

Large exposures to the individual clients or group: The Bank has individual borrower-wise exposure ceilings based
on the internal rating of the borrower as well as group-wise borrowing limits which are continuously tracked and
monitored.

173

• Geographic concentration for real estate exposures.

• Concentration of unsecured loans to total loans and advances.

• Concentration by Industry: Industry analysis plays an important part in assessing the concentration risk within the
loan portfolio. Industries are classiﬁ ed into various categories based on factors such as demand-supply, input related
risks, government policy stance towards the sector and ﬁ nancial strength of the sector in general. Such categorisation
is used in determining the expansion strategy for the particular industry.

Portfolio Management

Portfolio level risk analytics and reporting to senior management examines optimal spread of risk across various rating
classes, undue risk concentration across any particular industry segments and delinquencies. The Bank periodically
monitors its portfolios for any lead indicators of stress which includes potential delinquencies, external rating downgrades
and credit concentration. Borrowers or portfolios are marked for early warning when signs of weakness or ﬁ nancial
deterioration are envisaged in order that timely remedial actions may be initiated. In-depth sector speciﬁ c studies are
undertaken on portfolios vulnerable to extraneous shocks and the results are shared with the business departments. The
Bank has a well-deﬁ ned stress testing policy in place and at least on a quarterly basis, stress testing is undertaken on
various portfolios to gauge the impact of stress situations on the health of portfolio, proﬁ tability and capital adequacy.

As regards retail lending, the focus has been on increasing lending to secured portfolios (mortgage, auto), while maintaining
a cautious approach to unsecured lending (personal loans and credit card business). The Bank is continuously endeavoring
to improve the quality of incremental origination through better credit underwriting standards using improved scorecards.
Portfolio delinquency trends are monitored periodically.

Deﬁ nition of Non-Performing Assets

Advances are classiﬁ ed into performing and non-performing asset (NPAs) as per RBI guidelines.

A non-performing asset (NPA) is a loan or an advance where;

interest and/or instalment of principal remains overdue for a period of more than 90 days in respect of a term loan,

the account remains “out-of-order’’ for a period of more than 90 days in respect of an Overdraft or Cash Credit
(OD/CC),

the bill remains overdue for a period of more than 90 days in case of bills purchased and discounted,

4. a loan granted for short duration crops will be treated as NPA if the installments of principal or interest thereon

remain overdue for two crop seasons, and

5. a loan granted for long duration crops will be treated as NPA if the installments of principal or interest thereon remain

overdue for one crop season.

in respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative
contract, if these remain unpaid for a period of 90 days from the speciﬁ ed due date for payment.

the amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation transaction
undertaken in terms of guidelines on securitisation dated February 1, 2006.

NPAs are further classiﬁ ed into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. A sub-
standard asset is one, which has remained a NPA for a period less than or equal to 12 months. An asset is classiﬁ ed as
doubtful if it has remained in the sub-standard category for more than 12 months. A loss asset is one where loss has been
identiﬁ ed by the Bank or internal or external auditors or during RBI inspection but the amount has not been written-off
fully.

Deﬁ nition of Impairment

At each balance sheet date, the Bank ascertains if there is any impairment in its assets. If such impairment is detected, the
Bank estimates the recoverable amount of the asset. If the recoverable amount of the asset or the cash-generating unit to
which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the proﬁ t and loss account.

174

CREDIT RISK EXPOSURES

Total Gross Credit Risk Exposure Including Geographic Distribution of Exposure – Position as on 31st March 2013
(` in crores)

Fund Based

Non Fund Based *

Total

Domestic (Outstanding)

Overseas (Outstanding)

252,735.98

76,112.37

328,848.35

33,650.47

10,743.51

44,393.98

Total

286,386.45

86,855.88

373,242.33

* Non-fund based exposures are bank guarantees issued on behalf of constituents and acceptances and endorsements.

Distribution of Credit Risk Exposure by Industry Sector – Position as on 31st March 2013

Industry Classiﬁ cation

Sr.
No.

2.
3.

4.
5.

Infrastructure (excluding Power)
- of which Roads and ports
- of which Telecommunications
Power Generation & Distribution
All Engineering
- of which Electronics
Trade
Chemicals and chemical products
- of which Petro Chemicals
- of which Drugs and Pharmaceuticals
Iron and Steel
Food Processing
NBFCs
Petroleum, coal products and Nuclear fuels

6.
7.
8.
9.
10. Computer Software
11.
Edible Oils and Vanaspati
12. Other metal and metal products
13.
14. Cotton Textiles
15. Gems and Jewellery
16. Cement and Cement Products
17. Construction
18. Other Textiles
19.
Paper and Paper Products
20. Mining and quarrying (incl. coal)
Rubber Plastic and their products
21.
22.
Sugar
23. Glass and Glass ware
24. Wood and wood products
Beverage and Tobacco
25.
Tea
26.
Leather and Leather Products
27.

Vehicles, vehicle parts and transport equipments

(` in crores)

Amount

Fund Based
(Outstanding)
16,770.08
5,865.81
2,458.51
9,737.06
5,949.04
603.62
9,575.21
7,477.29
802.81
3,498.47
6,300.86
6,538.04
5,072.99
2,479.42
2,805.04
1,079.61
2,633.90
3,106.13
2,962.18
2,386.19
1,807.03
1,159.65
1,568.84
1,089.32
1,073.05
801.45
498.74
533.19
485.73
620.82
191.01
118.48

Non-Fund Based
(Outstanding)
11,870.95
1,841.61
1,395.08
15,659.43
9,319.28
65.47
4,627.38
4,419.40
641.28
578.23
4,946.91
138.95
1,339.61
2,542.48
1,640.01
3,082.23
1,280.39
551.68
498.70
639.44
989.37
1,328.30
466.69
262.42
249.96
106.10
385.61
225.53
237.85
31.74
65.35
14.56

175

Sr.
No.

28.
Jute Textiles
29. Other Industries

Industry Classiﬁ cation

- of which Banking and Finance
- of which Commercial real estate
- of which Shipping, Transportation & Logistics
- of which Professional services
- of which Entertainment & Media
Residual exposures to balance the total exposure
Total

30.

(` in crores)

Amount

Fund Based
(Outstanding)
33.96
47,129.18
17,616.25
6,752.16
3,236.86
4,508.53
1,620.52
144,402.96
286,386.45

Non-Fund Based
(Outstanding)
3.32
18,043.11
6,326.46
1,125.55
1,675.72
1,096.34
1,472.47
1,889.13
86,855.88

As on 31st March 2013, the Bank’s exposure to the industries stated below was more than 5% of the total gross credit
exposure:

Sr. No.

Industry Classiﬁ cation

Percentage of the total gross credit exposure

Infrastructure

Power Generation & Distribution

Banking & Finance

Residual Contractual Maturity breakdown of Assets – Position as on 31st March 2013

Maturity Bucket

1day
2 to 7 days
8 to 14 days
15 to 28 days
29 days to 3 months
Over 3 months and upto 6 months
Over 6 months and upto 12 months
Over 1 year and upto 3 years
Over 3 years and upto 5 years
Over 5 years
Total
* including money at call and short notice.

Cash,
balances
with RBI
7,797.24
74.53
277.17
218.10
651.57
745.30
884.40
1,028.34
617.24
2,498.20
14,792.09

Balances
with other
banks*
1,621.45
1,978.81
156.66
285.80
489.57
309.50
494.74
0.25
270.22
35.87
5,642.87

Investments

Advances

(` in crores)

Fixed
Assets

Other
assets

6,816.23
9,369.90
2,850.59
2,496.50
8,249.24
9,327.98
11,780.01
20,263.99
9,049.77
33,533.33

-
2,317.44
-
1,959.35
-
1,777.23
-
2,438.04
-
10,197.27
-
11,220.30
-
12,348.87
-
45,312.01
26,146.22
-
83,249.23 2,355.64
113,737.54 196,965.96 2,355.64

199.39
914.47
903.94
1,805.60
23.87
371.26
429.99
128.46
-
2,289.58
7,066.56

Movement of NPAs and Provision for NPAs (including NPIs) – Position as on 31st March, 2013

Amount of NPAs (Gross)*
- Substandard
- Doubtful 1
- Doubtful 2
- Doubtful 3
- Loss

176

(` in crores)
Amount
2,393.42
694.31
454.47
106.01
67.69
1,070.94

B.
C.

Net NPAs
NPA Ratios
- Gross NPAs (including NPIs) to gross advances (%)
- Net NPAs (including NPIs) to net advances (%)
Movement of NPAs (Gross)
- Opening balance as on 1st April 2012
- Additions
- Reductions
- Closing balance as on 31st March 2013
Movement of Provision for NPAs
- Opening balance as on 1st April 2012
- Provision made in 2012-13
- Transfer of restructuring provision
- Write-offs / Write-back of excess provision
- Closing balance as on 31st March 2013

* includes `11.72 crores outstanding under Application Money classiﬁ ed as non-performing asset.

NPIs and Movement of Provision for Depreciation on NPIs – Position as on 31st March 2013

Amount of Non-Performing Investments
Amount of Non-Performing Investments - Others*
Amount of Provision held for Non-performing investments
Amount of Provision held for Non-performing investments - Others*
Movement of provision for depreciation on investments
- Opening balance as on 1st April 2012
- Provision made in 2012-13
- Write-offs
- Write-back of excess provision
- Closing balance as on 31st March 2013

(` in crores)
Amount
704.13

1.20%
0.36%

1,806.30
2,023.36
(1,436.24)
2,393.42

1,323.92
1,192.20
13.89
(873.99)
1,656.02

(` in crores)
Amount
10.29
11.72
7.22
11.72

327.55
-
-
(103.94)
223.61

* represents amount outstanding under Application Money classiﬁ ed as non-performing asset.

Credit Risk: Use of Rating Agency under the Standardised Approach

The RBI guidelines on Basel II require banks to use ratings assigned by speciﬁ ed External Credit Assessment Agencies
(ECAIs) namely Brickworks, CARE, CRISIL, ICRA, India Ratings and SMERA for domestic counterparties and Standard &
Poor’s, Moody’s and Fitch for foreign counterparties.

The Bank is using issuer ratings and short-term and long-term instrument/bank facilities’ ratings which are assigned by
the accredited rating agencies viz. Brickworks, CARE, CRISIL, ICRA, India Ratings and SMERA and published in the public
domain to assign risk-weights in terms of RBI guidelines. In respect of claims on non-resident corporates and foreign
banks, ratings assigned by international rating agencies i.e. Standard & Poor’s, Moody’s and Fitch is used. For exposures
with contractual maturity of less than one year, a short-term rating is used. For cash credit facilities and exposures with
contractual maturity of more than one year, long-term rating is used.

Issue ratings would be used if the Bank has an exposure in the rated issue and this would include fund-based and non-
fund based working capital facilities as well as loans and investments. In case the Bank does not have exposure in a rated
issue, the Bank would use the issue rating for its comparable unrated exposures to the same borrower, provided that

177

the Bank’s exposures are pari-passu or senior and of similar or lesser maturity as compared to the rated issue. Structured
Obligation (SO) ratings are not used unless the Bank has a direct exposure in the ‘SO’ rated issue. If an issuer has a long-
term or short-term exposure with an external rating that warrants a risk weight of 150%, all unrated claims on the same
counterparty, whether short-term or long-term, also receive 150% risk weight, unless the Bank uses recognised credit risk
mitigation techniques for such claims.

Issuer ratings provide an opinion on the general credit worthiness of the rated entities in relation to their senior unsecured
obligations. Therefore, issuer ratings would be directly used to assign risk-weight to unrated exposures of the same
borrower.

Details of Gross Credit Risk Exposure (Fund based and Non-fund based) based on Risk-Weight – Position as on
31st March 2013

Below 100% risk weight
100% risk weight
More than 100% risk weight
Deduction from capital funds
- Investments in subsidiaries

VI. CREDIT RISK MITIGATION

(` in crores)
Amount
207,630.76
130,204.73
35,406.84

382.44

The Bank uses various collaterals both ﬁ nancial as well as non-ﬁ nancial, guarantees and credit insurance as credit risk
mitigants. The main ﬁ nancial collaterals include bank deposits, NSC/KVP/LIP and gold, while main non-ﬁ nancial collaterals
include land and building, plant and machinery, residential and commercial mortgages. The guarantees include guarantees
given by corporate, bank and personal guarantees. This also includes loans and advances guaranteed by Export Credit &
Guarantee Corporation Limited (ECGC), Credit Guarantee Fund Trust for Small Industries (CGTSI), Central Government
and State Government.

The Bank has in place a collateral management policy, which underlines the eligibility requirements for credit risk mitigants
(CRM) for capital computation as per Basel II guidelines. The Bank reduces its credit exposure to counterparty with the
value of eligible ﬁ nancial collateral to take account of the risk mitigating effect of the collateral. To account for the
volatility in the value of collateral, haircut is applied based on the type, issuer, maturity, rating and re-margining/revaluation
frequency of the collateral. The Bank revalues various ﬁ nancial collaterals at varied frequency depending on the type of
collateral. The Bank has a valuation policy that covers processes for collateral valuation and empanelment of valuers.

Details of Total Credit Exposure (after on or off Balance Sheet Netting) as on 31st March 2013

Covered by :
- Eligible ﬁ nancial collaterals after application of haircuts
- Guarantees/credit derivatives

VII. SECURITISATION

(` in crores)
Amount

16,244.47
9,000.15

The primary objectives for undertaking securitisation activity by the Bank are enhancing liquidity, optimisation of usage of
capital and churning of the assets as part of risk management strategy.

The securitisation of assets generally being undertaken by the Bank is on the basis of ‘True Sale’, which provides 100%
protection to the Bank from default. All risks in the securitised portfolio are transferred to a Special Purpose Vehicle (SPV),
except where the Bank provides sub-ordination of cash ﬂ ows to Senior Pass-Through Certiﬁ cate (PTC) holders by retaining
the junior tranche of the securitised pool. The Bank has not sponsored any special purpose vehicle which is required to be
consolidated in the consolidated ﬁ nancial statements as per accounting norms.

178

The Bank may also invest in securitised instruments which offer attractive risk adjusted returns. The Bank enters into
purchase/sale of corporate and retail loans through direct assignment/SPV. In most cases, post securitisation, the Bank
continues to service the loans transferred to the assignee/SPV. The Bank however does not follow the originate to distribute
model and pipeline and warehousing risk is not material to the Bank.

Valuation of securitised exposures is carried out in accordance with FIMMDA/RBI guidelines. Gain on securitisation is
recognised over the period of the underlying securities issued by the SPV. Loss on securitisation is immediately debited
to proﬁ t and loss account. In respect of credit enhancements provided or recourse obligations (projected delinquencies,
future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale in accordance with
AS-29 ‘Provisions, contingent liabilities and contingent assets’.

The Bank follows the standardised approach prescribed by the RBI for the securitisation activities. The Bank uses the
ratings assigned by various external credit rating agencies viz. Brickworks, CARE, CRISIL, ICRA, India Ratings and SMERA
for its securitisation exposures.

All transfers of assets under securitisation were effected on true sale basis. However, in the ﬁ nancial year ended
31st March 2013, the Bank has not securitised any asset.

A. Banking Book

Details of Exposure Securitised by the Bank and subject to Securitisation Framework

Sr. No.
1.
2.
3.

Type of Securitisation
Total amount of exposures securitised
Losses recognised by the Bank during the current period
Amount of assets intended to be securitised within a year
Of which
- Amount of assets originated within a year before securitisation
Amount of exposures securitised
- Corporate Loans
Unrecognised gain or losses on sale
- Corporate Loans

(` in crores)
Amount
-
-
-

Aggregate amount of Securitisation Exposures Retained or Purchased as on 31st March 2013 is given below

Sr. No.
1.
2.
3.
4.
5.

Type of Securitisation
Retained
Securities purchased
Liquidity facility
Credit enhancement (cash collateral)
Other commitments

On Balance Sheet (Amount)
-
-
-
-
-

(` in crores)
Off Balance Sheet (Amount)
-
-
-
-
-

Risk-weight wise Bucket Details of the Securitisation Exposures on the Basis of Book-Value

Below 100% risk weight
100% risk weight
More than 100% risk weight
Deductions
- Entirely from Tier I capital
- Credit enhancing I/Os deducted from Total Capital
- Credit enhancement (cash collateral)

Amount
-
-
-

-
-
-

(` in crores)
Capital Charge
-
-
-

-
-
-

179

B. Trading Book

Details of Exposure Securitised by the Bank and subject to Securitisation Framework

Sr. No.

Type of Securitisation

Aggregate amount of exposures securitised by the Bank for which the Bank has
retained some exposures and which is subject to the market risk approach

(` in crores)

Amount

Aggregate amount of Securitisation Exposures Retained or Purchased as on 31st March 2013 is given below

Sr. No. Type of Securitisation

(` in crores)
On Balance Sheet (Amount)* Off Balance Sheet (Amount)

Retained

Securities purchased

- Corporate Loans

- Lease Rental

- Priority Sector (auto pool & micro ﬁ nance)

Liquidity facility

Credit enhancement (cash collateral)

Other commitments

8.93

197.91

1,264.18

* includes outstanding balance of PTCs purchased in earlier years also

Risk-weight wise Bucket Details of the Securitisation Exposures on the Basis of Book-Value

Exposures subject to Comprehensive Risk Measure for speciﬁ c risk
- Retained
- Securities purchased
Exposures subject to the securitisation framework for speciﬁ c risk
Below 100% risk weight
100% risk weight
More than 100% risk weight
Deductions
- Entirely from Tier I capital
- Credit enhancing I/Os deducted from Total Capital
- Credit enhancement (cash collateral)

Amount

(` in crores)
Capital charge

-
-

1,471.02
-
-

-
-
-

-
-

59.60
-
-

-
-
-

VIII. MARKET RISK IN TRADING BOOK

Market risk is the risk of loss to the Bank’s earnings and capital due to changes in the market level of interest rates, price
of securities, foreign exchange rates and equities, as well as the volatilities of those changes. The Bank is exposed to
market risk through its investment activities and also trading activities, which are undertaken for customers as well as on
a proprietary basis. The Bank adopts a comprehensive approach to market risk management for its trading, investment
and asset/liability portfolios. For market risk management, the Bank has:

•

Board approved market risk policies and guidelines which are aligned to the regulatory norms and based on
experiences gained over the years. The policies are reviewed periodically keeping in view regulatory changes, business
requirements and market developments.

•

Process manual which are updated regularly to incorporate best practices.

180

• Market risk identiﬁ cation through elaborate mapping of the Bank’s main businesses for various market risks.

•

Statistical measures like Value at Risk (VaR), supplemented by stress tests, back tests and scenario analysis.

• Non-statistical measures like position limits, marked-to-market (MTM), gaps and sensitivities (mark-to-market,

position limits, duration, PVBP, option Greeks).

• Management Information System (MIS) for timely market risk reporting to senior management functionaries.

Risk limits such as position limits, stop-loss limits, alarm limits, gaps and sensitivities (duration, PVBP, option greeks) are
set up and reviewed periodically, based on a number of criteria including regulatory guidelines, relevant market analysis,
business strategy, management experience and the Bank’s risk appetite. These limits are monitored on a daily basis by the
Treasury Mid-ofﬁ ce and the exceptions are put up to ALCO and Risk Management Committee of the Board.

The Bank uses Historical Simulation and its variants for computing VaR for its trading portfolio. VaR is calculated and
reported on a daily basis for the trading portfolios at a 99% conﬁ dence level for a one-day holding period, using 250
days of historical data or one year of relative changes in historical rates and prices. The model assumes that the risk factor
changes observed in the past are a good estimate of those likely to occur in the future and is, therefore, limited by the
relevance of the historical data used. The method, however, does not make any assumption about the nature or type of
the loss distribution. The VaR models for different portfolios are back-tested at regular intervals and the results are used
to maintain and improve the efﬁ cacy of the model.

The VaR measure is supplemented by a series of stress tests and sensitivity analysis that estimates the likely behaviour of a
portfolio under extreme but plausible conditions and its impact on earnings and capital. The Bank undertakes stress tests
for market risks for its trading book, IRS, forex open position and forex gaps on a monthly basis as well as for liquidity risk
at the end of each quarter. The Bank is in the ﬁ nal stages of building its capabilities to migrate to advanced approach i.e.
Internal Models Approach for assessment of market risk capital.

Concentration Risk

The Bank has allocated the internal risk limits in order to avoid concentrations, wherever relevant. For example, the
Aggregate Gap Limit is allocated to various currencies and maturities as Individual Gap Limits to monitor concentrations.
Similarly, stop-loss limits and duration limits have been set up for different categories within a portfolio. Within the overall
PV01 limit, a sub limit is set up which is not expected to be breached by trades linked to any individual benchmark.

Liquidity Risk

Liquidity Risk is the current and prospective risk to earnings or capital arising from a bank’s inability to meet its current or
future obligations on the due date. Liquidity risk is two-dimensional viz., risk of being unable to fund portfolio of assets at
appropriate maturity and rates (liability dimension) and the risk of being unable to liquidate an asset in a timely manner at
a reasonable price (asset dimension).

The goal of Liquidity Risk Management is to meet all commitments on the due date and also be able to fund new
investment opportunities by raising sufﬁ cient funds in the form of increasing fresh liabilities or by expeditious asset sell-off
without incurring unacceptable losses, both under normal and adverse conditions. These objectives are ensured by setting
up policies, operational level committees, measurement tools and monitoring and reporting mechanism using effective
use of IT systems for availability of quality data.

The Bank manages its liquidity on a static as well as dynamic basis using various tools such as gap analysis, ratio analysis,
dynamic liquidity statements and scenario analysis. The Bank’s ALM policy deﬁ nes the tolerance limits for its structural
liquidity position. The Liquidity Policy for the domestic operations as well as for the overseas branches lay down the
operational framework for prudent risk management in the Bank. The liquidity proﬁ le of the Bank is analysed on a
static basis by tracking all cash inﬂ ows and outﬂ ows in the maturity ladder based on the actual maturity and expected
occurrence (for non-maturity items) of cash ﬂ ows. The liquidity proﬁ le of the Bank is also estimated on a dynamic basis
by considering the growth in deposits and loans, investment obligations, etc. for a short-term period of three months.
The Bank undertakes behavioral analysis of the non-maturity products viz. savings and current deposits and cash credit
/overdraft accounts on a periodic basis, to ascertain the volatility of residual balances in those accounts. The renewal
pattern and premature withdrawals of term deposits and drawdown of unavailed credit limits are also captured through
behavioral studies. The concentration of large deposits is monitored on a periodic basis.

181

The Bank’s ability to meet its obligations and fund itself in a crisis scenario is critical and accordingly, liquidity stress tests
are conducted under different scenarios at periodical intervals to assess the impact on liquidity to withstand stressed
conditions. The liquidity positions of overseas branches are managed in line with the Bank’s internal policies and host
country regulations. Such positions are also reviewed centrally by the Bank’s ALCO along with domestic positions.

Counterparty Risk

The Bank has a Counterparty Risk Management Policy incorporating well laid-down guidelines, processes and measures
for counterparty risk management. The policy includes separate counterparty rating models for commercial banks, foreign
banks and co-operative banks for determining maximum permissible limits for counterparties. Counterparty limits are
monitored daily and internal triggers are put in place to guard against breach in limits. Credit exposures to issuer of bonds,
advances, etc. are monitored separately under the prudential norms for exposure to a single borrower as per the Bank’s
Corporate Credit Risk Policy or Investment Policy, as applicable. The counterparty exposure limits are reviewed at periodic
intervals based on ﬁ nancials of the counterparties, business need, past transaction experiences and market conditions.
The Bank has also put in place the ‘Suitability & Appropriateness Policy’ and Loan Equivalent Risk (LER) Policy to evaluate
counterparty risk arising out of all customer derivatives contracts.

Country Risk

The Bank has a country risk management policy containing the guidelines, systems and processes to effectively identify,
assess, monitor and control its country risk exposures. Based on the risk proﬁ ling, countries are classiﬁ ed under seven-
categories i.e. insigniﬁ cant, low, moderate, high, very high, restricted and off-credit. Risk proﬁ ling is based on the ratings
provided by Export Credit Guarantee Corporation of India Ltd. (ECGC), Dun & Bradstreet, inputs received from overseas
branches/business departments, reports published by various agencies viz. Moody’s, Standard & Poor’s, Fitch and other
publications of repute. The categorisation of countries is reviewed at quarterly intervals or at more frequent intervals if
situations so warrant. An exposure to a country comprises all assets, both funded and non-funded, that represents claims
on residents of another country. The Bank has in place both category wise and country wise exposure limits. The Bank
monitors country risk exposures through a process of trigger limits as well as prior approval system for select categories
viz. high, very high, restricted and off-credit to ensure effective monitoring of exposures. As a proactive measure of
country risk management, Risk department issues ‘Rating Watch’ from time to time. Further, based on country-speciﬁ c
developments, the concerned business departments are provided updates on countries which have high probability of a
rating downgrade.

Risk Management Framework for Overseas Operations

The Bank has put in place separate risk management policies for its overseas branches in Singapore, Hong Kong, Dubai
and Colombo. These country-speciﬁ c risk policies are based on the host country regulators’ guidelines and in line with the
practices followed for the Indian operations. The Asset Liability Management and all the risk exposures for the overseas
operations are monitored centrally at the Central Ofﬁ ce.

Capital Requirement for Market Risk – Position as on 31st March 2013

- Interest rate risk

- Equity position risk

- Foreign exchange risk (including gold)

IX. OPERATIONAL RISK

Strategies and Processes

(` in crores)
Amount of Capital Required

1,687.38

124.02

30.11

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems, or from external
events. The operational risk management policy documents the Bank’s approach towards management of operational
risk and deﬁ nes the roles and responsibilities of the various stakeholders within the Bank. The policy also comprises
the detailed framework for operational risk loss data collection, risk and control self-assessment and key risk indicator
framework.

182

Based on the above policy the Bank has initiated several measures to manage operational risk. The Bank has put in
place a hierarchical structure to effectively manage operational risk through the formation of several internal committees
viz., Operational Risk Management Committee, Product Management Committee, Change Management Committee,
Outsourcing Committee, Software Evaluation Committee and IT Security Committee. The functioning of these committees
has stabilised.

Structure and Organisation

The Risk Management Committee (RMC) of the Board at the apex level is the policy making body. The RMC is supported by
the Operational Risk Management Committee (ORMC), consisting of Senior Management personnel, which is responsible
for implementation of the Operational Risk policies of the Bank. This internal committee oversees the implementation of
the OR framework and oversees the management of operational risks across the Bank. A sub-committee of ORMC (Sub-
ORMC) has been constituted to assist the ORMC in discharging its functions by deliberating the operational risk issues in
detail and escalating the critical issues to ORMC. The Operational Risk function, a distinct unit reporting to the Chief Risk
Ofﬁ cer of the Bank, ensures implementation of the procedures for management of operational risk.

A representative of the Risk department is also a permanent member of control committees on product management
covering approval of new products, change management of processes, outsourcing, software evaluation and IT Security.

Scope and Nature of Operational Risk Reporting and Measurement Systems

A systematic process for reporting risks, losses and non-compliance issues relating to operational risks has been developed
and implemented. The information gathered is being used to develop triggers to initiate corrective actions to improve
controls. All critical risks and potential loss events are reported to the Senior Management/ORMC.

The Bank has further enhanced its capability for effective management of operational risk with the implementation of
an Enterprise Risk Governance and Compliance platform (SAS EGRC). The IT platform would act as the single repository
of processes and operational, compliance and ﬁ nancial reporting risks. It facilitates capturing of individual risks and the
effectiveness of their controls, tagging of identiﬁ ed risks to processes and products, originates action plans and acts as a
repository of all operational risk events. A management dashboard template is also being designed as an output. The Bank
has captured 5,127 processes in the EGRC system and their related risks and controls. In the initial phase, 66 KRIs have
been identiﬁ ed and thresholds have been ﬁ xed for the various units of the Bank. These are being monitored through the
system on an ongoing basis. The roll-out of the system has commenced in a phased manner and is stated to be completed
by September 2013.

Policies for Hedging and Mitigating Operational risk

An Operational Risk Management Policy approved by the Risk Management Committee of the Board details the framework
for managing and monitoring operational risk in the Bank. Business units put in place basic internal controls as approved
by the Product Management Committee to ensure appropriate controls in the operating environment throughout the
Bank. As per the policy, all new products are being vetted by the Product Management Committee to identify and assess
potential operational risks involved and suggest control measures to mitigate the risks. Each new product or service
introduced is subject to a risk review and signoff process. Similarly, any changes to the existing products/processes are
being vetted by the Change Management Committee.

The Bank has adopted speciﬁ c policies on Business Continuity Management and IT Disaster Recovery. The Bank has
framed processes for identiﬁ cation of non-IT BCP teams, conducting training and awareness sessions, handling loss or
inaccessibility of staff, identifying backup personnel for critical positions, identifying alternative premises, and coordination
of contingency plans at the Bank level.

Approach for Operational Risk Capital Assessment

As per the RBI guidelines, the Bank has followed the Basic Indicator Approach for computing the capital for operational
risk for the year ending 31st March 2013. Based on the measures outlined above, the Bank is preparing itself for migration
to the Advanced Measurement Approach of capital computation for operational risk under Basel II.

183

X. INTEREST RATE RISK IN THE BANKING BOOK (IRRBB)

The IRRBB is managed according to the guidelines of the Bank’s ALM Policy. The Bank assesses its exposure to interest
rate risk in the banking book at the end of each quarter considering a drop in the market value of investments due to
50 bps change in interest rates. Calculation of interest rate risk in the banking book (IRRBB) is based on a present value
perspective with cash ﬂ ows discounted at zero coupon yields published by National Stock Exchange (NSE) for domestic
balance sheet and USD LIBOR for overseas balance sheet. Other currencies are taken in equivalent base currencies (INR
for domestic books and USD for overseas branches) as the Bank does not have material exposures to other currencies as
a percentage of the balance sheet. Cash ﬂ ows are assumed to occur at the middle of the regulatory buckets. Non-interest
sensitive products like cash, current account, capital, volatile portion of savings bank deposits, etc. are excluded from the
computation. The Bank does not run a position on interest rate options that might result in non-linear pay-off. Future
interest cash ﬂ ows from outstanding balances are included in the analysis.

The Bank employs Earnings at Risk (EaR) measures to assess the sensitivity of its net interest income to parallel movement
in interest rates on the entire balance sheet. The results of EaR measures as against the limits are reported to the senior
management on a weekly basis.

The Bank measures the level of its exposure to interest rate risk in terms of sensitivity of Market Value of its Equity (MVE) to
interest rate movements as stipulated in the relevant RBI guidelines. The Duration Gap Analysis (DGA) involves bucketing
of all on and off- balance sheet Risk Sensitive Assets (RSA) and Risk Sensitive Liabilities (RSL) as per their residual maturity/
re-pricing dates in various time bands and computing the Modiﬁ ed Duration Gap (MDG). MDG is used to evaluate the
impact on the MVE of the Bank under different interest rate scenarios. The Bank applies a standardised 200 bps parallel
rate shock by applying sensitivity weights to each time band (based on estimates of duration of the assets and liabilities
that fall into each time band) to measure the economic impact of the shock. The shock of 200 basis points is applied to
the entire balance sheet including the trading book as per RBI guidelines.

The ﬁ ndings of the various IRRBB measures are submitted to the ALCO, which is the apex committee for providing
strategic guidance and direction for the ALM measures.

Details of increase/(decrease) in earnings and economic value for upward and downward rate shocks based on balance
sheet as on 31st March 2013 are given below:

Earnings Perspective

Currency

INR

USD

Residual

Total

Economic Value Perspective

Currency

INR

USD

Residual

Total

184

(` in crores)

Interest Rate Shock

+200bps

(521.10)

39.58

11.99

(469.53)

-200bps

521.10

(39.58)

(11.99)

469.53

(` in crores)

Interest Rate Shock

+200bps

3,267.92

146.04

41.83

-200bps

(3,267.92)

(146.04)

(41.83)

3,455.79

(3,455.79)

BANK’S NETWORK : LIST OF CENTRES
AS ON 31 MARCH, 2013

State/ UT

State/ UT
Andaman &
Nicobar UT

Andhra Pradesh

Centre
Bathu Basti
Diglipur
Port Blair
Adilabad
Adoni
Alamuru
Alwal
Anakapalle
Anantapur
Bapatla
Bibinagar
Bobilli
Chevella
Chillakallu
Chinnamiram
Chirala
Chittoor
Dharmavaram
Edarapalli
Eluru
Gachibowli
Gajuwaka
Gollamandala
Gopalapatnam
Gudivada
Guntakal
Guntur
Hindupur
Hyderabad (Hyderabad)
Hyderabad (Rangareddy)
Jangareddigudem
Jayanthi
Kadapa
Kadiri
Kaikaluru
Kakinada
Kamareddy
Kandanathi
Kandukur
Karimnagar
Kasibugga
Kavali
Khammam
Kompally
Kothagudem
Kothbaspalle
Kukatpally
Kurnool
L B Nagar

Centre
Machilipatnam
Madanpalle
Mahabubabad
Mahbubnagar
Malkajgiri
Mancherial
Miryalguda
Mumbapur
Muthukur
Nalgonda
Nandyal
Narasaraopet
Nellore
Nizamabad
Nuzvid
Ongole
P L Puram
Paidiparru
Paritala
Patancheru
Peddahottur
Peddapalli
Poolapalle
Proddatur
Pulluru
Quthbullapur
Rajahmundry
Rajam
Rajampet
Ramagundam
Repalle
Sangareddy
Sathupally
Serilingampally
Shamshabad
Siddipeta
Srikakulam
Suryapet
Tadepalligudem
Tadpatri
Tenali
Tirupati
Uppal Kalan
Vemugodu
Verrupapuram
Vijayawada
Vinukonda
Visakhapatnam
Vizianagaram

State/ UT

Centre
Warangal
Yemmiganur
Zahirabad

Arunachal Pradesh Itanagar
Assam

Bihar

Barpeta Road
Biswanath Chariali
Bongaigaon
Dhubri
Dibrugarh
Duliajan
Goalpara
Golaghat
Guwahati (Kamrup Metro)
Guwahati (Kamrup)
Hailakandi
Hojai
Jorhat
Karimganj
Kokrajhar
Mangaldoi
Margherita
Morigaon
Nagaon
Nalbari
Noonmati
North Lakhimpur
Sibsagar
Silchar
Tezpur
Tinsukia
Udalguri
Abul Hasanpur
Arrah
Aurangabad
Barh
Basudevpur Chaputa
Begusarai
Bettiah
Bhabhua
Bhagalpur
Biharsharif
Buxar
Chapra
Danapur
Darbhanga
Darveshpur
Daulatpur Dewaria
Devkuli
Gaya

185

Centre
Gopalganj
Gopinathpur Dokra
Hajipur
Jehanabad
Kanchanpur
Katihar
Kishanganj
Kuari Buzurg
Madhepura
Madhubani
Majithi
Motihari
Munger
Muzaffarpur
Naugachhia
Patna
Purnia
Saharsa
Samastipur
Sasaram
Sitamarhi
Siwan
Chandigarh
Manimajra
Abhanpur
Akaltara
Ambikapur
Basin
Bhatapara
Bhilai
Bilaspur
Champa
Chandkuri
Dalli Rajhara
Dhamtari
Dongargarh
Dunda
Durg
Hatmudi
Jagdalpur
Jairam Nagar
Jashpurnagar
Jhilmila
Kanker
Kawardha
Kharsia
Korba
Mahasamund
Manendragarh
Raigarh
Raipur
Rajim
Rajnandgaon
Sakti

State/ UT

Chandigarh UT

Chattisgarh

186

State/ UT

Centre
Tulsi
Urla

Dadra & Nagar UT Silvassa
Daman & Diu UT Daman

State/ UT

Delhi
Goa

Gujarat

Diu
Delhi
Agaciam
Candolim
Mapusa
Margao
Panaji
Ponda
Vasco
Ahmedabad
Alipura
Amreli
Anand
Anjar
Ankleshwar
Asura
Atul
Bagasara
Bardoli
Bharuch
Bhavnagar
Bhuj
Bopal
Borsad
Botad
Chandlodiya
Changodar
Chhatral
Chikhli
Dahej
Dahod
Deesa
Devgad Baria
Dhoraji
Dhrangadhra
Dhrol
Dwarka
Gadhada
Gandhidham
Gandhinagar
Gariadhar
Godhra
Gondal
Halol
Harij
Himatnagar
Ichchapore
Idar
Jambusar
Jamjodhpur

Centre
Jamnagar
Jasdan
Jetpur-Navagadh
Junagadh
Kalavad
Kalol
Keshod
Khadat
Khambalia
Kodinar
Lathi
Madhapar
Mahuva
Manavadar
Mandvi
Mehsana
Metoda
Modasa
Morbi
Moti Bhoyan
Mundra
Nadiad
Naranpar
Navagam
Navsari
Paddhari
Padra
Palanpur
Patan
Pipavav
Porbandar
Radhanpur
Rajkot
Rajpipla
Rajula
Rapar
Sanand
Sihor
Sokhda
Surat
Surendranagar
Talaja
Tarasadi
Tathithaiya
Udalpur
Udhna
Umbergaon
Unjha
Upleta
Vadodara
Vallabh Vidyanagar
Valsad
Vansda
Vapi

State/ UT

Haryana

Centre
Vastrapur
Vega
Vejalpur
Veraval
Viramgam
Visavadar
Visnagar
Vyara
Wada
Wankaner
Ambala
Bahadurgarh
Baiyanpur
Basdhara
Bastali
Batour
Bhiwani
Bhiwani Khera
Bhurewala
Cheeka
Chhapra
Dahar
Dinarpur
Faridabad
Fatehabad
Garhi Sampla
Garhi Sarai Namdarkalan
Garnala
Ghespur
Gillan Khera
Gurgaon
Hissar
Jai Singh Pura
Jakhal
Jhajjar
Jind
Kaithal
Kakrali
Kalka
Kalpi
Kanwala
Karnal
Kumharia
Kundli
Kurukshetra
Magharpura
Makrauli Khurd
Manesar
Mirzapur
Nanaud
Narnaul
Narwana
Palri Kalan
Palwal

State/ UT

Centre
Panchkula
Panipat
Panjlasha
Ram Saran Majra
Ratia
Rawaldhi
Rewari
Rohtak
Sadaura
Saﬁ don
Saraswati Khera
Sherpur
Sirsa
Sonipat
Taranwali
Teha
Tibbi Majra
Todarpur
Tohana
Yamunanagar

Himachal Pradesh Baddi
Mandi
Shimla
Solan
Una

Jammu & Kashmir Anantnag

Jharkhand

Karnataka

Jammu
Leh
Srinagar
Udhampur
Bokaro
Chaibasa
Chas
Chirkunda
Daltonganj
Deoghar
Dhanbad
Dumka
Gamaria
Ghatshila
Giridih
Gumia
Hazaribagh
Jamshedpur
Kodarma
Mango
Patratu
Ramgarh
Ranchi
Arsikere
Athni
Bagalkot
Bailhongal
Bangalore

State/ UT

Centre
Basavakalyan
Belgaum
Bellary
Bhadravati
Bidadi
Bidar
Bijapur
Chamarajanagar
Channarayapatna
Chickmagalur
Chikballapur
Chikodi
Chintamani
Chitradurga
Davangere
Devadurga
Devanahalli
Dod Ballapur
Gadag
Gangawati
Gokak
Gottagodi
Gulbarga
Hassan
Haveri
Hoskote
Hospet
Hubli-Dharwad
Jamkhandi
Jinnur
Karwar
Kolar
Kollegal
Koppal
Kundapura
Kushalnagar
Kushtagi
Mandya
Mangalore
Manipal
Manvi
Marlanhalli
Moodbidri
Mudhol
Mysore
Nelamangala
Nipani
Puttur
Raichur
Ramanagara
Ranibennur
Sagar
Saidapur
Sandur

187

Centre
Sedam
Shahpur
Shimoga
Sindhnur
Sirsi
Siruguppa
Tavargeri
Tiptur
Tumkur
Udupi
Yadgir
Adoor
Alappuzha
Aluva
Angamaly
Attingal
Changanasseri
Irinjalakuda
Kalamaserry
Kanhangad
Kannur
Kasargod
Kazhakuttam
Kochi
Kollam
Kothamangalam
Kottakkal
Kottarakkara
Kottayam
Kozhikode
Malappuram
Manjeri
Mavelikkara
Nedumangad
Nilambur
North Paravur
Palai
Palakkad
Pathanamthitta
Payyannur
Perinthalmanna
Perumbavoor
Sulthanbathery
Taliparamba
Thalassery
Thiruvananthapuram
Thodupuzha
Thrikkakara
Thrippunithura
Thrissur
Tirur
Tiruvalla

State/ UT

Kerala

188

State/ UT

Centre
Vadakara
Madhya Pradesh Alirajpur

State/ UT

Maharashtra

Ashok Nagar
Balaghat
Barwani
Beetul
Bhind
Bhopal
Bicholi Hapsi
Bina
Burhanpur
Chhatarpur
Chhindwara
Dabra
Damoh
Datia
Dewas
Dhar
Gawli Palasia
Guna
Gwalior
Harda
Hoshangabad
Indore
Itarsi
Jabalpur
Jhabua
Kalapipal
Katara
Katni
Khandwa
Khargone
Lasudia Mori
Maihar
Majhuali
Mandla
Mandsaur
Morena
Nagda
Narsimhapur
Neemuch
Pipariya
Pithampur
Raisen
Rajgarh
Ratlam
Rau
Rewa
Sagar
Satna
Sehore
Sendhwa
Seoni
Shahdol

Centre
Shahpura
Shajapur
Sheopur
Shivpuri
Sidhi
Singrauli
Tikamgarh
Ujjain
Vidisha
Waidhan
Ahmednagar
Akluj
Akola
Alibag
Ambernath
Amravati
Aurangabad
Badlapur
Ballarpur
Baramati
Barshi
Beed
Bhandara
Bhigwan
Bhiwandi
Bhusawal
Boisar
Buldhana
Chakan
Chalisgaon
Chandrapur
Chiplun
Daund
Devalali
Dhule
Dindori
Dombivali
Ghoti
Gondia
Hinghanghat
Hingna
Hingoli
Hinjewadi
Ichalkaranji
Islampur
Jalgaon
Jalna
Kagal
Kalyan
Karad
Khamgaon
Khed-Shivapur
Kolhapur
Lasalgaon

State/ UT

Manipur

Centre
Latur
Malegaon
Malkapur
Mira-Bhayander
Miraj
Mumbai
Murbad
Nagpur
Nalasopara
Nanded
Nandurbar
Nashik
Navi Mumbai (Thane)
Navi Mumbai (Raigad)
Osmanabad
Pandharpur
Panvel
Paratwada
Parbhani
Pen
Phaltan
Pimpalgaon
Pimpri Chinchwad
Pune
Rahuri-Khurd
Ratnagiri
Sangamner
Sangli
Satara
Shikrapur
Shirdi
Shirur
Shrirampur
Sinnar
Solapur
Tasgaon
Thane
Tuljapur
Udgir
Ulhasnagar
Vasai
Virar
Wadi
Wai
Waluj
Wani
Wardha
Washim
Yavatmal
Yevla
Yewat
Churachandpur
Imphal (East)
Imphal (West)

State/ UT
Meghalaya

Mizoram
Nagaland

Orissa

Centre
Jowai
Shillong
Tura
Aizawl
Dimapur
Kohima
Mokokchung
Wokha
Angul
Balasore
Barbil
Bargarh
Baripada
Basuaghai
Berhampur
Bhadrak
Bhanjanagar
Bhawanipatna
Bhubaneswar
Bolangir
Boudhgarh
Chandanpur
Chandikhole
Cuttack
Deogarh
Dhamraport
Dharamgarh
Dhenkanal
Dumuduma
Gopalpur
Gunupur
Jagatpur
Jagatsinghpur
Jajpur
Jaleswar
Jatni
Jeypore
Jharsuguda
Kalarhanga
Kantabanji
Kendrapara
Keonjhar
Khordha
Koraput
Kundra
Lunahar
Malkangiri
Mancheswar
Nabrangpur
Nawapara (Nuapada)
Nayagarh
Nimapara
Paradip
Parlakhemundi

State/ UT

Pondicherry UT

Punjab

Centre
Phulbani
Puri
Rairangpur
Rajgangpur
Rayagada
Rourkela
Sambalpur
Sonepur
Sundargarh
Talcher
Titlagarh
Umerkote
Karaikal
Pondicherry
Abohar
Adampur
Adamwal
Adda Dhaka
Ajnala
Amloh
Amritsar
Bagha Purana
Ballo Majra
Ballopur
Banga
Baran Hara
Barnala
Batala
Bathinda
Begowal
Bhatta Dhua
Bhogpur
Bikhiwind
Budhlada
Changal
Chatt
Chau Majra
Cheeda
Chogawan
Dalamwal
Dasuya
Dera Baba Nanak
Derabassi
Devigarh
Dhariwal
Dhilwan
Dhuri
Dinanagar
Dohlron
Faridkot
Fatehgarh Churian
Fatehgarh Sahib
Fazilka
Ferozepur

189

Centre
Gardhiwala
Garhshankar
Gehri Mandi
Gill Patti
Gobindgarh
Goraya
Gurdaspur
Gureh
Hoshiarpur
Hukumat Singh Wala
Jagraon
Jalandhar
Jassian
Jeeda
Jhabal Kalan
Jian
Kangniwal
Kapurthala
Kartarpur
Katar Singhwala
Khadaur Sahib
Khanna
Kheri Jattan
Kotkapura
Kukkar Majra
Kurarhi
Lakhnaur
Lambra
Landran
Ludhiana
Majitha
Malerkotla
Malout
Manakwal
Mangli Nichhi
Mansa
Mavi Kalan
Mehron
Miani Khas
Moga
Mohali
Mowai
Mukerian
Muktsar
Multania
Mundian Kalan
Nabha
Nagra
Nakodar
Nawan Purba
Nawanshahr
Pathankot
Patiala
Patti

State/ UT

190

State/ UT

Rajasthan

Centre
Phagwara
Phillaur
Phuglana
Phullanwala
Qadian
Raikot
Raipur Kalan
Rajpura
Ramasara
Ramnagar
Ranian
Rayya
Rupnagar
Rurki Kalan
Sahnewal
Sailkiana
Samana
Samrala
Sangal Sohal
Sangrur
Sarsini
Shahkot
Sher Khan Wala
Sri Hargobindpur
Sudhar
Sultanpur Lodhi
Sunam
Tarn Taran
Theri
Threeke
Tung
Urmar Tanda
Abu Road
Ajmer
Alwar
Balotra
Bandikui
Banswara
Baran
Barmer
Bayana
Beawar
Behror
Bhadra
Bharatpur
Bhilwara
Bhiwadi
Bikaner
Bilara
Bundi
Chirawa
Chittaurgarh
Churu
Dausa

State/ UT

Sikkim

Tamil Nadu

Centre
Deeg
Didwana
Dungarpur
Ganganagar
Hanumangarh
Jaipur
Jalore
Jhalawar
Jhunjhunu
Jodhpur
Khairthal
Khandela
Khatoo Shyamji
Kherli
Kishangarh Bas
Kota
Lachhmangarh
Lalsot
Losal
Mahwa
Mandawa
Merta City
Mukandgarh
Nadbai
Nagar
Nagaur
Nathdwara
Neem-Ka-Thana
Nohar
Pali
Phalodi
Pilani
Pilibanga
Pipar City
Rajgarh
Ramgarh
Rawatbhata
Rawatsar
Reengus
Sagwara
Sangaria
Sardarshahar
Sawai Madhopur
Sikar
Sri Madhopur
Tijara
Tonk
Udaipur
Gangtok
Namchi
Rangpo
Ranipool
Alandur
Ambattur

State/ UT

Centre
Ammapettai
Anaikudam
Anthiyur
Appakudal
Aranthangi
Arni
Aruppukottai
Attur
Avadi
Ayothiapatinam
Bodhupatty
Chengalpattu
Chennai
Chidambaram
Coimbatore
Cuddalore
Cumbum
Dharapuram
Dharmapuri
Dindigul
Edanganasalai
Edappadi
Eraiyur
Erode
Gudiyatham
Hosur
Ilanji
Irungattukottai
Kallakkurichi
Kancheepuram
Kandeertheertham
Kangeyam
Karaikudi
Karamadai
Karumathampatti
Karur
Kelambakkam
Kethaiurambu
Korattur
Kottur
Krishnagiri
Kulumur
Kumbakonam
Labbaikudikadu
Lalgudi
Madurai
Maduranthakam
Mallasamudram
Manachanallur
Manapparai
Mannargudi
Mayiladuthurai
Mecheri
Medavakkam

State/ UT

Centre
Merpanaikadu
Mettunasuvampalayam
Mettupalayam
Mettur
Mullipuram
Musiri
Muthuservamadam
Nagapattinam
Nagercoil
Nallikaundanpalayam
Nasiyanur
Omalur
Ooty
Oriyur
Palayamkottai
Palladam
Pallavaram
Paramkudi
Pattukottai
Perambalur
Periasemur
Perungudi
Pollachi
Poonamallee
Porur
Pudukkottai
Rajapalayam
Ramanathapuram
Rasipuram
Salem
Sankari
Sarkarsamakulam
Sathyamangalam
Sembakkam
Sevugampatti
Sirugamani
Sivakasi
Srirangam
Taramangalam
Thanjavur
Theni
Thirukalambur
Thirukarungudi
Thiruvallur
Thiruvarur
Thiruvottiyur
Thondamuthur
Thoraipakkam
Thuraiyur
Tiruchengode
Tiruchirapalli
Tirunelveli
Tirupur
Tiruttani

State/ UT

Tripura

Uttar Pradesh

Centre
Tiruvannamalai
Tuticorin
Varanavasi
Vazhapadi
Veerapatti
Vellakoil
Vellore
Vembarpatti
Villupuram
Virudhunagar
Agartala
Bishalgarh
Dharmanagar
Udaipur
Agra
Aligarh
Allahabad
Amroha
Aonla
Atrauli
Azamgarh
Badaun
Baghpat
Baheri
Bahraich
Ballia
Balrampur
Banda
Bansi
Barabanki
Bareilly
Basti
Bhadohi
Bhaisana
Bijnor
Bilaspur
Bulandshahr
Chandausi
Deoria
Dhampur
Etah
Etawah
Faizabad
Farrukhabad
Fatehpur
Firozabad
Gajraula
Ghaziabad
Ghazipur
Gonda
Gorakhpur
Hapur
Hardoi
Hathras

191

State/ UT

West Bengal

Centre
Jaunpur
Jhansi
Kannauj
Kanpur
Khalilabad
Khatauli
Khurja
Kosikalan
Lakhimpur-Kheri
Lalitpur
Lucknow
Maharajganj
Mahoba
Mainpuri
Mathura
Maunath Bhanjan
Meerut
Mirzapur
Moradabad
Muzaffarnagar
Najibabad
Noida
Padrauna
Palia Kalan
Pilibhit
Pratapgarh
Puranpur
Rae Bareli
Rampur
Renukoot
Saharanpur
Sambhal
Shahjahanpur
Shikhohabad
Sirsaganj
Sitapur
Sultanpur
Unnao
Varanasi
Vrindavan
Bazpur
Bhaisia
Dehradun
Gangoowala
Haridwar
Kashipur
Kichha
Makanpur Mahmood Alampur
Mussoorie
Pandri
Rishikesh

State/ UT

Uttarakhand

192

Centre
Roorkee
Rudrapur
Talli Haldwani
Alipurduar
Amtala
Andul
Arambagh
Asansol
Bagnan
Baharampur
Baidyabati
Bally
Balurghat
Bankura
Baranagar
Barasat
Barddhaman
Barrackpore
Baruipur
Basirhat
Belghoria
Binnaguri
Bolpur
Bongaon
Boral
Chandernagore
Chinsurah
Contai
Dakshineswar
Dalkhola
Dankuni
Dareeiling
Dhupguri
Diamond Harbour
Domjur
Dum Dum
Durgapur
Farakka
Fulia
Guskara
Habra
Haldia
Howrah
Islampur
Jaigaon
Jalpaiguri
Jangipur
Jaynagar Mazilpur
Kalimpong
Kalna
Kalyani

State/ UT

Grand Total
Overseas

Centre
Kanchrapara
Kandi
Katwa
Kharagpur
Khardaha
Koch Bihar
Kolkata
Konnagar
Krishnanagar
Madhyamgram
Mahestala
Malda
Maslandpur
Medinipur
Memari
Nabadwip
Nabapally
Naihati
Narendrapur
New Barrackpore
New Garia
Nimta
Panagarh
Pandua
Panihati
Panskura
Puruliya
Raiganj
Rajarhat
Rajpur-Sonarpur
Rampurhat
Ranaghat
Raniganj
Rishra
Sainthia
Salt Lake
Serampore
Shyamnagar
Siliguri
Singur
Suri
Tamluk
Tarakeswar
Uttarpara
1263
Singapore
Hong Kong
Dubai
Shanghai
Abu Dhabi
Colombo

Nineteenth Annual Report 2012-13

AXIS BANK LIMITED

NOTICE

NOTICE is hereby given that the Nineteenth Annual General Meeting of the members of Axis Bank Limited will be held
on Friday, the 19th July, 2013 at 10.00 A.M. at J. B. Auditorium, Ahmedabad Management Association, AMA Complex,
ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad - 380 015 to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Balance Sheet as at 31st March, 2013, Proﬁ t & Loss Account and Cash ﬂ ow

statement for the year ended 31st March, 2013 and the reports of Directors and Auditors thereon.

2. To appoint a Director in place of Shri S. B. Mathur, who retires by rotation and, being eligible, offers himself for

re-appointment as a Director.

3. To appoint a Director in place of Shri Prasad R. Menon, who retires by rotation and, being eligible, offers himself for

re-appointment as a Director.

4. To appoint a Director in place of Shri R. N. Bhattacharyya, who retires by rotation and, being eligible, offers himself

for re-appointment as a Director.

5. To declare a dividend on the Equity Shares of the Bank.

6. To consider and pass with or without modiﬁ cation(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 224A and other applicable provisions, if any, of the
Companies Act, 1956 and the Banking Regulation Act, 1949, M/s. Deloitte Haskins & Sells, Chartered Accountants,
Ahmedabad, ICAI Registration Number 117365W, be and are hereby appointed as the Statutory Auditors of the Bank
to hold ofﬁ ce from the conclusion of the Nineteenth Annual General Meeting until the conclusion of the Twentieth
Annual General Meeting, on such remuneration as may be approved by the Audit Committee of the Board.”

SPECIAL BUSINESS:

7. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT Smt. Ireena Vittal, who was appointed as an Additional Director at the meeting of the Board of
Directors held on 3rd November, 2012 and who holds ofﬁ ce as such upto the date of this Annual General Meeting
and in respect of whom notice under Section 257 of the Companies Act, 1956 has been received from a member
signifying his intention to propose Smt. Ireena Vittal as a candidate for the ofﬁ ce of Director of the Bank is hereby
appointed as a Director of the Bank, liable to retire by rotation.”

8. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT Shri Rohit Bhagat, who was appointed as an Additional Director at the meeting of the Board of
Directors held on 16th January, 2013 and who holds ofﬁ ce as such upto the date of this Annual General Meeting
and in respect of whom notice under Section 257 of the Companies Act, 1956 has been received from a member
signifying his intention to propose Shri Rohit Bhagat as a candidate for the ofﬁ ce of Director of the Bank is hereby
appointed as a Director of the Bank, liable to retire by rotation.”

9. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT Dr. Sanjiv Misra, who was appointed as an Additional Director with effect from 8th March, 2013
(Date of RBI approval) and who holds ofﬁ ce as such upto the date of this Annual General Meeting and in respect
of whom notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his
intention to propose Dr. Sanjiv Misra as a candidate for the ofﬁ ce of Director of the Bank is hereby appointed as a
Director of the Bank, not liable to retire by rotation.”

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Nineteenth Annual Report 2012-13

10. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of the Companies Act, 1956, Banking Regulation Act, 1949 and
Articles of Association of the Bank, Dr. Sanjiv Misra is appointed as the Non-Executive Chairman of the Bank
for a period of three years, effective 8th March, 2013 upto 7th March, 2016 and he be paid remuneration as a
Non-Executive Chairman of the Bank as per the following terms and conditions:

Particulars
1. Remuneration
Perquisites

1. Staff Car
2. Touring
3. Driver, Ofﬁ ce, Ofﬁ ce Staff

`15 lacs per annum.

: Car to be provided by the Bank.
:
:

Traveling expenses to be borne by the Bank for Board functions as a Chairman.
Furnishing of ofﬁ ce including all equipments – upto a total cost of `7.5 lacs
(one time expenses).
Expenses for ofﬁ ce maintenance – `1,25,000/- per month as a reimbursement
on the basis of self declaration.

4. Sitting Fees

: As payable to other Non-Executive Directors”.

“RESOLVED FURTHER THAT the Board of Directors of the Bank is authorised to do all such acts, deeds and things
and to execute any document or instruction etc. as may be required to give effect to this Resolution.”

11. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT subject to approval by the Reserve Bank of India, approval of the members of the Bank is hereby
given for revising the remuneration by way of salary and perquisites payable to Smt. Shikha Sharma, Managing
Director & CEO of the Bank, with effect from 1st June, 2013, as under :

a. Basic Salary: `1,96,02,000 per annum.

b. House Rent Allowance in lieu of Bank’s owned / leased accommodation be paid at `65,47,200 per annum.

c. Utility Bills be reimbursed at actual upto a limit of `3,30,000 per annum.

d. Leave Fare Concession facility be paid at `12,26,500 per annum.

e. Variable Pay to be paid as decided by the Board.

f. All other terms and conditions of her employment to remain unchanged.”

12. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT subject to approval by the Reserve Bank of India, approval of the members of the Bank is hereby
given for revising the remuneration by way of salary and perquisites payable to Shri Somnath Sengupta, Executive
Director & Head (Corporate Centre) of the Bank, with effect from 1st April, 2013 or such other date as may be
approved by RBI, as under :

a. Basic Salary: `1,27,08,720 per annum.

b. House Rent Allowance in lieu of Bank’s owned/leased accommodation be paid at `30,89,120 per annum.

c. Utility Bills be reimbursed at actual upto a limit of `1,32,000 per annum.

d. Leave Fare Concession facility be paid at `5,50,000 per annum.

e. Variable Pay to be paid as decided by the Board.

f. All other terms and conditions of his employment to remain unchanged.”

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Nineteenth Annual Report 2012-13

13. To consider and pass with or without modiﬁ cation(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT subject to approval by the Reserve Bank of India, approval of the members of the Bank is hereby
given for revising the remuneration by way of salary and perquisites payable to Shri V. Srinivasan, Executive Director
& Head (Corporate Banking) of the Bank, with effect from 1st April, 2013 or such other date as may be approved by
RBI, as under:

a. Basic Salary: `1,37,26,136 per annum.

b. House Rent Allowance in lieu of Bank’s owned / leased accommodation be paid at `30,89,120 per annum.

c. Utility Bills be reimbursed at actual upto a limit of `1,32,000 per annum

d. Leave Fare Concession facility be paid at `5,50,000 per annum.

e. Variable Pay to be paid as decided by the Board.

f. All other terms and conditions of his employment to remain unchanged.”

14. To consider and pass with or without modiﬁ cation(s), the following resolution, as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of section 81 and all other applicable provisions, if any, of the
Companies Act, 1956, and in accordance with other regulatory laws and the provisions of the Memorandum and
Articles of Association of the Bank, the Board of Directors is authorised to issue, offer and allot additional equity stock
options convertible into Equity Shares of the aggregate nominal face value not exceeding `7,50,00,000 (75,00,000
equity shares of `10/- each paid up) in addition to the approvals already granted by shareholders at their General
Meetings, to the present and future employees and Whole-time Directors of the Bank under an Employee Stock
Option Scheme (ESOS), on the terms and conditions as set out in the Explanatory Statement to this resolution and on
such other terms and conditions and in such tranche/s as may be decided by the Board in its absolute discretion.”

“RESOLVED FURTHER THAT without prejudice to the generality of the above, but subject to the terms, as approved
by the members, the Board / HR and Remuneration Committee, is authorised to implement the scheme (with or
without modiﬁ cations and variations) in one or more tranches in such manner as the Board/HR and Remuneration
Committee may determine.”

“RESOLVED FURTHER THAT the Board is authorised to delegate all or any of the powers herein conferred to the HR
and Remuneration Committee constituted for this purpose or to the Managing Director & CEO of the Bank.”

“RESOLVED FURTHER THAT the Equity Shares to be issued as stated aforesaid shall rank pari-passu with all existing
Equity Shares of the Bank, including for the purpose of payment of dividend.”

Place : Mumbai
Date : 25th April, 2013

By order of the Board

P. J. Oza
Company Secretary

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Notes:

Nineteenth Annual Report 2012-13

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. PROXIES IN ORDER TO
BE VALID AND EFFECTIVE MUST BE DELIVERED AT THE REGISTERED OFFICE OF THE BANK NOT LATER THAN
FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

2. The relevant explanatory statement pursuant to the provisions of Section 173(2) of the Companies Act, 1956 in

respect of item Nos. 6 to 14, is annexed hereto.

3. The Register of Members and the Share Transfer Books of the Bank will remain closed from Tuesday, the 9th day of

July, 2013 to Friday, the 19th day of July, 2013 (both days inclusive).

4. The Dividend would be paid to the shareholders whose names stand on the Register of Members on the close of
business hours of 8th July, 2013. ECS credit / dispatch of the dividend warrants would commence on 20th July, 2013
and is expected to be completed on or before 26th July, 2013.

5. Shareholders holding shares in physical form are requested to immediately notify change in their address, if any, to
the Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited, Hyderabad or to the Registered
Ofﬁ ce of the Bank, quoting their Folio number(s).

In order to avoid fraudulent encashment of dividend warrants, the details of your Bank Account will be printed
on the dividend warrants. We, therefore, request you to send to our Registrar and Share Transfer Agents,
M/s. Karvy Computershare Private Limited, Hyderabad or to the Registered Ofﬁ ce of the Bank, on or before
8th July, 2013, a Bank Mandate (providing details of name of the Bank, branch and place with PIN code No.,where
the account is maintained and the Bank Account No) or changes therein, if not provided earlier, under the signature
of the Sole / First holder quoting their Folio number.

The Bank is offering the facility of ECS/NECS in centres wherever available. The ECS Mandate Form is annexed.
This facility could also be used by the shareholders instead of the Bank Mandate System, for receiving the credit of
dividends.

6. Shareholders holding shares in dematerialised mode are requested to intimate all changes pertaining to their bank
details, ECS mandates, email addresses, nominations, power of attorney, change of address/name etc. to their
Depository Participant (DP) only and not to the Bank or its Registrar and Share Transfer Agents. Any such changes
effected by the DPs will be automatically reﬂ ected in the records of the Bank subsequently.

7. Shareholders may avail of the Nomination Facility under Section 109A of the Companies Act, 1956. The relevant

Nomination Form is annexed.

8. Shareholders seeking any information with regard to accounts are requested to write to the Bank at an early date to

enable the Management to keep the information ready.

9. SEBI has made it mandatory for every participant in the securities/capital market to furnish the details of Income tax
Permanent Account Number (PAN). Accordingly, all the shareholders holding shares in physical form are requested to
submit their details of PAN along with a photocopy of both sides of the PAN card, duly attested, to the Registrar and
Share Transfer Agents of the Bank.

10. The Ministry of Corporate Affairs (MCA) has launched “Green Initiatives in the Corporate Governance” by allowing
paperless compliances by the companies. MCA has issued circulars stating that the service of a notice/document by
a company to its shareholders can now be made through electronic mode. In view of the above, the Annual Report
(Audited Financial Statements, Directors Report, Auditors Report etc.) is being sent to the shareholders in electronic
form to the email address registered with their Depository Participant (in case of electronic shareholding)/the Bank’s
Registrar and Share Transfer Agents (in case of physical shareholding).

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Nineteenth Annual Report 2012-13

We, therefore, request and encourage you to register your email ID in the records of your Depository Participant
(in case of electronic holding)/the Bank’s Registrar and Share Transfer Agents (in case of physical shareholding)
mentioning your folio no./demat account details.

However, in case you wish to receive the above shareholder communication in paper form, you may write to the
Bank’s Registrar and Share Transfer Agents, M/s. Karvy Computershare Private Limited, Unit: Axis Bank Limited,
Plot No. 17 to 24, Vittalrao Nagar, Madhapur, Hyderabad – 500081, or send an email at einward.ris@karvy.com
mentioning your folio no./demat account details.

The Shareholders are requested to write to the Company Secretary or to the Registrar and Share Transfer Agents
regarding transfer of shares and for resolving grievances at the below address.

The Company Secretary
Axis Bank Limited
Registered Ofﬁ ce
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad – 380 006.
Email: p.oza@axisbank.com or sanjeev.kapoor@axisbank.com or rajendra.swaminarayan@axisbank.com

M/s. Karvy Computershare Private Limited

Unit: Axis Bank Limited
Plot No. 17 to 24, Vittalrao Nagar, Madhapur, Hyderabad – 500 081.
Phone No. 040-23420815 to 23420824
Fax No. 040-23420814
Email: einward.ris@karvy.com
Contact Persons: Shri V. K. Jayaraman, GM (RIS) / Ms.Varalakshmi, Sr. Manager (RIS)

11. Information regarding Directors retiring by rotation:

i) Shri S. B. Mathur is a Chartered Accountant, registered with the Institute of Chartered Accountants of India. He has
also qualiﬁ ed in Parts I and II of Institute of Costs and Works Accountants, London. Shri Mathur is director of NSE
and a former chairman of LIC. Prior to serving as chairman of LIC, Shri Mathur was Executive Director of marketing
and international operations at LIC. He has also held various senior positions at LIC and attended several seminars
at national and international forums. He was appointed by the Government of India to serve as the Administrator of
SUUTI from December 2004 to November 2007. As on 31st March 2013, he is the Chairman of the Audit Committee
and Nomination Committee and member of Committee of Directors, Shareholders / Investors Grievance Committee
and Acquisitions, Divestments and Mergers Committee of the Bank’s Board. He does not hold any equity share of the
Bank.

ii) Shri Prasad R. Menon is a Chemical Engineer from the Indian Institute of Technology, Kharagpur. He has over 40
years of diverse experience in premier multinational and Indian companies in the chemical and power industry. In
October 2000, Shri Menon took over as the Managing Director of Tata Chemicals Limited where he helped complete
the successful acquisition and integration of Brunner Mond (U.K.) Limited, Magadi Soda Company (Kenya) and
Indo MarocPhosphore S.A. (Morocco). In October 2006, he took over as the Managing Director of The Tata Power
Company Limited. He has championed sustainability as a key strategic initiative in the organization. Shri Menon
serves on the Board of Directors of several major Tata Group companies, as well as on the supervisory board of
Sanmar Group in Chennai and SKF India Limited. He is the Chairman of the Tata Group Safety Committee as well
as Group Sustainability Committee. Shri Menon is the member of the Advisory Council of IITB-Monash Research
Academy. He is also a Member of the Governing Council of Centre for Environment Education, Nehru Foundation
for Development; Member of the Advisory Board of the Grantham Institute in London; Member of the Advisory
Committee of National Stock Exchange Centre for Excellence in Corporate Governance; on the Advisory Board of
The Energy & Resources Institute (TERI); and he is on the Advisory Council of CII-ITC Centre of Excellence for Sustainable

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Nineteenth Annual Report 2012-13

Development. As on 31st March 2013, he is the Chairman of HR and Remuneration Committee and Acquisitions,
Divestments and Mergers Committee and member of Committee of Directors and IT Strategy Committee of the
Bank’s Board. He does not hold any equity share of the Bank.

iii) Shri R. N. Bhattacharyya has a Masters degree in Economics from Calcutta University and has worked for two years
as a lecturer at WB educational services. Shri Bhattacharyya was a member of the local board of the State Bank of
India at the Kolkata region from June 2010 to January 2011 and is a 36-year veteran of the Indian Police Service. From
July 2006 to July 2009, Shri Bhattacharyya served as a part time non-ofﬁ cial director on the Board of Directors of
Hindustan Aeronautics Limited, Bangalore. He was also the Director of insurance in the Department of Economic
Affairs, Ministry of Finance, from 1984 to 1986 and the Director of the Department of Steel, Ministry of Steel
and Mines, from1981 to 1984. In addition, Shri Bhattacharyya has served as government director on the boards
of Oriental Insurance Company in Delhi, United India Insurance Company in Chennai and New India Assurance
Company in Mumbai from 1984 to 1986. As on 31st March 2013, he is the member of Committee of Directors,
Shareholders / Investors Grievance Committee and Special Committee of the Board of Directors for Monitoring of
Large Value Frauds of the Bank’s Board. He does not hold any equity share of the Bank.

Place : Mumbai
Date : 25th April, 2013

By order of the Board

P. J. Oza
Company Secretary

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Nineteenth Annual Report 2012-13

ANNEXURE TO NOTICE

EXPLANATORY STATEMENT U/S 173(2) OF THE COMPANIES ACT, 1956

Item No. 6:

Section 224A of the Companies Act, 1956 provides that in case of companies in which not less than 25 percent of
the subscribed share capital is held, whether singly or in combination, by public ﬁ nancial institutions, banks, insurance
companies, Government companies, Central Government or State Government(s), the appointment of an Auditor of
the Company shall be made by a Special Resolution. The Administrator of the Speciﬁ ed Undertaking of the Unit Trust of
India (erstwhile Unit Trust of India), Life Insurance Corporation of India, General Insurance Corporation and its erstwhile
subsidiaries, constitute public ﬁ nancial institutions in terms of Section 4A of the Companies Act, 1956, and hold more
than 25 percent of the subscribed equity share capital of the Bank. Hence, a Special Resolution is proposed for the
appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Bank’s Statutory Auditors to hold ofﬁ ce from
the conclusion of this meeting upto the conclusion of the next Annual General Meeting.

As required, M/s. Deloitte Haskins & Sells have forwarded a certiﬁ cate to the Bank stating that their appointment, if made,
will be within the limit speciﬁ ed in Sub-Section (1B) of Section 224 of the Companies Act, 1956.

The Directors recommend the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Statutory
Auditors of the Bank.

None of the Directors is in any way concerned with or interested in the resolution at Item No. 6 of the Notice.

Item No. 7:

Smt. Ireena Vittal was appointed as an Additional Director of the Bank w.e.f. 3rd November, 2012. Under Section 260 of
the Companies Act, 1956, read with Article 91 of the Articles of Association of the Bank, she continues to hold ofﬁ ce
as a Director until the conclusion of the ensuing Annual General Meeting. However, as required under Section 257 of
the Companies Act, 1956, the Bank has received notice from a member signifying his intention to propose Smt.Vittal as
a candidate for the ofﬁ ce of Director of the Bank and the requisite deposit of `500 has also been received by the Bank
along with such notice. It is proposed that Smt. Vittal will be liable to retire by rotation. She does not hold any equity
share of the Bank.

Smt. Ireena Vittal has a B.Sc. in Electronics from Osmania University and a PGDM from IIM, Calcutta. She is an independent
strategic advisor, with signiﬁ cant knowledge in agriculture and urban development in India and emerging markets. She
has worked at McKinsey & Company for 16 years, where she assisted local and multinational companies in driving
proﬁ table growth. Smt. Vittal has also co-authored several studies relating to agriculture and urbanization.

As on 31st March, 2013, Smt.Vittal is a member of Risk Management Committee, Customer Service Committee and
Acquisitions, Divestments and Mergers Committee.

The Directors recommend approval of the resolution.

Except for Smt. Ireena Vittal, no other Director of the Bank is in any way concerned with or interested in the resolution
at Item No. 7 of the Notice.

Item No. 8:

Shri Rohit Bhagat was appointed as an Additional Director of the Bank w.e.f. 16th January, 2013. Under Section 260 of
the Companies Act, 1956, read with Article 91 of the Articles of Association of the Bank, he continues to hold ofﬁ ce as
a Director until the conclusion of the ensuing Annual General Meeting. However, as required under Section 257 of the
Companies Act, 1956, the Bank has received notice from a member signifying his intention to propose Shri Bhagat as
a candidate for the ofﬁ ce of Director of the Bank and the requisite deposit of `500 has also been received by the Bank
along with such notice. It is proposed that Shri Bhagat will be liable to retire by rotation. He does not hold any equity
share of the Bank.

Shri Rohit Bhagat has served as Chairman, Asia Paciﬁ c, of BlackRock (the world’s largest investment manager) and was
a member of the Global Executive Committee. Prior to that he served as the Global Chief Operating Ofﬁ cer of Barclays

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Nineteenth Annual Report 2012-13

Global Investors and was a member of the Global Executive Committee. Previously, he was a Senior Partner at The Boston
Consulting Group where his responsibilities over time included Managing Director of the Indian practice and co-head
of the US ﬁ nancial services practice. He has over 20 years of experience in ﬁ nancial services and related advisory work,
and has lived and worked in San Francisco, Hong Kong, Mumbai, London, Chicago and Delhi. He has an MBA from the
Kellogg School at Northwestern University, an M.S. Engg. from the University of Texas at Austin, and a B.Tech. from
the Indian Institute of Technology (Delhi). He has been a member of both TiE (The Indus Entrepreneur) and YPO (Young
Presidents Organization) and has served on the SEBI sub-committee for corporate governance.

As on 31st March, 2013, Shri Rohit Bhagat was not a member of any Committee of the Board.

The Directors recommend approval of the resolution.

Except for Shri Rohit Bhagat, no other Director of the Bank is in any way concerned with or interested in the resolution
at Item No. 8 of the Notice.

Item Nos. 9 and 10:

The Speciﬁ ed Undertaking of the Unit Trust of India had vide letter dated 10th January, 2013 nominated Dr. Sanjiv Misra,
as the Non-Executive Chairman of the Bank. The Board of Directors of the Bank has at its meeting held on 16th January,
2013, appointed him as an Additional Director and also subject to approval of Reserve Bank of India, Government of
India, the shareholders and such other approvals to the extent required, appointed Dr. Sanjiv Misra as the Non-Executive
Chairman of the Bank for a period of 3 years effective 8th March, 2013 or any date as may be approved by RBI on
the remuneration as set out in the resolution. RBI vide its letter dated 6th March, 2013 approved the appointment of
Dr. Sanjiv Misra as the Non-Executive Chairman of the Bank as also the payment of remuneration to him with effect from
8th March, 2013.

Dr. Sanjiv Misra graduated in Economics from St. Stephen’s College, Delhi. He has a Master’s degree in Economics from
the Delhi School of Economics, a Master’s degree in Public Administration from the Harvard Kennedy School, USA and
a Ph.D from the Jawaharlal Nehru University, New Delhi. At Harvard University, he was designated Lucius N. Littauer
Fellow of 1987 in recognition of exceptional academic strengths and leadership qualities. Dr. Misra was a member of the
Indian Administrative Service for over 35 years during which period he held a wide range of key positions in the Federal
and state governments, including as Managing Director of the Gujarat Industrial Development Corporation and stints at
senior levels in the Government of India in the Cabinet Ofﬁ ce, the Ministry of Petroleum and the Ministry of Finance. He
was a Secretary in the Ministry of Finance till his superannuation in 2008. Subsequently, he served as a Member of the
13th Finance Commission, a constitutional position with the rank of a Minister of State. Till recently Dr. Misra was
a member of the Advisory Council of the Asian Development Bank Institute, Tokyo. He was also a member of the
Committee on Fiscal Consolidation (Kelkar Committee) set up by the Finance Minister in August 2012 to chart out a road
map for ﬁ scal consolidation for the Indian economy. He has a number of publications on policy issues to his credit.

Under Section 260 of the Companies Act, 1956, read with Article 91(1) of the Articles of Association of the Bank,
Dr. Sanjiv Misra continues to hold ofﬁ ce as a Director until the conclusion of the ensuing Annual General Meeting.
However, as required under Section 257, the Bank has received notice from a member signifying his intention to propose
Dr. Sanjiv Misra as a candidate for the ofﬁ ce of Director of the Bank and the requisite deposit of `500 has also been
received by the Bank along with such notice. In terms of article no. 89 of the Articles of Association of the Bank, he is not
liable to retire by rotation. Dr. Sanjiv Misra does not hold any equity share of the Bank.

As on 31st March, 2013, Dr. Sanjiv Misra was not a member of any Committee of the Board.

The Directors recommend approval of the resolutions at Item Nos. 9 and 10 of the Notice.

Except for Dr. Sanjiv Misra, no other Director of the Bank is in any way concerned with or interested in the Resolutions
at Item Nos. 9 and 10 of the Notice.

Item No. 11:

The members of the Bank at the 18th Annual General Meeting held on 22nd June, 2012 had re-appointed Smt. Shikha
Sharma as the Managing Director & CEO of the Bank for a period of three years effective 1st June, 2012 and had also
approved payment of remuneration to her.

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Nineteenth Annual Report 2012-13

During the year ended 31st March, 2013, under leadership of Smt. Shikha Sharma,the Bank has shown all round progress
in terms of high quality proﬁ t growth, branch expansion, ATM network expansion and improved brand equity. The Bank
was able to sustain performance in Retail and Corporate Banking despite challenging external environment. She has been
instrumental in driving the progress on people front and setting the foundation for risk management for the Bank. In view
of this, the HR and Remuneration Committee of the Board, which met on 22nd April, 2013, examined the remuneration
of Smt. Shikha Sharma, the Managing Director & CEO, in comparison with the remuneration of the Managing Directors
of the peer group banks and recommended a revision in the emoluments to be paid to Smt. Shikha Sharma.

The Board of Directors of the Bank at its meeting held on 25th April, 2013 has approved the revision in remuneration by
way of salary and perquisites payable to Smt. Shikha Sharma with effect from 1st June, 2013.

The Directors recommend approval of the resolution.

No Director is in any way concerned with or interested in the Resolution at item No. 11 except Smt. Shikha Sharma to the
extent of revision in her remuneration.

Item No. 12:

The members of the Bank at the 18th Annual General Meeting held on 22nd June, 2012 had appointed Shri Somnath
Sengupta as the Wholetime Director of the Bank. He has taken charge as the Executive Director with effect from
15th October, 2012. The members had also approved remuneration to be paid to him.

During the year ended 31st March, 2013, Shri Somnath Sengupta took on a broader role of the Corporate Center Head and
has managed the set of diverse portfolios very well which include Audit and Compliance in addition to Risk, IT Operations
and Finance. He has been instrumental in developing the Residual Risk assessment framework for Retail Assets, Agri,
Information Systems & Forex. He has engaged himself extensively on HR issues. He has navigated transition of IT on both,
execution and leadership changes as needed. Under his guidance lot of building blocks have been put in place to create a
strong foundation of the Bank which will augment well in future for the Bank. In view of this, the HR and Remuneration
Committee of the Board, which met on 22nd April, 2013, reviewed the remuneration being paid to Shri Somnath Sengupta
in comparison with the remuneration of Executive Directors of peer group banks and recommended a revision in the
emoluments to be paid to him.

The Board of Directors of the Bank at its meeting held on 25th April, 2013 has approved the revision in remuneration by
way of salary and perquisites payable to Shri Somnath Sengupta with effect from 1st April, 2013 or such other date as
may be approved by RBI.

The Directors recommend approval of the resolution.

No Director is in any way concerned with or interested in the Resolution at item No. 12 except Shri Somnath Sengupta to
the extent of revision in his remuneration.

Item No. 13:

The members of the Bank at the 18th Annual General Meeting held on 22nd June, 2012 had appointed Shri V. Srinivasan as
the Whole time Director of the Bank. He has taken charge as the Executive Director with effect from 15th October, 2012.
The members had also approved remuneration to be paid to him.

During the year ended 31st March, 2013, in a slowing economic environment, Shri V. Srinivasan has done a good job of
protecting and growing the proﬁ t pool of the Bank. There has been considerable progress in integrating the Investment
Bank with Corporate Bank. Under his leadership, synergies between Retail and Corporate Bank gained momentum. He
has led the integration of erstwhile Enam with Axis Bank. He has spent considerable time in building investor conﬁ dence.
Key initiative on the Enterprise Payment Hub was launched in the year. In view of this, the HR and Remuneration
Committee of the Board, which met on 22nd April, 2013, reviewed the remuneration being paid to Shri V. Srinivasan
in comparison with the remuneration of Executive Directors of peer group banks and recommended a revision in the
emoluments to be paid to him.

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Nineteenth Annual Report 2012-13

The Board of Directors of the Bank at its meeting held on 25th April, 2013 has approved the revision in remuneration by
way of salary and perquisites payable to Shri V. Srinivasan with effect from 1st April, 2013 or such other date as may be
approved by RBI.

The Directors recommend approval of the resolution.

No Director is in any way concerned with or interested in the Resolution at item No. 13 except Shri V. Srinivasan to the
extent of revision in his remuneration.

Item No. 14:

The shareholders of the Bank had given their approval at an Extraordinary General meeting held on 24th February,
2001 for implementation of an Employee Stock Option Plan which was designed to foster a sense of ownership and
belonging among employees / Directors. The total number of shares / options to be issued, allocated or allotted under
this plan to the Bank’s present and future employees / Directors was not to exceed 1,30,00,000 equity shares / options.
The shareholders had further given approval for issue, offer and allotment of 1,00,00,000, 48,00,000, 79,70,000 and
47,47,400 equity stock options convertible into Equity Shares in the Annual General Meetings held on 18th June, 2004,
2nd June, 2006, 6th June, 2008 and 8th June, 2010 respectively.

The Bank has granted on an average, 28,99,967 options (0.62% of current paid up capital) during the last three years to
its senior ofﬁ cers. As on 31st March, 2013, the Bank had a pool of 24,61,717 options available for grant to its employees
/ Whole-time Directors. Further the Bank has granted upto 23,50,000 stock options at its Board meeting held on
25th April, 2013. This has left the Bank with negligible number of options available in the pool for grant in future.

Employee Stock options are a critical talent retention tool in the emerging competitive environment. With a view to
continue the practice of rewarding employees and utilise ESOP as a retention tool, the Board of Directors at its meeting
held on 25th April, 2013, based on the recommendation of the HR & Remuneration Committee, proposed grant of
additional 75,00,000 stock options. These additional options are expected to be utilised in the next three years by the
Bank for annual grant of stock options to its employees in such a manner that the total number of options granted to
employees in future in a year will not exceed 0.60% of the outstanding paid up capital.

The terms and conditions for which shareholders’ approval is being requested are broadly similar to the existing employee
stock option scheme approved by the shareholders on 24th February, 2001. The proposed resolution is designed to
achieve the objective of incentivising employees towards attaining the periodic objectives set for them, and thereby
improving the proﬁ tability of the Bank.

The following would be the broad terms and conditions of the ESOP:

Total number of options/shares to be issued under the ESOP:

It is proposed to grant options for a total of 75,00,000 Equity Shares of the face value of `10 each [in addition to the
approvals granted by shareholders at an Extraordinary General Meeting held on 24/02/2001 and at Annual General
Meetings held on 18/06/2004, 02/06/2006, 06/06/2008 and 08/06/2010].

Identiﬁ cation of classes of employees entitled to participate in the ESOP:

All permanent and conﬁ rmed employees of the Bank, present as well as future, including the Managing Director & CEO,
and other Directors of the Bank subject to RBI approval will be entitled to participate in the ESOP, subject to the applicable
regulatory requirements and guidelines issued by the Securities and Exchange Board of India (SEBI). All eligible employees
and Directors of the Subsidiaries of the Bank present as well as future shall also be entitled to participate in ESOP.

Date of Grant:

The date of grant would be such date as would be decided by the Board / HR and Remuneration Committee for the
purpose of grant of options.

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Requirements of Vesting and period of vesting:

Nineteenth Annual Report 2012-13

In the event of the stock options being offered to an employee, the employee should continue to remain in the employment
of the Bank from the date of grant till the vesting of the stock options. In the case of an employee, who retires by way
of superannuation or otherwise and who has been granted options, the entire options so granted would vest on the
earliest date of vesting after retirement. In the case of the Managing Director & CEO and Whole-time Director/s, the date
of cessation of his/her service will be deemed to be his/her date of retirement.

The vesting period shall commence on the expiry of one year from the date of grant of the options to the employees/
Directors and could extend up to four years from the date of grant of options. The options could be granted in tranches
and could vest in tranches. The number of stock options made available to employees could vary at the discretion of the
HR and Remuneration Committee.

Maximum period within which the options shall be vested:

From the date of grant of the options, the options shall vest in the employees/Directors within such period as may be
prescribed by the HR and Remuneration Committee, which period shall, as mentioned above, be not less than one year
and not more than four years from the date of grant of the options.

Exercise Price/Pricing Formula:

The Equity shares would be issued to eligible employees and Directors at a price (Exercise Price) being the closing price
on the last working day prior to the date of grant at that Stock Exchange which has had the maximum trading volume
of the Bank’s shares on that day.

Exercise Period and the process of exercise:

From the date of vesting of the options, the employees/Directors shall be entitled to exercise the options within a period
of three years from the date of the respective vesting of the options. The options would be exercisable by the said
employees/Directors by payment of the consideration amount in cash and submitting the requisite application form after
which the shares would be allotted.

Appraisal process for determining the eligibility of employees to the ESOP:

The Bank conducts an annual performance appraisal for all its employees while deciding upon the number of options
to be granted to the employees under the ESOP, the grade and performance of the employee, and any other relevant
contributory factor as deemed ﬁ t will be taken into consideration.

Maximum Number of Options to be issued per employee and in the aggregate:

The options will be granted to the employees in a manner such that no single employee/Director shall be granted options
under the Plan entitling such employee/Director to Equity Shares in the Bank which would represent more than 10% of
the total number of options granted under the Scheme.

Accounting Policies:

The Bank shall comply with the disclosure and accounting policies prescribed by SEBI and any other appropriate authority.

1. Method of Valuation: The Bank proposes to use the intrinsic value method for calculating the employee compensation

cost.

2. The Statement: As the Bank has proposed to calculate the employee compensation cost using the intrinsic value
of the stock options, the difference between the employee compensation cost so computed and the employee
compensation cost that shall have been recognised if it had used the fair value of the options, shall be disclosed in
the Directors’ Report and the impact of this difference on proﬁ ts and on EPS of the Bank shall also be disclosed in the
Directors’ Report.

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The Directors recommend the resolution for approval of the members.

Nineteenth Annual Report 2012-13

Approval of the members by way of a special resolution is sought in terms of Section 81 and all other applicable
provisions, if any, of the Companies Act, 1956 for the issue of Equity shares of the Bank to the persons mentioned above
under ESOP. The Board/ HR and Remuneration Committee shall have the absolute authority to vary or modify the terms
hereinabove in accordance with and subject to all applicable guidelines which may be stipulated by SEBI or otherwise.

The Whole-time Directors of the Bank who would be eligible/qualiﬁ ed to avail beneﬁ ts of ESOP may be deemed to be
concerned with or interested in the resolution at item No. 14 of the Notice, to the extent of offer of options which may
be made to them. The members’ approval in accordance with this resolution is inter-alia also being sought for authorising
the Board of Directors and the HR and Remuneration Committee to do acts stated in the resolution hereinabove where
they would be the beneﬁ ciaries.

Place : Mumbai
Date : 25th April, 2013

By order of the Board

P. J. Oza
Company Secretary

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NOMINATION FORM
FORM 2B
(See rules 4CCC and 5D)
(To be ﬁ lled in by individual(s) applying singly or jointly)

I/We ____________________________________________________________________________________________________________ and

_________________________________________________________________________________________________________________ and

__________________________________________________________________________________________________ the holders of shares

bearing numbers ______________________________________________ of Axis Bank Limited wish to make a nomination and do hereby
nominate the following person(s) in whom all rights of transfer and/or amount payable in respect of shares shall vest in the event of my
or our death.

Name(s) and Address(s) of Nominee(s)

: ____________________________________________________________________

Folio No.

Address

: ____________________________________________________________________

____________________________________________________________________

Date of Birth*

: ____________________________________________________________________

*(To be furnished in case the nominee is a minor)
**The Nominee is minor whose guardian is

Name

: ________________________________________________________________________________________________________

Address

: ________________________________________________________________________________________________________

________________________________________________________________________________________________________

(**To be deleted if not applicable)

Signature : 1. _________________________________ 2. _________________________________ 3. _______________________________

Name

: 1. _________________________________ 2. _________________________________ 3. _______________________________

Address

: ________________________________________________________________________________________________________

________________________________________________________________________________________________________

Date

: _________ / ________ /2013

Address, Name and Signature of witness :

___________________________________________________________

_____________________________________________________

(Name and Address)

Signature with Date

1. ___________________________________________________________ 1. ___________________________________________________

2. ___________________________________________________________ 2. ___________________________________________________

Instructions :

The Nomination can be made by individuals only applying/holding shares on their own behalf singly or jointly. Non-individual including society, trust,
body corporate, partnership ﬁ rm, Karta of HUF, holder of power of attorney cannot nominate. If the shares are held jointly, all joint holders will sign
the nomination form. Space is provided as a specimen, if there are more joint holders more sheets can be added for signatures of holders of shares and
witness.

A minor can be nominated by a holder of shares and in that event the name and address of the Guardian shall be given by the holder.

The nominee shall not be a trust, society, body corporate, partnership ﬁ rm, Karta of HUF, or a power of attorney holder. A non-resident Indian can be
a nominee on re-patriable basis.

Nomination stands rescinded upon transfer of shares.

Transfer of shares in favour of a nominee shall be a valid discharge by a Company against the legal heir.

The intimation regarding Nomination/Nomination form shall be ﬁ led in duplicate with Company/Registrar and Share Transfer Agents of the Company
who will return one copy thereof to the shareholder.

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Nineteenth Annual Report 2012-13

ECS MANDATE FORM

To
M/s. Karvy Computershare Private Limited
Unit : Axis Bank Limited
Plot No. 17 to 24, Vittalrao Nagar
Madhapur, Hyderabad - 500 081

FOR SHARES HELD IN PHYSICAL MODE
Please complete this form and send it to
M/s. Karvy Computershare Private Limited, Hyderabad

FOR SHARES HELD IN DEMAT MODE
Shareholders should inform their DPs directly

I hereby consent to have the amount of dividend on my equity shares credited through the National Electronic Clearing
Service (Credit Clearing) - (NECS). The particulars are:

Folio No.

________________________________________________________________________________

2. Name of 1st Registered holder

________________________________________________________________________________

3. Bank Details :

________________________________________________________________________________

• Name of Bank

________________________________________________________________________________

•

Full address of the Branch

________________________________________________________________________________

• Account Number

________________________________________________________________________________

• Bank Ledger No.

________________________________________________________________________________

• Account Type : (Please tick the relevant box for Savings Bank Account, Current Account or Cash Credit A/c)

10 - Savings

11 - Current

12 - Cash Credit

•

9 Digit Code number of the Bank and branch appearing on the MICR cheque issued by the Bank (Please attach a
photocopy of a cheque for verifying the accuracy of the code number):

I hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of incomplete
or incorrect information, I will not hold the Company responsible.

(Signature of the 1st Registered holder as per

the specimen signature with the Company)

Name

: _________________________________________

Address : _________________________________________

_________________________________________

Date : _______ / _______ /2013

_________________________________________

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AXIS BANK LIMITED
Registered Ofﬁ ce: Trishul, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006

Nineteenth Annual Report 2012-13

PROXY FORM

I/We, ____________________________________________________________________________________, of ___________________

in the district of ___________________________________ being a member/members of Axis Bank Limited hereby appoint

Shri/Smt. _________________________________________________________________________________ of _____________________

in the district of __________________________ or failing him Shri/Smt. _____________________________________________________

of ___________________________ in the district of __________________________________________ as my/our proxy to attend and
vote for me/us/our behalf at the 19th Annual General Meeting of the Bank to be held on Friday, the 19th July, 2013
at 10.00 a.m. at J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg,
Ahmedabad - 380 015 and at any adjournment thereof.

Signed this ______ day of ____________, 2013

Signature

Address

: __________________________________________________________________

Afﬁ x

15 Paise

Revenue

Stamp

Folio No./CL ID/DP ID No. : ____________________________________ No. of Shares held : _____________________________

N.B. : 1. The Proxy need not be a member.

2. The Proxy Form duly signed and stamped should reach the Bank’s Registered Ofﬁ ce at least 48 hours before the time of

Meeting.

PLEASE BRING THIS ATTENDANCE SLIP TO THE MEETING HALL AND HAND IT OVER AT THE ENTRANCE

ATTENDANCE SLIP

I/We hereby record my/our presence at the 19th Annual General Meeting of Axis Bank Limited held at J. B. Auditorium, Ahmedabad
Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad - 380 015 on Friday, the 19th July, 2013
at 10.00 a.m.

Name of the Shareholder

: _________________________________________________________________

Ledger Folio No./CL ID/DP ID No.

: _________________________________________________________________

Number of shares held

: _________________________________________________________________

Name of the Proxy/Representative, if any : _________________________________________________________________

Signature of the Member/s/Proxy

: _________________________________________________________________

Signature of the Representative

: _________________________________________________________________

Registered Ofﬁ ce: Trishul, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006.

AXIS BANK LIMITED

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