AnnuAl RepoRt 2017-18
cOntents
01-29
BUSINESS rEvIEW
Building on a strong foundation
02
Expanding our reach
03
revisiting 2017-18
04
06 Measuring our progress
08 A closer look at our business segments
10 Message from the Managing Director & CEO
14
18
22 Nurturing future achievers
Purpose beyond profit
25
Awards and recognition
27
28
Board of Directors
29 Core management team
Addressing national priorities
Enriching customer experiences
30-128
STATUTOry rEPOrTS
Directors’ report
30
41 Management discussion and analysis
62 Corporate governance
104 Other reports
129-262
FINANCIAL STATEMENTS
130 Independent Auditor’s report - Standalone
Financial Statements
134 Standalone Financial Statements
214 Independent Auditor’s report - Consolidated
Financial Statements
218 Consolidated Financial Statements
262 Form AOC 1
263-290
BASEL III DISCLOSUrES
EXPLOrE ONLINE
www.axisbank.com
axis Bank
deliveRs value
Axis Bank is India’s third largest
private sector bank, offering a
wide spectrum of financial products
and services to customer segments
spanning retail, Small and Medium
Enterprises (SMEs) and corporate
businesses. The Bank has a strong
team of over 59,600 employees
and is present across 2,163 cities
and towns across India.
It also has 11 overseas offices with branches
in Singapore, Hong Kong, Dubai (at the DIFC),
Shanghai and Colombo; an offshore banking unit
at International Financial Service Centre (IFSC),
Gujarat International Finance Tec-City (GIFT City),
Gandhinagar; representative offices in Dubai,
Abu Dhabi, Sharjah and Dhaka; and an overseas
subsidiary in London, UK.
pROgRess in 2017-18
K691,330 cRORes
TOTAL ASSETS
15% y-o-y GrOWTH
K453,623 cRORes
TOTAL DEPOSITS
9% y-o-y GrOWTH
K439,650 cRORes
TOTAL ADvANCES
18% y-o-y GrOWTH
K56,747 cRORes
TOTAL INCOME
1% y-o-y GrOWTH
K18,618 cRORes
NET INTErEST INCOME
3% y-o-y GrOWTH
WE LIVE IN A WORLD WHERE TODAY’S WOW
QUICKLY BECOMES TOMORROW’S ORDINARY,
AND THE RULES OF BUSINESS LEADERSHIP
TRANSFORM IN THE BLINK OF AN EYE AND
WHERE FABULOUS INNOVATION IS THE NEW
NORMAL AND ENCOURAGINGLY, CUSTOMERS
ARE ALWAYS SEEKING A BETTER WAY.
Beyond business, we are reaching out to
create tangible impact in the lives of those who
are marginalised. Our sustainable livelihood
programmes aim to strengthen farm productivity,
improve natural resource management, provide
alternative income-generating options and increase
employability and entrepreneurial skills.
India’s banking industry is constantly evolving and
our objective is to be at the vanguard of this change
through consistent innovation and stakeholder
outreach. We will continue to innovate around the
aspirations of our customers and stakeholders and
go the extra mile to partner their progress and usher
in real impact in their lives.
They are rightfully demanding that we not just serve
their current financial requirements efficiently, but
also anticipate their future ones. We are happy to
start our day at Axis Bank with unrelenting customer
obsession, ingenuity and commitment to operational
excellence.
We are catering to the requirements of small and
medium businesses and helping build national
infrastructure. We are expanding and deepening our
footprint across India’s vast terrain, transcending the
digital divide in the urban and semi-urban growth
centres and in the under-banked rural areas.
At the same time, we continue to reinforce our
infrastructure, investing in ahead-of-the-curve
technology, strengthening governance and control
framework and nurturing future leadership.
As we continue our journey, we renew ourselves
to embrace new opportunities to learn, grow and
deliver – for our greatest accomplishments lie
ahead of us.
Annual Report 2017 -18
BUILDING ON A STRONG
FOUNDATION
Our journey began in 1994. Over the years, we have
steadily grown the scale and scope of the business, offering
a comprehensive suite of financial products and services
and emerging as India’s third largest private sector bank.
We leverage technology and our deep understanding of
India’s financial markets to make banking for our customers
faster, simpler and more secure.
The trust and confidence of our customers remain
our strongest anchor, encouraging us to consistently
improve our products and service propositions.
We are reaching out to millions of customers in
India, enriching their lives through our products and
services. We have 3,703 branches in India and
we are planning to further strengthen our physical
presence. At the same time, our digital outreach
continues to grow significantly.
Our customer centricity has enabled us to achieve
consistent growth with a five-year CAGR (2013-14 to
2017-18) of 15% in total assets, 12% in total deposits
and 17% in total advances.
VISION
To be the preferred financial solutions provider
excelling in customer delivery through insight,
empowered employees and smart use
of technology.
CORE VALUES
Customer Centricity
Ethics
Transparency
Teamwork
Ownership
2
K691,330 CRORES
BALANCE SHEET SIZE
K131,022 CRORES
MARKET CAPITALISATION
22.34 MILLION
DEBIT CARD BASE
4.48 MILLION
CREDIT CARD BASE
16.57%
CAPITAL ADEQUACY RATIO
13.04%
TIER - I CAPITAL
ADEQUACY RATIO
STANDALONE FIGURES AS ON/FOR THE YEAR ENDED 31 MARCH 2018
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
EXPANDING
OUR REACH
13,814
ATMS
2,263
CASH DEPOSIT
& WITHDRAWAL
MACHINES
3,703*
BRANCHES
66
SME
CENTRES
*DOMESTIC BRANCHES, INCLUDING EXTENSION COUNTERS | AS ON 31 MARCH 2018
REGION-WISE BRANCHES (%)
REACHING MORE
CUSTOMERS THROUGH
DIGITAL CHANNELS
Our digital journey started more than a
decade ago. Ever since inception, the digital
paradigm has always been the force
multiplier for us in the competitive banking
landscape. We realised that digital was
going to radically change India’s entire
banking landscape and when the ecosystem
moved to digital, we made a conscious call
to grow our prominence in the space.
31
23
22
24
BRANCH CLASSIFICATION (%)
4
13
30
23
30
As on 31 March 2018
Classification
Metro
Semi urban
Urban
Rural unbanked
Rural banked
Branches
1,113
1,109
869
476
136
6.8 MILLION
AXIS MOBILE
APP USERS
3.7 MILLION
FREECHARGE
MONTHLY
ACTIVE USERS
K192,735
CRORES*
VALUE OF MOBILE
TRANSACTIONS*
K429,700
CRORES
VALUE OF DIGITAL
CHANNEL
TRANSACTIONS
5+ LAKHS
EDC MACHINES
NETWORK
* Including UPI/BHIM transactions
Figures are as on/for the year ended 31 March 2018
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
REVISITING 2017-18
RETAIL
BANKING
Savings bank deposits grew by 18%
y-o-y and stood at I148,202 crores
Launched dedicated inward remittance
rates for NRI customers on wire
transfers, simplifying banking; we also
launched the new digital remittance
platform - remitmoney.com - to
enhance customer convenience
Tied up with the Indian Health
Organisation (IHO) for discounted
health services for family members of
NRI customers
Launched ‘Experience Axis campaign’,
converging all offerings across
shopping, dining and travel
Mortgage loans crossed the I1 lakh
crores mark during 2017-18 and stood
at I100,012 crores
Launched Shubh Aarambh Home
Loans that allow four EMIs to be
waived off every four years for home
loans of up to I30 lakh - to fortify our
footprint in the affordable housing
segment
Launched Axis ASAP (savings account
that can be instantly opened online
with just PAN and Aadhaar details)
- offers industry-first feature where
savings balances over I10,000 are
automatically treated as fixed deposit
and customers earn 6.75% interest
TECHNOLOGY AND DIGITAL
BANKING
Built a strong technology platform
and developer-friendly APIs that allow
partners/start-ups to plug-and-play
Axis UPI on their mobile applications;
the platform is available to Google
Tez, Uber, Samsung Pay, LIC, IRCTC
and Big Bazaar
Onboarded over 11.5 million UPI IDs
of which 64% were non-Axis Bank
customers, which led to the Bank’s
share of 17% in UPI transactions
Launched Axis Aha! Chatbot on the
website, a conversational assistant
powered by Artificial Intelligence
20,000 biometric readers deployed
to leverage electronic Know Your
Customer (e-KYC) for account opening
and other Aadhaar-based services
INTERNATIONAL
BANKING
Opened International Finance
branch, an offshore banking unit at
International Financial Service Centre
(IFSC), Gujarat International Finance
Tec-City (GIFT City), Gandhinagar
Opened representative office in
Sharjah, UAE
LAUNCHED
‘EXPERIENCE AXIS’,
CAMPAIGN CONVERGING ALL
OFFERINGS ACROSS SHOPPING,
DINING AND TRAVEL
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
CORPORATE
BANKING
Lending focus continues to remain on
better rated corporates and ~86% of
new sanctions in the corporate book
were to companies rated ‘A’ and
above
Currently, 77% of outstanding
standard corporate loans are to
companies rated ‘A’ and above
Launched instant international
payment services using Ripple’s
enterprise blockchain technology
solution
Continued to remain a dominant
player in the Debt Capital Market
segment by arranging H184,104 crores
of bonds and debentures for various
PSUs and corporates in 2017-18
PAYMENTS
Substantial increase in credit card
spends by 54% to I44,328 crores in
2017-18 from I28,740 crores last year
Axis Bank and Kochi Metro joined
hands to launch India’s first
single-wallet contactless,
open-loop metro card, enabling
cashless commuting along with an
enhanced shopping experience
Our merchant acquiring business
continues to be among India’s largest,
with over 5.02 lakh base of installed
terminals, of which 2.26 lakh terminals
are enabled for accepting contactless
payments
CAPITAL RAISE AND
BUSINESS ACQUISITION
Raised H8,680 crores of capital from a
consortium of investors (Bain Capital,
Life Insurance Corporation of India and
other marquee investors). Also allotted
4.54 crores share warrants exercisable
within a period of 18 months, which
upon conversion into shares will add
H2,563 crores to the CET-1 capital of
the Bank
Acquired FreeCharge, one of the
leading payment fintechs in India in
October 2017, through acquisition of
two legal entities - Accelyst Solutions
Private Limited and FreeCharge
Payment Technologies Private Limited
RAISED I8,680 CRORES
FROM A CONSORTIUM
OF INVESTORS
(BAIN CAPITAL,
LIFE INSURANCE
CORPORATION OF
INDIA AND OTHER
MARQUEE INVESTORS)
4TH
LARGEST CREDIT CARD
ISSUER IN INDIA
7%
MARKET SHARE IN DEBIT
CARDS BASED ON SPENDS AT
POS TERMINALS
CORPORATE SOCIAL
RESPONSIBILITY (CSR) & PEOPLE
Spent I133.77 crores towards various
CSR initiatives in 2017-18
Under our overarching theme of
‘Sustainable Livelihoods’, Axis Bank
Foundation’s (ABF) current programmes
are aimed towards strengthening and
increasing farm productivity, improving
natural resource management, providing
alternate income-generating options
and increasing employability and
entrepreneurial skills
Axis Dil Se is aimed at transforming
over 100 village schools in Leh and
Kargil districts by creating physical and
educational infrastructure. This initiative
is aligned with the Government of India’s
Border Area Development Programme
(BADP)
Solarised Axis House, Noida, reducing
carbon emissions by 12.70 lakh kg
annually
Pledged support towards the Government
of Maharashtra’s ‘Village Social
Transformation Mission’ aiming to
address adverse conditions in 1,000
villages plagued by drought, low human
development index and various other
social challenges to transform them into
‘model villages’
During the year, over 24,600 employees
underwent a two-day behavioural
training programme customised to their
grade and their role challenges
THROUGH VARIOUS
INITIATIVES ACROSS 21
STATES AND 178 DISTRICTS,
ABF HAS HELPED IMPACT
AND IMPROVE A MILLION
LIVELIHOODS
STANDALONE FIGURES AS ON/FOR THE YEAR ENDED 31 MARCH 2018
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
MEASURING OUR PROGRESS
TOTAL DEPOSITS (I IN CRORES)
TOTAL ADVANCES (I IN CRORES)
RETAIL ADVANCES (I IN CRORES)
17-18
16-17
15-16
14-15
13-14
453,623
414,379
439,650
206,465
373,069
338,774
17-18
16-17
15-16
14-15
13-14
281,083
230,067
17-18
16-17
15-16
14-15
13-14
167,993
138,521
111,932
88,028
357,968
322,442
280,945
5-year CAGR
12%
y-o-y growth
9%
5-year CAGR 17%
y-o-y growth
18%
5-year CAGR 26%
y-o-y growth
23%
Deposit franchise delivers yet another
strong year
Loan growth continues to remain strong
CASA (I IN CRORES)
SAVINGS BANK DEPOSITS (I IN CRORES)
243,852
148,202
Loan portfolio of the Bank is now
dominated by Retail, representing 47% of
total advances
CURRENT ACCOUNT DEPOSITS (I IN CRORES)
17-18
16-17
15-16
14-15
13-14
213,050
169,445
144,400
126,462
17-18
16-17
15-16
14-15
13-14
126,048
105,793
88,292
77,776
17-18
16-17
15-16
14-15
13-14
63,652
56,108
48,686
95,650
87,002
5-year CAGR 17%
y-o-y growth
14%
5-year CAGR 18%
y-o-y growth
18%
5-year CAGR 15%
y-o-y growth
10%
Low cost deposits continue to report healthy growth
TOTAL ASSETS/LIABILITIES (I IN CRORES)
NET INTEREST INCOME (I IN CRORES)
OTHER INCOME (I IN CRORES)
691,330
601,468
539,821
17-18
16-17
15-16
14-15
13-14
461,932
383,245
17-18
16-17
15-16
14-15
13-14
18,618
18,093
16,833
10,967
11,691
17-18
16-17
15-16
14-15
13-14
9,371
8,365
7,405
14,224
11,952
5-year CAGR 15%
y-o-y growth
15%
5-year CAGR 14%
y-o-y growth
3%
5-year CAGR 11%
y-o-y growth
(6%)
Overall balance sheet growth remains
healthy
NII grew 3% y-o-y impacted mainly by
high slippages
Other income declined y-o-y on account
of lower trading gains
6
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
OPERATING REVENUE (I IN CRORES)
OPERATING PROFIT (I IN CRORES)
NET PROFIT (I IN CRORES)
29,585
29,784
26,204
17-18
16-17
15-16
14-15
13-14
22,589
19,357
17-18
16-17
15-16
14-15
13-14
13,385
11,456
15,594
276
17,585
16,104
17-18
16-17
15-16
14-15
13-14
3,679
8,224
7,358
6,218
5-year CAGR 13%
y-o-y growth
(1%)
5-year CAGR 11%
y-o-y growth
(11%)
y-o-y growth (93%)
Operating revenue impacted by lower
growth in NII and lower trading gains
BOOK VALUE PER SHARE* (I)
Operating profit declined on account
of higher growth in operating expenses
compared to growth in operating revenue
DIVIDEND PER SHARE* (I)
Earnings impacted by provisioning on
NPAs
GROSS NPA/NET NPA (%)
17-18
16-17
15-16
14-15
13-14
188.47
162.69
247.20
NIL
17-18
232.83
223.12
16-17
15-16
14-15
13-14
3.40
2.11
5.00
5.00
4.60
4.00
17-18
16-17
15-16
14-15
13-14
0.70
0.44
0.40
6.77
5.04
1.67
1.34
1.22
5-year CAGR 12%
y-o-y growth
6%
NET NPA
GROSS NPA
*Previous year figures have been adjusted to reflect the effect of sub-division of one equity share of the Bank having nominal value of H10 each into
five equity shares of nominal value of H2 each.
LOANS & ADVANCES MIX IN 2017-18 (%)
FEE INCOME MIX IN 2017-18 (%)
FINANCIAL RATIOS (%)
13
47
5 2
Return on Equity
18
27
48
Return on Assets
Capital Adequacy
Ratio
Tier - I Capital
Adequacy Ratio
2
2
7.
3
5
.
0
5
6
.
0
4
0
.
0
5
9
.
4
1
7
8
.
1
1
SME
Retail Banking
SME
2016-17
2017-18
Transaction Banking
Treasury and DCM
Corporate Credit
40
Retail
Corporate
Previous year figures have been re-grouped wherever necessary. All above figures are standalone.
7
5
.
6
1
4
0
.
3
1
7
6
Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
A CLOSER LOOK AT OUR
BUSINESS SEGMENTS
Our corporate banking and retail banking segments cater to diverse
customer requirements and enable them to achieve their aspirations.
Retail Banking
At Axis Bank, our retail banking segment offers
end-to-end banking solutions to our retail customers through
multiple channels. Our wide range of products and services
include term deposits, loans, investments and payment solutions.
CUSTOMER
D
D
SAVE WITH
SECURITY
CONVENIENT AND
FAST PAYMENT
SOLUTIONS
SUPPORT TO CREATE
ASSETS AS PER
ASPIRATIONS
INSURANCE TO
ENSURE SUSTENANCE
FOR DEAR ONES
INVEST FOR
RETURNS
Savings
Account
Debit, Credit and
Prepaid cards
Home, Vehicle and
Personal Loans
Life and General
Insurance
Mutual Funds
and Structured
Investments
ATMs, Mobile
banking and
Remittances
Fixed Deposits,
Retail Broking
RETAIL DEPOSITS
INVESTMENT PRODUCTS
Our retail deposits include savings accounts, time
deposits and tailor-made products for a few target
groups, such as high net-worth individuals, senior
citizens, working mothers, armed forces personnel,
students and salaried employees.
K148,202 CRORES
SAVING BANK DEPOSITS IN 2017-18
18% y-o-y GROWTH
K 95,650 CRORES
RETAIL TERM DEPOSITS IN 2017-18
11% y-o-y GROWTH
We distribute market investment products such as
mutual funds and bancassurance products (such as
Life and General Insurance) through our branches.
We further provide a simplified online trading
platform – Axis Direct – to customers in association
with Axis Securities Limited (a 100% subsidiary
company of the Bank).
RETAIL LENDING
We offer a wide range of retail asset products
including personal loans, auto loans, consumer
loans, loans against gold and education loans,
along with different types of secured loans.
Our payment products and services comprise
debit cards, credit cards, travel currency cards
and Point-of-Sale (PoS) terminals.
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Corporate Banking
Our corporate banking solutions comprise credit,
transaction banking, treasury, syndication,
investment banking and trustee services.
CREDIT
TREASURY
Our loan and fee-based products and services
are tailored to meet the financial requirements
of large and medium-sized corporate clients and
SMEs. Our products and services include cash
credit facilities, demand and short-term loans,
project finance, export credit, factoring, channel
financing, structured products, discounting of
bills, documentary credits, guarantees, foreign
exchange and derivative products. Our liability
products for large and mid-corporate segments
comprise current accounts, certificates
of deposits and time deposits.
K233,186 CRORES
NON-RETAIL ADVANCES IN 2017-18
14% y-o-y GROWTH
TRANSACTION
BANKING
Our Transaction Banking group (TxB) offers
integrated products and services in the
realms of current accounts, cash management
services, capital market services, trade, foreign
exchange and derivatives, cross-border trade
and correspondent banking services; and tax
collections on behalf of the Government
of India and various State Governments.
K 95,650 CRORES
CURRENT ACCOUNT DEPOSITS IN 2017-18
10% y-o-y GROWTH
The Treasury supervises our funding position and
maintains our regulatory reserve requirements.
It invests in sovereign and corporate debt
instruments and engages in proprietary trading
in equity and fixed income securities, foreign
exchange, currency futures and options.
The division further governs our investments
in commercial paper, mutual funds and floating
rate instruments as part of the management
of short-term surplus liquidity. Moreover, it offers
a wide range of treasury products and
services to corporate customers.
SYNDICATION
We also offer services of placement and
syndication in the form of local currency bonds,
rupee and foreign term loans, along with external
commercial borrowings to corporate customers.
INVESTMENT BANKING
AND TRUSTEE SERVICES
We cater to investment banking and trusteeship
services requirements of our corporate clients
through our wholly-owned subsidiaries.
Axis Capital Limited offers investment banking
services relating to equity capital markets,
institutional stockbroking and M&A advisory.
Axis Trustee Services Limited is engaged in
trusteeship activities, acting as debenture trustee
and as trustee to various securitisation trusts.
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
MESSAGE FROM THE
MANAGING DIRECTOR
& CEO
Dear Shareholders,
As we enter our 25th year of operations, it gives me
immense satisfaction to share that the Bank over
all these years has not only helped businesses and
individuals make real progress in their lives, but
our contribution towards society has had a deeper
impact beyond the economic growth of the nation.
I would like to share with you all one such real-life
story, which I experienced during one of our visits to
a rural branch.
‘Pramila, a housewife from a small village near
Indore had taken a microfinance loan from us some
18 months back for setting up her grocery shop.
The remarkable part is that she has not only repaid
that loan but has also used her income to set up few
other businesses like tailoring and a beauty parlour.
This has earned her huge respect in her household,
and made her a role model in the community and an
inspiration for women across nearby villages.’
India’s banks have evolved tremendously over the last
25 years – from providing basic banking services
with little effective competition in the pre-liberalisation
era, to becoming market-driven universal banks. The
combination and contribution of the public sector and
private sector banks over all these years, and more
recently with the introduction of small finance and
payment banks, has made tremendous positive impact
on the society and economy.
The branch network of all scheduled commercial
banks in India has more than doubled from nearly
60,000 in 1991 to over 138,000 in 2017, offering
direct employment to 1.35 million people; total bank
credit and deposits have grown nearly 70 times
and 55 times, respectively. The banks have not only
aided economic expansion by meeting the credit
requirements of businesses and individuals, but
have also been the core facilitator of infrastructure
development and have driven growth in priority
sectors such as MSME and agriculture. The banks
have also played a key role in extending the
25 YEARS OF PROGRESS
AND MAKING A DIFFERENCE
Shikha Sharma
Managing Director & CEO
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Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Government’s social benefit schemes and driving the
financial inclusion agenda.
mechanism, but is also likely to inculcate a stronger
corporate credit culture, going forward.
India’s macroeconomic fundamentals continued to
improve last year on the back of significant policy
initiatives by the Government aided by a stable
monetary policy. The country saw a sovereign
rating upgrade and also climbed up the charts in
ease of doing business. Both these developments
should result in higher foreign investments in the
medium term. The implementation of the Goods and
Service Tax (GST) regime in 2017 has been one
of the biggest structural economic reforms, benefits
of which will continue to accrue in the years to
come. GST reform along with demonetisation and
digitisation efforts will significantly benefit towards
formalisation of the economy.
From the perspective of the Indian banking industry,
the fiscal year 2018 was a mixed one. Apart from
the lingering asset quality problems, there were
some serious issues around fraud and operational
misses that came to the fore towards later part
of the year. The regulator has initiated measures
and issued guidelines to ensure that the systems,
business practices, operational processes and risk
management for the sector are robust and safe.
While these challenges are real, it is important to
acknowledge that at this stage in the development
of our country, the banking sector in India remains
a force of good, moving our inclusive growth
agenda forward.
During this fiscal year, the Bank undertook accelerated
Non-Performing Asset (NPA) recognition in line with
its desire to get past the asset quality issues of the last
cycle. With the aggressive recognition we undertook
during the fiscal year, we believe the NPA recognition
phase of this credit cycle is now nearly complete.
The Axis franchise continued to deliver steady
operating performance with core operating revenue
growth of 6% and moderation in operating expenses
growth. The Bank’s retail franchise remains robust
with strong growth in loans, fees and low-cost
deposits. The Bank’s SME loan growth improved
considerably in the later part of the year with risk
parameters under control. The quality of corporate
book too has been steadily improving with higher
incremental sanctions to better rated corporates,
significant reduction in concentration risk and
increase in the share of working capital loans.
Despite the pain on asset quality front, the Bank
continues to have a strong balance sheet with one of
the best provision coverage and capital adequacy
ratios of 65% and 16.57%, respectively. During the
course of the year, the Bank raised capital from a
few marquee investors that further augmented the
capital adequacy position with Tier-I ratio of 13.04%
at the end of fiscal year 2018. Our subsidiaries had
another good year as they continued to gain scale
and market share in their respective segments.
The resolution process for large stressed accounts
referred by the Reserve Bank of India (RBI) under the
new Insolvency and Bankruptcy code (IBC) has largely
been on track. On the credit growth side, the situation
seems to be improving. The credit growth continued
to pick up through the year, partially led by the base
effect, and tighter liquidity conditions helped shift
credit demand back to banks from bond markets.
In the corporate segment, our learnings from
the last cycle have helped us to calibrate our
portfolio concentration a lot more tightly than in
the previous years. In the last few years, we have
significantly strengthened credit underwriting and risk
management practices at the Bank. We continue to
focus on targeting the pool of better rated corporates
and re-orienting the corporate franchise towards a
more flow-led transaction banking-oriented business.
Moving on to the financial performance of the Bank,
Axis Bank had a second challenging year in a row
this year. Our historical focus on project finance in
infrastructure sectors, steel and power continued to
create significant headwinds for us this year. The
asset quality issues thus continued to be a pain
point for the second year. The recent guidelines on
stressed asset recognition and resolution along with
fully functioning bankruptcy infrastructure would
not only expedite the recognition and resolution
The Bank continues to remain the leading player in
the Debt Capital Market segment. Our top position
in the leader board over the last 10 years positions
the Bank very well to benefit from the growth in the
corporate bonds market.
We believe that demonetisation and the
implementation of GST are likely to result in faster
shift from informal to formal sector, and that is perhaps
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being reflected in the SME growth. With significant government
policy initiatives such as ‘Skill India’ and ‘Make in India’ directed
around this sector, we expect SME growth to come back into
higher trajectory than witnessed in the recent past. From a risk
perspective, the SME book has held up well and we intend to
use more of data that is now available post GST to automate
underwriting and risk management for smaller ticket-size SME
loans as well.
The Retail franchise remains robust as we continue to gain
market share in both retail deposits and loans. We reaffirmed
our strong positioning in low-cost deposits with a CASA ratio
of 54%. During the year, we added 400 branches to our
distribution strength; however, the branch formats have been
smaller with improving employee productivity led by automation
and centralisation of back office operations.
We believe deposit mobilisation in fiscal year 2019 could pose
some challenge. We expect branches to continue playing a
crucial role in deposit mobilisation, customer acquisition and
providing localised services. Hence, we would continue to make
adequate investments in our branch network.
The overarching theme for us in Retail Banking has been
to service and deepen relationships with existing internal
customers for growth. Over the last few years, we have made
significant investments in technology and processes and further
strengthened our risk management architecture. We have one of
the best digital capabilities in India and have been increasingly
using digital analytics to identify potential customers, optimise
branch locations and provide customised solutions through
AI-backed chatbot and mobile app.
Our retail loan book continues to grow strongly with significant
diversification in portfolio mix. We believe there is considerable
scope to cross-sell and grow the unsecured side of our retail
loan book, as we look to onboard granular retail risk while
reducing concentration risk on the corporate side.
The Bank’s strong distribution capabilities, brand and ability
to constantly innovate and offer right product proposition to
customers has helped us build and gain significant market
share in most of the retail businesses in quick time. We have
the market leadership in Forex cards and in the credit cards
business. Despite being a late entrant, we are currently ranked
fourth in terms of market share. The Bank is today among the
top five players in the home loan market. We have also built
one of the best wealth management franchises among banks in
the country - our Burgundy proposition is now among our fastest
growing business lines.
in 2010 has maintained its leadership position on equity league
tables over the last decade. The subsidiaries have helped the
Bank to offer strong proposition to our corporate and retail
customers and played a meaningful role in building the Axis
Bank franchise.
Digital payments and online consumption of financial services are
growing on the back of ‘Digital India’ initiatives. Today, there is
an opportunity to ride on the digital infrastructure to strengthen
payments, trade and information flow to aid sustainable and
inclusive growth. The Bank has always been at the forefront of
digitisation, contributing actively to the Government’s vision of a
‘less cash’ economy. We have the country’s second largest PoS
network, a strong cards franchise and in the mobile banking
space, the Bank ranks among the top in terms of market share by
transaction value and volumes.
The Bank continues to be the leader in partnership-driven
innovation and has redefined digital payments in India
by providing its customers with a differentiated payments
experience. During the year, the Bank, in association with Kochi
Metro Rail Limited (KMRL), launched India’s first open-loop
transit EMV contactless metro card. The Bank also partnered
with marquee names such as Google, IRCTC, LIC, Uber, Ola
and others to drive the acceptance of payments on the
UPI platform.
The acquisition of FreeCharge earlier this year re-affirms the
Bank’s determination to lead the journey of digitisation of
financial services. We believe that FreeCharge’s unique value
proposition in the digital payments space and the strength of its
acquisition engine would help to build the Axis franchise further
and create significant value for the Bank. The post-acquisition
activities at FreeCharge remain on track and all key top-line
metrics have shown considerable improvement.
During the year, the Bank also launched instant international
payment services using Ripple’s enterprise blockchain technology
solution. The Bank has been the first financial institution in India
to offer a Ripple-enabled, frictionless payments experience that
would make international remittances faster.
Over the last 24 years, the foundation of the Bank has been
built on our core values – to do the right thing for our 20+
million customers. Though we have progressed a lot in terms of
technology, what hasn’t changed is our legacy customer service
‘The Axis Experience’ – which is service in a digital world but
with an old world charm. During the year, Axis Bank very aptly
won the NASSCOM Customer Service Excellence Award - 2017
under the ‘Transformation’ category.
Similarly, within the Axis family, our subsidiaries in institutional
equity business, broking, asset management and non-banking
finance arm have scaled up well. Axis AMC that was set up in
2009 is now among the top 10 mutual fund houses in India;
Axis Direct, the broking business that was launched in 2011,
ranks among the top three brokerage firms in terms of active
client base. Our institutional equities business that we acquired
Core to our approach is the belief that our long-term success
depends on the progress of the communities and the people
we serve. Axis Bank Foundation has been relentlessly working
over the last decade to help provide sustainable livelihoods and
create value for the communities through its various integrated
rural skill development and educational programmes. It is a
matter of great satisfaction for us that the Axis Bank Foundation
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has achieved the target it had set for itself of achieving a million
sustainable livelihoods by 2017. During the year, the Bank also
launched ‘Axis Dil Se’ – a CSR initiative in partnership with
17000 ft Foundation – that saw 108 schools across the remotest
parts of Kargil and Ladakh being adopted by 20 senior Axis
Bank leaders for a period of three years.
The Bank deservingly was included in FTSE4Good Emerging
Index in recognition of its Environmental, Social and
Governance (ESG) practices. And as we move ahead, we
continue to remain conscious of our deep commitment to our
environment and the underprivileged. The Axis Bank Foundation
now aims to create two million sustainable livelihoods over the
next eight years.
Going forward, I continue to believe that the Indian banking
sector is well placed to benefit from the informal to formal shift
that is currently underway. Also, private banks in the country
will continue to gain significant part of the incremental market
share. We believe that with our strong financial and market
position backed by our core capabilities, we would certainly be
among the top few banks in the country.
I am extremely proud of the great franchise we have built and
that is reflected in the way in which customers and shareholders
have reposed faith in us. Over the last nine years, we have
successfully built a strong CASA franchise on back of continued
investments in branch infrastructure. Our market share in
deposits has grown from 2.6% in 2008-09 to 3.6% at the end
of 2017-18, with branch network increasing from 835 branches
to over 3,700 branches over this period. On the lending
side, we have grown our lending book from nearly `80,000
crores to around `440,000 crores over these nine years, at a
CAGR of 21%. At the same time, we have achieved significant
diversification in balance sheet with the share of Retail loans in
our loan book rising from 20% to 47%. Most notably, we have
filled up strategic product gaps and developed key subsidiary
businesses to become a full service bank. The Bank now has
strong capabilities across retail, corporate and SME segments
and offers strong proposition to its customers with subsidiaries
complementing the strategy. The retailisation of the Axis franchise
has been the bedrock of the Bank’s financial performance, thus
improving the quality and sustainability of its earnings.
Earlier this year, I had requested the Board to reconsider my
re-appointment till 31 December 2018, which has been
accepted and is subject to shareholder approval. Axis is a
great institution with a very promising future and I am confident
that our Board will find the right person to lead this institution
in its next phase. While we go through that process, I am fully
committed to maintain high performance levels at the Bank.
The Bank has taken significant steps in fiscal year 2018 to get
past the asset quality issues of this cycle and the top priority for
us in fiscal year 2019 will be to achieve normalisation of credit
risk. The second focus area would be to deliver profitable growth.
The third area of delivery would be to enhance capabilities
to strengthen operational risk management and re-invent our
corporate bank driven by technology. The fourth deliverable for
fiscal year 2019 is to continue investing in digital capabilities,
analytics and our subsidiaries to drive future growth.
I have thoroughly enjoyed my nine-year long association with
this great Bank. I have given it my best and have been rewarded
by the support and association of all our internal and external
partners. The future of Axis Bank remains extremely bright and I
wish it and all its stakeholders the very best.
STRATEGIES FOR 2018-19
NORMALISE
CREDIT RISK
DELIVER
PROFITABLE
GROWTH
ENHANCE
CAPABILITIES
INVEST IN
THE FUTURE
Continue to move
corporate lending
business towards
better rated customers
and working capital
loans
Focus on enhancing
operational risk
management and
compliance
Re-invent the
corporate bank
by strengthening
technology, product
and talent capabilities
Expect high-quality
deposit franchise to
continue delivering
strong growth
Continue
outperforming the
industry loan growth
Prioritise growth in
segments with better
risk adjusted returns
Achieve cost
efficiencies
Maintain leadership
and further invest
in digital
Leverage analytics
and newer
technologies
to automate and
digitalise processes
Scale up and
diversification of
subsidiaries
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CREATING REAL IMPACT
Addressing
national priorities
India continues to progress with wide-ranging
policy reforms and initiatives. The result is that
the country today presents unprecedented
opportunities for global and domestic businesses.
The government is putting more emphasis on
infrastructure development, entrepreneurship
and investment, improving the business climate,
enhancing productivity and fostering strong and
sustainable growth.
To support the nation’s strong growth appetite,
there is more focus on increasing access to banking
and other facilities to energise the economy and
empower the disadvantaged.
We are helping strengthen India’s national priorities
to enhance the country’s global competitiveness
and build a strong, stable and inclusive society.
SUPPORTING
BRAVEHEARTS
Power Salute is designed for
defence personnel and their
families. It provides customised
banking services such as
enhanced coverage,
long-term investment planning
and banking privileges
post-retirement, among others.
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ENCOURAGING
ENTREPRENEURSHIP
We delivered a million micro loans (average ticket
size of H18,000) to women through our micro-lending
programme on a joint-lending model. The loans were
given for various purposes such as entrepreneurship
and children’s education. Besides, we are financing
Lakmé Salon franchisees (75% of the Lakmé
franchisees are women entrepreneurs).
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RAISING SAFE BANKING
AWARENESS
We launched #MuhPeTaala, a
campaign to promote safe banking
in association with Mumbai Police
during the International Fraud
Awareness week. The campaign
created awareness to prevent
cyber banking crimes, especially
through fraudulent calls phishing for
information such as ATM pins, CVVs
and OTPs, among others.
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CONVENIENCE FOR ALL
EMPOWERING AGRARIAN SECTOR
We launched the Axis ‘Republic’ Salary Account to cater
exclusively to Public Sector Undertakings (PSUs) and
government sector employees. It offers higher returns on
deposits of over H50,000 and many other benefits.
Our Kisan credit cards provide farmers round-the-clock
availability of funds. Over 2+ lakh farmers have so far
benefitted (withdrawal limit of up to H1 lakh per day).
We introduced Aadhaar-enabled banking for pensioners, as
key banking partner of the Government in the Direct Benefit
Transfer process of pension payments. Now, pensioners can
get in touch with our business correspondents and receive
their pension without travelling to bank branches.
NURTURING START-UPS
Our Innovation Lab (Thought Factory) has so far mentored
six start-ups in their evolution. We are shortlisting start-ups
for the second cohort of the Accelerator and building an API
Sandbox environment for a quick plug-n-play, enabling faster
product test/adoption.
We started Axis Start-up Social to provide a platform for
start-ups to network and share knowledge. This initiative
underlines our commitment towards providing multiple
opportunities for start-ups.
ENABLING AFFORDABLE HOUSING
We provide home loans to customers in the low-income
segment through our special Asha Home Loans. We offer
loans of up to 85% of property market value, along with
floating and fixed interest options; 31,000+ customers gained
access to their homes through this product.
In the affordable housing segment, we are attracting more
customers through our home loan offering (Shubh Aarambh).
Maximum loan amount of up to H30 lakh can be availed
under the scheme. Part pre-payments are also allowed
with complete flexibility. Up to 12 EMIs can be waived off
at no extra cost in case of on-time payment and there are
many other added benefits to make the experience of home
ownership a memorable one.
PARTNERING NATION-BUILDING
We are one of the leading banks in the Electronic Toll
Collection Project proposed by National Highways
Authority of India (NHAI) and guided by National Payments
Corporation of India (NPCI). Total automation of toll
collection across the country is expected to reduce average
waiting time at toll plazas by 10 minutes.
Advancing dairy industry: India’s diary industry is
slated to reach H9.4 trillion by 2020 (Source: Edelweiss
Securities Report). Yet the industry is primarily based on
a ‘cash-and-carry’ model. At Axis Bank, we provided the
industry a customised dual-pronged solution for its digital
transformation.
Payment solutions for procurements: Designed
a gateway to simplify and accelerate payments
computation in dairies, reducing working capital cycle.
Collection solutions for deliveries: Developed an
app to enable distributors and retailers to concurrently
order milk and make payments.
Digitising mandis: We are helping develop e-National
Agriculture Market (eNAM), a pan-India electronic trading
portal to digitally connect mandis by offering end-to-end
transaction solutions that provide:
Integrated ordering platform: Offers real-time
information on funds and order fulfilment.
Simplified funds collection: Leverages branch
network and Cash Deposit Machines (CDMs) to collect
funds from buyers.
DRIVING
RENEWABLE
ENERGY
WE ARE COLLABORATING WITH FERYR
ENERGY TO OFFER TERM LOANS FOR ROOFTOP
INSTALLATION OF SOLAR POWER PROJECTS
IN TELANGANA AND ANDHRA PRADESH. THE
LOANS ARE MEANT FOR INDUSTRIAL AND
COMMERCIAL PURPOSES AND ARE PROVIDED
TO MICRO- SMALL AND MEDIUM ENTERPRISES
(MSMEs) AND SELF-EMPLOYED INDIVIDUALS TO
ENCOURAGE GRASSROOTS ENTREPRENEURSHIP
AND USHER IN REAL IMPACT.
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CREATING REAL IMPACT
Enriching customer
experiences
We are encouraged by the fact that customer
expectations are never static. They continue to
evolve and challenge us to think better and work
smarter. We depend on deep data analytics to
gain insights into emerging trends and aspirations
and accordingly tailor bespoke solutions.
6.75%
interest
Automatic
FD
The Bank launched Axis ASAP (savings account
that can be instantly opened online with just
PAN and Aadhaar details) which offers
industry-first feature where savings balances
over `10,000 are automatically treated as fixed
deposits and customers earn 6.75% interest.
Early adoption of advanced technology and its
proper implementation also plays a very big role
in delivering on customer expectations.
We realised that digital was going to radically
change India’s entire banking landscape and we
were adequately equipped to emerge among the
leaders in digital banking. Our experience and
expertise have enabled us to continue to grow
our digital footprint.
A S A P A C C O U N T K H O L O
A S A P F EA T U R E S P A O
I N S T A N T B A N K A C C O U NT
AUTOMATIC
FIXED DEPOSIT
6.75%
INTEREST
E A S Y
B I L L
P A Y
AXIS ASAP
We initiated the first online
eKYC-based account ‘Axis ASAP’,
which offers customers the opportunity
to open bank accounts instantly.
FREECHARGE
We acquired the payments wallet
FreeCharge (first such acquisition of a
digital payments company by a bank in
India) to strengthen our digital offerings.
A S A P A C C O U N T K H O L O
A S A P F EA T U R E S P A O
I N ST A N T B A N K A C C O U NT
E A S Y
B I L L P A Y
A S A P A C C O U N T K H O L O
A S A P F EA T U R E S P A O
I N S T A N T B A N K A C C O U N T
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TRAVEL IN STYLE
We were India’s first bank to launch a Forex card
for international travellers in 2002. We are now
the market leader with over 45% market share. We
also launched India travel card - India’s first and
only Indian currency prepaid travel card for foreign
nationals.
Multi-Currency Forex Card
16 currencies on one card | Reload on the go | Accepted Worldwide
H o l i d a y M o r e C a s h l e s s
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
India’s first bills discounting platform that promises to revolutionize the way businesses get paid.
Upload invoices for the orders you have delivered, choose the best bid and receive payments within 48
hours to help businesses grow faster. Visit www.invoicemart.com
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GROWING OUR DIGITAL FOOTPRINT
GROWING OUR DIGITAL FOOTPRINT
We acquired the payments fintech
company FreeCharge (first such
acquisition of a digital payments
company by a bank in India) to
strengthen our digital offerings.
FreeCharge is a leading pan-India
digital payments company with over
five crores registered customers and
200,000+ merchants.
transactions and use of blockchain for
remittances.
We enable our customers to make
informed decisions on mutual fund
schemes with Mutual Funds Screener
on the Axis Bank website. The platform
provides fund comparisons and details
such as risk category, fund performance,
peer comparison, asset allocation and
portfolio details, among others.
We launched Axis ASAP – a savings
account that can be instantly opened
online with just PAN and Aadhaar
details – it has industry-first feature
where savings balances over H10,000
are automatically treated as fixed
deposits and customers earn an interest
of 6.75%.
We launched ASAP loans to address
finance needs of small businesses
faster, through small ticket
pre-approved e-loans for pre-qualified
customers. ASAP loans eliminate the
hassles of documentation, physical
visits and negotiations and complete
the disbursement process in less than
10 minutes. In its first year of launch,
we disbursed more than H20 crores
through this platform and going
forward, expect to scale it.
We launched India’s first open-loop
smart card, in association with the
city transportation body, enabling
commuters in Bengaluru and Kochi
to travel cashless and hassle-free in
public transport.
We introduced Axis OK, an app that
empowers feature phone users to
avail basic banking facilities digitally
without internet.
We launched instant international
payment services using Ripple’s
enterprise blockchain technology
solution. Ripple connects banks,
payment providers, digital asset
exchanges and corporates to provide
frictionless experience to send money
globally. The transactions reach their
destination account in minutes, with
certainty of settlement, and provide
complete transparency.
We introduced AI in chatbots for
interactive interface mutual funds
DELIGHTING CORPORATE
CUSTOMERS
We enriched our Corporate Internet
Banking (CIB) experience by migrating
customers to a single portal for all
corporate digital offerings, along
with a one-view dashboard for all
corporate relationships. This allows
corporate borrowers to submit
various documents/declarations
online. The Trade Connect platform
is also integrated with CIB for trade
transactions by corporate customers.
We launched a bulk bill payment
solution for corporates that helps
settle various bills such as utility and
telecom, among others. Corporates
have access to various payment
options using this platform.
We are engaging with e-commerce
companies, fintech companies and
start-ups for our investment banking
solutions and banking products.
SIMPLIFYING OVERSEAS
TRANSACTIONS
We partnered with Earthport to
provide a unique remittance solution
with guaranteed turnaround time and
fixed charges for remittances to
60+ countries.
We developed an online platform
for remitting funds overseas to cater
to customers who do not maintain
accounts with Axis Bank. The platform
allows online transactions after
completing a one-time KYC.
We launched Remit Money with
customer-centric features such as
instant/near-instant money transfer and
integration with payment gateways.
The portal provides instant account
verification in USA, real-time chat
facilities and 24x7 customer service for
convenient cross-border fund transfers.
We introduced ‘E-softex’, a software
that provides data pertaining to Softex
forms, invoices and remittances to
software companies through an online
portal. The Softex forms are matched
with remittances and export data
processing and the monitoring system
is updated automatically.
ENHANCING OUR CUSTOMER
VALUE PROPOSITION
We partnered with leading health and
medical services providers (Apollo
and Max Healthcare) to provide our
customers with exclusive health and
wellness services at discounted prices.
We implemented Straight Through
Processing (STP) in areas of loans,
general insurance, health insurance
and credit card space, reducing
turnaround time.
HASSLE-FREE
PROPOSITION
WE INTRODUCED
AN INDUSTRY-FIRST
SCHEME, WHICH
OFFERS ABSOLUTE
LIQUIDITY WITH OUR
TERM DEPOSIT PLANS.
OUR CUSTOMERS NEED
NOT WORRY ABOUT
PREMATURE CLOSURE
PENALTY FOR THE FIRST
PARTIAL WITHDRAWAL
OF UP TO 25% FOR
THE TERM DEPOSITS’
PRINCIPAL VALUE.
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CREATING REAL IMPACT
Nurturing future
achievers
To drive our future transformation, our people will
require new skills and capabilities to reflect the
changing needs of the business. Therefore, we
continue to devise solutions to attract, develop
and retain these skills and capabilities, while
fostering a culture that reinforces our core values.
BEING LEARNING AGILE
HOLISTIC DEVELOPMENT PROGRAMMES
Through our online learning and testing
platform - Axis Competency Profiler - we
assess functional competence and create
a pool of dependable talent. The platform
also serves as a tool for employee career
management, while providing deep insights
into the productivity and performance of
their respective business units.
Our HR tool ‘twin-tracking’ helps build
core traditional banking capabilities,
while focussing on new-age skills for the
future. It has been the bedrock for the
Bank’s Academies.
Collaboration with experts helps the
Academies provide our people an
opportunity to master core banking
functional areas. It also helps in
developing new-age skills such as
analytics and digital. Micro certifications
that lead to ‘Axis Bank Power Profiles’ is
among the Bank’s core focus areas for
building future capabilities.
The Axis Learning Achievers programme
and the Axis Business Clinics use
‘storytelling’ as a powerful medium of
learning. Using the cascade format of
facilitation, the Banking on Compliance
programme drives ethical decision making,
KYC/AML knowledge and the importance
of compliance in every transaction the
Bank undertakes.
HIGH-PERFORMANCE CULTURE
Our integrated Performance Management &
Capability Development system - ACElerate
- helps in fostering high performance
and capability building. Capability
development interventions are provided to
high-performing employees to hone their
skills further and help them perform better.
During 2017-18, over 24,600 employees
underwent a two-day behavioural training
programme, customised to their grade and
their role challenges.
A young and engaged workforce with an
average age of 29.5 years continues to
drive the Axis Bank brand forward.
AXIS
CHAMPIONS
Our annual recognition programme
- Axis Champions - fosters cultural
alignment across the organisation
and recognises champions for
their efforts. During 2017-18,
the programme received 15,000
nominations from across the country.
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ACElerate
We integrated Performance Management
and Capability Development system for fostering
high performance and capability building.
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EMPOWERING LIVELIHOODS
Under our overarching theme of
‘Sustainable Livelihoods’, Axis Bank
Foundation’s current programmes are
aimed towards strengthening and
increasing farm productivity, improving
natural resource management, providing
alternate income-generating options
and increasing employability and
entrepreneurial skills. Through our
various initiatives across 21 states
and 178 districts, Axis Bank
Foundation has helped impact and
improve a million livelihoods.
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CREATING REAL IMPACT
Purpose beyond
profit
At Axis Bank, we look at ourselves as a catalyst
for progress. Axis Bank Foundation (ABF) furthers
this by enabling opportunities that enhance
incomes for those who are economically and
socially backward or disadvantaged through its
Sustainable Livelihood programme.
LIVELIHOOD PROMOTION
INCREASED EMPLOYABILITY
THROUGH SKILLING
The skilling programme imparts knowledge
in trades such as hospitality, retail, nursing,
beautician, tailoring, electrical and so on
in conjunction with basic English and life
skills with linkages for employment and
entrepreneurship. It focusses on skilling the
able and disabled youth.
NUMBER OF
PROJECTS
18
NUMBER OF
STATES
21
NUMBER OF
VILLAGES
10,293
ENHANCING RURAL LIVELIHOOD
The Rural Livelihood programme focusses
on activities such as:
a) Natural Resource Management
resulting in improved access to water
and enhanced soil productivity
b) Farm-Based Activities resulting
in increase in income and food
security through enhanced agricultural
productivity
c) Non-Farm-Based Activities such
as dairy, goatery, piggery, poultry and
so on, resulting in additional income
and risk mitigation
d) Collectives, which includes formation
of Self-Help Groups (SHGs), producer
groups and so on, resulting in a
platform for cohesiveness, stronger
voice and camaraderie
NUMBER OF
BENEFICIARIES
1 MILLION+
IMPROVED
FARMER RETURNS
One of the key outcomes of the Rural
Livelihood programme is higher returns
for farmers. A higher return, along
with conducive ecosystem that includes
access to finance and markets, ensures
long-term sustainability.
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LIVELIHOOD
PROMOTION
SUCCESS STORIES
ABF in partnership with Self Reliant
Initiatives through Joint Action
(SRIJAN) tapped livelihood potential
in Bali block - one of the most
backward regions of Rajasthan -
though collection and processing
of custard apples. To realise the
potential, a Farmer Producer
Organisation (FPO), Ghummar Mahila
Samiti, was formed and a value
chain around the commodity was
developed. Currently, over 1,000
women participate in this programme.
A net income enhancement of
H12,500 for each participant has
been witnessed through the custard
apple value chain.
ABF and Youth4Jobs (Y4J) partnership
is committed to train 8,000 physically
challenged individuals across multiple
states. Kavitha (28) from Warangal,
Telangana is the sole bread-earner
of her family. She enrolled herself
for the training programme and post
completion, was able to secure a
job in the insurance sector, earning
H10,000 per month. She is now
catering to her family’s daily expenses
and repaying a loan her family
borrowed from a local moneylender
to build their house.
PROMOTING GREEN
DEVELOPMENT
INCREASING
FINANCIAL LITERACY
CELEBRATING DIGITAL FINANCIAL
LITERACY WEEK
We continue our ‘Digi-Prayas’ initiative
to impart financial literacy to 80,000
people across India. It will help residents
in 24 selected villages to be financially
literate, digitally aware and proactively
adopt various modes of digital banking
such as mobile and UPI-based banking,
among others. We are setting up digital
banking ecosystems in these villages to
encourage the use of technology-based
banking activities.
VILLAGE SOCIAL
TRANSFORMATION MISSION
ABF joined hands with the Government
of Maharashtra to transform adverse
conditions in 1,000 villages plagued by
drought, low human development index
and other social challenges. ABF will
help in transforming them into ‘model
villages’ and will implement its flagship
financial inclusion and financial literacy
programmes to introduce banking in
these villages.
CONTRIBUTION TO SUSTAINABLE
DEVELOPMENT GOALS
The outcomes of ABF programmes
are contributing to some of the
Sustainable Development Goals
(SDGs) set by United Nations in
2015. The goals are:
We have actively
funded projects in
the realms of clean
technology, renewable
energy, energy-efficient
products and sustainable
infrastructure. Besides, we
have 3MW total installed
capacity of solar energy
for our operations.
BIO-DEGRADABLE CARD
We launched a bio-degradable card
offering customers a unique way to
contribute towards eco-friendly payment
solutions. These are recyclable cards that
do not release carbon, methane or other
harmful pollutants. Available on select
gift card products and acceptable at all
domestic merchant outlets and online
portals, these serve as an electronic
gifting option.
ENVIRONMENT SUSTAINABILITY
MANAGEMENT GROUP (ESMG)
ESMG under Corporate Banking executes
sustainable lending policy. Through this,
we aim to integrate environmental and
social due diligence into the internal risk
management framework and remain
committed to support sustainable sectors
that combat climatic changes.
K3,492 CRORES
CREDIT OUTSTANDING FOR
SUSTAINABLE SECTORS LIKE
RENEWABLE ENERGY, WASTE
PROCESSING AND MASS
RAPID TRANSPORT
26
27
Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
AWARDS AND RECOGNITION
IDC I.C.O.N.I.C Insight Awards 2017 for Excellence in Operations
Grand Jury Award – Institutional at the UTI Mutual Fund and
CNBC TV18 Financial Advisor Awards 2016-17
Best Use of Digital and Channels Technology at
CX Innovator Best Omnichannel Customer Success Story at the
the IBA Banking Technology Awards 2018
2017 Genesys Customer Innovation Awards 2017
26
27
FICCI CSR Award 2016-17 in the Women Empowerment category
Dale Carnegie Global Leadership Award for 2017
Annual Report 2017 -18
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
BOARD OF DIRECTORS
AS ON 16 MAY 2018
Dr. Sanjiv Misra
Chairman
Shikha Sharma
Prasad Menon
Managing Director & CEO
Director
Prof. Samir Barua
Director
Som Mittal
Director
Rohit Bhagat
Director
Usha Sangwan
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Ketaki Bhagwati
Director
B. Babu Rao
Director
Stephen Pagliuca
Director
V. Srinivasan
Deputy Managing Director
Rajiv Anand
Executive Director
(Retail Banking)
Rajesh Dahiya
Executive Director
(Corporate Centre)
28
29
CORE MANAGEMENT TEAM
AS ON 16 MAY 2018
Jairam Sridharan
Group Executive and Chief Financial Officer
Sundaresan Mahadevan
Group Executive - Corporate Relationship Group &
Transaction Banking
Statutory Auditors
M/s S. R. Batliboi & Co. LLP
Chartered Accountants
Secretarial Auditors
M/s BNP & Associates
Company Secretaries
Sidharth Rath
Group Executive
Rajendra Adsul
President - International Banking
J.P. Singh
President - SME
Cyril Anand
President and Chief Risk Officer
Himadri Chatterjee
President - Retail & Wholesale Banking Operations
Rudrapriyo Ray
President - Structured Finance Group
Sanjay Silas
President - Branch Banking
Akshaya Kumar Panda
President - Corporate Client Coverage Group
Prashant Joshi
President - Corporate Credit Department
Girish V. Koliyote
Company Secretary
Registrar and Share Transfer Agent
M/s Karvy Computershare Private Limited
Unit: Axis Bank Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli,
Financial District, Nanakramguda, Hyderabad – 500 032
Tel. No: 040-67162222 Fax No: 040-23001153
Registered Office
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad – 380 006
Tel. No.: 079-66306161 Fax No.:079-26409321
Corporate Office
‘Axis House’, C-2, Wadia International Centre,
Pandurang Budhkar Marg, Worli, Mumbai – 400 025
Tel. No.: 022-24252525/43252525 Fax No.:022-24251800
Email: shareholders@axisbank.com
Website: www.axisbank.com
29
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES DIRECTORS’ REPORT
The Board of Directors have the pleasure of presenting the 24th Annual Report of the Bank together with the Audited Statement of
Accounts, Auditors’ Report and the Report on the business and operations of the Bank, for the financial year ended 31st March 2018.
FINANCIAL PERFORMANCE
The financial highlights for the year under review, are presented below:
Particulars
Deposits
Savings Bank Deposits
Current Account Deposits
Advances
Retail Advances
Non-retail Advances
Total Assets/Liabilities
Net Interest Income
Other Income
Fee Income
Trading Profit(1)
Misc. Income
Operating Expenses
Operating Profit
Provision for Tax
Other Provisions and Write offs
Net Profit
Balance in Profit and Loss account brought forward from previous year
Amount Available For Appropriation
Appropriations
Transfer to Statutory Reserve
Transfer (from)/to Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Dividend paid (includes tax on dividend)
Surplus carried over to Balance Sheet
(1) Excluding Merchant Exchange Profit
KEY PERFORMANCE INDICATORS
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 Profit as a percentage of working funds*
Return on Average Assets
Profit 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
Previous year figures have been re-grouped wherever necessary
30
2017-18
2016-17
(` in crore)
Growth
453,622.72
148,202.05
95,649.55
439,650.31
206,464.62
233,185.69
691,329.58
18,617.73
10,967.09
8,866.97
1,616.76
483.36
13,990.34
15,594.48
(154.11)
15,472.91
275.68
24,448.33
24,724.01
68.92
103.49
101.65
1.62
1,405.28
23,043.05
414,378.79
126,048.29
87,001.75
373,069.35
167,992.95
205,076.40
601,467.67
18,093.12
11,691.31
7,882.01
3,400.34
408.96
12,199.91
17,584.52
1,788.28
12,116.96
3,679.28
23,766.46
27,445.74
919.82
(87.16)
755.57
1.75
1,407.43
24,448.33
9.47%
17.58%
9.94%
17.85%
22.90%
13.71%
14.94%
2.90%
(6.91%)
12.50%
(52.45%)
18.19%
14.68%
(11.32%)
-
27.70%
(92.51%)
-
-
(92.51%)
-
(86.55%)
(7.43%)
(0.15%)
-
2017-18
2016-17
7.15%
1.71%
3.44%
0.53%
2.43%
0.04%
`0.47 lakhs
`14.84 crore
3.40%
7.88%
2.07%
3.67%
7.22%
3.11%
0.65%
`6.68 lakhs
`14.00 crore
2.11%
Annual Report 2017 -18
CAPITAL & RESERVES
During the year, the Bank raised additional equity capital through preferential allotment of 16,53,28,892 equity shares of `2 each of
the Bank at a price of `525.00 per equity share. Consequently, the total issued and paid-up equity share capital of the Bank increased
by `33.07 crore and the Reserves of the Bank increased by `8,620.95 crore after charging of issue related expenses.
Further, the Bank also issued, 4,53,57,385 convertible warrants, convertible into 4,53,57,385 equity shares of ` 2 each of the Bank at a
price of `565.00 per warrant on a preferential basis. The said convertible warrants are exercisable within a period of 18 months from
the date of its allotment. The said equity shares and convertible warrants were allotted to a consortium of investors (Bain Capital, Life
Insurance Corporation of India and other marquee investors).
During the year, the Bank also allotted 61,73,935 equity shares of `2 each of the Bank pursuant to exercise of options under the
various Employee Stock Option Scheme(s) of the Bank by some of its Whole Time Directors / Employees and that of its subsidiary
companies.
Pursuant to the said allotments, the total issued and paid-up equity share capital of the Bank, as on 31st March 2018 increased to
`513.31 crore, as compared to `479.01 crore, as on 31st March 2017.
The category wise shareholding pattern of the Bank, as on 31st March 2018, was as under:
Sr. No. Category / Shareholder
No. of Shares held
% of paid-up
Capital
PROMOTERS
Life Insurance Corporation of India (LIC)
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
General Insurance Corporation of India
The New India Assurance Company Limited
National Insurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
1
2
3
4
5
6
7
FOREIGN INVESTORS
8
9
Overseas Investors (including FIIs/OCBs/NRIs)
Foreign Direct Investment (GDR)
DOMESTIC FINANCIAL INSTITUTIONS
10
11
Financial Institutions / Mutual Funds / Banks / NBFC
Others
Total
34,94,51,108
25,32,70,690
3,72,50,000
2,54,03,585
21,34,681
63,30,020
26,26,337
1,31,64,80,211
11,53,42,680
24,27,74,995
21,54,74,629
13.62
9.87
1.45
0.99
0.08
0.25
0.10
51.29
4.49
9.46
8.40
2,56,65,38,936
100.00
The said equity shares of the Bank are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Unsecured,
Redeemable, Non-Convertible, Subordinated, Perpetual Debentures issued by the Bank on a private placement basis are listed on
NSE and BSE. The Bonds issued by the Bank under the MTN programme are listed on Singapore Stock Exchange and the Green
Bonds issued by the Bank are listed on London Stock Exchange. The Global Depository Receipts (GDR) issued by the Bank are listed
on London Stock Exchange.
The Bank has paid the listing fees to the said Stock Exchanges for the financial year 2017-18.
DIVIDEND
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations) the Bank has formulated and adopted a Dividend Distribution Policy with the objective of providing clarity to
its stakeholders on the profit distribution strategies of the Bank. The said Policy has been hosted on the website of the Bank at https://
www.axisbank.com/shareholders-corner/corporate-governance/Compliance-Report.
The Diluted Earnings Per Share (EPS) of the Bank for the financial year 2017-18 stood at `1.12 per equity share of `2/- each as
compared to `15.34 per equity share of `2/- each in the previous financial year. After making mandatory appropriations to Statutory
Reserve, Investment Reserve, Reserve Fund and Capital Reserve, no profits are available for distribution as dividend for the financial
31
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
year ended 31st March 2018. Accordingly, no dividend has been recommended by the Board of Directors of the Bank for the financial
year ended 31st March 2018.
CLOSURE OF SHARE TRANSFER BOOKS
The Register of Members and the Share Transfer Books of the Bank will be closed from Saturday, 2nd June 2018 to Wednesday, 20th
June 2018 (both days inclusive) for the purpose of the 24th Annual General Meeting of the Shareholders of the Bank to be held on
20th June 2018.
RATINGS OF VARIOUS DEBT INSTRUMENTS
The Unsecured Redeemable Non-Convertible Subordinated Debentures issued by the Bank, on a private placement basis, during the
financial year 2017-18, were rated “CRISIL AAA/Stable” by CRISIL Ltd, “ICRA AAA hyb” by ICRA Limited and “IND AAA” by India
Ratings and Research Private Limited.
The Unsecured, Subordinated, Perpetual, Additional Tier 1, Basel III Compliant Non-Convertible Debentures issued by the Bank on
a private placement basis, during the financial year 2017-18, were rated “CRISIL AA+/Stable” by CRISIL Ltd, “ICRA AA+ (hyb)” by
ICRA Limited and “IND AA+” by India Ratings & Research Private Ltd.
The Bonds issued by the Bank under the MTN programme on a private placement basis, during the financial year 2017-18, were rated
“Baa3” by Moodys, “BBB-” by S&P and Fitch.
BOARD OF DIRECTORS
During the year, the following changes took place in the composition of the Board of Directors of the Bank:
Shri V. R. Kaundinya ceased to hold office as an Independent Director of the Bank, with effect from the close of business hours on
Wednesday, 11th October 2017, upon completion of the maximum permissible tenure of 8 continuous years, under Section 10A (2A)
of the Banking Regulation Act, 1949. The Board acknowledges the invaluable contributions rendered by Shri V. R. Kaundinya during
his tenure as an Independent Director of the Bank and places on record its deep appreciation for the insightful perspectives and
suggestions provided by him at the meetings of the Board/Committees.
Shri Stephen Pagliuca (Nominee of entities affiliated to BAIN Capital) was appointed as an Additional Non-Executive (Nominee)
Director of the Bank, for a period of 4 consecutive years, with effect from 19th December 2017, subject to approval of the Shareholders
of the Bank. Shri Stephen Pagliuca shall not be liable to retire by rotation during the said period.
The current term of Smt. Shikha Sharma, Managing Director & CEO of the Bank is due to expire on 31st May 2018. The Board of
Directors at its meeting held on 7th December 2017 had re-appointed Smt. Shikha Sharma as the Managing Director & CEO of
the Bank for a further period of three years w.e.f. 1st June 2018. At the meeting of the Board of Directors held on 9th April 2018,
Smt. Shikha Sharma requested the Board that the period of her re-appointment as the Managing Director & CEO of the Bank be revised
from 1st June 2018 up to 31st December 2018. The Board considered her request and approved her re-appointment as the Managing
Director & CEO of the Bank from 1st June 2018 up to 31st December 2018 (both days inclusive) and the terms and conditions relating
to the said re-appointment, including remuneration, subject to the approval of the RBI and the Shareholders of the Bank, which would
also enable the Bank to manage the transition period and ensure orderly succession for the said post. The RBI has granted its approval
to the said re-appointment and the terms and conditions, including remuneration thereof.
During the year, no other changes took place in the composition of the Board of Directors of the Bank. The composition of the Board
of Directors of the Bank is in compliance with the applicable norms.
SELECTION AND APPOINTMENT OF DIRECTORS
The selection and appointment of Directors of the Bank is done in accordance with the relevant provisions of the Companies Act, 2013,
the relevant Rules made thereunder, the Banking Regulation Act, 1949, the Guidelines issued by the RBI and the relevant provisions of
the Listing Regulations relating to Corporate Governance.
The Bank has a formal succession planning process in place, pursuant to which it periodically reviews its in-house talent across all
levels and benchmarks it with the talent available in the banking industry. In terms of the succession planning/ talent review process,
the Bank proactively takes steps to review the existing talent at the senior management level of the Bank and also engages the services
of an external consultant to assess the suitability of potential candidates both from inside and outside the Bank taking into account the
contemporary skills sets required for the said post and their ability to manage challenges faced by the Bank.
The Bank adheres to the process and methodology prescribed by the RBI in respect of ‘Fit & Proper’ criteria as applicable to Private Sector
Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually
and collectively in order to be eligible to be appointed as a Director of the Bank. The prescribed declarations given by the Directors
other than that of the Members of the Nomination & Remuneration Committee (NRC) are placed before the NRC and the declarations
32
Annual Report 2017 -18 given by the Members of the NRC are placed before the Board, for its review and noting. The said declarations are obtained from all the
Directors on an annual basis and also at the time of their appointment / re-appointment, in compliance with the said laws. An assessment
on whether the Directors fulfil the said criteria is also carried out by the NRC and the Board on an annual basis, before considering their
candidature for re-appointment.
The NRC also reviews the structure, size, composition of the Board, the regional and industry experience, track record, expertise and
other relevant information and documents of the Directors before making appropriate recommendations to the Board with regard to their
appointment, re-appointment and remuneration designed to enhance the Board’s effectiveness.
The NRC on an ongoing basis also identifies potential candidates from diverse backgrounds including but not limited to accountancy,
agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, information technology, core
industries, infrastructure sector, payment and settlement systems, human resource, risk management and business management, thus
providing the Board with members who have special knowledge, practical experience and diverse set of skills, who could serve the
diverse business interests of the Bank.
DECLARATION OF INDEPENDENCE
All the Independent Directors of the Bank have given their respective declarations stating that they meet the criteria prescribed for
independence under the applicable laws and in the opinion of the Board, all the Independent Directors of the Bank meet the said criteria.
KEY MANAGERIAL PERSONNEL
Smt. Shikha Sharma, Managing Director & CEO, Shri Jairam Sridharan, Chief Financial Officer and Shri Girish V. Koliyote, Company
Secretary are the Key Managerial Personnel of the Bank, in terms of Section 2(51) read with Section 203(1) of the Companies Act, 2013.
During the year, there were no changes in the composition of the Key Managerial Personnel of the Bank.
BOARD PERFORMANCE EVALUATION
The Companies Act, 2013 and the Listing Regulations relating to Corporate Governance contains provisions on evaluation of the
performance of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Directors, Chairperson and
the Board Committees.
The Bank had engaged the services of an external consultant to help it conduct an impartial and independent Board performance
evaluation, as aforesaid. On the basis of their findings, a process of evaluation was recommended to the NRC for adoption. The manner
in which the evaluation has been conducted is explained in the Report on Corporate Governance, which forms part of this report.
MEETINGS
The schedule of the meetings of the Board and the Board Committees for the ensuing financial year is circulated in advance to the
Members of the Board, for their consideration and approval. During the year, 9 meetings of the Board of Directors of the Bank were
held and the gap between the said meetings did not exceed the limit of 120 days, as prescribed under the relevant provisions of the
Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to Corporate Governance.
AUDIT COMMITTEE
The composition, role and functions of the Audit Committee of the Board of Directors of the Bank is disclosed in the Report on Corporate
Governance, which forms part of this report.
REMUNERATION POLICY
The Bank has formulated and adopted a Comprehensive Remuneration Policy for its Directors, Key Managerial Personnel and other
Employees, in terms of the relevant provisions of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder and the
Listing Regulations relating to Corporate Governance. The details of the said Remuneration Policy have been disclosed in the Report on
Corporate Governance, which forms part of this report. The said Policy has been hosted on the website of the Bank at https://www.
axisbank.com/shareholders-corner/corporate-governance/Compliance-Report.
WHISTLE BLOWER POLICY AND VIGIL MECHANISM
The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Report on Corporate Governance, which forms
part of this report.
33
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES SUBSIDIARIES
As on 31st March 2018, the Bank has the following eleven unlisted subsidiary companies and one step down subsidiary;
i)
ii)
Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.
Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.
iii) Axis Capital Ltd. provides services relating to investment banking, equity capital markets, institutional stock broking, mergers
and acquisition advisory, etc.
iv) Axis Finance Ltd. is an NBFC and carries on the activities of loan against shares, margin funding, IPO financing, etc.
v)
Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual fund business.
vi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital support
to businesses.
vii) Axis Securities Ltd. is primarily in the business of marketing of credit cards and retail asset products and also provides retail
broking services.
viii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitisation
trusts.
ix) A.TREDS Ltd. is engaged in the business of discounting trade receivables.
x)
Freecharge Payment Technologies Private Ltd. which was acquired on 6th October 2017 is in the business of providing digital
payments services through web & mobile-based platforms and payment gateways.
xi) Accelyst Solutions Private Ltd. which was acquired on 6th October 2017 is in the business of providing digital payments services
through web- & mobile-based platforms.
xii) Axis Capital USA, LLC. is a wholly owned subsidiary of Axis Capital Limited incorporated in USA and provides financial services
relating to equity capital market, institutional stock broking to institutional investors in USA.
During the Financial Year 2017-18, Axis Securities Europe Ltd. engaged in the business of financial advisory services was wound up
with effect from 16th May 2017.
During the year, the Bank acquired 100% equity capital of Accelyst Solutions Private Ltd. and Freecharge Payment Technologies
Private Ltd. Both the companies have become wholly owned subsidiaries of the Bank. Freecharge Payment Technologies Private Ltd.
is engaged in the business of operating payment system for semi-closed prepaid payment instruments and gift vouchers under the
license issued by the Reserve Bank of India, card processing services, payment aggregation services, merchant acquisition services
and payment support services. Accelyst Solutions Private Ltd. is engaged in the business of providing and facilitating online recharge
/ bill payment / coupon services, marketing platform for third parties, distribution of mutual funds and insurance products through the
mobile application /website / mobile site.
During the year, Axis Capital Ltd. incorporated Axis Capital USA, LLC on 2nd August 2017, as its wholly owned subsidiary in USA
to provide financial services relating to equity capital market, institution stock broking to institutional investors in USA. It will be
operational after completion of registration formalities with Financial Industry Regulatory Authority, Inc. (FINRA) and Securities and
Exchange Commission, USA.
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
2014, as amended, the Bank has prepared its consolidated financial statements including that of all its subsidiary companies, which
forms part of this report. The financial position and performance of each of the said subsidiary companies are given in the statement
containing the salient features of the financial statements of the said subsidiary companies of the Bank, which is annexed to this report.
In accordance with the third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of the Bank, containing therein
its standalone financial statements and the consolidated financial statements and all other documents required to be attached thereto
has been hosted on its website www.axisbank.com.
Further, in accordance with the fourth proviso to the said section, the audited annual accounts of each of the said subsidiary companies
of the Bank have been hosted on the Bank’s website https://www.axisbank.com/shareholders-corner/shareholder’s-information/
annual-reports#/.
34
Annual Report 2017 -18 Any shareholder interested in obtaining a physical copy of the aforesaid financial statements may write to the Company Secretary at
the Registered Office of the Bank. Further, please note that the said financial statements will also be available for inspection by the
Members of the Bank and Trustees of Debenture holders at the Registered Office of the Bank during business hours from 11.00 a.m.
to 1.00 p.m. on all working days except Saturdays, Sundays, Bank Holidays and National Holidays.
RELATED PARTY TRANSACTIONS
During the year, the Bank has not entered into any materially significant transactions with its Promoters, Directors, Management,
Subsidiaries or Relatives of the Directors/Management, which could lead to potential conflict of interest between the Bank and these
parties, other than transactions entered into in the ordinary course of its business.
Transactions entered into by the Bank with related parties in the normal course of its business were placed before the Audit Committee
of the Board (ACB). There were no material individual transactions with related parties, which were not in the normal course of the
business of the Bank, nor were there any material transactions with related parties or others, which were not on arm’s length basis.
Accordingly, AOC-2 is not applicable to the Bank. A statement giving details of all related party transactions, entered pursuant to the
omnibus approval so granted, is placed before the ACB for their review, on a quarterly basis. The Bank has developed a Standard
Operating Procedure for the purpose of identifying and monitoring such transactions. The policy on Related Party Transactions has
been hosted on the Bank’s website at https://www.axisbank.com/docs/default-source/quarterly-reports/6policy-on-related-party
transactions.pdf?sfvrsn=2, in terms of the Listing Regulations relating to Corporate Governance.
EMPLOYEE STOCK OPTION PLAN (ESOP)
Since the financial year 2000-01, the Bank has formulated and adopted several Employee Stock Option Schemes (ESOS) for the
benefit of the eligible Directors / Employees of the Bank and some of its subsidiary companies, in terms of the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 / Securities and Exchange
Board of India (Share Based Employee Benefits) Regulations, 2014, as amended, from time to time. The objective of the said ESOS is
to enhance employee motivation, enable employees to participate, directly or indirectly, in the long-term growth and financial success
of the Bank, to act as a retention mechanism by enabling employee participation in the business of the Bank as its active stakeholder
and to usher an ‘owner-manager’ culture.
In terms of the said ESOS, as on date, up to 24,00,87,000 options can be granted by the Bank to the eligible Directors / Employees
of the Bank and some of its Subsidiary Companies. The eligibility and number of options to be granted to such eligible Directors /
Employees is determined on the basis of their performance and such other criteria as reviewed and approved by the NRC / Board of
Directors of the Bank, as the case may be, from time to time.
During the period from February 2001 to July 2013, the Shareholders of the Bank had approved the grant of stock options, as
aforesaid, on six occasions. Under the first two ESOS of the Bank and in respect of the grant of stock options made by the Bank upto
29th April 2004, the option conversion price was set at the average of the daily high-low price of the Bank’s equity shares traded
during the 52 weeks preceding the date of approval of grant by the Board of Directors of the Bank / NRC, prevailing on the Stock
Exchange which had the maximum trading volume of the Bank’s equity share during the said period. Thereafter, under the third and
subsequent ESOS of the Bank and with effect from the said grants made by the Bank on or after 10th June 2005, the option conversion
price was changed to the latest available closing price of the equity shares prevailing on the Stock Exchange which recorded higher
trading volume, on the day prior to the date of approval of grant by the NRC.
Pursuant to the sub-division of the equity shares of the Bank, the Shareholders of the Bank at the 20th Annual General Meeting held on
27th June 2014, also approved the consequent adjustments to the stock options granted to the eligible Directors / Employees of the
Bank and that of its Subsidiary Companies, under the various ESOS of the Bank, such that all stock options available for grant (including
lapsed and forfeited options available for reissue) and those already granted but not vested and those vested but not exercised, as
on the record date fixed for the purpose of sub-division, were proportionately converted into options bearing equity shares of the face
value of `2 each of the Bank and the grant price of all the outstanding stock options (unvested, vested and unexercised) as on the said
record date for the purpose of sub-division were proportionately adjusted by dividing the existing grant price by 5. The record date
for the said sub-division was 30th July 2014.
Since 24th February 2001 up to 15th May 2017, the NRC / Board had out of the said 24,00,87,000 options, approved the grant
of 25,31,58,700 options (including 2,62,12,797 options which were lapsed and forfeited) to the eligible Directors / Employees
of the Bank and some of its Subsidiary Companies, in terms of the various ESOS of the Bank. The said options are non-transferable
and vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the date of respective grant, subject to
standard vesting and other conditions as set out in the respective ESOS of the Bank. The said options are required to be exercised by
the concerned Directors / Employees of the Bank and some of its Subsidiary Companies, within a period of three / five years, from
the date of its respective vesting, in terms of the respective ESOS of the Bank.
35
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES As of 31st March 2018, out of the said 25,31,58,700 options so granted 21,34,53,153 options have been vested, out of which
19,73,90,994 options have been exercised and the balance 1,60,62,159 options remain unexercised. Further 1,34,92,750 options
remained unvested and 2,62,12,797 options had been treated as lapsed and forfeited.
There were no material changes in the ESOS of the Bank during the financial year 2017-18 and the same is in compliance with the
relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014.
Statutory disclosures as mandated under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 have been
uploaded on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report.
CORPORATE GOVERNANCE
The Bank is committed to achieving and adhering to the highest standards of Corporate Governance and it constantly benchmarks
itself with best practices, in this regard.
The Report on Corporate Governance for the financial year 2017-18 along with a Certificate issued by the Statutory Auditors of
the Bank confirming compliance with the mandatory requirements relating to Corporate Governance as stipulated under Chapter
IV of the Listing Regulations, forms part of this report.
The Corporate Governance framework of the Bank incorporates all the mandatory requirements as prescribed in the Listing
Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the Listing Regulations, detailed in
the Report on Corporate Governance, which forms part of this report.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Board of Directors of the Bank hereby declares and confirms the following statements, in terms of Section 134(3)(c) of the
Companies Act, 2013:
a)
b)
c)
That in the preparation of the annual accounts for the financial year ended 31st March 2018, the applicable accounting
standards had been followed along with proper explanation relating to material departures.
That such accounting policies as mentioned in Note 17 of the Notes to accounts of the Financial Statements have been
selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Bank as at 31st March 2018 and of the profit of the Bank for the year
ended on that date.
That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and
other irregularities.
d)
That the annual accounts have been prepared on a going concern basis.
e)
f)
That internal financial controls to be followed by the Bank, were in place and that the same were adequate and were
operating effectively.
That proper system to ensure compliance with the provisions of all applicable laws was in place and the same were adequate
and operating effectively.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) and Section 134(3) of the Companies Act, 2013 read with Rule 12 (1) of the Companies (Management
and Administration) Rules, 2014, as amended, the extract of the Annual Return in Form MGT 9, is provided as an annexure to this
report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, in respect of directors / employees of the Bank, is provided as an annexure to
this report.
36
Annual Report 2017 -18 As on 31st March 2018, the Bank had 50 employees who were employed throughout the year and were in receipt of remuneration
of more than `1.02 crore per annum and 6 employees of the Bank who were employed for part of the year and were in receipt of
remuneration of more than `8.50 lakhs per month.
In terms of Section 136 of the Companies Act, 2013, the copy of the financial statements of the Bank, including the consolidated
financial statements, the auditor’s report and relevant annexures to the said financial statements and reports are being sent to the
Members and other persons entitled thereto, excluding the information in respect of the said 56 employees of the Bank containing
the particulars as specified in Rule 5 (2) of the said Rules, which is available for inspection by the Members at the Registered Office
of the Bank during business hours of the Bank up to the date of the ensuing Annual General Meeting. Any Member interested in
obtaining a copy thereof, may write to the Company Secretary of the Bank at its Registered Office.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:
Energy and natural resource conservation have been focus areas for the Bank and conscious efforts are being made towards improving
energy performance, year on year.
For Sustainable Development, Energy efficiency initiatives have been implemented across several branches and offices through energy
and resource conservation projects.
The Bank ensures strict compliance with all statutory requirements and voluntarily undertakes several sustainable steps in order to
contribute towards a better environment.
Some of the steps undertaken and the impact perceived are listed below:
•
•
•
•
Implementation of Solar energy projects across select Branches/ Offices, aggregating ~5.05 MW. This also includes 1.27 MW
project at Axis House, NOIDA
Implementation of Centralised Energy Management System (CEMS) to monitor and control energy consumption.
Conversion of conventional lighting to LED in select premises & implementation of LED lights in all new Branches/Offices.
Conversion of Food/Wet waste at Axis House into manure through compost machine for use in landscaping/gardening.
• Maintenance of unity power factor through 500 KVAR x 4 Nos of APFC panels in auto mode for optimum use of power at Axis
House
•
•
•
•
•
•
•
Installation of Motion sensors for workstation and common area lighting at Axis House.
Re-cycling of Dry waste at Axis House into stationery items like notepads.
Daily re-cycling of 150 KL of water through Sewage Treatment Plant at Axis House, Worli.
Reduction of water consumption at Axis House and Gigaplex (Airoli) through use of aerators.
Rain Water Harvesting at Axis House.
Saving of water through use of Bio-blocks in urinals at Select Large Facilities.
Installation of sensors i3n washbasins to optimise flow of water.
FOREIGN EXCHANGE EARNING AND OUTGO:
The provisions relating to Section 134(3)(m) of the Companies Act, 2013 on particulars relating to Foreign Exchange Earning and
Outgo are not applicable to a Banking Company, as such no disclosure is being made in this regard.
MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT
The Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the Listing
Regulations, is provided as an annexure to this report.
RISK MANAGEMENT
Pursuant to Regulation 21 of the Listing Regulations, the Bank has constituted a Risk Management Committee of the Board of Directors.
The details of the said Committee and its terms of reference are set out in the Report on Corporate Governance, which forms part of
this report.
37
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES The Bank has formulated and adopted a robust Risk Management Framework. Whilst the Board is responsible for framing, implementing
and monitoring the Risk Management Framework, it has delegated its powers relating to monitoring and reviewing of risks associated
with the business of the Bank to the said Committee. The details of the Risk Management Framework and issues related thereto have
been explained in the Management’s Discussion and Analysis Report, which is provided as an annexure to this report.
BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34(2)(f) of the Listing Regulations, top 500 listed entities based on their market capitalisation as on 31st March
every year, are required to submit their Business Responsibility Report (BRR) as a part of the Annual Report. The Bank’s Business
Responsibility Report describing the initiatives taken by the Bank from an environmental, social and governance perspective has been
hosted on the website of the Bank, www.axisbank.com at https://www.axisbank.com/shareholders-corner/shareholder’s-information/
business-responsibility-report. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Bank
at its Registered Office.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The provisions relating to Section 134(3)(g) of the Companies Act, 2013 on particulars of loans, guarantees and investments are not
applicable to a Banking Company, as such no disclosure is being made in this regard.
CORPORATE SOCIAL RESPONSIBILITY
The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the Board of Directors, in accordance with the
provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility) Rules, 2014, as
amended.
The brief outline of the CSR Policy, including overview of the programs undertaken by the Bank, the composition of the CSR Committee,
average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of the amounts spent by the
Bank on CSR activities during the year under review, have been provided as an annexure to this report.
The Bank’s Corporate Social Responsibility Policy which has been reviewed and approved by the CSR Committee has been hosted on
the website of the Bank at https://www.axisbank.com/csr.
PLAN AND STATUS OF IND AS IMPLEMENTATION
The Reserve Bank of India (RBI) issued a circular in February 2016 requiring banks to implement Indian Accounting Standards (Ind
AS) and prepare standalone and consolidated Ind AS financial statements with effect from 1st April 2018. Banks are also required
to report the comparative financial statements for the financial year 2017-18, to be published along with the financial statement for
the year beginning 1st April 2018. However, the RBI in its press release issued on 5th April 2018 has deferred the applicability of Ind
AS by one year for Scheduled Commercial Banks. Banks are now required to implement Ind AS with effect from 1st April 2019 and
prepare standalone and consolidated Ind AS financial statements for FY 2019-20 with comparative figures for financial year 2018-19.
In line with the RBI guidelines on Ind AS implementation, the Bank has formed a Steering Committee comprising members from the
concerned functional areas, headed by the Deputy Managing Director of the Bank. A quarterly progress report on the status of Ind
AS implementation in the Bank is presented to the Audit Committee of the Board. During FY 2016-17, the Bank has undertaken a
preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also submitted Proforma
Ind AS financial statements for the six months ended 30th September 2016 and three months ended 30th June 2017 to the RBI.
The Bank has identified and evaluated data gaps, process and system changes required to implement Ind AS and is in the process of
implementing necessary changes in its IT system and other processes. Dry-run of accounting systems and end-to-end reporting process
will be undertaken at the appropriate time during the year. The Bank has been holding workshops and training for its staff, which will
continue in the current year.
The Bank is in the process of preparation of opening Ind AS financials as on 1st April 2018 and is also examining impact of Ind AS on
business planning, budgeting, taxation, capital planning and on capital adequacy. The Bank will prepare quarterly Ind AS financials
during the year 2018-19 for internal purpose, which will be used later, as comparative numbers for the financial year 2019-20.
STATUTORY AUDITORS
At the 20th Annual General Meeting of the Shareholders of the Bank held on 27th June 2014, M/s S. R. Batliboi & Co. LLP, Chartered
Accountants, Statutory Auditors of the Bank (Membership No. 301003E/ E300005), was appointed as the Statutory Auditors of the
Bank to hold office as such from the conclusion of the 20th Annual General Meeting until the conclusion of the 24th Annual General
Meeting, subject to the approval of the Reserve Bank of India and ratification by the Shareholders each year and on such remuneration,
as may be approved by the Audit Committee of the Board (ACB).
38
Annual Report 2017 -18 As the term of M/s S. R. Batliboi & Co. LLP, Chartered Accountants will expire at the conclusion of the ensuing 24th Annual General
Meeting of the Bank, it is proposed to appoint M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Membership Number
103523W/W100048) as the Bank’s new Statutory Auditor, subject to the approval of the Shareholders of the Bank. Pursuant to the
recommendation of the Audit Committee of the Board, the Board of Directors has proposed the appointment of M/s Haribhakti & Co.
LLP, Chartered Accountants, having registration number 103523W/W100048, issued by the Institute of Chartered Accountants of
India, as the Statutory Auditors of the Bank for a period of four consecutive years and to hold office as such from the conclusion of the
24th Annual General Meeting upto the conclusion of the 28th Annual General Meeting. The Shareholders are requested to consider
their appointment on such remuneration as may be decided by the ACB. The said appointment has been approved by the RBI.
In this regard, the Bank has received a certificate from the said Statutory Auditor to the effect that the appointment, if made, would be
in accordance with the relevant provisions of Section 141 of the Companies Act, 2013. The said appointment has also been approved
by the RBI in terms of relevant provisions of the Banking Regulation Act, 1949.
As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have subjected
themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate
issued by the Peer Review Board of ICAI.
There are no qualifications, reservations or adverse remarks made by M/s S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory
Auditors of the Bank, in their report. Further, pursuant to Section 143(12) of the Companies Act, 2013, the Statutory Auditors of the
Bank have not reported any instances of frauds committed in the Bank by its officers or employees.
The Board of Directors places on record their appreciation for the professional services rendered by M/s S. R. Batliboi & Co.,
Chartered Accountants, during their tenure as the Statutory Auditors of the Bank.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the relevant provisions of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the Bank had appointed M/s BNP & Associates, Company Secretaries,
Mumbai, to act as the Secretarial Auditor of the Bank for the financial year 2017-18. The secretarial audit of the Bank was conducted
on a quarterly basis in respect of the matters prescribed in the said Rules and as set out in the Secretarial Audit Report for the financial
year 2017-18, which is provided as an annexure to this report.
The Secretarial Auditor of the Bank, in its report has made an observation on the Directions issued by SEBI on 27th December 2017
with respect to the alleged leakage of Unpublished Price Sensitive Information (UPSI) relating to the unaudited financial results of the
Bank, for the quarter ended 30th June 2017.
Pursuant to the said Directions, the Bank had appointed Deloitte Touche Tohmatsu India LLP, Mumbai (Deloitte) to evaluate and suggest
measures to strengthen the process, controls and systems relating to preparation, finalization and disclosure of the financial results of
the Bank and conduct a fact-finding review into the alleged leakage of unpublished price sensitive information relating to the unaudited
financial results of the Bank, for the quarter ended 30th June 2017 and submit a report to the Bank within the time frame prescribed
by SEBI. The Bank had also appointed Ernst & Young (EY) to conduct a similar review in respect of the representatives of the Statutory
Auditors of the Bank, as they had access to the said results.
The Bank has submitted its report to SEBI, in compliance with the said Directions. Based on the procedures performed by Deloitte and
EY, their findings indicate that they did not come across any specific instance that indicates sharing or forwarding of UPSI data relating
to the said financial results of the Bank, with any external parties/ individuals.
The Bank has also taken measures to further strengthen its process, controls and systems relating to preparation, finalisation and
disclosure of its financial results and to plug any possible source of leakage of UPSI relating to its financial results, in future.
Apart from the above, there are no qualifications, reservations or adverse remarks made by the Secretarial Auditor of the Bank, in its
report.
SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE
GOING CONCERN STATUS AND OPERATIONS OF THE BANK
During the financial year 2017-18, no significant or material orders were passed by any Regulator, Court or Tribunal against the Bank,
which could impact its going concern status or operations.
39
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES ADEQUACY OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
The Board has inter alia reviewed the adequacy and effectiveness of the Bank’s internal financial controls relating to its financial
statements.
The Board has discussed with the Management of the Bank the major financial risk exposures and the steps taken by it to monitor and
control such exposures, overseen and reviewed the functioning of the Whistle Blower Mechanism (which is a part of the Bank’s Fraud
Risk Management Policy) and the findings in respect of the investigations conducted on frauds, which were material in nature and the
actions taken by the Management in this regard.
CEO & CFO CERTIFICATION
Certificate issued by Smt. Shikha Sharma, Managing Director & CEO and Shri Jairam Sridharan, Group Executive & CFO of the Bank,
for the financial year ended 31st March 2018, was placed before the Board of Directors at its meeting held on 26th April 2018, in
terms of Regulation 17(8) of the Listing Regulations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE BANK
There are no material changes and commitments which affected the financial position of the Bank which occurred between the end of
the financial year of the Bank to which the financial statements relate and the date of this report.
ACKNOWLEDGEMENTS
The Board of Directors places on record its gratitude to the Reserve Bank of India, Ministry of Corporate Affairs, Securities and
Exchange Board of India, other Statutory and Regulatory Authorities, Financial Institutions, Stock Exchanges, Registrar and Share
Transfer Agent, Debenture Trustees, Depositories and Correspondent Banks for their continued support and guidance.
The Board also places on record its appreciation to the Shareholders of the Bank for their continued support and to its valued customers
for their continued patronage. The Board also expresses its deep sense of appreciation to all the employees of the Bank for their strong
work ethic, excellent performance, professionalism, teamwork, commitment and initiatives which has led to the Bank reinforcing its
customer centric image and making commendable progress in today’s challenging environment.
For and on behalf of the Board of Directors
Place: Mumbai
Date: 16th May 2018
Dr. Sanjiv Misra
Chairman
40
Annual Report 2017 -18 MANAGEMENT’S DISCUSSION AND ANALYSIS
MACRO-ECONOMIC ENVIRONMENT
Global growth accelerated during fiscal 2018, with a synchronized recovery in US, the Euro area, and Japan; even China seemed
to be stabilizing. A pervasive sense of investor confidence led to unusually low financial markets volatility, resulting in aggressive
pricing of risk assets across bond and emerging markets. Oil prices rose during the year, as OPEC cuts led inventories to be drawn
down, while metal prices recovered along with fall in inventories due to stronger demand. Global Inflation, however, has remained
persistently below central bank’s targets. However, global central banks are becoming more hawkish, with at least 3 Fed rate hikes in
2018, an ECB rate hike in 2019, and the end of Quantitative Easing by Bank of Japan in 2019 all now within the realm of possibility.
India’s macro fundamentals have remained broadly stable, but with oil prices no longer falling, the tailwinds from falling inflation and
a low current account deficit are fading. At the same time, the government has extended the fiscal consolidation programme, raising
deficit targets for both FY18 and FY19. Domestic growth appears to be recovering cyclically, and high frequency indicators showing
a recovery more pronounced in manufacturing than in services. Both remain drivers of a stronger GDP print, with the CSO estimating
FY18 growth at 6.6%, and the RBI forecasting FY19 growth at 7.4%.
Capex trends are beginning to improve, as seen in IIP and other high frequency indicators, and as noted by the RBI in its latest
monetary policy review. Corporate credit growth is better than the troughs following the demonetization exercise, but this currently
appears to be partially due to working capital financing. A reallocation from market instruments, which tightening liquidity has made
less attractive, to bank credit is also a factor.
At the first RBI Monetary Policy Committee (MPC) meeting in early April, members did express concerns on upside risks to inflation,
but seemed more confident over a lower trajectory, which they projected only slightly above the 4% target well into FY20 (with the
caveat that these did not factor in the new Minimum Support Prices formula). The risks to inflation which appeared tilted to the upside
– lengthening of fiscal consolidation, potentially higher inflation through the new Minimum Support Prices (MSP) formula and higher
customs duty, high household inflation expectations, global central bank tightening, higher commodity prices, etc – will play a role in
determining the stance of policy. The MPC chose to continue with its neutral stance so as to nurture the nascent recovery.
PROSPECTS FOR FISCAL 2019
The IMF projects Global growth prospects to remain firm in the coming year, with lower taxes and fiscal expansion in the US, as
well as potential Eurozone reforms amid accommodative financing conditions. China’s able stewardship of the shift to a lower and
sustainable growth trajectory has led to some easing in investor uncertainty. However, fresh risks are asserting themselves. Higher oil
and commodity prices might once again lead to larger trade imbalances, increasing future potential volatility. A potential trade war,
with US tariffs on steel seeing retaliation from other countries, might escalate. The effects of faster than expected withdrawal of stimulus,
can still hit markets where risks are priced aggressively, particularly Emerging Markets currencies.
Although our base projections indicate that CPI inflation in India is likely to average ~4.3% over FY19, there are many upside risks,
including the pass through to fuel of high oil prices, spatial and temporal distribution of monsoon rains, implementation of 7th Pay
Commission awards for State Government employees and steep increase in kharif MSP. Given these risks, which are reflected in the
minutes of the latest meeting, we expect the Monetary Policy Committee to remain on an extended pause with a rising probability of
eventual tightening. Liquidity will be tighter than in FY 18, and market interest rates have risen back from low levels to those more
commensurate with seasonal patterns. Assuming that liquidity conditions will be maintained around neutral levels by the RBI, short end
interest rates are likely to remain linked to the RBI repo rate. However, long term rates retain the potential to be driven by broader
market trends, as in the past few months.
As per our base projections, India’s growth is expected to improve to 7.3% in FY19, with much of the increase likely from higher
consumption. Investment is likely to remain modest, particularly in H1, but capex spend will be supported by spends on urban
infrastructure and road and rail projects, renewable energy and affordable housing. Bank credit growth will also revive only gradually,
since most of the initial capex will be public sector led.
As a result of these trends, the Rupee is likely to steadily depreciate, with RBI able to modulate volatility. The broad, longer term drift
is likely to depend more on global trends, especially movements in other Emerging Market currencies.
41
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES OVERVIEW OF FINANCIAL PERFORMANCE
Operating performance
Particulars
Net interest income
Non-interest income
Operative revenue
Operating expenses
Operating profit
Provisions and contingencies
Profit before tax
Provision for tax
Net profit
2017-18
2016-17
% change
(` in crores)
18,617.73
10,967.09
29,584.82
13,990.34
15,594.48
15,472.91
121.57
(154.11)
275.68
18,093.12
11,691.31
29,784.43
12,199.91
17,584.52
12,116.96
5,467.56
1,788.28
3,679.28
2.90
(6.19)
(0.67)
14.68
(11.32)
27.70
(97.78)
-
(92.51)
Net profit for the year ended 31 March, 2018 contracted by 92.51% and stood at `275.68 crores, as compared to the net profit of
`3,679.28 crores last year, primarily on account of higher provision for non-performing assets (NPAs). Operating profit reported a
decline of 11.32% over the previous year to `15,594.48 crores with operating revenue decline of 0.67%.
Operating revenue declined from `29,784.43 crores in fiscal 2017 to `29,584.82 crores in fiscal 2018. Net interest income (NII)
rose 2.90% from `18,093.12 crores in fiscal 2017 to `18,617.73 crores in fiscal 2018. Non-interest income consisting of fee,
trading and other income declined by 6.19% from `11,691.31 crores in fiscal 2017 to `10,967.09 crores in fiscal 2018. However
fee income grew strongly by 12.50% from `7,882.01 crores in fiscal 2017 to `8,866.97 crores in fiscal 2018. Trading profit
declined by 52.45% and stood at `1,616.76 crores in fiscal 2018.
Operating expenses rose 14.68% from `12,199.91 crores in fiscal 2017 to `13,990.34 crores in fiscal 2018 as the Bank continued
to invest in branch infrastructure, technology and human capital to support its business growth. Decline in operating revenues along
with higher operating expenses this fiscal led to a decline in the Bank’s operating profit by 11.32% to `15,594.48 crores from
`17,584.52 crores reported last year. Provisions and contingencies jumped 27.70% from `12,116.96 crores in fiscal 2017 to
`15,472.91 crores in fiscal 2018. Consequently, profit before taxes declined by 97.78% to `121.57crores and net profit contracted
by 92.51%, from `3,679.28 crores in fiscal 2017 to `275.68 crores in fiscal 2018.
Net interest income
Particulars
Interest on loans
Interest on investments
Other interest income
Interest income
Interest on deposits
Other interest expense
Interest expense
Net interest income
Average interest earning assets1
Average CASA1
Net interest margin
Yield on assets
Yield on advances
Yield on investments
Cost of funds
Cost of deposits
1 computed on daily average basis
42
2017-18
2016-17
(` in crores)
% change
34,137.47
9,983.30
1,659.54
45,780.31
19,173.52
7,989.06
27,162.58
18,617.73
541,127
179,731
3.44%
8.44%
9.12%
7.14%
5.15%
4.89%
33,124.96
9,622.82
1,794.38
44,542.16
19,639.63
6,809.41
26,449.04
18,093.12
492,868
151,678
3.67%
8.97%
9.77%
7.49%
5.60%
5.54%
3.06
3.75
(7.51)
2.78
(2.37)
17.32
2.70
2.90
9.79
18.50
-
-
-
-
-
-
Annual Report 2017 -18 NII constituted 62.93% of the operating revenue and increased by 2.90% from `18,093.12 crores in fiscal 2017 to `18,617.73
crores in fiscal 2018. The increase is primarily due to an increase in average interest earning assets on a daily average basis by
9.79%, even as net interest margin (NIM) during the fiscal year 2018 contracted by 23 bps to 3.44%. The decline in NIM was mainly
on account of higher fall in yield on interest earning assets of 53 basis points (bps) as compared to 45 bps decline in cost of funds.
During this period, the yield on interest earning assets decreased from 8.97% last year to 8.44%. The yield on advances declined by
65 bps from 9.77% in fiscal 2017 to 9.12% in fiscal 2018 primarily due to higher interest reversals on NPAs and reduction in base
rate by 20 bps, even as marginal cost of funds based lending rate (MCLR) rose by 15 bps in the last quarter of the fiscal 2018. The
yield on investments contracted by 35 bps during the fiscal 2018. Cost of funds also moderated by 45 bps from 5.60% in fiscal 2017
to 5.15% in fiscal 2018 led by moderation in the cost of deposits and further aided by the Bank’s continued focus on CASA. During
the year, the cost of deposits decreased to 4.89% from 5.54% last year, primarily due to a decrease in cost of term deposits by 73
bps to 6.91% from 7.64% last year. CASA deposits, on a daily average basis, reported a healthy increase of 18.50% to `179,731
crores from `151,678 crores last year.
Non-interest income
Particulars
Fee income
Trading profit
Miscellaneous income
Non-interest income
2017-18
2016-17
% change
(` in crores)
8,866.97
1,616.76
483.36
7,882.01
3,400.34
408.96
10,967.09
11,691.31
12.50
(52.45)
18.19
(6.19)
Non-interest income comprising fees, trading profit and miscellaneous income declined by 6.19% to `10,967.09 crores in fiscal 2018
from `11,691.31 crores last year and constituted 37.07% of the operating revenue of the Bank.
FEE INCOME
17-18
16-17
15-16
14-15
13-14
(` in crores)
8,867
7,882
7,502
6,779
5,985
Fee income increased by 12.50% to `8,866.97 crores from
`7,882.01 crores last year and continued to remain a significant
part of the Bank’s non-interest income. It constituted 80.85% of non-
interest income and contributed 29.97% to the operating revenue.
The share of granular fees comprising of Retail and Transaction
Banking fees witnessed improvement during the year and stood at
75% compared to 70% last year. Retail card fees, Retail non-card
fees and Transaction Banking fees constituted 18%, 30% and 27%,
respectively of the total fee income in fiscal 2018. The Corporate
Banking fee growth momentum remained weak during the year due
to lack of fresh investment demand and the Bank’s continued focus
on better rated corporate clients. The share of Corporate fee in the
overall fee profile stood at 18%. The rest 7% was contributed by
Treasury and SME segments.
During the year, proprietary trading profits declined by 52.45% to `1,616.76 crores from `3,400.34 crores last year mainly on
account of lower profits on SLR and bond portfolio in fiscal 2018 compared to fiscal 2017.
The Bank’s miscellaneous income was higher at `483.36 crores compared to `408.96 crores in previous year mainly on account of
recovery in written off accounts.
Operating revenue
The operating revenue of the Bank decreased by 0.67% to `29,584.82 crores from `29,784.43 crores last year. The core income
streams (NII and fees) constituted 92.90% of the operating revenue, reflecting the stability of the Bank’s earnings.
43
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Operating expenses
Particulars
Staff cost
Depreciation
Other operating expenses
Operating expenses
Cost : Income Ratio
Cost : Assets Ratio
(` in crores)
2017-18
2016-17
% change
4,312.96
568.10
9,109.28
3,891.86
508.80
7,799.25
13,990.34
12,199.91
47.29%
2.17%
40.96%
2.13%
10.82
11.65
16.80
14.68
-
-
The operating expenses growth for the Bank moderated during the year to 14.68% as compared to 20.78% last year. The Bank
continued to focus on making investments in expanding branch network and other infrastructure required for supporting the existing
and new businesses, as a result of which the operating expenses increased to `13,990.34 crores from `12,199.91 crores last year.
The operating expenses to assets ratio stood at 2.17% compared to 2.13% last year.
Staff cost increased by 10.82% from `3,891.86 crores in fiscal 2017 to `4,312.96 crores in fiscal 2018, primarily on account of
5.29% increase in employee strength from 56,617 as at end of fiscal 2017 to 59,614 as at the end of fiscal 2018.
Other operating expenses increased by 16.80% from `7,799.25 crores in fiscal 2017 to `9,109.28 crores in fiscal 2018. The
increase is primarily due to investments in branch infrastructure and technology to support business growth. The Bank added 400
branches during fiscal 2018.
Operating profit
During the year, the operating profit of the Bank declined by 11.32% to `15,594.48 crores from `17,584.52 crores last year.
Provisions and contingencies
Particulars
2017-18
2016-17
% change
(` in crores)
Provision for non-performing assets
16,598.71
11,157.06
48.77
Provision for restructured assets/SDR/S4A
Provision for standard assets including unhedged foreign currency exposure
Provision for depreciation in value of investments
Provision for country risk
Provision for other contingencies
Provisions and contingencies
(307.16)
(144.30)
(211.01)
(19.94)
(443.39)
290.53
334.57
238.70
19.94
76.16
-
-
-
-
-
15,472.91
12,116.96
27.70
During fiscal 2018, the Bank created higher amount of total provisions (excluding provisions for tax) of `15,472.91 crores compared
to `12,116.96 crores last year. The Bank provided `16,598.71 crores towards non-performing assets compared to `11,157.06
crores last year and `144.30 crores were written back for standard assets including unhedged foreign currency exposure compared
to `334.57 crores provided last year. During the year, there was a net write-back in provision against restructured assets/SDR/S4A
of `307.16 crores mainly due to accounts turning NPAs. The credit costs for fiscal 2018 stood at 3.57%, 75 bps higher than that
witnessed in fiscal 2017.
Asset Quality Parameters
The asset quality stress during the year continued to remain largely dominated by legacy corporate loans to stressed sectors like
iron and steel, infrastructure construction and power. The Bank added `33,419 crores as fresh addition to Gross NPAs during the
fiscal year with the Bank’s ratio of Gross NPAs to gross customer assets increasing to 6.77%, at the end of March 2018 from 5.04%
as at end of March 2017. In February 2018, RBI issued revised guidelines on Resolution of Stressed Assets. Under the revised
guidelines, all the extant instructions on resolution of stressed assets such as Framework for Revitalising Distressed Assets, Corporate
44
Annual Report 2017 -18 Debt Restructuring Scheme, Flexible Structuring of Existing Long
Term Project Loans, SDR Scheme, Change in Ownership outside
SDR and S4A Scheme were withdrawn with immediate effect. This
has resulted in higher NPA slippages due to accounts under these
schemes losing the ‘stand still’ benefit.
The Bank added `24,656 crores to Net NPAs after adjusting for
recoveries and upgradations of `3,853 crores and `4,910 crores
respectively and the Bank’s Net NPA ratio (Net NPAs as percentage
of net customer assets) increased to 3.40% from 2.11%.
During the fiscal, the Bank started disclosing the quantum of
low rated pool of stressed accounts in addition to the Watch List
disclosures, to provide a better sense of the source of stress. The
Bank added `27,345 crores of corporate slippages during the
year, of which 84% came from lower rated BB and below pool.
(` in crores)
34,249
GROSS AND NET NPA
16,592
21,280
17-18
16-17
15-16
14-15
13-14
8,627
2,522
6,088
1,317
4,110
1,025
3,146
Net NPA
Gross NPA
The Watch List that the Bank had first published in end March 2016 declined by 98% over FY17 and FY18 and residual balance of
the same stood at `428 crores as on 31 March, 2018. The residual Watch List has now been dissolved and continues to be a part of
the BB and below pool of standard advances.
The Bank’s provision coverage remained steady during the fiscal and stood at 65% after considering prudential write-offs.
The net restructured book stood at `1,087 crores and net restructured assets ratio (net restructured assets as percentage of net customer
assets) was 0.22%. During the year slippages from the standard restructured book stood at `5,096 crores.
The book value of the assets sold by the Bank to ARCs during fiscal 2018 was `42 crores (net of provisions). The consideration
(excluding accounts already written-off) was settled in cash of `67 crores.
KEY RATIOS
Particulars
Basic earnings per share (`)
Diluted earnings per share (`)
Book value per share (`)
Return on equity (%)
Return on assets (%)
Net interest margin (%)
Profit per employee (` lakh)
Business per employee (` crores)
Credit/deposit ratio (Domestic)
Credit/deposit ratio (Global)
2017-18
2016-17
1.13
1.12
247.20
0.53%
0.04%
3.44%
0.47
14.84
85.50%
96.92%
15.40
15.34
232.83
7.22%
0.65%
3.67%
6.68
14.00
79.07%
90.03%
Basic Earnings Per Share (EPS) was `1.13 compared to `15.40 last year, while the Diluted Earnings Per Share was `1.12 compared
to `15.34 last year. Return on Equity (RoE) and Return on Assets (RoA) stood at 0.53% and 0.04% respectively. Book Value per Share
increased by 6.17% to `247.20 from `232.83 last year. Profit per Employee stood at `0.47 lakh and Business per Employee stood
at `14.84 crores.
Credit Deposit (CD) ratio of the Bank as on 31 March, 2018 was at 96.92% with a domestic CD ratio of 85.50%. Considering
Infrastructure Bonds, that are more cost effective and asset liability management friendly than deposits of same maturity, as a part of
the Bank’s deposits base, the domestic CD ratio stood at 82.98%.
45
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Balance Sheet parameters
Assets
Particulars
2017-18
2016-17
% change
(` in crores)
Cash and bank balances
Government securities
Other securities
Total investments
Retail advances
Corporate advances
SME advances
Total advances
Fixed assets
Other assets1
Total assets
35,481
104,053
49,823
153,876
206,464
174,446
58,740
439,650
3,972
50,377
691,330
50,256
93,008
35,786
128,794
167,993
155,904
49,172
373,069
3,747
45,602
601,468
(29.40)
11.88
39.22
19.47
22.90
11.89
19.46
17.85
6.00
10.47
14.94
1 includes Priority Sector Lending deposits of `21,479 crores (previous year `17,107 crores)
Total assets increased by 15% to `691,330 crores as on 31 March, 2018 from `601,468 crores as on 31 March, 2017.
` in crores
Advances
Total advances of the Bank as on 31 March, 2018 increased by
18% to `439,650 crores from `373,069 crores as on 31 March
2017, largely driven by healthy growth in the Retail segment.
Corporate advances comprised 40% of total loans and grew by
RETAIL ADVANCES AS % TO TOTAL ADVANCES
17-18
16-17
15-16
14-15
13-14
47%
45%
41%
40%
38%
ADVANCES
(` in crores)
439,650
373,069
338,774
281,083
230,067
17-18
16-17
15-16
14-15
13-14
12% to `174,446 crores, Retail loans comprised 47% of total loans
and increased by 23% to `206,464 crores, SME loans grew by
19% to `58,740 crores and constituted 13% of total loans.
The retail lending growth was led by auto loans, personal loans and credit cards. Mortgages continue to grow faster than the industry
growth. Home loans remain the largest retail segment and accounted for 40% of retail loans, retail agricultural loans accounted
for 15%, loans against property 8%, personal loans and credit cards together accounted for 14% and auto loans 10%, while non-
schematic loans comprising loan against deposits and other loans accounted for 13%.
Investments
The investment portfolio of the Bank increased by 19% to `153,876 crores, of which investments in Government and approved
securities, held mainly for SLR requirement, increased by 12% to `104,053 crores. Other investments, including corporate debt
securities, increased by 39% to `49,823 crores. 85% of the government securities has been classified in the HTM category, while
79% of the bonds and debentures portfolio has been classified in the AFS category.
46
Annual Report 2017 -18 Liabilities and shareholder’s funds
Particulars
Capital
Reserves and Surplus
Total shareholder’s funds
Deposits
-
-
-
-
-
-
Current account deposits
Savings bank deposits
CASA
Retail term deposits
Non-retail term deposits
Total term deposits
Borrowings
-
-
In India
-
Infra bonds
Outside India
Other liabilities and provision
Total liabilities and shareholder’s funds
2017-18
2016-17
% change
(` in crores)
513
62,932
63,445
453,623
95,650
148,202
243,852
137,795
71,976
209,771
148,016
76,096
13,705
71,920
26,246
479
55,284
55,763
414,379
87,002
126,048
213,050
123,925
77,404
201,329
105,031
51,082
13,705
53,949
26,295
691,330
601,468
7.10
13.83
13.78
9.47
9.94
17.58
14.46
11.19
(7.01)
4.19
40.93
48.97
-
33.31
(0.19)
14.94
Deposits
The total deposits of the Bank increased by 9% to `453,623 crores against `414,379 crores last year. The high base effect of last
fiscal year that saw huge deposit inflows post demonetization impacted the deposit growth in fiscal 2018. Savings Bank deposits
reported a growth of 18% to `148,202 crores, while Current Account deposits reported an increase of 10% to `95,650 crores.
During the fiscal 2018, the Bank reduced the interest rate on Savings Accounts by 50 bps to 3.50% for deposits up to `50 lakhs. As
on 31 March, 2018, low-cost CASA deposits increased by 14% to `243,852 crores from `213,050 crores last year and constituted
53.76% of total deposits as compared to 51.41% last year. Savings Bank deposits on a daily average basis, increased by 16% to
`119,578 crores, while Current Account deposits reported a growth of 23% to `60,154 crores. The percentage share of CASA in
total deposits, on a daily average basis, was at 45.83% compared to 42.75% last year.
The Bank continued to maintain its focus on retail term deposits. As on 31 March, 2018, the retail term deposits grew 11% and stood
at `137,795 crores, constituting 65.69% of the total term deposits compared to 61.55% last year. As on 31 March, 2018, CASA
and retail term deposits constituted 84.13% of total deposits.
Borrowings
The total borrowings of the Bank increased by 40.93% from `105,031 crores in fiscal 2017 to `148,016 crores in fiscal 2018.
During the fiscal, the Bank issued senior fixed rate bonds aggregating to US $ 500 million under its Global Medium Term Note (MTN)
programme in the international markets. Domestically, the Bank raised `5,000 crores through Subordinated Debt and `3,500 crores
through Additional Tier I bonds during the fiscal. The outstanding balance in long term infrastructure bonds as on 31 March, 2018
was `13,705 crores.
Capital Management
The Bank continues its endeavour for greater capital efficiency and shoring up its capital adequacy to enhance shareholder value.
In order to achieve this objective, the Bank has been focusing on increasing the proportion of lower risk weighted assets. With asset
quality on mend and loan mix having largely diversified, the Bank’s capital management framework attains further prominence for
better utilisation of capital for an optimal mix of businesses.
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 through preferential allotment of equity shares to select investors. The Bank mobilised an aggregate of `8,653.79
crores (net of share issue expenses) through this offering, by issuing 165,328,892 equity shares collectively to Bain Capital, LIC of
India and other marquee investors. The equity shares offered in the preferential allotment were priced at `525 per share. The Bank
also issued 45,357,385 warrants convertible into equity shares to entities associated with Bain Capital and Capital Group at a price
47
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
of `565 per share. During the year, the Bank also raised capital of `8,500 crores through issuance of Tier I and Tier II bonds, of which
Tier I was `3,500 crores and Tier II was `5,000 crores.
These measures have significantly strengthened the capital position of the Bank, particularly core Tier I capital, providing adequate
support for future growth.
The Bank is well capitalised with an overall capital adequacy ratio (CAR) under Basel III being at 16.57% at the end of the year,
well above the benchmark requirement of 9.00% stipulated by Reserve Bank of India (RBI). Of this, the Common Equity Tier I (CET
I) CAR was 11.68% (against minimum regulatory requirement of 5.50%) and Tier I CAR was 13.04% (against minimum regulatory
requirement of 7.00%). As on 31 March, 2018, the Bank’s Tier II CAR under Basel III stood at 3.53%.
The Bank has implemented the Basel III capital regulation from 1 April, 2013 in a phased manner which is to be fully implemented as
on 31 March, 2019. This will also align full implementation of Basel III in India closer to the internationally agreed date of 1 January,
2019.
The following table sets forth the capital, risk-weighted assets and capital adequacy ratios computed as on 31 March, 2018 and 31
March, 2017 in accordance with the applicable RBI guidelines under Basel III.
Particulars
Tier I capital
Tier II capital
Out of which
-
-
Tier II capital instruments
Other eligible for Tier II capital
Total capital qualifying for computation of capital adequacy ratio
Total risk-weighted assets and contingencies
Total capital adequacy ratio
Out of above
-
-
-
Common equity tier I capital ratio
Tier I capital ratio
Tier II capital ratio
(` in crores)
2017-18
2016-17
67,476.27
18,298.59
16,035.00
2,263.59
85,774.86
56,039.32
14,565.85
12,366.01
2,199.84
70,605.17
517,630.78
472,313.18
16.57%
11.68%
13.04%
3.53%
14.95%
11.13%
11.87%
3.08%
BUSINESS OVERVIEW
An overview of the Bank’s various business segments along with their performance during financial year 2017-18 and future strategies
is presented below.
Retail Banking
Retail Banking – Bedrock of the Bank’s performance
Retail Bank continues to be the bedrock of Bank’s financial performance. Strong execution, robust distribution and digital proliferation
has helped the Bank gain strong market share and improve customer experience. During the financial year 2017-18, Retail contributed
63%, 47% and 48% of the Bank’s deposits, advances and fee income respectively.
The Bank has over the years developed long-term relationship with its customers by being their preferred financial solutions provider
across their needs. Customer centricity and innovation remain the core pillars through which the Bank has been fulfilling the financial
needs and aspirations of its customers and the society at large.
In addition to acquiring new customers, the Retail Banking strategy has been to deepen relationships with existing internal customers,
led by big data analytics for growth. The Bank has created a strong and contemporary digital backend to support its operations.
Further, adopting design-thinking approach, process automation and partnership-driven innovation has enabled the Bank to harness
the true potential that Retail Banking in India has to offer.
India – Immense Potential for Retail Banking
India continues to offer immense potential and opportunities for the Retail Banking franchise. The Bank sees exciting times ahead with
four key themes shaping the future of retail banking in the next five years -
48
Annual Report 2017 -18 1.
Low penetration numbers across key products - low housing loan penetration (2.5%), household debt at very low level (11%),
low penetration of acceptance infrastructure for digital payments (165 Point Of Sales terminals per 100,000 adults)
2.
Rapid technology adoption amongst all income and social strata due to falling cost of data and internet access
3.
Democratization of data with India Stack and open application programming interfaces (APIs)
4.
Concerted efforts to formalize the economy through tax reforms, introduction of Goods and Services Tax (GST), digitization
of high volume low value transactions, Aadhaar seeding across financial & non-financial services and the drive for affordable
housing
Leveraging these macro trends has helped the Bank create ‘real progress, real impact’ across customer segments and businesses
resulting in higher market share specifically in digital payments space. The pace at which the Bank has gained market share in digital
space compared to its traditional banking business is a testimony to the Bank’s predilection for digital and customer.
Technology and Analytics – The Back Bone of growing Branch Network
Branches are not just places where the customers transact and conduct business but also are edifices of trust. The Bank believes that
branches continue to play an integral role not only in deposit mobilisation from new to bank customers, but have also been core driver
of the Bank’s acquisition strategy across products. Savings Bank deposits grew by 18% while the Retail Term Deposits grew by 11%
during the year. As on 31 March, 2018, the Bank had over 22.5 million savings account customers, registering a growth of 11%. The
sourcing of retail loans through branches has seen significant improvement over the years and contributed 50% to overall sourcing in
FY18 vis-à-vis 36% in FY13.
The Bank therefore sees greater merit in a calibrated growth of its branch network through combination of advanced analytics that help
in identifying high potential locations and technology tools that increase staff productivity & smaller branch formats.
During the year the Bank added 399 domestic branches/banking outlets and 1 offshore banking unit at IFSC, GIFT City, Gandhinagar.
The Bank’s geographical reach now extends to 29 states and 6 union territories, covering 2,163 centers and 653 districts. As on 31
March, 2018, the Bank had a network of 3,703 domestic branches/banking outlets as compared to 3,304 last year. Around 17%
of the Bank’s branches are in rural areas and 78% of the Bank’s rural branches are in unbanked locations. As on 31 March, 2018,
the Bank had 13,814 ATMs. The Bank was the first private sector Bank to introduce recyclers, which can accept and dispense cash.
As on 31 March, 2018, the Bank had deployed 2,263 recyclers. The recycler handles 40% of the overall cash deposits at the Bank,
leading to efficient use of Bank Staff.
The Bank has also successfully scaled up the ‘Saksham’ initiative, aimed at improving the customer experience by providing a single
screen for instant fulfilment of various service requests. Saksham currently processes over 55 million transactions and service requests
annually
Speed Banking kiosks are a flagship initiative. Walk in customers can do financial and non-financial transactions on these kiosks. The
Bank has added 302 speed banking kiosks in fiscal 2017-18 and intends to keep increasing the digital footprint further.
The Bank has deployed about 20,000 biometric readers across its network to leverage eKYC (electronic know your customer)
for account opening and other Aadhaar-based services thereby creating seamless authentication experience for customers even at
branches. 75% of the Bank’s key service requests at branches are being serviced through the instant gratification mode.
Retail Advances – The Growth Engine
The Retail Advances portfolio has grown at a CAGR of 26% over the last five years and stood at `206,465 crores as on 31 March,
2018 up 23% from `167,993 crores last year. The Bank continued to increase its share of retail loans to total advances, which stood
at 47% compared to 33% in March 2013. The Bank has been able to grow retail advances faster than Industry by focusing on two
key areas:
•
•
Deepening within existing branches coupled with expansion in new geographies, where the Bank already had seasoned
branches.
Increased use of analytics that helped not just in identifying the right target segments but also helped in keeping risks under
control.
Overall, about 50% of incremental retail loans were sourced through branches in fiscal 2018. Existing deposit customers contributed
about 72% of the incremental retail loans, which in turn has helped the credit quality of retail loans to remain steady. The Bank has
49
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES steadily diversified its retail loan portfolio into a broad based portfolio spanning rural loans, personal loans, small business banking
loans, vehicle loans and credit cards etc. which had been dominated by home loans in the past. Secured loan products accounted for
84% of retail loans. Of the total portfolio, home loans accounted for 40%, rural loans accounted for 15%, auto loans 10% and loans
against property 8%. The Bank has been comfortable taking on granular risk and the unsecured retail loans stood at 16% of the total
portfolio, with personal loans and credit cards accounting for 10% and 4%, respectively.
Small Business Banking (SBB) has emerged as one of the growth engines in retail lending space with a targeted focus on small
borrowers. SBB book grew by 81%, which can be attributed to the continuous iteration across sales processes, score-based decision
making and strong engagement at the branch level.
Building scale and leadership in traditional and newer models of Digital Payments
As the economy continues to go digital, there has been a significant behavioral change in retail payments – from large value-
low volume transactions using credentials that are managed by the Bank to small ticket size-high volume transactions using public
credentials. This shift has presented the opportunity to broad base payments. The new age digital payments are outgrowing cash, but
the opportunity remains large and compounding effect will show over time.
Digital Payments continues to be at the core to the Retail Banking strategy. UPI is at the forefront of this digital ecosystem as the Bank
is leveraging UPI to attract non-Axis Bank customers. The Bank was among the early entrants to work closely with NPCI for UPI launch.
The Bank has built strong technology platform and developer friendly API’s that allow partners, startups to plug & play Axis UPI on
their mobile applications. The Bank has used this head start to its advantage by making this platform available to multiple partners
like Google Tez, Uber, Samsung Pay, LIC, IRCTC, Big Bazaar. Today the Bank has a share of 15% in UPI transactions, with over 11.5
million UPI IDs onboarded and 64% of them being non-Axis Bank customers.
The Bank’s traditional cards business continues to grow and deepen the franchise. The Bank is one of the largest debit card issuers
in the country, with a base of 22.34 million and going forward ~50% of cards issuance are going to be enabled for contactless
payments. The Bank had over 4.48 million credit cards in force as on 31 March, 2018, making it the 4th largest credit card issuer in
the country. The credit cards portfolio saw a substantial increase in spends by 54% to `44,328 crores from `28,740 crores last year.
The Bank’s merchant acquiring business continues to be one of the largest acquirers in the country with over 502,226 base of installed
terminals of which 225,819 terminals are enabled for accepting contactless payments. The Bank is also using digital technologies like
Bharat QR to drive high volume-low value payments acceptance use cases.
Rapid Adoption of Mobile and Internet Banking Channels
The Bank takes a holistic view of digital that transcends beyond mobile applications and customer interfaces. Taking cognizance of the
fact that with the onset of fintech startups and global technology giants, customers are now comparing buying journeys across product
categories; the Bank has extensively adopted a Design thinking approach with greater use of customer usability panels to test design
and flows of various digital journeys. The bank has seen immediate results of this approach.
During the year, an improved and redesigned version of Axis Mobile App was launched with several new and useful features for the
customers like a dedicated loan centre, credit card spend analyzer, notifications and a newer dashboard. The focus was on increasing
discoverability of various products and services within the app. The version was well received and has helped the Bank to significantly
improve Google play store ratings for its App.
In November 2017, the Bank launched its first online ekYC based account Axis ASAP. Axis ASAP offers customers the opportunity to
open bank accounts instantly in minutes without any paperwork. The Bank has seen a strong consumer response with the number of
accounts opened already crossing the 2.5 lac mark.
The Bank launched Axis Aha! Chatbot on the website in December 2017. Axis Aha! is a conversational assistant powered by artificial
intelligence and uses machine learning to assist customers with banking services. The Bank has been among the first in the industry
to enable financials transactions via simple chats; Just type Pay `200 to Sam and Axis Aha! does the rest. Axis Aha! lets users
send money, pay mobile bills, do recharges or block cards. It also answers user questions on FAQ’s, loans and general help. Since
inception, it has processed over 3.5 lac conversations, answered over 1.3 lac FAQs and transacted over `12.5 lacs.
The mobile banking user base witnessed a 72% increase in fiscal 2018 and the Bank was ranked number 1 by mobile banking
transactions value in August and October 2017 as per data published by RBI. Axis Internet Banking too has witnessed strong adoption
and has been awarded with prestigious Best Retail Online Banking Experience, India award at The Asset Triple A Digital Awards
2017, Hong Kong.
Digital as a strong lever for enhancing service levels and productivity
The Bank is making greater use of technology to further reduce account opening times. The entire sales force is equipped with tablets
that helps them on-board savings accounts, current accounts and credit card customers in a paperless process. Tablet based account
50
Annual Report 2017 -18 opening now forms the back bone of customers on-boarding journey.
Robotic Process Automation (RPA) and Artificial Intelligence (AI) were extensively adopted with the objective of improving turnaround
time and efficiency. Through an extensive process redesign exercise, 90 key processes were identified for re-architecting using RPA
and AI. By process Re-Engineering and digitisation, the Bank has been able to reduce the turnaround time on savings and current
account opening by about 90%; and on various other processes by 50%-80%. In addition to improving efficiency, there was significant
impact on customer satisfaction and risk containment as well.
Enabling Wealth Creation through Niche Offerings
During the year, Burgundy – the Bank’s unique offering for its affluent customers further consolidated its portfolio. The AUM of Burgundy
customers with the Bank, across banking and wealth management products, crossed the `1 lakh crore milestone to end the year at
`123,298 crores (~[US$ 18.92 billion]). Savings account balances have been growing at a CAGR of 23% over the last 4 years while
fee from wealth management services has been growing at a CAGR of over 55% over the last 4 years - demonstrating a healthy mix
and sustainable growth for the business. Burgundy customers represent a unique blend of traditionally wealthy along with affluent
millennials. On an average, each Burgundy family has availed 4.56 unique products from the Bank.
A strong and growing 30 million Indian diaspora (NRIs and PIOs) across the world look for a trusted banking partner in India; through
a focused approach, the Bank has been strengthening its proposition to better serve these customers. The Bank offers a complete
suite of banking and investment products under its NRI Services for Indians living and working overseas. NRIs can open an account,
operate it and also invest in deposits, secondary market or mutual funds, all through the comfort of their home or office overseas by
way of strong digital offerings. The Bank also offers a range of premium services to NRI customers under the NRI Burgundy and NRI
Priority program.
The Bank launched two key customer centric initiatives in this space this year. The first was Dedicated Inward Remittance rates for NRI
customers on wire transfers, making it absolutely transparent and simple for customers. The Bank also launched new digital remittance
platform, remitmoney.com, to bring convenience in every remittance transaction to its customers. Going a step ahead and assisting
NRIs beyond just financials, the Bank also tied up with Indian Health Organization (IHO) for discounted health services for the NRI
Family Banking customers.
Axis Bank today is one of the leading distributors of mutual funds in India and distributes products of 13 major asset management
companies. These investment products are mainly offered by the Bank’s branch network and digital channels based on a thorough
analysis of the customers’ lifecycle and lifestyle requirements. The Bank has over 1 million mutual fund customers and generates a fee
income of around 11% of the total Retail Banking fees. The Bank also offers online trading services to its customers in collaboration
with Axis Securities Ltd. (a 100% subsidiary of the Bank) under the name Axis Direct. Axis Direct crossed 1.8 million total customers
during the year.
Insurance penetration in India is almost half of the global average, product suitability and fitment is the key and the Bank has taken
several measures to ensure customers get the product best suited for their needs. With Max Life Insurance, the Bank has now secured
over 1 million lives since inception of the partnership. Partnership with Life Insurance Corporation of India has given the desired choice
to prospective customers and Bank has insured 19,000 customers through LIC of India in its very 1st year of the relationship making the
Bank one of the leading bancassurance partners for LIC. In General insurance, the Bank has a tie-up with Tata AIG General Insurance
Company Ltd. (American International Group) and for health insurance with Apollo Munich Health Insurance Company Ltd. The Bank
remains committed to bring the best of insurance products that best suit the needs of its customers and is constantly looking at more
and better avenues.
Using Technology to bring the under-served into the mainstream
Financial Inclusion is an integral component of the Bank’s rural strategy to further extend reach in the rural market. During financial
year 2017-18, the Bank has covered 0.22 million rural people in 15,240 Financial Literacy Camps under ‘Pragatishala’. The Bank
launched project DigiPrayas across villages which has impacted 80,000 lives through opening of 4,500 basic savings accounts,
appointing 50 Business Correspondents, seeding of 4,100 accounts with Aadhaar. Under PMJDY, Bank has opened over 0.77 million
accounts of which 89% customers have been issued Rupay Cards with a total balance of `225 crores. Overall, the Bank has issued
0.85 million Pradhan Mantri Suraksha Bima Yojana (PMSBY) and 0.22 million Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
policies of which, the Bank has registered 599 claims under both insurance scheme. Further, the Bank has actively promoted Atal
Pension Yojana (APY) wherein the Bank is ranked first amongst all private sector banks in sourcing of APY. Overall, 0.23 million
customers have been enrolled under APY.
The Bank’s home loan product Asha Home Loans for aspiring first time home owners belonging to the low-income group (LIG) and
economically weaker segments (EWS) has seen 40% increase in book size from `3,131 crores as on 31 March, 2017 to `4,371
crores as on 31 March, 2018.
51
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Corporate Banking
During the financial year 2017-18, the credit off take by the corporate segment was marginally better compared to previous fiscal
even as the asset quality issues continued to weigh on the sector. The credit growth continued to improve through the year aided by
the fading base effect of demonetisation. The tightening liquidity conditions resulted in sharp rise in bond yields towards the second
half of the fiscal which helped in shifting the credit demand back from bond markets to banks.
While the basic industries like steel and construction saw pickup in loan growth, credit off take to the core industrial segments like
power, metals, roads and energy remained weak due to low capex and leveraged corporate balance sheets. The Government and
Regulator’s efforts to alleviate and resolve the asset quality issues through implementation of Insolvency and Bankruptcy Code have
been progressing well and the resolution for some of the large stressed accounts is expected in the near term. The regulator’s recent
guidelines on resolution of stressed assets are further likely to expedite the recognition and resolution mechanism. The ongoing NCLT
resolution mechanism under IBC is likely to result in stressed assets going into the hands of stronger sponsors and this will result in
consolidation of banking relationships and refinancing opportunity for the larger banks.
In the corporate segment, the Bank’s strategic focus in recent years has been towards building a higher rated lending book, increase
the share of working capital loans and reducing the concentration risk. During the fiscal 2018, the Bank’s corporate loan growth
picked up to 12% as compared to flat growth in fiscal 2017 with working capital loans growing by 63% YOY.
The Bank continues to focus on lending to higher rated corporates with operational cash flows. Approximately 86% of new sanctions in
the corporate book were to companies rated ‘A’ and above. Presently, 77% of outstanding standard corporate loans are to companies
rated ‘A’ and above. At the same time, we have been focussing on increasing the share of working capital facilities in the overall
business composition tapping the pool of better rated corporates. The share of working capital exposures to overall corporate loan
book has increased from 22% in 2017 to 32% in 2018.
The Bank’s strategy of portfolio diversification through sectoral approach to credit continued where the focus was on identifying sector-
specific opportunities and risks. The concentration risk continues to see a steady decline in the last few years with exposure to top 20
single borrowers as percentage of Tier-1 capital at 121% as on end March 2018, as compared to 283% at the end of fiscal 2010.
The corporate client relationship model introduced a few years ago continued to prove beneficial for the bank. The Bank along with
its subsidiaries addresses most of financial services requirements of a corporate be it borrowing, trade finance, cash management,
remittances, investment banking, security services etc. The holistic approach has moved the Bank away from just sales based approach
of offering corporate credit to providing an entire bouquet of products and services.
The Bank continues to focus on the government business and widened its footprint in PSUs during the year. The Bank also increased its
focus on tapping credit opportunities in the new Digital Age businesses through a sub-vertical New Economy Group (NEG). Further,
Bank has identified the Food processing and Agro processing industries as sunrise sectors. The credit opportunities in these industries
are also tapped by NEG. The loan book of NEG business has grown strongly by 584% in fiscal 2018.
International Banking
The International Banking strategy of the Bank continues to revolve around leveraging its relationships with corporates in India and
non-resident Indians, by providing banking solutions at overseas centres. The Bank, through its international operations, leverages the
skills and strengths built in its domestic operations. It also widens the horizon of the product offerings covering a varied spectrum of
corporate and retail banking solutions across client segments in various geographies. The Bank has strategic international presence
in seven countries through its branches in Singapore, Hong Kong, DIFC – Dubai, Colombo and Shanghai, representative offices at
Dubai, Abu Dhabi, Sharjah and Dhaka; an off-shore banking unit in International Financial Service Centre (IFSC), Gujarat International
Finance Tec-City (GIFT City), Gandhinagar and a wholly-owned overseas banking subsidiary in the United Kingdom. During the year,
the Bank witnessed opening of its sixth branch, an offshore banking unit at IFSC, GIFT City, Gandhinagar. GIFT City Branch will make
its contribution towards government’s initiatives of growth of IFSC in India besides consolidating its corporate banking business there.
The bank also opened its fourth Representative Office at Sharjah, UAE in March 2018. The Representative Office will promote the
retail business emanating from the affluent and mass affluent segment of NRIs in UAE, as is being done by existing Representative
Offices. The Bank continues to offer corporate banking, trade finance, treasury and risk management solutions through the branches
at Singapore, Hong Kong, DIFC, Shanghai, Colombo and GIFT City and retail liability products from its branches at Hong Kong and
Colombo. The Bank’s Gulf Co-operation Council (GCC) initiatives in the form of representative offices in UAE and alliances with banks
and exchange houses in the Middle East provide support for leveraging the business opportunities emanating from the large NRI
diaspora present in these countries. The representative office at Dhaka promotes trade finance business arising between Bangladesh
and India & other Asian financial markets where Bank has a presence.
During the year under review, emphasis continued towards trade finance business and value added services. As on 31st March, 2018,
the total assets at overseas branches stood at USD 9.36 billion as compared to USD 8.37 billion last year. Axis Bank UK Limited
(ABUK), the Bank’s overseas banking subsidiary, completed its fifth year of operations during the year under review. The total assets
of ABUK stood at USD 1,040 million as on 31 March, 2018, as against USD 823 million as on 31 March, 2017.
52
Annual Report 2017 -18 Treasury
The Bank’s Treasury function comprises Asset Liability Management (ALM), Proprietary trading business in Interest rates & Equity,
Foreign Exchange & Derivatives and Arrangership business.
The ALM group manages the regulatory requirements of Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and Liquidity
Coverage Ratio (LCR). The group also manages the liquidity, interest rate and currency risks in the Bank’s portfolio, under the guidance
of the Asset Liability Committee (ALCO) of the Bank. ALM group is responsible for overall liquidity management of the domestic book
and longer term liquidity management of the overseas branches across geographies.
The proprietary trading group in Government securities within Treasury plays an important role of market making, participating in
primary auctions of RBI etc. The Bank also holds one of the largest Corporate bond investment portfolio with 95% of them have rating
of atleast ‘A’ and runs limited trading book in Equity, Commercial papers and Certificate of deposits.
Forex Trading Group is a major participant in the Foreign Exchange & Derivatives market. The group provides risk management
and hedging solutions to a wide range of corporate customers and financial institutions. The Bank was awarded the First Rank by
Euromoney in their FX Survey 2016 in eight categories amongst Asian Corporate Respondents and in eleven categories amongst
Indian Corporate Respondents.
The Bank continues to remain a dominant player in the Debt Capital Market (DCM) Segment. During the year, the Bank arranged
`184,104 crores of bonds and debentures for various PSUs and corporates. The Bank has been ranked number one in the Bloomberg
Official League Table for domestic bonds in India for the 11th consecutive year for calendar year 2017. Bank has also been ranked
number one arranger as per Prime Database for the nine months ended December 2017.
In International Debt Capital Markets business, the Bank has been a leader in this segment covering USD/EUR bonds, Masala bonds,
Green bonds etc. The Bank was the Lead Manager in the very first Masala Bond issue and the first Green Masala Bond issued by
domestic companies.
During the year, the Bank was awarded Best DCM House in India by Finance Asia and Best Bond Adviser – Domestic India-2017 at
The Asset Triple A Country Awards. The Bank was also ranked among the Top banks in the secondary market in Asia currency bonds
(India)-Corporate Bonds by The Asset Benchmark Research.
Transaction Banking
Transaction Banking unit focuses on the flow businesses, i.e. current accounts, collection & payments solutions, trade services, forex
remittances and capital market solutions. It caters to corporates, SMEs, financial institutions, Government segment and also to retail
customers for their forex requirements such as forex cards and wire transfers.
The key financial deliverables of the business are current account float balances and fee income. Current account balances grew from
`87,002 crores as on 31 March, 2017 to `95,650 crores as on 31 March, 2018, a year on year growth of 10%. Daily average
balances in current accounts grew 23%, from `48,800 crores in fiscal 2017 to `60,154 crores in fiscal 2018. The business generated
a fee income of `2,396 crores in fiscal 2018, a growth of 18% year on year.
The key themes that the business has been focusing on are deepening share of wallet for existing clients, offering digital solutions to
customers and enhancing customer service. The relationship managers and branches are continuously equipped with analytical tools
and learning interventions to help cross-sell the large suite of transaction banking products to customers.
Current Accounts
The Bank has over 1.9 million current accounts served through a range of customised, sector specific offerings. The Bank has made
significant investments and enhancements in its online banking platforms for driving digital adoption and channel migration. Further,
the Bank continues to focus on deepening the current account relationships by cross-selling other products such as tax payments, cash
management solutions, loans, forex and trade products.
Cash Management Solutions
The Bank provides comprehensive and customizable cash management solutions that enable faster fund movement by leveraging the
Bank’s extensive physical network backed by state-of-the-art technological systems. To provide a seamless experience to its customers,
the Bank has integrated all its digital products onto its new Corporate Internet Banking platform. The Bank also provides digital bulk
payment solutions that include front-end file-upload for various payments and ERP integration for high-transacting corporates. The
enhanced collections product suite includes new features like National Automated Clearing House (NACH) Debit, Unified Payments
Interface (UPI), Aadhaar E-sign mandate and innovative easy-to-use Point of Sale machines, increasing the breadth of options available
to customers.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Government Business
The Bank has been authorised by Reserve Bank of India and Government of India (GOI) to handle all Government Banking transactions
which includes the following:
•
•
•
•
Collection of Direct taxes
Collection of GST in all branches in online as well as offline mode
Disbursement of Central Civil as well as Defence Pensions
Accredited by Reserve Bank of India as one of the authorized banker for Ministry Of Urban Development, Ministry of Housing
and Poverty Alleviation, Controller General of Accounts and Institute of Government accounts and finance
The Bank is a participating entity in the Government’s Public Financial Management System (PFMS). PFMS monitors different social
sector programmes in India and tracks the disbursement of funds in relation to such programmes, using an online management
information system and decision support system. The Bank also is associated with the e-Governance initiatives of five states and
union territories, namely Andhra Pradesh (e-Seva), Karnataka (Bangalore One and Karnataka One), Chandigarh UT (Sampark),
Chhattisgarh (Chhatisgarh Online information system for Citizen Empowerment), Uttar Pradesh (e-Suvidha) aimed at providing better
services to the citizens. Further, the Bank is also involved in various digital initiatives of GOI which includes e-Procurement, e-mandi,
e-nagarpalika, direct benefit transfers, smart city, online payment gateways and cashless initiatives through various modes.
Trade, Forex and risk management Services
The Bank offers a complete suite of Trade finance and foreign exchange business solutions through Forex B category branches spread
across the country. The Bank also offers a variety of hedging solutions such as exchange and interest rate derivative structures,
including forwards, options and swaps in accordance with the regulatory guidelines and derivative policy of the Bank. Overall, client
risk management service continues to be a strong business franchise for the Bank with total annual turnover expected to reach close
to `4 lac crores in this financial year. In addition to the services offered through branch and subsidiary network spread across India,
the Bank also leverages its tie-ups with reputed correspondent banks across the world to offer these services to overseas customers.
The Bank is one of the few private sector banks on-boarded as advisory bank in Government e-Marketplace (GeM). This tie-up enables
the Bank to offer automated solution for advising electronic performance guarantees (e-PBG) to Govt. departments/organisations/
PSUs with value added features like integrated responses and faster turnaround time.
International Retail
The Bank offers a range of forex and remittances products to its retail customers, which include forex cards, inward and outward wire
transfers, traveller’s cheques and foreign currency notes, remittance facilities through online portal as well as through collaboration
with correspondent banks and exchange houses. The Bank offers remittances facility to NRI customers through the Bank’s Sri Lanka
Branch and Axis Bank UK Ltd., for remittances to India. Additionally, the Bank offers remittances from Gulf Co-operation Council (GCC)
region to Sri Lanka through tie-up with four exchange houses.
The Bank continues to have a market leadership position in forex cards with 16 currency options other than INR being offered.
Additionally, the Bank offers Miles & More Multi-Currency Forex Card in association with Lufthansa airline aimed at frequent flyers, an
industry first in this segment. In line with the continuing focus on enabling digital channels for its customers, the Bank has enabled Axis
Mobile app for the standalone forex card holders. The aggregate load value on forex cards crossed USD 9 billion during the year.
The volumes of retail remittances also rose by 8% during the year and the Bank processed outward remittances of USD 4 billion and
inward remittances of USD 9.3 billion.
Custodial and Capital Market Services
The major activities undertaken by the Capital Market Division are fund based and non-fund based credit facilities, clearing bank
activities, Professional Clearing Member Services (PCM), NSCCL custodian services, fund accounting services, IPOs, dividend
distribution & escrow services.
The Bank acts as a clearing bank and professional clearing member across exchanges in India providing clearing member services
and funds clearing solutions to exchange members. The Bank is also a SEBI registered custodian of securities servicing various segment
of clients viz. Foreign Portfolio Investments, Foreign Direct Investments, Portfolio Management Service Providers and Foreign Venture
Capital Investors etc. Assets under custody services are over `58,224 crores.
Lending to Small and Medium Enterprises
Small and Medium Enterprises (SME) play a crucial role in shaping the economic growth and development of the nation. The sector
54
Annual Report 2017 -18 has also been regarded for fostering entrepreneurship, employment generation and innovation. The government has in the recent years
provided major impetus through various programs and schemes to strengthen the SME sector. During the year, while the implementation
of GST led to formalisation of businesses for SMEs after initial disruptions during the transition phase, the subsequent measures like
rationalisation of GST rates and change in the criteria for classification of MSMEs are likely to aid the SME growth.
The Bank, by virtue of its understanding and expertise in SME business, is committed to provide timely, adequate and hassle free credit
to the SMEs across sectors. The Bank, through its 66 dedicated SME Centres and more than 3,500 Branches, is able to offer best-in
class lending and other banking services to customers. The Bank’s SME Business comprises of three business verticals namely Medium
Enterprises Group (MEG), Small Enterprises Group (SEG) and Supply Chain Finance (SCF).
The Bank has a wide range of regular and customised products designed for SME customers across manufacturing, trade and services
sectors including Working Capital, Term Loan, Trade Finance, Project Finance and Bill / Invoice Discounting etc. The SME Business in
the Bank continues to focus towards lending to the Priority sector (PSL) and is a significant contributor to the Bank’s overall PSL portfolio.
During the fiscal, the Bank’s SME advances grew at 19% to `58,740 crores from `49,172 crores last year. The SME portfolio of the Bank
constituted 13% of the Bank’s total advances as on 31 March, 2018.
With a commitment to support the SME growth, the Bank has taken its Evolve series - an educational initiative for SMEs - to a new level.
The 4th edition of Evolve was organised around the concept of How Family Business may be transformed into successful business in 30
cities where more than 3,000 SMEs participated. Similar to last three events, the fourth edition of Evolve series was much appreciated
by all the participants and has become a signature initiative in building the SME capacity. These initiatives were aligned to relevant
government initiatives/national priority programs such as ‘Make in India’, ‘Skill India’ and ‘Digital India’.
Despite the challenging environment, the asset quality in SME segment has remained relatively stable and the focus remains on building
a quality portfolio by acquiring better rated SME customers. Advanced business analytics is being used to identify potential borrower
across various sectors. The Bank also uses the Early Warning Signals tool which helps the Bank to identify unfavourable sectoral trends
early in the cycle and take corrective action if necessary. We continue to source good rated Customers and maintain quality of portfolio.
Business Intelligence Unit
Artificial Intelligence and machine learning are changing lives globally at rapid pace. Businesses are adopting AI and machine learning
across industries to revolutionize customer experience, personalization and decision making.
The Business Intelligence Unit along with Thought Factory (Axis Innovation Lab), is setting up an AICoE (Artificial Intelligence Centre of
Excellence) to build and enhance customer facing solutions such as creation of personalized product recommendations, improved customer
targeting by smart micro-segments through identification of latent behavior patterns, identification of customer base for pre-approved
loans and planning of branches and ATM locations. This Centre will also help identifying fraudulent card transactions, identifying point
of compromise at ATMs in case of skimming and to prioritize investigation on complex money laundering transactions.
This year, the Bank is going live with its Big Data Lake project for implementing scalable analytical solutions to bring personalized banking
services for its customers in real time. As a first for Micro Finance Industry, the Bank has built an integrated Tab sourcing and Big Data
platform to understand borrower’s behavior for better credit decision making and underwriting. At Axis Bank we are investing significantly
in tools and technology infrastructure for understanding unstructured data (like email text, voice data from call center, video data from
CCTV cameras etc.) to build customer centric solutions on top of it.
Risk Management
The risk management objective of the Bank is to balance the trade-off between risk and return and ensure that the Bank operates within
the Board approved risk appetite statement. An independent risk management function ensures that the risk is managed through a risk
management architecture as well as through policies and processes approved by the Board of Directors encompassing independent
identification, measurement and management of risks across the various businesses of the Bank. 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 refining and improving its risk measurement systems including
automation of processes wherever feasible not only to ensure compliance with regulatory requirements, but also to ensure better risk-
adjusted return and optimal capital utilisation, keeping in view its business objectives. Pursuant to review of the risk profile of the Bank,
the Board has not come across any element of risk which would threaten the existence of the Bank.
The overall risk appetite and philosophy of the Bank is defined by its Board of Directors. The Risk Appetite framework provides guidance
to the management on the desired level of risk for various types of risks in the long term and helps steer critical portfolio decisions.
Further, the Internal Capital Adequacy Assessment Process (ICAAP) of the Bank assesses all the significant risks associated with
various businesses. The independent risk management structure within the Bank is responsible for managing the credit risk, market
risk, liquidity risk, operational risk, other Pillar II risks like reputational risk and strategic risk and exercising oversight on risks
associated with subsidiaries. The risk management processes are guided by well-defined policies appropriate for the various risk
categories viz. credit risk, market risk, operational risk, liquidity risk, counterparty risk, country risk, reputational risk, strategic
risk and subsidiaries risk, supplemented by periodic validations of the methods used and monitoring through the sub-committees
55
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES of the Board. The Risk Management Committee (RMC), a committee constituted by 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 (COD) and
the Audit Committee of the Board (ACB) 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), Operational Risk Management Committee (ORMC),
Subsidiaries Governance Committee (SGC), Reputation Risk Management Committee (RRMC), Information Security Committee
(ISSC), Central Outsourcing Committee (COC) and Business Continuity Planning Management Committee (BCPMC) operate within
the broad policy framework of the Bank.
Credit Risk
Credit risk is the risk of financial 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 focuses on maintaining asset quality and concentrations at
individual exposures as well as at the portfolio level.
Internal rating forms the core of the risk management process for wholesale business with internal ratings determining the acceptability
of risk, maximum exposure ceiling, sanctioning authority, pricing decisions, review frequency. For the retail portfolio including small
businesses and small agriculture borrowers, the Bank uses different product-specific scorecards. Large, risky or complex exposures
require to be independently vetted by the risk department for each incremental transaction whereas small, templated exposures are
extended within the approved product policies. 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.
Credit models used for risk estimation are assessed for its discriminatory power, calibration accuracy and stability independently
by a validation committee.
During the year the Bank has brought greater alignment in bank level appetite and the operational limits. The key risk metrics are
monitored regularly and deviations are discussed with business to decide on the course of remedial action. The governance around
deviation from internal limits has also been considerably strengthened. Asset quality target on incremental corporate loan business
have been considerably tightened over the past few years. While parts of corporate portfolio remain under stress, key asset quality
metrics have all moderated during the year. Concentration limits have also been tightened over the past few years.
Market Risk
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 its 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 market risk limits and comparable benchmarks which
provides guidance to the business in optimizing the risk-adjusted rate of return of the Bank’s trading and investment portfolio.
Market risk management is guided by well laid down policies, guidelines, processes and systems for the identification, measurement,
monitoring and reporting of exposures against various risk limits set in accordance with the risk appetite of the Bank. Treasury
Mid-Office 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 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, trigger limits, gaps and sensitivities (duration, PVBP, option greeks) are used as non-statistical measures of market
risk management.
Historical data calculated at a 99% confidence level for a one-day holding period over a simulation and its variants are used to
compute VaR for the trading portfolio 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 efficacy of the model. VaR measurements are supplemented with a series
of stress tests and sensitivity analyses as per a well laid out stress testing framework.
Liquidity Risk
Liquidity is a bank’s capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations at
reasonable cost and without incurring unacceptable losses. Liquidity risk is the inability of a bank to meet such obligations as they
become due, without adversely affecting the bank’s financial condition. The Asset Liability Management Policy of the Bank stipulates
a broad framework for liquidity risk management to ensure that the Bank is in a position to meet its liquidity obligations as well as to
withstand a period of liquidity stress from bank-level factors, market-wide factors or a combination of both.
The liquidity profile of the Bank is monitored for both domestic as well as overseas operations on a static as well as on a dynamic basis
56
Annual Report 2017 -18 by using the gap analysis technique supplemented by monitoring of key liquidity ratios and conduct of liquidity stress tests periodically.
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.
The Bank has integrated into the asset liability management framework the liquidity risk management guidelines issued by RBI pursuant
to the Basel III framework on liquidity standards. These include the intraday liquidity management and the Liquidity Coverage Ratio
(LCR). The Bank maintains the regulatory mandated LCR as per the transitional arrangement laid down by RBI and also ensures
adherence to RBI guidelines on monitoring and management of liquidity including liquidity ratios.
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, efficient and proactive manner. The policy aims at assessing and measuring the magnitude of risks,
monitoring and mitigating them through well-defined framework and governance structure.
The RMC at the apex level is the policy making body and 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.
All new products and processes, as well as changes in existing products and processes are subjected to risk evaluation by the
Operational Risk team. The overall responsibility of new products is vested with the Bank’s Product Management Committee and
Change Management Committee. Outsourcing arrangements are examined and approved by the Bank’s Outsourcing Committee
after due recommendations from the Operational Risk team. The IT Security Committee of the Bank provides directions for mitigating
operational risk in the information systems. The Bank has set up a comprehensive Operational Risk Measurement System (ORMS) for
documenting, assessing and periodic monitoring of various risks and controls linked to various processes across all business lines.
Over the year, the Bank has focused on strengthening the operational and information security risk frameworks by implementing
several initiatives.
The Business Continuity Planning Management Committee (BCPMC) exercises oversight on the implementation of the approved
Business Continuity Plan (BCP) framework which has been put in place to ensure continuity of service to its large customer base. The
effectiveness of the approved Business Continuity Plan (BCP) framework is tested for all identified critical internal activities to ensure
readiness to meet various contingency scenarios. The learning from the BCP exercises are used as inputs to further refine the framework.
Subsidiary Governance
The Bank currently has eleven subsidiaries. The oversight of Subsidiaries is an essential element for the implementation of robust
corporate governance across group entities and is an integral feature of a well-managed business, capable of creating value through
enhanced reputation and investor confidence. Towards this objective, the Bank has implemented an integrated framework to align
governance practices at Axis Group level which is overseen by the Board and Board level committees. The governance framework
comprises risk, compliance, audit and finance frameworks and encompasses a set of policies including inter alia, Policy for Oversight
of Subsidiaries, Arm’s Length Policy, Subsidiary Risk Management Policy etc. for operationalization of the governance framework.
Information Technology and Cyber Security
The Bank has undertaken various technology enabled business initiatives to realize the vision of customer centricity and to respond to
customer demand in real time by knowing its customers and their behaviour and to offer a single view across all the bank’s products
and services.
Reliable business processes and improved customer service continued to be the key business capabilities that IT delivered for the
Bank. With new customers entering formal banking system and the volume of transactions increasing rapidly, the need for robust
and dependable technology has increased significantly. The Bank’s IT infrastructure was augmented to build capabilities. The Bank
upgraded its core systems, moved to next versions of applications and adopted modern technology stack for better scalability.
The Bank has adopted a holistic cyber security program with a comprehensive Cyber Security Policy (CSP) and standards based
on industry best practices with compliance to regulatory guidelines. The Bank has created its cyber security design and framework
based on National Institute of Standards and Technology (NIST) standard. The Bank’s cyber security framework is built around five
fundamental areas including Identify, Protect, Detect, Respond and Recover. The Bank has a 24 X 7 Security Operations Centre and
Cyber Security Operations System.
Digital-first application architectures were created that takes advantage of the new capabilities of business analytics. Using data
collected in a mobile world and providing real-time analytics, the Bank was able to build objective measures by which it was able to
respond to the unpredictability of the changing consumer behaviour.
The Bank also took significant steps in the area of Robotics Process Automation (RPA) and Blockchain technology this year. The Bank
57
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES has implemented Straight through processing (STP) and automation through advanced techniques of RPA and Machine Learning to
reduce human intervention and errors and deliver improved throughput. Blockchain has emerged as a potentially disruptive force
capable of transforming financial services industry by making transactions faster, cheaper, more secure and transparent. The Bank
implemented Blockchain Inter Ledger protocol technology solution to build a faster and more efficient cross-border remittance network.
Compliance
The Compliance function is one of the key elements in Bank’s corporate governance structure. It ensures strict observance of all
statutory provisions in various legislations such as Banking Regulation Act, Foreign Exchange Management Act, Prevention of Money
Laundering Act, Reserve Bank of India Act, etc. as well as other regulatory guidelines issued from time to time, standards and codes
prescribed by BCSBI, FEDAI, FIMMDA, etc. and also the Bank’s internal policies and fair practice code. The Compliance function
assists the Board and Top Management in managing the compliance risk that is the risk of legal or regulatory sanctions, financial loss
or reputational loss that the Bank may suffer as a result of its failure to comply with the applicable laws, regulations or code of conduct
applicable to banking activities.
The Bank is committed to adhere to the highest standards of compliance vis-à-vis regulatory prescriptions and internal guidelines. The
Bank has a robust Compliance Policy, outlining compliance philosophy of the bank and roles and responsibilities of the Compliance
Department. The Compliance function plays a crucial role in ensuring that the overall business of the Bank is conducted in accordance
with regulatory prescriptions. The Compliance function aims to improve compliance culture within the Bank through various enablers
like dissemination of regulatory changes, percolation of compliance knowledge through training, newsletters, e-learning initiatives
and other means of communication apart from direct interaction. To ensure that all the businesses of the Bank are operating within the
ambit of Compliance Framework, the Compliance Department is involved in vetting all new products and processes. It evaluates the
adequacy of internal controls and examines the systemic correction required, based on its analysis and interpretation of the regulatory
doctrine and the deviations observed during compliance monitoring and testing programme. It also ensures that internal policies
address the regulatory requirements comprehensively. The Audit Committee of the Board reviews the performance of the Compliance
Department and the status of compliance with regulatory guidelines on a periodic basis.
As the focal point of contact with RBI and other regulatory entities, the Compliance Department periodically apprises both the Bank’s
management as well as the Board of Directors on the status of compliance in the Bank and the changes in regulatory environment.
The Bank has put in place an Enterprise-wide Governance Risk and Compliance Framework, an online tool, which is pivotal in
addressing operational, compliance and financial reporting risk, bringing efficiency in processes and improvement in compliance
levels besides facilitating annual assessment of these risks. The Compliance Department also propagates and monitors a Group
Compliance approach encompassing the Bank and its subsidiaries.
Internal Audit
The Bank’s Internal Audit function provides an independent view to its Board of Directors and Senior Management on the quality and
efficacy of the internal controls, risk management systems, governance systems and processes in place on an on-going basis. This is
provided to primarily ensure that the business and support functions are in compliance with both, internal and regulatory guidelines.
In line with the RBI’s guidelines on Risk Based Internal Audit (RBIA), the Bank has adopted a robust internal audit policy. The Risk
Based Internal Audit has been designed after factoring regulatory guidelines and also international best practices. The policy has
a well-defined architecture for conducting Risk Based Internal Audit across all audit entities. The audit policy articulates the audit
strategy in terms of a concerted focus on strategic and emerging business risks. These inputs form a key step in the identification of the
audit universe for the audit planning exercise. The audit frequencies are in sync with the risk profile of each unit to be audited. This
is in alignment with guidelines relating to Risk Based Internal Audit. The scope of Risk Based Internal Audit includes examining the
adequacy and effectiveness of internal control systems, external compliances and also evaluating the risk residing at the audit entities.
Further to augment the internal audit function, concurrent audit, thematic audit and integrated audit reviews have been integrated into
the internal audit process in order to make the function more robust.
The Internal Audit functions independently under the supervision of Audit Committee of the Board, thereby ensuring its independence.
The Board reviews the efficacy of the internal audit function, effectiveness of the internal controls laid down by the Bank and compliance
with internal as also regulatory guidelines.
Corporate Social Responsibility (CSR)
The primary purpose of Axis Bank’s CSR philosophy is to make a meaningful and measurable impact on the lives of economically,
physically and socially challenged communities across India, by actively supporting initiatives that aim at creating suitable conditions
for their sustainable livelihoods. As a financial institution, the Bank believes that it can play an active role in stimulating India’s socio-
economic development as well as its ecological balance. The Bank is also making efforts to align its CSR activities with some of the
Sustainable Development Goals laid out by United Nations in 2015.
The CSR activities of the Bank are guided by its Corporate Social Responsibility (CSR) Policy which has been formulated and adopted
by the Bank in compliance with the provisions of Section 135 of the Companies Act, 2013 and is accessible on the Bank’s website
www.axisbank.com.
The prescribed CSR expenditure for the Bank for fiscal 2018 in terms of the Section 135 of the Companies Act, 2013 and Rules
58
Annual Report 2017 -18 framed thereunder was `186.82 crores, against which the Bank has spent `133.77 crores towards various CSR initiatives. The details
of initiatives taken by the Bank on CSR during the year as per annexure attached to the Companies (Corporate Social Responsibility
Policy) Rules, 2014 are given as an annexure to the Directors’ Report.
The Bank pursues its CSR activities either directly or through the Axis Bank Foundation (ABF), directly, or through any other entity as
deemed suitable by the CSR Committee of the Board. The CSR activities undertaken directly by the Bank focus on poverty alleviation,
rural development through promoting financial literacy and enabling financial inclusion, environmental sustainability, education and
skill development. With over 3,703 branches across the country, the Bank actively tries to leverage its geographical spread to expand
the reach and impact of its initiatives. During the year, the Bank directly supported 15 such programs.
By reaching out to the rural populace through these interventions, the Bank aims to help the intended participants generate sustainable
sources of income for their households. The Bank has collaborated with reputed NGOs and Trusts to have a deeper penetration in the
rural areas to support livelihood programs that are sustainable and replicable. In its endeavour to foster inclusiveness, the Bank has
tied up with a reputed NGO to create awareness on the Right of Persons with Disabilities (RPWD) Act and will train organizations
involved in skilling the Persons with Disabilities (PWDs) to ensure the absorption of PWDs in the workforce.
The Bank has also taken a pioneering step to bridge the human resource gap faced by the development sector by supporting the
‘Buddha Fellowship’ initiative wherein young graduates from IIM, IIT and other reputed institutions will get an opportunity of two years
of rigorous engagement with the development sector – on field work in NGOs and government and mentorship by senior leaders from
corporate and development sector to groom them into a development entrepreneur.
Understanding the need to propagate the importance of health in the rural areas, the Bank conducted a health camp offering basic
diagnostic services. Additionally, Financial Literacy sessions were conducted as part of the Mass Awareness Camp (MAC) for the
participants of Joint Liability Group (JLG) and other community members. The mass awareness camp is designed to involve the entire
community at large to be a part of the financial learning process. A skit was prepared on the overview and the benefits of banking.
The activities are part of a larger intervention undertaken by the Bank with the rural communities on Financial Literacy that will include
vocational training and financial awareness campaigns for low-income households.
Towards promoting Financial Inclusion at a pan-India level, the Bank engages Business Correspondents (BCs) to act as banking
intermediaries to impart the financial literacy programs leading to a deeper percolation and adoption of financial products and
services. In FY 2017-18, the Bank enrolled 7.7 lac members for various social security schemes through its various banking channels.
During the year, the Bank conducted specialized knowledge sharing sessions for SMEs wherein industry domain experts share
knowledge and discuss case studies focusing on SME sector growth and development. The various sessions covered more than 3,000
SMEs through 30 knowledge sharing sessions held in 30 cities. The Bank also conducts knowledge sessions on global trade through
its Forex Club initiative, reaching 6,500 MSMEs of which 60% were New To Bank (NTB).
In line with the national priority to eliminate open defecation from the country under the ‘Swachh Bharat Mission’, the Bank supported
various initiatives towards an ODF-free India, such as in the greater Nagpur region, where the Bank partnered with a nationally
recognized NGO to design a communication strategy to take the message to the general public and specifically to school students.
Towards promoting greater environmental sustainability, the Bank has been working towards reducing its carbon emissions through
installation of solar panels at select locations and remotely managed smart energy systems. As on March 31, 2018, the Bank had
an installed capacity of 5.05 MW. The Bank is also supporting an initiative wherein 3,80,000 trees will be planted in around five
states viz. Andhra Pradesh, Rajasthan, Gujarat, Odisha and Maharashtra that will improve vegetation in common lands, arrest and
reverse land degradation, besides helping in reducing pressure on the forests and common lands. This initiative is expected to improve
availability of fodder, fuel wood, biodiversity, water, nutrients thereby improving livelihoods of poor rural households. Additionally,
ABF, through its partners, undertakes tree plantation drives at locations across India. During the reporting period, 14.35 lac saplings
were planted.
During the year, Axis Bank embarked on an ambitious endeavour to reach out to the remote communities in the Ladakh region of
Jammu & Kashmir and launched a three year program ‘Axis DilSe – Connecting Remote Communities’ aimed at transforming over
100 village schools in Leh and Kargil districts by creating physical and educational infrastructure. The initiative is in alignment with
the Government of India’s Border Area Development Program (BADP).
The Axis Bank Foundation (ABF), set up as a Public Charitable Trust in 2006 has partnered with NGOs primarily working in the
areas of Rural Livelihood and Vocational Training. Within Rural Livelihoods, the core focus areas are Watershed Management and
Agriculture Productivity, Livestock Enhancement and Financial Inclusion. The initiatives undertaken in these areas have helped in
enhancing agricultural output through improved farm practices, thereby making multiple cropping possible. The initiatives also support
communities in better livestock rearing thereby creating an alternative stream of income, which can supplement and improve overall
income. Many of the ABF-supported programs are closely aligned with the Government of India’s rural development schemes such as
The Mahatma Gandhi National Rural Employment Guarantee Act and Pradhan Mantri Krishi Sichai Yojana.
The Foundation’s programs also aim to strengthen the role of women in rural economies. As part of ABF’s financial inclusion initiatives,
a total of 13,396 Self Help Groups (SHGs) have been formed with 159,654 women members. These SHGs have recorded a savings
of `28.95 crores and borrowings of `55.30 crores from the formal sector.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES During the reporting period, ABF achieved its stated mission of creating 1 million livelihoods well before the stated target completion
date of 31 December 2017, of which 63% are women. The Foundation has now committed itself to supporting 2 million households
by 2025.
The various Livelihood programs of the Bank and ABF seek to provide vocational training to unemployed youth, including Persons with
Disabilities (PwD), improving their ability to find employment and strengthen their self-dependence, in alignment with national schemes
such as Skill India Mission. In the reporting year, 21,510 youth have been trained, of which 67% have been placed.
‘Axis Cares’ is the employee engagement platform that enables the workforce of the Bank to engage with various initiatives of the
Foundation and support them through payroll donations.
The Bank’s CSR agenda is closely guided and monitored by the Board level CSR Committee of the Bank and its top management. The
Bank and ABF follow the highest fiduciary responsibility to ensure a thorough due diligence and monitoring of projects, partners and
measurement of impact. From time to time, members of the CSR Committee or top management visit project intervention sites to directly
interact with implementation partners and participants.
During the year, the Bank was rewarded by the ‘FICCI CSR Summit & Awards 2017 in the ‘Women Empowerment Category’ in
recognition of its CSR efforts and impacts created.
Additional details of the Bank’s community development efforts can be accessed through the Bank’s standalone annual sustainability
report, the Bank’s ‘CSR & Sustainability’ web-section on www.axisbank.com and ABF’s website www.axisbankfoundation.org.
Human Resources
This year, the Bank entered the 25th year of its journey. The Bank continues to focus on capability building, keeping the future in mind.
The Bank has made intensive efforts to ensure that employees’ capabilities are developed so that employees can handle challenges of
future while staying abreast with the functional domain knowledge of Banking. The Bank ended the year with a workforce strength of
59,614 employees. Some key focus areas of the Bank were:
Building Bankers the Axis Way: The Bank takes significant efforts to enhance the employee’s capabilities by focusing on developing
their core functional knowledge and building on their banking skills. Through its various learning interventions, the Bank continues to
provide platforms for employees to improve on their Banking domain knowledge and skills. The Bank’s online learning and testing
platform, Axis Competency Profiler, assesses employees on their functional competence and creates a pool of functionally strong
employees. The Bank has collaborations with the best names in their respective fields of expertise, to bring learning academies to our
employees. These Academies provide employees the opportunity to gain levels of mastery in Core Banking areas like the Credit, Risk,
Trade & Forex Academies in collaboration with CRISIL to build deep knowledge in these areas.
This learning mindset is strengthened when subject matter experts within the Bank are encouraged to nurture a culture of learning and
sharing. The Axis Learning Achievers program and the Axis Business Clinics provides leaders with teachable points of view while
assimilating story telling as a powerful medium of learning. Using the cascade format of facilitation, the Banking on Compliance
program drives ethical decision making, KYC/AML knowledge and importance of compliance in every transaction the Bank undertakes.
Reinforcing Meritocracy: The Bank’s integrated Performance Management & Capability Development system - ACElerate – helps in
fostering high performance as well as building capability. Capability development interventions are provided to high performing
employees to hone their skills further and help them perform at the next level. More than 24,600 employees underwent a 2-day
behavioural training program customized to their grade and their role challenges. Enhancement Program was offered to poor
performers as a lever to opt for stretch targets and have a chance at upgrading their rating retrospectively. The Bank’s promotion
process allows for the best performers to shine through, regardless of their age, gender, past performance & background. A young
and engaged workforce with an average age of 29.5 years and the Bank’s policy on being an equal opportunity employer continue
to significantly contribute towards the Axis Bank brand.
Leadership development across levels has been the Bank’s continued focus. ’Hire at frontline and grow from within’ is the strategy
deployed across the Bank. Inter-linkages across the different academic tie-ups ensure that the best talent are placed across the
organization in roles that add value while bring in new perspectives and points of view.
The Bank follows an institutionalized approach of providing differentiated learning opportunities to the Top Talent. In order to gain
a better understanding of how the Digital Wave is disrupting businesses and reshaping strategies, the Bank partnered with INSEAD,
one of the world’s pre-eminent Business Schools, to bring our Leaders a world-class program in the shape of the Axis INSEAD Digital
Leadership Academy. Additionally, developmental interventions in the form of executive coaching, mentoring and feedback tools
were introduced and extended to a wider audience to facilitate their leadership journey.
Axis Blitz Voices continued, where our leaders travelled to 27 locations and met nearly 5,000 employees to listen to their voices.
The Bank introduced an integrated employee survey architecture to be able to hear from employees at various stages of their
employee lifecycle.
The Bank has been continuously enhancing employee experience through personalized human connect as well as technology
enabled connect. The best-in-class technology is deployed to automate HR processes & the internal employee portal, MyConnect
provides employees with a seamless and digitally enhanced HR experience.
60
Annual Report 2017 -18 Partnering with external stakeholders: The Bank continued giving back to the community via the Axis DilSe initiative. The DilSe
program saw 108 schools across the remotest part so of Kargil and Ladakh being adopted by 20 senior leaders for a period of
3 years. Providing playgrounds, libraries, solar panels, digital learning, desks and chairs are part of the program. 31 employees
along with the leaders spent time with the children, villagers and teachers to drive home the importance of education and the
importance of working towards fulfilling their dreams.
Through the fulfilment of its HR agenda, the Bank continues to strive towards its pledge of serving its customers, shareholders,
employees & communities.
Subsidiary Performance
During fiscal 2018, the Bank’s subsidiaries reported healthy growth in revenue and earnings of 31% and 5% respectively.
Axis Finance Limited, the Bank’s fast growing NBFC that caters to the unique financing requirment of retail and wholesale customers,
reported 54% YoY growth in total loans with 64% growth in retail loans. Axis Finance’s net profit increased by 27% and contributed
44% to total subsidiaries’ earnings.
Axis Capital, the Bank’s institutional equities and investment banking franchise has been the leader in equity and equity linked
deals over the last decade and had another great year with 42% market share of the IPO market. Axis Capital contributed 29% to
the total earnings of the subsidiaries.
Axis AMC and Axis Securities continued to contribute towards the Bank’s Retail Franchise building strategy and strengthen the bond
with its customers. Axis AMC reported 45% YoY growth in average AUM with 26% growth in total number of folios and contributed
9% to total subsidiaries’ earnings. Axis Securities, one of the fastest growing brokerage firms in India reported 33% growth in
cumulative client base to 1.84 million and contributed 13% to subsidiairies’ net profits.
During the fiscal, the Bank acquired Freecharge, one of the India’s leading digital payment companies that has a current user base
of 61.5 million, GMV of over `2,000 crores and ~110 million transactions. The Bank believes that the Freecharge’s unique value
proposition in the digital payments space and the strength of its acquisition engine would help to build the Axis franchise further
and create significant value for the Bank. With Digital Payments as a hook, the Bank intends to leverage the platform for digital
distribution of retail products by targeting digitally native mobile first customers. The post-acquisition activities at Freecharge remain
on track with total payment volumes up 36% and monthly active users increasing by 44% during the period October 2017 to March
2018.
A.TReDs Limited, the Bank’s subsidiary that was set up in partnership with m-Junction, was one of the three entities allowed by RBI
to set up the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating cash flows for MSMEs. The Bank’s
digital invoice discounting platform ‘Invoicemart’ for MSMEs has done exceptionally well with market share of nearly 43% among
all TReDS platforms. It currently has more than 350 particpants on the platform and has clocked more than `410 crores in financed
throughput by e-discounting nearly 14,300 invoices.
Safe Harbor
Except for the historical information contained herein, statements in this Annual Report which contain words or phrases such as
“will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”,
“contemplate”, “seek to”, “future”, “objective”, “goal”, “strategy”, “philosophy”, “project”, “should”, “will pursue” and similar
expressions or variations of such expressions may constitute “forward-looking statements”. These forward-looking statements involve
a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the
forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our
strategy, future levels of non-performing loans, our growth and expansion, the adequacy of our allowance for credit losses, our
provisioning policies, technological changes, investment income, cash flow projections, our exposure to market risks as well as
other risks. Axis Bank Limited undertakes no obligation to update forward-looking statements to reflect events or circumstances after
the date thereof.
61
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE AS
PER PROVISIONS OF CHAPTER IV OF SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Members of Axis Bank Limited
Axis Bank Limited
’Axis House’, C-2,
Wadia International Centre,
Pandurang Budhkar Marg,
Worli, Mumbai,
Maharashtra – 400 025
1.
The Corporate Governance Report prepared by Axis Bank Limited (hereinafter “the Bank”), contains details as required by
the provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable criteria’) with respect to Corporate Governance for the
year ended March 31, 2018. This report is required by the Bank for annual submission to the Stock exchange and to be sent to
the Shareholders of the Bank.
Management’s Responsibility
2.
The preparation of the Corporate Governance Report is the responsibility of the Management of the Bank including the
preparation and maintenance of all relevant supporting records and documents. This responsibility also includes the design,
implementation and maintenance of internal control relevant to the preparation and presentation of the Corporate Governance
Report.
3.
The Management along with the Board of Directors are also responsible for ensuring that the Bank complies with the conditions
of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and Exchange Board of India.
Auditor’s Responsibility
4.
Pursuant to the requirements of the Listing Regulations, our responsibility is to express a reasonable assurance in the form of
an opinion whether the Bank has complied with the specific requirements of the Listing Regulations referred to in paragraph 3
above.
5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports or
Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance, both issued by the Institute
of Chartered Accountants of India (“ICAI”). The Guidance Note on Reports or Certificates for Special Purposes requires that we
comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.
6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control
for Firms that Perform Audits and Reviews of Historical Financial Information and Other Assurance and Related Services
Engagements.
7.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated in compliance of
the Corporate Governance Report with the applicable criteria. Summary of key procedures performed include:
i.
Reading and understanding of the information prepared by the Bank and included in its Corporate Governance Report;
ii. Obtained and verified that the composition of the Board of Directors w.r.t. executive and non-executive directors has been
met throughout the reporting period;
iii. Obtained and read the Directors Register as on March 31, 2018 and verified that at least one women director was on
the Board during the year;
iv. Obtained and read the minutes of the following committee meetings held from April 1, 2017 to March 31, 2018:
(a)
Board of Directors Meeting;
(b) Audit Committee;
62
Annual Report 2017 -18
(c) Annual General Meeting and Extraordinary General Meeting;
(d) Nomination and Remuneration Committee;
(e)
Stakeholders Relationship Committee; and
(f)
Risk Management Committee;
v. Obtained necessary representations and declarations from directors of the Bank including the Independent Directors ; and
vi.
Performed necessary inquiries with the management and also obtained necessary specific representations from
management.
The above-mentioned procedures include examining evidence supporting the particulars in the Corporate Governance Report on
a test basis. Further, our scope of work under this report did not involve us performing audit tests for the purposes of expressing
an opinion on the fairness or accuracy of any of the financial information or the financial statements of the Bank taken as a
whole.
8.
Based on the procedures performed by us as referred in paragraph 7 above, and according to the information and explanations
given to us, we are of the opinion that the Bank has complied with the conditions of Corporate Governance as stipulated in the
Listing Regulations, as applicable for the year ended March 31, 2018, referred to in paragraph 3 above.
Other Matters and Restriction on Use
9.
This report is neither an assurance as to the future viability of the Bank nor the efficiency or effectiveness with which the
management has conducted the affairs of the Bank.
10. This report is addressed to and provided to the members of the Bank solely for the purpose of enabling it to comply with its
obligations under the Listing Regulations with reference to compliance with the relevant regulations of Corporate Governance
and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or
any duty of care or for any other purpose or to any other party to whom it is shown or into whose hands it may come without our
prior consent in writing. We have no responsibility to update this report for events and circumstances occurring after the date of
this report.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm registration number: 301003E/E300005
per Viren H. Mehta
Partner
Membership No.048749
Place: Mumbai
Date: 16th May 2018
63
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
CORPORATE GOVERNANCE
(Part of the Directors’ Report for the year ended 31st March 2018)
(1) PHILOSOPHY ON CODE OF GOVERNANCE
Your Bank’s policy on Corporate Governance has been:
I.
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 institutionalize accountability, transparency and equality of treatment for all its stakeholders, as central tenets of good
corporate governance and to articulate this approach in its day-to-day functioning and in dealing with all its stakeholders.
(2) BOARD OF DIRECTORS
I.
II.
III.
The composition of the Board of Directors of the Bank is governed under the relevant provisions of the Companies Act,
2013, the relevant Rules made thereunder, the Banking Regulation Act, 1949, the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and the Articles of
Association of the Bank.
The Board of Directors of the Bank has an optimum combination of Independent, Non-Executive and Executive Directors.
The Board presently comprises of 15 Directors representing diverse combination of professionalism, knowledge, expertise
and experience as relevant for the banking business. The Board has 8 Independent Directors constituting more than one-
third of its total membership strength and 3 Women Directors. None of the Directors or their relatives are related to each
other. The Board is led by the Non-Executive (Part-Time) Chairman, who is an Independent Director.
The Board comprises of nominees of the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) and
Life Insurance Corporation of India (LIC), Promoters of the Bank and BC Asia Investments VII Limited, Integral Investments
South Asia IV and BC Asia Investments III Limited (being entities affiliated to BAIN Capital, a Global Private Equity firm).
The following Members constitute the Board, as on 31st March 2018:
Sr. No. Name of the Director
Category
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Dr. Sanjiv Misra
Independent Director & Non-Executive (Part-Time) Chairman
Smt. Shikha Sharma
Managing Director & CEO
Shri Prasad R. Menon
Independent Non-Executive
Prof. Samir K. Barua
Independent Non-Executive
Shri Som Mittal
Shri Rohit Bhagat
Independent Non-Executive
Independent Non-Executive
Smt. Usha Sangwan
Nominee Director – Life Insurance Corporation of India (LIC) [Equity Investor] - Promoter
Shri S. Vishvanathan
Independent Non-Executive
Shri Rakesh Makhija
Independent Non-Executive
Smt. Ketaki Bhagwati
Independent Non-Executive
Shri B. Baburao
Nominee Director – Administrator of the Specified Undertaking of Unit Trust of India
(SUUTI) [Equity Investor] – Promoter
Shri Stephen Pagliuca
(w.e.f. 19th December 2017)
Additional Nominee Director – Entities affiliated to BAIN Capital [Equity Investor]
Shri V. Srinivasan
Shri Rajiv Anand
Deputy Managing Director
Executive Director (Retail Banking)
Shri Rajesh Dahiya
Executive Director (Corporate Centre)
IV.
The Bank recognizes and embraces the importance of a diverse board in its success and is endowed with appropriate
balance of skills, experience and diversity of perspectives thereby ensuring effective board governance. The Board has
reviewed and adopted the Policy on Board Diversity which sets out its approach to ensure Board diversity so as to enhance
its effectiveness whilst discharging its fiduciary obligations towards the stakeholders of the Bank.
64
Annual Report 2017 -18
The role of the Board is to provide effective guidance and oversight to the Management of the Bank so that it delivers
enduring sustainable value, is fully compliant with extant laws and regulations and functions in an ethical and efficient
manner. The duties and responsibilities of the Board have been set out in its Charter, in terms of the relevant provisions
of the Companies Act, 2013, the relevant Rules made thereunder, the Listing Regulations, Banking Regulation Act, 1949,
Guidelines issued by the RBI, in this regard, from time to time and the Articles of Association of the Bank.
The responsibilities of the Board include inter alia overseeing the functioning of the Bank, monitoring legal, statutory
compliance, internal controls and risk management on the basis of information provided to it. The Board is also responsible
for approving the strategic direction, plans and priorities for the Bank, monitoring corporate performance against strategic
business plans, reviewing and approving the Bank’s operating results on a quarterly basis, overseeing the Bank’s Corporate
Governance framework and supervising the succession planning process for its Directors and Senior Management.
Accordingly, the Board deliberates on matters such as business strategy, risk, financial results, succession planning,
compliance, customer service, information technology and human resources as covered under the seven critical themes
prescribed by the RBI and such other matters as deemed appropriate. The Board spends considerable time perusing
the information provided to them which facilitates informed decision making and effective participation at its meetings,
leading to higher board effectiveness. The Board oversees the actions and results of the Management to ensure that the
long term objectives of enhancing shareholders value are met. The Board has the discretion to engage the services of
external experts / advisors, as deemed appropriate.
In all, 9 meetings of the Board were held during the financial year 2017-18, i.e. on 25th April 2017, 15th May 2017,
25th July 2017, 16th October 2017, 9th November 2017, 10th November 2017, 7th December 2017, 22nd January 2018
and 23rd March 2018. The meetings held on 25th April 2017, 25th July 2017 and 16th October 2017 were spread over
a period of 2 days. The gap between two Board meetings did not exceed the prescribed limit of 120 days. The requisite
quorum was present for all the meetings of the Board held during the financial year 2017-18.
The details of the meetings of the Board attended by the Directors during the financial year 2017-18, their attendance at the
23rd Annual General Meeting (AGM) of the Bank, the number of other Directorships and Memberships / Chairmanships
in Board Committees held by them, as on 31st March 2018, are given below:
Name of the Director
Board
Meetings
attended
during
the year
Sitting
fees (in
Rupees)
Attendance
at 23rd
AGM (26th
July 2017)
Number of other
directorships
of other
companies(1)
of Indian
public
limited
companies
Number of
memberships
in board
committees(2)
Independent Director & Non-Executive (Part-Time) Chairman
Dr. Sanjiv Misra
9/9
9,00,000
Yes
Nominee Director – SUUTI
Shri B. Baburao&
9/9
9,00,000
Yes
Nominee Director – LIC
Smt. Usha Sangwan@&
6/9
6,00,000
Yes
Nominee Director – Entities affiliated to BAIN Capital
Shri Stephen Pagliuca
(Appointed w.e.f. 19th December
2017)
Independent Directors
Shri V. R. Kaundinya@
(Ceased to be a Director on expiry
of tenure w.e.f. the close of business
hours on 11th October 2017)
Shri Prasad R. Menon
Prof. Samir K. Barua
Shri Som Mittal@
2/2
2,00,000
N.A.
2/3
2,00,000
Yes
9/9
9/9
7/9
9,00,000
9,00,000
7,00,000
Yes
Yes
Yes
2
4
5
0
-
2
5
3
0
1
7
6
-
2
1
5
2(1)
2(1)
3(1)
0
-
2(1)
6(4)
3(2)
65
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Name of the Director
Board
Meetings
attended
during
the year
Sitting
fees (in
Rupees)
Attendance
at 23rd
AGM (26th
July 2017)
Number of other
directorships
of other
companies(1)
of Indian
public
limited
companies
Number of
memberships
in board
committees(2)
Shri Rohit Bhagat
Shri S. Vishvanathan@
Shri Rakesh Makhija
Smt. Ketaki Bhagwati
9/9
8/9
9/9
9/9
9,00,000
8,00,000
9,00,000
9,00,000
Managing Director & CEO/ Whole Time Directors
Smt. Shikha Sharma
Managing Director
& CEO
Shri V. Srinivasan-Deputy Managing
Director
Shri Rajiv Anand Executive Director -
Retail Banking
Shri Rajesh Dahiya
Executive Director
-Corporate Centre
9/9
9/9
9/9
9/9
---
---
---
---
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0
2
4
1
2
5
2
1
4
0
0
0
0
1
0
0
0
3(1)
5(1)
0
0
0
0
1
The meetings held on 15th May 2017, 9th November 2017, 10th November 2017, 7th December 2017 and 22nd January
2018 were conducted through video conference.
@
&
(1)
(2)
Leave of absence was granted to the concerned Directors who had expressed their inability to attend the respective
meetings.
Sitting fees paid to Shri B. Baburao (Nominee Director – SUUTI) and Smt. Usha Sangwan (Nominee Director – LIC)
for attending the meetings of the Board/Committees have been credited to the bank account of SUUTI and LIC,
respectively.
Includes foreign companies, private limited companies and Section 8 companies.
Includes only Memberships of the Audit Committee and Stakeholders Relationship Committee in public limited
companies. Figures in brackets represent number of Chairmanships of the said Committees.
Notes:
•
Section 165 of the Companies Act, 2013:
1) None of the Directors of the Bank holds office of directorships in more than 20 companies. This includes alternate
directorships, private limited companies and Section 8 companies.
2) None of the Directors of the Bank holds office of directorships in more than 10 public limited companies. This
includes directorship in private companies that are either holding or subsidiary company of a public company.
•
Regulation 25 of the Listing Regulations:
1) None of the Directors of the Bank serve as an Independent Director in more than 7 listed companies.
2) None of the Whole-Time Directors of the Bank serve as an Independent Director in any listed company.
•
Regulation 26 of the Listing Regulations:
None of the Directors of the Bank is a Member in more than 10 Committees or is a Chairperson in more than 5 Committees
of Public Limited Companies. In terms of this regulation, only Chairmanship / Membership in Audit Committee and
Stakeholders Relationship Committee are required to be considered for the said purpose.
66
Annual Report 2017 -18
All Directors of the Bank have submitted their annual disclosures / declarations as mandated under the Companies Act,
2013 and the Rules made thereunder, the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and
the Banking Regulation Act, 1949 and the Guidelines issued by the RBI, in this regard, from time to time.
Board Meetings
Schedule of Board meetings
The schedule in respect of the meetings of the Board / Committees thereof to be held during the next financial year and for the
ensuing Annual General Meeting is circulated in advance to all the Members of the Board.
Critical themes for review by the Board
The RBI vide its Circular no. DBR No. BC.93/29.67.001/2014-15 dated 14th May 2015 had prescribed ‘Seven Critical
Themes’ to be reviewed by the Board namely business strategy, financial reports and their integrity, risk, compliance, customer
protection, financial inclusion and human resources. The agenda for Board meetings also includes matters forming part of the
said critical themes, as stipulated by the RBI.
Board agenda
The Board agenda is prepared based on inputs received from the concerned departments of the Bank and finalised in consultation
with the Chairman of the Board of Directors of the Bank. The Board agenda and notes thereof are sent to the Directors in
advance to enable them to read and comprehend the matters to be dealt with and seek further information / clarification.
The Board agenda and notes are uploaded on the Bank’s e-meeting portal wherein the Directors can review the same in a
secure environment and at their convenience. The information relating to schedule of meetings, organization structure, events
and conferences, announcements of material events and various articles about the Bank are also uploaded on the said e-meeting
portal, for the information of the Directors.
The Minutes of the Board meetings are circulated to the Chairman for his review and approval and thereafter circulated to
the other Members of the Board for their comments in accordance with the Secretarial Standards on meetings of the Board of
Directors (SS-1) issued by the Institute of Company Secretaries of India (ICSI).
In case of business exigencies or urgency of matters, resolutions are passed by the Board through circulation. Video conferencing
facilities are also used to facilitate participation by Directors who are unable to physically attend the meetings of the Board or
its Committees. As a matter of good governance, the Directors of the Bank are not allowed to participate in Board meetings
through video conference during deliberations on the agenda items relating to consideration of financial results of the Bank and
other price sensitive matters as prescribed in SS-1.
Committees of the Board
The business of the Board is also conducted through the Committees constituted by the Board to deal with specific matters as per
delegated powers for different functional areas of the Bank and as mandated under the relevant provisions of the Companies
Act, 2013, the relevant Rules made thereunder, the Listing Regulations, Banking Regulation Act, 1949, Guidelines issued by the
RBI, from time to time and the Articles of Association of the Bank.
The Board has constituted 12 Committees, viz., Committee of Directors, Audit Committee, Risk Management Committee,
Stakeholders Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee,
Special Committee of the Board of Directors for Monitoring of Large Value Frauds, Customer Service Committee, IT Strategy
Committee, Review Committee, Acquisitions, Divestments and Mergers Committee and Committee of Whole-time Directors.
The Agenda of the meetings of the Committees is finalised in consultation with the Chairman of the concerned Committees. The
Committees ensure that any feedback or observations made by them during the course of the meetings forms part of the Action
Taken Report for their review at the subsequent meetings. The Chairman of the Committees briefs the Board on the key decisions
taken by the Committee at its meetings.
The Bank in order to facilitate linkages between two Board Committees has appointed Non-Executive Directors as common
members. The Audit Committee of the Board and the Committee of Directors have Shri S. Vishvanathan as a common member.
The Risk Management Committee and the Nomination and Remuneration Committee have Shri Rohit Bhagat as a common
member. The Audit Committee of the Board and the Special Committee of the Board of Directors for Monitoring of Large Value
Frauds have Prof. Samir Barua, Shri Rakesh Makhija and Shri B. Baburao as common members. IT Strategy Committee and
67
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Customer Service Committee have Shri Som Mittal as a common member. The Audit Committee of the Board and the Risk
Management Committee have Prof. Samir Barua as a common member. The Committee of Directors and the Risk Management
Committee have Smt. Ketaki Bhagwati as a common member. The Committee of Directors and the Review Committee have
Shri S. Vishvanathan and Smt. Ketaki Bhagwati as common members.
The terms of reference of the said Committees, their composition and attendance of the members at the meetings of the said
Committees, are detailed as under.
(1) Committee of Directors
The Committee of Directors of the Board (Committee of Directors) comprises of 5 members out of which 3 are Independent
Directors. The Members are Shri S. Vishvanathan, Independent Director (Chairman), Smt. Shikha Sharma, Managing
Director & CEO, Shri Prasad R. Menon, Independent Director, Shri V. Srinivasan, Deputy Managing Director and Smt.
Ketaki Bhagwati, Independent Director of the Bank.
The terms of reference of the Committee of Directors, are as under:
i)
ii)
iii)
iv)
v)
vi)
To review loans sanctioned by Senior Management Committee, provide approvals for loans above certain stipulated
limits, to discuss strategic issues in relation to credit policy and deliberate on the quality of the credit portfolio of the
Bank.
To monitor the exposures (both credit and investments) of the Bank and to consider and approve one time compromise
settlement proposals, in respect of loan accounts which have been written off.
To sanction revenue expenditures relating to the Bank’s business/operations covering all its departments and
business segments, above certain stipulated limits.
To approve expansion of the location of the Bank’s Network of offices, Branches, Extension counters, Automated
Teller Machines, Automated Fare Collection Equipment and Currency chests locally as well as internationally and
review the Annual Branch Expansion Plan and Annual Report of the Branches.
To review investment strategy, periodically review investments made and approve investment related proposals
above certain limits.
To review and approve proposals relating to the Bank’s business/operations covering all its departments and
business segments.
vii)
To ensure compliance with the statutory/regulatory framework, etc. locally as well as internationally.
viii) To discuss issues relating to day to day affairs/problems and to establish systems for facilitating efficient operations
of the Bank.
ix)
x)
xi)
To assess the adequacy of Policies mandated by RBI/other regulators (domestic/overseas) relating to the business/
operations of the Bank on an ongoing basis.
To review loans granted to directors (including the Chairman/Managing Director) of other banks which have been
sanctioned by the Management Committee.
To sanction credit facility extended to any firm/company in which any director of other banks is interested as a
partner/ director or guarantor.
xii) Any other matter as may be authorised by the Board of Directors or required to be done pursuant to any applicable
laws, rules, regulations or as decided by the Management of the Bank.
xiii) Any other matter as may be required to be done pursuant to the Board approved policy of the Bank.
In all, 12 meetings of the Committee of Directors were held during the Financial Year 2017-18 i.e. on 24th May 2017,
22nd June 2017, 11th August 2017, 20th September 2017, 8th November 2017, 15th November 2017, 30th November
2017, 22nd December 2017, 21st January 2018, 30th January 2018, 23rd February 2018 and 22nd March 2018.
68
Annual Report 2017 -18
The details of the meetings of the Committee of Directors attended by the Members during the year 2017-18, are given
below:
Name of the Members
Shri S. Vishvanathan
Smt. Shikha Sharma@
Shri Prasad R. Menon@
Shri V. Srinivasan
Smt. Ketaki Bhagwati
Attendance
Sitting fees
(in `)
12/12
9/12
10/12
12/12
12/12
6,00,000
---
5,00,000
---
6,00,000
The meetings held on 24th May 2017, 20th September 2017, 15th November 2017, 30th November 2017, 22nd December
2017, 21st January 2018, 30th January 2018 and 23rd February 2018 were conducted through video conference.
@Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
(2) Audit Committee
The Audit Committee of the Board of Directors of the Bank (Audit Committee) comprises of 4 members out of which 3
are Independent Directors. The Members are Prof. Samir K. Barua, (Chairman), Shri S. Vishvanathan and Shri Rakesh
Makhija, Independent Directors and Shri B. Baburao, Non-Executive Director of the Bank. The Members of the Audit
Committee are financially literate and have requisite accounting and financial management expertise.
The tenure of Shri V. R. Kaundinya as an Independent Director of the Bank had ceased, with effect from the close of
business hours on Wednesday, 11th October 2017, upon completion of the maximum permissible tenure of 8 continuous
years, under Section 10A (2A) of the Banking Regulation Act, 1949. Accordingly, he ceased to be a member of the Audit
Committee with effect from the said date.
Pursuant to the vacancy caused by the expiry of tenure of Shri V. R. Kaundinya, Shri B. Baburao, Non-Executive Director
was inducted as a member of the Audit Committee w.e.f. 17th October 2017.
The terms of reference of the Audit Committee, are as under:
i)
To provide direction and to oversee the operation of the audit function.
ii)
To review the internal audit system with special emphasis on its quality and effectiveness.
iii)
To review all matters as specified by RBI in the circular on Calendar of Reviews as per RBI Circular dated 10th
November 2010 and notifications, if any, issued from time to time in this regard.
iv)
To review findings of internal and concurrent audit reports.
v)
To discuss the matters related to frauds.
vi)
To discuss and follow up for the audit observations relating to Long Form Audit Report.
vii)
To review the status of compliance with respect to Risk Assessment Report, Risk Mitigation Plan, Scrutiny Reports
issued by RBI and any other domestic/overseas regulators and forensic audit reports by external agencies, if any.
viii) To review the concurrent audit system of the Bank (including the appointment of concurrent auditors) and appointment
of statutory auditors.
ix)
x)
To oversee the Bank’s financial reporting process and the disclosure of its financial information to ensure that the
financial statements are correct, sufficient and credible.
To recommend to the Board, the appointment, re-appointment, remuneration and terms of appointment of the
statutory auditors of the Bank.
69
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
xi)
To approve payments to statutory auditors for any other services rendered by them.
xii)
To review, with the management, the annual financial statements and auditor’s report thereon before submission to
the Board for approval with particular reference to:
• Matters required to be included in the Director’s Responsibility Statement in the Board’s report in terms of
clause (5) of section 134 of the Companies Act, 2013.
•
Changes, if any, in accounting policies & practices and reasons for the same.
• Major accounting entries involving estimates based on the exercise of judgment by the management.
•
•
•
Significant adjustments made in the financial statements arising out of audit findings.
Compliance with listing and other legal requirements relating to financial statements.
Disclosure of any related party transactions.
• Modified opinion in the draft audit report.
xiii) To review with the management, the quarterly financial statements before submission to the Board for approval.
xiv) 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 utilized 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.
xv)
To review with the management, performance and independence of statutory and internal auditors, adequacy of
the internal control systems and effectiveness of audit process.
xvi) To obtain and review reports of the Compliance Officer appointed in the Bank, at stipulated periodicity, in terms of
RBI instructions and circulated to all the functional heads.
xvii) To review the adequacy of internal audit function, if any, including the structure of the internal audit department,
staffing, seniority of the official heading the department, reporting structure, coverage and frequency of internal
audit.
xviii) To discuss with Chief Audit Executive / Internal Auditors any significant audit findings and follow up thereon.
xix) To review the findings of any internal investigations by the internal / statutory 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.
xx)
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.
xxi) To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in
case of non-payment of declared dividends) and creditors.
xxii) To review functioning of the Whistle Blower and Vigilance Mechanism.
xxiii) To approve the appointment of the Chief Financial Officer. The Audit Committee, while approving the said
appointment, shall assess the qualifications, experience & background, etc. of the candidate.
xxiv) To review and approve the appointment, removal and terms of remuneration of the Chief Audit Executive and / or
any change in the incumbency of the Chief Audit Executive of the Bank, along with the reasons for such change.
xxv) To approve any subsequent modification of transactions of the Bank that shall involve related parties.
xxvi) Scrutiny of inter-corporate loans and investments which are not in the ordinary course of business of the Bank.
70
Annual Report 2017 -18
xxvii) Evaluation of internal financial controls and risk management system.
xxviii) Valuation of undertakings or assets of the company, wherever it is necessary.
xxix) Review and approve the change in the incumbency of the Chief Compliance Officer of the Bank.
xxx) Review Segmental Reporting.
xxxi) Review of cases of wilful defaults.
xxxii) Review of the consolidated status of adherence to the arm’s length principle by the subsidiaries /step down
subsidiaries as per the Group Arm’s Length Policy.
xxxiii) Review of the summary of changes in Compliance Officers of the subsidiaries.
The Chief Audit Executive and the Group Executive & Chief Financial Officer of the Bank attend the meetings of the Audit
Committee. The Chief Audit Executive of the Bank directly reports to the Audit Committee of the Board. Prof. Samir K.
Barua, Chairman of the Audit Committee attended the Twenty Third Annual General Meeting of the Shareholders of the
Bank. The Company Secretary of the Bank acts as a secretary to the Audit Committee.
The Audit Committee discusses with the Statutory Auditors, the key highlights of the quarterly and annual financial results
of the Bank, before recommending the same to the Board of Directors of the Bank for their approval. The representatives of
the Statutory Auditors have attended the meetings of the Audit Committee held during the year for review of the quarterly
/annual financial results of the Bank. The Audit Committee also discusses with the Statutory Auditors on matters connected
with the said financial results, without the presence of any executives of the Bank.
In all, 15 meetings of the Audit Committee were held during the Financial Year 2017-18 i.e. on 26th April 2017, 24th
May 2017, 22nd June 2017, 25th July 2017, 18th August 2017, 20th September 2017, 17th October 2017, 23rd October
2017, 8th November 2017, 15th November 2017, 29th November 2017, 21st December 2017, 22nd January 2018, 22nd
February 2018 and 22nd March 2018.
The details of the meetings of the Audit Committee attended by the Members during the year 2017-18, are given below:
Name of the Members
Prof. Samir K. Barua
Shri V. R. Kaundinya@ (Ceased to be a Member w.e.f. the close of business hours on
11th October 2017)
Shri S. Vishvanathan@
Shri Rakesh Makhija@
Shri B. Baburao (inducted as a Member w.e.f. 17th October 2017)
Attendance
Sitting fees
(in `)
15/15
5/6
14/15
14/15
9/9
7,50,000
2,50,000
7,00,000
7,00,000
4,50,000
The meeting held on 20th September 2017 was conducted through video conference.
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
(3) Risk Management Committee
The Risk Management Committee of the Board of Directors of the Bank (Risk Management Committee) comprises of 5
members out of which 4 are Independent Directors. The Members are Prof. Samir K. Barua, (Chairman) and Dr. Sanjiv
Misra, Independent Directors, Smt. Shikha Sharma, Managing Director & CEO, Shri Rohit Bhagat and Smt. Ketaki
Bhagwati, Independent Directors of the Bank.
The terms of reference of the Risk Management Committee, are as under:
i)
To review the status of risk management in the Bank in pursuance of the objectives of the risk strategy of the Bank
71
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
and in terms of the notifications / guidelines issued by the RBI or any other regulators and as assigned by the Board,
from time to time.
ii)
To oversee and advise to the Board, on:
a)
defining risk appetite, tolerance thereof and review the same, as appropriate;
b)
the systems of risk management framework, internal control and compliance to identify, measure, aggregate,
control and report key risks;
c)
the alignment of business strategy with the Board’s risk appetite;
d)
the 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)
To advise the Board on all risk matters.
iv)
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.
v)
To review the asset liability management (ALM) of the Bank on a regular basis.
vi)
To consider any major regulatory issues that may have a bearing on the risk profile and risk appetite of the Bank.
vii)
To provide to the Board such additional assurance as it may require regarding the quality of risk information
submitted to it.
viii) To approve the strategy and policies of the Bank, to ensure well integrated enterprise risk management in the Bank.
ix)
To review risk return profile of the Bank, capital adequacy based on the risk profile 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 significant risk exposures.
x)
To exercise oversight over the risk management function of the Bank.
xi)
To review 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 and to give clear focus to current and
forward-looking aspects of risk exposure.
xii)
To ensure that processes and infrastructure (including staffing, people, systems, operations, limits and controls)
satisfy Bank’s policy on risks.
xiii) To review and approve market risk limits, including triggers or stop-losses for traded and accrual portfolios.
xiv) To ensure certification of financial models – through appointment of qualified and competent staff and the effectiveness
of all systems used to calculate market risk.
xv)
To reinforce the culture and awareness of risk management throughout the organisation.
xvi) To provide guidance and inputs to the Board and the Management on the hiring and reporting structure of the Chief
Risk Officer of the Bank.
xvii) To carry out any additional specific functions that may be laid down by RBI or other regulators from time to time,
including oversight over funding and liquidity management;
xviii) Delegation of authority to the operating teams, operational risk capital methodology etc.
xix) To review the Potential Risks to Credit Portfolio, accentuated level of credit risk and rating migration.
72
Annual Report 2017 -18
xx)
To review Stress Testing Results.
xxi) To review Back-Testing Report.
The Chief Risk Officer (CRO) of the Bank reports directly to the Managing Director & CEO of the Bank. The CRO of
the Bank oversees the risk management function and is responsible for developing and setting the risk management
framework, developing and maintaining systems and processes to identify, approve, measure, monitor, control and report
risks, developing risk controls and mitigation processes, ensuring adherence to the Risk Appetite established by the Board.
The CRO of the Bank is independent of the business lines and is actively involved in key decision making processes. The
CRO of the Bank also meets the Risk Management Committee without the presence of other executive management of the
Bank.
In all, 7 meetings of the Risk Management Committee were held during the Financial Year 2017-18 i.e. on 25th April
2017, 31st May 2017, 21st June 2017, 26th July 2017, 16th October 2017, 23rd January 2018 and 22nd February 2018.
The details of the meetings of the Risk Management Committee attended by the Members during the year 2017-18, are
given below:
Name of the Members
Prof. Samir K. Barua
Dr. Sanjiv Misra@
Smt. Shikha Sharma@
Shri Rohit Bhagat@
Smt. Ketaki Bhagwati@
Attendance
Sitting fees
(in `)
7/7
6/7
6/7
5/7
7/7
3,50,000
3,00,000
---
2,50,000
3,50,000
The meetings held on 31st May 2017, 21st June 2017, 23rd January 2018 and 22nd February 2018 were conducted
through video conference.
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
(4) Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Board of Directors of the Bank (Stakeholders Relationship Committee)
comprises of 2 members. The Members are Shri B. Baburao Non-Executive Director (Chairman) and Shri Rajesh Dahiya,
Executive Director (Corporate Centre) of the Bank.
The tenure of Shri V. R. Kaundinya as an Independent Director of the Bank had ceased, with effect from the close of
business hours on Wednesday, 11th October 2017, upon completion of the maximum permissible tenure of 8 continuous
years, under Section 10A (2A) of the Banking Regulation Act, 1949. Accordingly, he ceased to be a member of the
Stakeholders Relationship Committee, with effect from the said date.
Shri V. R. Kaundinya, erstwhile Chairman of the Stakeholders Relationship Committee had attended the Twenty Third
Annual General Meeting of the Shareholders of the Bank. The Company Secretary of the Bank is the Compliance Officer,
in terms of Regulation 6 of the Listing Regulations.
The terms of reference of the Stakeholders Relationship Committee, are as under:
i)
To review the status of redressal of correspondences / complaints, received from the security holders of the Bank
/ Statutory / Regulatory Authorities, inter alia relating to non-receipt of dividend / interest / refund order /
redemption of debt securities, transfer / transmission of shares, non-receipt of annual report and other related
documents.
ii)
To review the adherence to the service standards adopted by the Bank in respect of various services being rendered
by the Registrar & Share Transfer Agent to its shareholders.
73
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
iii)
To review the various measures / initiatives taken by the Bank inter alia for reducing the quantum of unclaimed
dividends, ensuring timely receipt of dividend warrant / annual report / statutory notice by the shareholders of the
Bank and recommend measures to further enhance the service standards for the benefit of the security holders of the
Bank.
iv)
To review the status of compliance by the Bank under applicable Corporate and Securities laws.
v)
To consider and review such other matters, as the Committee may deem fit, from time to time.
In all, 4 meetings of the Stakeholders Relationship Committee were held during the Financial Year 2017-18 i.e. on 13th
April 2017, 13th July 2017, 13th October 2017 and 15th January 2018.
The details of the Stakeholders Relationship Committee meetings attended by the Members during the year 2017-18, are
given below:
Name of the Members
Attendance
Sitting fees
Shri V. R. Kaundinya (Ceased to be a Member w.e.f. the close of business hours on
11th October 2017)
Shri B. Baburao
Shri Rajesh Dahiya
2/2
4/4
4/4
1,00,000
2,00,000
---
(in `)
The meeting held on 13th April 2017 was conducted through video conference.
(5) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board of Directors of the Bank (Nomination and Remuneration
Committee) comprises of 4 members, all of them being Independent Directors. The Members are Shri Prasad R. Menon
(Chairman), Shri Rohit Bhagat, Shri Rakesh Makhija and Shri Som Mittal.
The tenure of Shri V. R. Kaundinya as an Independent Director of the Bank had ceased, with effect from the close of
business hours on Wednesday, 11th October 2017, upon completion of the maximum permissible tenure of 8 continuous
years, under Section 10A (2A) of the Banking Regulation Act, 1949. Accordingly, he ceased to be a member of the
Nomination and Remuneration Committee with effect from the said date.
Shri Som Mittal, Independent Director was inducted as a member of the Nomination and Remuneration Committee w.e.f.
7th December 2017.
Shri Prasad R. Menon, Chairman of the Nomination & Remuneration Committee attended the Twenty Third Annual
General Meeting of the Shareholders of the Bank.
The terms of reference of the Nomination and Remuneration Committee, are as under:
For Nomination / Governance matters:
i)
ii)
iii)
Review the structure, size, composition, diversity of the Board and make necessary recommendations to the Board
with regard to any changes as necessary and formulation of policy thereon.
Evaluate the skills that exist and those that are absent but needed at the Board level, based on the diversity policy
of the Board and search for appropriate candidates who have the profile to provide such skill sets.
To evaluate the succession planning process adopted by the Bank and suggest suitable course of action, if any,
relating to vacancies that would be required to be filled at Board level on account of retirement / resignation /
expiry of term of Directors, including Chairman.
iv) Advise criteria for evaluation of Individual and Independent Directors, Board as a whole as well as Committees
thereof and shall carry out evaluation of performance of Individual and Independent Directors, Board as a whole
and Committees thereof.
74
Annual Report 2017 -18
v)
vi)
vii)
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 qualification, expertise, track record, integrity, ‘fit and
proper’ criteria, positive attributes and independence (if applicable) and on the basis of the report of performance
evaluation of directors including independent directors and formulate the criteria relating thereto.
To recommend the appointment / re-appointment of Managing Director & CEO and other Whole-Time Directors and
also terms of their appointment including remuneration, for the approval of the Board.
To identify persons who may be appointed in Senior Management position of the Bank, in accordance with the
criteria laid down and recommend their appointment / removal for the approval of the Board.
viii) Formulate and review the Policy on Board Diversity.
For Remuneration / HR matters:
i)
ii)
Review and recommend to the Board for approval, the overall remuneration framework and associated policy of the
Bank (including remuneration policy for Directors, Key Managerial Personnel and other employees of the Bank).
Review and recommend to the Board for approval of the level and structure of fixed pay, variable pay, perquisites,
bonus pool and any other form of compensation as may be included from time to time to all the employees of the
Bank including the Managing Director & CEO, the Whole-time Directors and Senior Management and also annual
revision in remuneration to be made thereof.
iii)
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.
iv)
Recommend to the Board the compensation payable to the Chairman of the Bank.
v)
vi)
Review the Code of Conduct and HR strategy, policy and performance appraisal process within the Bank, as well
as any fundamental changes in organization structure which could have wide ranging or high risk implications.
Review and recommend to the Board for its approval, the talent management and succession policy and process
in the Bank, for ensuring business continuity, especially at the levels of Managing Director & CEO, Whole Time
Directors and Senior Management and other key roles of the Bank and their progression to the Board.
vii)
Review and recommend to the Board for approval the creation of new positions one level below the Managing
Director & CEO of the Bank.
viii) Set the goals, objectives and performance benchmarks for the Bank and for Managing Director & CEO, the Whole
Time Directors and Senior Management for the financial year and over the medium to long term.
ix)
Review the performance of the Managing Director & CEO, the Whole-Time Directors and Senior Management of
the Bank, at the end of every financial year.
x)
Review organization health through feedback from employee surveys conducted on a regular basis.
xi)
Perform such other duties as may be required to be done under any law, statute, rules, regulations etc. enacted by
Government of India, Reserve Bank of India or by any other regulatory or statutory body.
xii) Review and recommend to the Board for approval, the early retirement option scheme for the Whole-Time Directors
and other employees of the Bank.
xiii) Consider and approve the Stock based compensation for all the employees of the Bank including the Managing
Director & CEO, the Whole-time Directors, Senior Management and other eligible employees of the Bank, in terms
of the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended, from time
to time.
In all, 8 meetings of the Nomination and Remuneration Committee were held during the Financial Year 2017-18 i.e. on
25th April 2017, 15th May 2017, 22nd June 2017, 24th July 2017, 16th October 2017, 7th December 2017, 22nd January
2018 and 23rd March 2018.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The details of the meetings of the Nomination and Remuneration Committee attended by the Members during the year
2017-18, are given below:
Name of the Members
Shri Prasad R. Menon
Shri Rohit Bhagat
Shri Rakesh Makhija
Shri V. R. Kaundinya (Ceased to be a Member w.e.f. the close of business hours on
11th October 2017)
Shri Som Mittal (inducted as a Member w.e.f. 7th December 2017)
Attendance
Sitting fees
(in `)
8/8
8/8
8/8
4/4
2/2
4,00,000
4,00,000
4,00,000
2,00,000
1,00,000
The meetings held on 25th April 2017, 15th May 2017, 22nd June 2017 and 7th December 2017 were conducted through
video conference.
(6) Special Committee of the Board of Directors for Monitoring of Large Value Frauds
The Special Committee of the Board of Directors for Monitoring of Large Value Frauds of the Bank (Special Committee for
Monitoring of Large Value Frauds) comprises of 5 members out of which 2 are Independent Directors. The Members are
Prof. Samir K. Barua, Independent Director (Chairman), Smt. Shikha Sharma, Managing Director & CEO, Shri Rakesh
Makhija, Independent Director, Shri B. Baburao, Non-Executive Director and Shri Rajesh Dahiya, Executive Director
(Corporate Centre) of the Bank.
The major functions of the Special Committee for Monitoring of Large Value Frauds are to monitor and review all the frauds
of `10 million and above and the terms of reference of the Committee, are as under:
i)
Identify the systemic lacunae, if any that facilitated perpetration of the fraud and put in place measures to plug the
same.
ii)
Identify the reasons for delay, in detection, if any and reporting to top management of the Bank and RBI.
iii) Monitor progress of CBI / Police investigation and recovery position.
iv)
v)
Ensure that staff accountability is examined at all levels in all the cases of frauds and staff side action, if required,
is completed quickly without loss of time.
Review the efficacy 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.
vii)
To review the reporting of all identified accounts to Central Fraud Monitoring Cell (CFMC), RBI as per existing cut-
offs and to review reporting of all accounts beyond `500 million classified as RFA or ‘Frauds’ on the CRILC data
platform with the dates on which the accounts were classified as such as per the existing cut-offs.
viii) To consider and approve the Policy prescribing the process to be adopted by the Financial Crime Management
Department of the Bank to implement the directions of the Committee, subject to review by the Board.
ix)
x)
To review cyber frauds and specifically monitor the progress of the mitigating steps taken by the Bank in such cases
and the efficacy of the same in containing fraud numbers and values.
To review functioning of the Fraud Review Council (FRC) with regard to fraud trends and preventive steps taken by
the business groups within the Bank to prevent/curb the frauds.
xi)
To review the Fraud Risk Management process, Fraud Monitoring and Fraud Investigation Function of the Bank.
In all, 5 meetings of Special Committee for Monitoring of Large Value Frauds were held during the Financial Year 2017-18
i.e. on 22nd June 2017, 20th September 2017, 29th November 2017, 21st December 2017 and 22nd March 2018.
76
Annual Report 2017 -18
The details of the meetings of the Special Committee for Monitoring of Large Value Frauds attended by the Members
during the year 2017-18, are given below:
Name of the Members
Attendance
Sitting fees
(in `)
Prof. Samir Barua
Smt. Shikha Sharma@
Shri Rakesh Makhija
Shri B. Baburao@
Shri Rajesh Dahiya@
5/5
4/5
5/5
4/5
4/5
2,50,000
---
2,50,000
2,00,000
---
No meeting of the Committee was conducted through video conference.
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
(7) Customer Service Committee
The Customer Service Committee of the Board of Directors of the Bank (Customer Service Committee) comprises of 3
Members out of which 1 is an Independent Director. The Members are Shri Som Mittal, Independent Director (Chairman),
Shri B. Baburao, Non-Executive Director and Shri Rajiv Anand, Executive Director (Retail Banking) of the Bank.
The terms of reference of the Customer Service Committee, are as under:
i)
Overseeing the functioning of the Bank’s Standing Committee on Customer Service.
ii)
To review the level of customer service in the Bank including customer complaints and the nature of their resolutions.
iii)
Provide guidance in improving the customer service level / customer care aspects in the Bank.
iv)
v)
vi)
Review awards given by the Banking Ombudsman in respect of a complaint filed by any customer with the
Ombudsman and also to review awards remaining unimplemented for more than three months with the reason(s)
thereof.
To ensure that the Bank provides and continues to provide, best-in-class service across all its category of customers
which will help it 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 operation of his account, the product approval process with a view to its
suitability and appropriateness, the annual survey of depositor satisfaction and the triennial audit of such services.
vii)
The Committee could also examine any other issues having a bearing on the quality of customer service being
rendered by the Bank including the root cause analysis of the Complaints being made.
viii) To ensure implementation of the directives issued by the RBI, from time to time, with respect to rendering services to
customers of the Bank.
ix)
To review the customer complaints received against subsidiaries of the Bank.
x)
To review the status of providing ramp facility at the branches of the Bank, for the benefit of the disabled customers
of the Bank to access the branch and conduct banking transactions without any difficulties and to review the status
of implementation of recommendations made by the Committee for providing other services for the benefit of
physically disabled customers of the Bank.
xi)
To review the progress made by the Bank relating to converting all existing ATMs as talking ATMs with Braille
keypads for the benefit of blind customers.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
xii)
To review the details of claims received pertaining to deceased depositors / locker-hirers / depositors of safe
custody article accounts and those pending beyond the stipulated period and reasons thereof.
In all, 5 meetings of the Customer Service Committee were held during the Financial Year 2017-18 i.e. on 3rd April 2017,
25th April 2017, 26th July 2017, 17th October 2017 and 23rd January 2018. The details of the meetings of the Customer
Service Committee attended by the Members during the year 2017-18, are given below:
Name of the Members
Attendance
Sitting fees
(in `)
Shri Som Mittal
Shri B. Baburao@
Shri Rajiv Anand
5/5
4/5
5/5
2,50,000
2,00,000
---
The meeting held on 3rd April 2017 was conducted through video conference.
@ Leave of absence was granted to the concerned Member who had expressed his inability to attend the respective
meeting.
(8)
IT Strategy Committee
The IT Strategy Committee of the Board of Directors of the Bank (IT Strategy Committee) comprises of 5 Members out of
which 2 are Independent Directors. The Members are Shri Som Mittal, (Chairman) and Shri Prasad R. Menon, Independent
Directors, Smt. Shikha Sharma, Managing Director & CEO, Shri V. Srinivasan, Deputy Managing Director and Shri Rajiv
Anand, Executive Director (Retail Banking) of the Bank.
The terms of reference of the IT Strategy Committee, are as under:
i)
Approving IT strategy and policies.
ii)
Ensuring that management has an effective IT strategic planning process in place.
iii)
Ensuring and ratifying that the business strategy is aligned with the IT strategy.
iv)
Ensuring that the IT organizational structure serves business requirements and direction.
v) 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 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.
x)
Assessing if IT architecture has been designed to derive maximum business value.
xi)
Reviewing IT performance measurement and contribution to businesses.
xii)
To approve capital and revenue expenditure in respect of IT procurements.
xiii) Ensuring IT investments represent a balance of risks and benefits and that budgets are acceptable.
xiv) Assessing Senior Management’s performance in implementing IT strategies.
xv) Overseeing the aggregate funding of IT at a bank-level and ascertaining if the management has resources to ensure
the proper management of IT risks.
78
Annual Report 2017 -18
xvi) Ensuring that the IT organizational structure complements the business model and its direction.
xvii) Review the activities of the IT Steering Committee.
xviii) Reviewing strategy for addressing cyber security risks and review of related issues.
xix) Review of the IT related frauds, if any.
In all, 7 meetings of IT Strategy Committee were held during the Financial Year 2017-18 i.e. on 15th June 2017, 12th
September 2017, 9th November 2017, 18th December 2017, 23rd January 2018, 15th March 2018 and 22nd March
2018.
The details of the meetings of the IT Strategy Committee attended by the Members during the year 2017-18, are given
below:
Name of the Members
Attendance
Sitting fees
(in `)
Shri Som Mittal
Shri Prasad R. Menon
Smt. Shikha Sharma@
Shri V. Srinivasan@
Shri Rajiv Anand@
7/7
7/7
6/7
4/7
6/7
3,50,000
3,50,000
---
---
---
The meeting held on 18th December 2017 was conducted through video conference
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
(9) Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board of Directors of the Bank (CSR Committee) comprises of 3
members out of which 1 is an Independent Director. The Members are Shri Som Mittal, Independent Director (Chairman),
Shri Rajesh Dahiya, Executive Director (Corporate Centre) and Shri Rajiv Anand, Executive Director (Retail Banking) of the
Bank.
The terms of reference of CSR Committee, are as under:
i)
ii)
iii)
iv)
v)
vi)
Formulating and recommending to the Board, the Corporate Social Responsibility (CSR) strategy of the Bank
including the CSR Policy, its implementation and review such that the Bank’s social, environmental and economic
activities are aligned.
Reviewing and approving, the CSR activities to be undertaken by the Bank either directly or through Axis Bank
Foundation and determining the CSR projects / programmes which the Bank plans to undertake during the year of
implementation, specifying modalities of execution in the areas / sectors chosen and implementation schedules for
the same.
Recommending the amount of expenditure to be incurred on the CSR activities in accordance with Section 135(5)
of the Companies Act, 2013.
Review and monitor the compliance of initiatives undertaken and evaluate performance of the activities against the
agreed targets.
Conduct an impact assessment of the various initiatives undertaken in terms of the CSR Policy of the Bank at periodic
intervals.
Instituting a transparent monitoring mechanism for ensuring implementation of the projects / programs / activities
proposed to be undertaken by the Bank.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
vii)
Reviewing and recommending the annual CSR report for the Board’s approval and for public disclosure.
viii) Performing such other duties with respect to CSR activities, as may be required to be done by the Bank under
any law, statute, rules, regulations etc. enacted by Government of India, Reserve Bank of India or by any other
regulatory or statutory body.
The details of the CSR activities undertaken by the Bank during the year under review have been provided in the annexure
to the Directors’ report.
In all, 4 meetings of CSR Committee were held during the Financial Year 2017-18 i.e. on 15th June 2017, 13th September
2017, 18th December 2017 and 15th March 2018.
The details of the CSR Committee meetings attended by the Members during the year 2017-18, are given below:
Name of the Members
Attendance
Sitting fees
(in `)
Shri Som Mittal
Shri Rajesh Dahiya
Shri Rajiv Anand
No meeting was conducted through video conference.
(10) Review Committee
4/4
4/4
4/4
2,00,000
---
---
The Review Committee of the Board of Directors of the Bank (Review Committee) comprises of 3 members out of which
2 are Independent Directors. The Members are Smt. Shikha Sharma, Managing Director & CEO (Chairperson), Shri S.
Vishvanathan and Smt. Ketaki Bhagwati, Independent Directors of the Bank.
Shri V. Srinivasan, Deputy Managing Director of the Bank stepped down as a Member of the Review Committee w.e.f.
11th July 2017.
The terms of reference of the Review Committee, are as under:
i)
ii)
To review and confirm the Order(s) passed by the said Internal Committee identifying a borrower as a Wilful Defaulter,
in terms of Para 3 (c) of the RBI Master Circular No. RBI/2015-16/100 DBR.No.CID. BC.22/20.16.003/2015-16
dated 1st July 2015.
To review and confirm the Order(s) passed by the said Internal Committee identifying a borrower as a Non-cooperative
borrower, in terms of Para 2 (d) of RBI Circular No. RBI/2014-15/362 DBR.No.CID. BC.54/20.16.064/2014-15
dated 22nd December 2014.
iii)
To review the information relating to the Non-cooperative borrowers to be submitted to Central Repository of
Information on Large Credits (CRILC).
In all, 3 meetings of Review Committee were held during the Financial Year 2017-18 i.e. on 24th July 2017, 11th August
2017 and 20th September 2017.
The details of the meetings of the Review Committee attended by the Members during the year 2017-18, are given below:
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Annual Report 2017 -18
Name of the Members
Smt. Shikha Sharma
Shri S. Vishvanathan
Smt. Ketaki Bhagwati
Shri V. Srinivasan (ceased to be a Member w.e.f. 11th July 2017)
The meeting held on 20th September 2017 was conducted through video conference.
(11) Acquisitions, Divestments and Mergers Committee
Attendance
Sitting fees
(in `)
3/3
3/3
3/3
0/0
---
1,50,000
1,50,000
---
The Acquisitions, Divestments and Mergers Committee of the Board of Directors of the Bank (ADAM Committee) comprises
of 4 Members out of which 3 are Independent Directors. The Members are Shri Prasad R. Menon, Independent Director
(Chairman), Smt. Shikha Sharma, Managing Director & CEO, Shri Rohit Bhagat and Shri Rakesh Makhija, Independent
Directors of the Bank.
The terms of reference of ADAM Committee, are as under:
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 final decision.
i)
Strategic investments are distinct from financial investments. The basic parameters for defining such investments are:
•
•
Acquisition of greater than 25% stake in a company.
Acquisition of stake in a company where the proportion is 25% or lower but where the Bank intends to have
management participation. (However, these would exclude cases where the stake is acquired under a loan-
restructuring / CDR arrangement or where shares are pledged to the Bank against credit facilities).
ii)
Strategic divestments
•
Sale of an existing business of the Bank (as distinct from the sale of assets in the normal course of business
such as sale of loans / investment portfolios, sale of assets to ARCs and fixed assets).
iii) Acquisition of business
•
Business takeover / acquisition as distinct from portfolio or asset purchase (As distinct from the normal
purchase of loans/investment portfolios, purchase of assets etc. If the purchase of a portfolio is accompanied
by other integral elements of the business such as manpower, technology or a distribution franchise, a
reference should be made to the Committee).
iv)
Sale of stake (including minority stake) in strategic investments/ subsidiaries.
In all, 5 meetings of ADAM Committee were held during the Financial Year 2017-18 i.e. on 24th July 2017, 11th August
2017, 16th October 2017, 7th December 2017 and 23rd March 2018.
The details of the meetings of the ADAM Committee attended by the Members during the year 2017-18, are given below:
Name of the Members
Shri Prasad R. Menon
Smt. Shikha Sharma
Shri Rohit Bhagat
Shri Rakesh Makhija
The meeting held on 7th December 2017 was conducted through video conference.
Attendance
Sitting fees
(in `)
5/5
5/5
5/5
5/5
2,50,000
---
2,50,000
2,50,000
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
(12) Committee of Whole-Time Directors
The Committee of Whole-Time Directors of the Board of Directors of the Bank (COWTD) comprises of 4 Members. The
Members are Smt. Shikha Sharma, Managing Director & CEO (Chairperson), Shri V. Srinivasan, Deputy Managing
Director, Shri Rajiv Anand, Executive Director (Retail Banking) and Shri Rajesh Dahiya, Executive Director (Corporate
Centre) of the Bank.
The terms of reference of COWTD, are as under:
i)
Issuance of Power of Attorney to various officials of the Bank.
ii)
Allotment of equity shares under ESOP scheme.
iii)
Issue of Duplicate Share Certificates in Lieu of original Share Certificates Lost / Misplaced.
iv) Annual Branch Expansion Plan approved by the Board: Substitution of Branch Centres / New Specialised & CPC /
Service Branches / Rural Unbanked Centre.
v)
Review of the Security measures in branches and ATMs.
vi)
Interest Rates on Deposits.
vii)
Investments / Disinvestments in SLR securities & Derivatives deals during the month.
viii) Review of Non SLR activities for the month.
ix)
Review of the Domestic Funds Management and SLR Investments for the month.
x)
Correspondent Banking Relationship – Opening of Nostro and Vostro Accounts.
xi)
Empanelment/Dis-Empanelment of Broker for FC- INR Option Market Segment, Derivative Segment, Equity and
Wholesale Debt Market Segment.
xii) Quarterly report on Customer Service for Exporters.
xiii) Money Market Operations – Deals through approved brokers.
xiv) Modification/ Changes in Service Charges.
xv)
Reporting of the Debenture Trustee Activities.
xvi) To apply for registration of the Company with various authorities of any State or Centre including sales tax authorities,
income tax authorities, shops & establishment authorities and to do or perform all matters relating to the above.
xvii) To authorise persons to represent the Bank at General Meetings of any company, association of persons, cooperative
society or any institution, of which the Bank is a shareholder/member.
xviii) To authorise employee(s) or others to execute, for and on behalf of the Bank, agreements, applications, deeds,
documents and any other writings in connection with the business of the Bank.
xix) Appointment of Trustees for Employees Welfare Trust, Employees Group Gratuity Assurance Scheme, Provident
Fund, Employees Superannuation Scheme of the Bank.
xx) Approval of On-Boarding of Co-operative Banks.
xxi) Approval/Ratification of Risk Policies of Overseas Branches.
xxii) Setting up/Enhancement of New Counterparty Exposure Limits - under Exception Route.
xxiii) To review status of events escalated.
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Annual Report 2017 -18
xxiv) Any other matter as may be authorised by the Board of Directors/Board Level Committees or required to be done
pursuant to any laws, rules, regulations or any internal circular of the Bank.
xxv) Any other routine administrative matters.
xxvi) To review and approve the Early Retirement Option Scheme to be offered to Whole-Time Directors and Employees
of the Bank.
xxvii) Reviewing Rupee Drawing Arrangement (RDA) with Non-Resident Exchange Houses;
xxviii) Reviewing Status Report on Stock Audit conducted
xxix) To ratify Credit appraisal cases with rating below AB- BBB+;
xxx) To approve the Bank’s Sustainability Framework and review the Bank’s Sustainability Performance including public
disclosures in the form of Sustainability Report and any other such sustainability disclosures.
xxxi) Approve the allotment of Debt securities issued by the Bank, including, but not limited to long term bonds, green
bonds, non-convertible debentures, perpetual debt instruments, Tier II Capital Bonds or such other debt securities as
may be permitted under the RBI guidelines, from time to time, in domestic and/or overseas market, in one or more
tranches, on a private placement basis or in such manner as may be permitted by RBI.
xxxii) Approve the allotment of any other Securities issued by the Bank.
In all, 11 meetings of COWTD were held during the Financial Year 2017-18 i.e. on 10th May 2017, 15th June 2017, 11th
August 2017, 28th September 2017, 30th October 2017, 27th November 2017, 12th December 2017, 18th December
2017, 29th January 2018, 19th February 2018 and 26th March 2018. No sitting fees are paid to the Members of the
COWTD, for participating in the said meetings.
The details of the COWTD meetings attended by the Members during the year 2017-18, are given below:
Name of the Members
Smt. Shikha Sharma@
Shri V Srinivasan
Shri Rajiv Anand@
Shri Rajesh Dahiya@
Attendance
Sitting fees
(in `)
10/11
11/11
10/11
9/11
---
---
---
---
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective
meetings.
Special Meeting of Independent Directors
During the year under review, the Independent Directors of the Bank met on 27th April 2017 and 22nd January 2018 without the
presence of the Non-Independent Directors and Members of the Senior Management of the Bank.
At the said meetings, the Independent Directors of the Bank inter alia reviewed the performance of the Non-Independent
Directors and the Board as a whole, reviewed the performance of the Chairman of the Bank taking into account the views of
the Executive and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the
Management and the Board which is necessary for them to effectively and reasonably perform their duties.
No sitting fees were paid to the Independent Directors of the Bank for participating in the said meetings.
Remuneration Policy
The Bank has formulated and adopted a Comprehensive Remuneration Policy for its Directors, Key Managerial Personnel and
Employees of the Bank, in terms of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder, Regulation 19
of the Listing Regulations and the Guidelines issued by the RBI, in this regard, from time to time. The said policy was reviewed
and approved by the Board of Directors of the Bank at its meeting held on 25th July 2017.
83
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The Bank’s remuneration practices are underpinned by principles of meritocracy and fairness. The remuneration system strives
to maintain the ability to attract, retain, reward and motivate talent in order to enable the Bank to attain its strategic objectives
within the increasingly competitive context in which it operates. The Bank’s pay-for- performance approach strives to ensure that
both internal and external equity are in line with the emerging market trends.
The Bank strives to ensure that the compensation practices are in line with the extant compensation regulations as applicable.
The remuneration paid to all the employees is in accordance with the said Policy of the Bank.
Remuneration of Directors
i.
Dr. Sanjiv Misra was appointed as the Non-Executive (Part-time) Chairman of the Bank, for a period of three years, with
effect from 18th July 2016. The details of remuneration paid to Dr. Sanjiv Misra, in terms of the approvals granted by the
Reserve Bank of India and the Shareholders of the Bank for the Financial year 2017-18, are as under:
For the period
1st April 2017 up to 17th July 2017
18th July 2017 up to 31st March 2018
Remuneration
`2,50,000 per month
`2,75,000 per month
Company Car
Free use of Bank’s Car for official and private purposes
Free use of Bank’s Car for official and private purposes
Touring
Travelling and Official expenses to be borne by the
Bank for Board functions as a Chairman
Travelling and Official expenses to be borne by the
Bank for Board functions as a Chairman
Sitting Fees
As payable to other Non- Executive Directors
As payable to other Non- Executive Directors
ii.
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 2015. The Board of Directors of the Bank had approved the revision in the remuneration payable to Smt. Shikha
Sharma as the Managing Director & CEO of the Bank, for the period from 1st June 2017 to 31st May 2018, which was
approved by the RBI and the Shareholders of the Bank. The details of remuneration paid to Smt. Shikha Sharma during
the year under review, in terms of the approvals granted by the RBI and the Shareholders of the Bank, are given below in
sub-para vii.
Smt. Shikha Sharma was granted 78,40,000 options, in various tranches under the various Employee Stock Option
Schemes of the Bank, since 1st June 2009 being the date of her appointment as the Managing Director & CEO of the
Bank. Out of the above, 63,10,000 options have been vested, 39,75,000 options have been exercised and the balance
23,35,000 options remain unexercised, as on 31st March 2018. Further, 15,30,000 options remain unvested, as on
31st March 2018.
iii.
Shri V. Srinivasan was appointed as the Deputy Managing Director of the Bank for a period of 3 years, w.e.f. 21st
December 2015. The Board of Directors of the Bank had approved the revision in the remuneration payable to Shri V.
Srinivasan as the Deputy Managing Director of the Bank, for the period from 1st June 2017 to 31st May 2018, which was
approved by the RBI and the Shareholders of the Bank. The details of the remuneration paid to Shri V. Srinivasan during
the year under review, in terms of the approvals granted by the RBI and the Shareholders of the Bank, are given below in
sub-para vii.
Shri V. Srinivasan was granted 38,75,000 options, in various tranches under the various Employee Stock Option Schemes
of the Bank, since 7th September 2009 being the date of his appointment as the Executive Director & Head (Corporate
Banking) of the Bank. Out of the above, 30,25,000 options have been vested, 17,50,000 options have been exercised
and the balance 12,75,000 options remain unexercised, as on 31st March 2018. Further, 8,50,000 options remain
unvested, as on 31st March 2018.
iv.
Shri Rajiv Anand was appointed as the Executive Director (Retail Banking) of the Bank, for a period of 3 years w.e.f. 4th
August 2016. The Board of Directors of the Bank had approved the revision in the remuneration payable to Shri Rajiv
Anand as the Executive Director (Retail Banking) of the Bank, for the for the period from 1st June 2017 to 31st May 2018,
which was approved by the RBI and the Shareholders of the Bank. The details of remuneration paid to Shri Rajiv Anand
during the year under review, in terms of the approval granted by the RBI and the Shareholders of the Bank, are given
below in sub-para vii.
Shri Rajiv Anand was granted 19,20,000 options, in various tranches under the various Employee Stock Option Schemes
of the Bank, since 30th March 2009 being the date of his appointment as the Managing Director & CEO of Axis
Asset Management Company Limited, subsidiary of the Bank. Out of the above, 13,64,000 options have been vested,
8,25,000 options have been exercised and the balance 5,39,000 options remain unexercised, as on 31st March 2018.
Further, 5,56,000 options remain unvested, as on 31st March 2018.
84
Annual Report 2017 -18
v.
Shri Rajesh Dahiya was appointed as the Executive Director (Corporate Centre) of the Bank, for a period of 3 years w.e.f.
4th August 2016. The Board of Directors of the Bank had approved the revision in the remuneration payable to Shri Rajesh
Dahiya as the Executive Director (Corporate Centre) of the Bank, for the period from 1st June 2017 to 31st May 2018,
which was approved by the RBI and the Shareholders of the Bank. The details of remuneration paid to Shri Rajesh Dahiya
during the year under review, in terms of the approval granted by the RBI and the Shareholders of the Bank, are given
below in sub-para vii.
Shri Rajesh Dahiya was granted 11,67,500 options, in various tranches under the various Employee Stock Option
Schemes of the Bank, since 1st June 2010 being the date of his appointment as the President (Human Resources) of the
Bank. Out of the above, 6,85,000 options have been vested, 3,77,000 options have been exercised and the balance
3,08,000 options remain unexercised, as on 31st March 2018. Further, 4,82,500 options remain unvested, as on 31st
March 2018.
vi.
The Bank does not grant Stock Options to its Non-Executive Directors. The Non-Executive Directors of the Bank are eligible
to receive sitting fees for the meetings of the Board / Committees, attended by them and to Profit Linked Commission
(except for Non-Executive (Part-Time) Chairman), in terms of the RBI circular dated 1st June 2015 on Guidelines on
Compensation of Non-executive Directors of Private Sector Banks.
vii.
The Whole-Time Directors of the Bank are not entitled to receive any sitting fee from the Bank or from its Subsidiary
Companies.
The details of remuneration paid to the Whole-Time Directors of the Bank during the financial year 2017-18, in terms of
the approval(s) granted by the RBI and the Shareholders of the Bank, are as under:
(in `)
Smt. Shikha Sharma
Shri V. Srinivasan
Shri Rajiv Anand
Shri Rajesh Dahiya
Salary (Basic)
Leave Fare Concession
facility
House Rent Allowance
Deferred Variable pay
(for 2013-14 and 2014-15)
2,90,97,336
14,76,000
97,05,336
44,09,897
2,06,14,000
1,51,94,698
1,33,57,954
6,05,004
5,49,996
5,49,996
51,52,000
11,62,855
50,14,248
-
-
-
Superannuation Allowance
/ Fund
10% of Basic pay (fund
contribution)
20,61,400
15,19,467
13,35,793
Perquisites (excluding ESOP)
32,08,204
10,83,946
20,86,639
21,91,364
Provident Fund (Bank
Contribution)
Gratuity
12 % of Basic Pay
12 % of Basic Pay
12 % of Basic Pay
12 % of Basic Pay
One month’s salary for
each completed year of
service
One month’s salary for
each completed year of
service
One month’s salary for
each completed year of
service
One month’s salary for
each completed year
of service
Perquisites (evaluated as per Income Tax Rules, 1962, wherever applicable, or otherwise at actual cost to the Bank) such
as Bank’s furnished accommodation, electricity, water and furnishings, club fees, personal accident insurance, loans,
use of car and telephone at residence, leave encashment, medical reimbursement, travelling and halting allowances,
newspapers and periodicals and others were provided in accordance with the Rules of the Bank.
Whilst the approval of the RBI for revision in the remuneration payable to the Managing Director & CEO, the Deputy
Managing Director and the Whole-time Directors of the Bank for the period 1st June 2017 to 31st May 2018 and for grant
of stock options has been received, the approval for payment of variable pay for the financial year 2016-17, to the said
Directors of the Bank, is awaited.
The Bank does not pay any severance fees to its Managing Director & CEO or to its Whole-Time Directors. The tenure
of the office of the Managing Director & CEO and the Whole-time Directors of the Bank is effective for a period of three
years from date of their respective appointment and/or as approved by the RBI and the same can be terminated by either
party by giving three months’ notice in writing.
85
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
viii. All the Non-Executive Directors of the Bank were paid siting fees of `1,00,000 for every meeting of the Board and
`50,000 for every meeting of the Committee of the Board attended by them. The details of the sitting fees paid to the
Non-Executive Directors of the Bank during the financial year 2017-18, are as under:
Name of Director
Dr. Sanjiv Misra
Shri V. R. Kaundinya (Term expired w.e.f. the close of business hours on 11th October 2017)
Shri Prasad R. Menon
Prof. Samir K. Barua
Shri Som Mittal
Shri Rohit Bhagat
Smt. Usha Sangwan@
Shri S. Vishvanathan
Shri Rakesh Makhija
Smt. Ketaki Bhagwati
Shri B. Baburao@
Shri Stephen Pagliuca [appointed as an Additional Non-Executive (Nominee)
Director w.e.f. 19th December 2017]
Total
(in `)
Sitting Fees
12,00,000
7,50,000
24,00,000
22,50,000
16,00,000
18,00,000
6,00,000
22,50,000
25,00,000
20,00,000
19,50,000
2,00,000
1,95,00,000
@The sitting fees paid to Smt. Usha Sangwan (Nominee Director – LIC) and Shri B. Baburao (Nominee Director – SUUTI)
for attending the meetings of the Board / Committees thereof, have been credited to the bank account of LIC and SUUTI,
respectively.
As on 31st March 2018, none of the Non-Executive Directors of the Bank held any equity shares of the Bank.
ix.
The following Non-Executive Directors of the Bank were eligible for Profit Linked Commission, for the financial year 2016-17,
in terms of the RBI Circular No.DBR. No.BC.97/29.67.001/2014-15 dated 1st June 2015 on Guidelines on Compensation
of Non-Executive Directors of Private Sector Banks, which was paid to them during the financial year 2017-18, detailed as
under:
Name of Director
Dr. Sanjiv Misra#
Shri V. R. Kaundinya
Shri Prasad R. Menon
Prof. Samir K. Barua
Shri Som Mittal
Shri Rohit Bhagat
Smt. Usha Sangwan@
Shri S. Vishvanathan
Shri Rakesh Makhija
Smt. Ketaki Bhagwati
Shri B. Baburao@
Total
(in `)
Profit Linked
Commission
1,83,562
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
1,01,83,562
# The profit linked commission was paid to Dr. Sanjiv Misra in his capacity as an Independent Director of the Bank, for the
period from 12th May 2016 to 17th July 2016 (both days inclusive).
@ The profit linked commission paid to Smt. Usha Sangwan (Nominee Director – LIC) and Shri B. Baburao (Nominee
Director – SUUTI) have been credited to the bank account of LIC and SUUTI, respectively.
86
Annual Report 2017 -18
Evaluation of Board’s Performance
The performance evaluation of the Board as a whole as well as that of its Committees, Independent Directors and Non
Independent Directors and Chairman of the Board was done in accordance with the relevant provisions of the Companies Act,
2013, the relevant Rules made thereunder and the Listing Regulations relating to Corporate Governance.
The NRC reviews and advises the criteria for such evaluation process and overseas the performance evaluation. Pursuant to the
recommendation of the NRC, the Board has adopted a formal mechanism for evaluating the performance of its Committees,
Individual Directors including the Independent Directors and Non-Independent Directors, the Chairman of the Board and the
Board as a whole.
The Bank had engaged the services of an external agency for setting the methodology and determining the process of such
evaluation and advising the Board on the measures pursuant to outcome of such evaluation.
The said evaluation was conducted on the various aspects of the Board’s functioning such as Strategic alignment and direction,
Engagement alignment, Composition & structure, Dynamics & culture, Ethical leadership & corporate citizenship, Board support,
Performance of key Committees, Self-evaluation and Attendance.
Familiarisation Programme for Independent Directors
The Bank has conducted the familiarisation programme for its Independent and Non-Executive Directors covering the matters as
specified under Regulation 25 (7) of the Listing Regulations. The details of the same have been uploaded on the website of the
Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report.
Induction Programme for new Directors
The new Directors are inducted through one to one meetings with the Managing Director & CEO, Whole-time Directors and
other members of the Senior Management on issues relating to business strategy, regulatory environment, business plans and
key performance indicators. They are also provided with information relating to the finances and operations of the Bank,
the organization structure and their roles, duties and responsibilities. On appointment, the Directors are issued a Letter of
Appointment setting out the terms and conditions relating to their appointment and their duties and responsibilities under
applicable laws.
Disclosure in terms of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013
The Bank has formulated and adopted a policy on prevention of sexual harassment at workplace and takes all necessary
measures to ensure a harassment-free workplace and has instituted an Internal Complaints Committee for redressal of complaints
and to prevent sexual harassment. The Bank believes that all employees, including other individuals who are dealing with the
Bank have the right to be treated with dignity.
The following is a summary of sexual harassment complaints received and disposed off by the Bank, during the financial year
2017-2018:
Number of complaints of sexual harassment received during the year - 47
Number of complaints disposed off during the year – 43
Number of cases pending for more than 90 days – 2 (There are two cases which have exceeded the desired TAT).
Please find below a brief explanation for the delay in TAT:
Case 1: The Complainant was not an Axis Bank employee but was appointed by Axis Bank as a trainer. Inspite of repeated
follow ups by Axis Bank, there was delay by the Complainant’s employer to revert with the information requested for examining
the case.
Case 2: Show Cause Notice was issued to the Respondent, however he did not attend the personal hearing scheduled. A second
chance was provided to the Respondent in which he presented himself in front of the CICC. Thereafter the case was closed.
87
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Number of workshops/awareness programme conducted against sexual harassment carried out – 15
Nature of action taken by the Employer or District Officer – As per the Bank’s Staff Rules.
The said Committee takes appropriate action against the employee(s) who have violated the norms prescribed under the Policy,
which includes disciplinary action such as issuance of warning letter and in some cases termination of employment depending
upon the gravity of the violation.
Whistleblower Policy & Vigil Mechanism
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, the Bank has formulated a Whistleblower Policy and Vigil Mechanism which is in compliance with the
relevant provisions of Section 177(9) of the Companies Act, 2013, Rules made thereunder and Regulation 4(2)(d) of the
Listing Regulations. The Policy provides an 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 an offence, the Policy enables the Bank’s staff to report the
concerns directly to the Chairman of the Audit Committee of the Board. The Policy is intended to encourage reporting of suspected
or actual occurrence of illegal, unethical or inappropriate actions, behaviour or practices by staff without fear of retribution. This
Policy can be used regularly as a tool to voice concerns on irregularities, malpractices and other misdemeanours.
To ensure smooth flow and management of complaints under Whistleblower Policy, a web-based application - ‘Corporate
Whistleblower’ has been set up which also provides an option for anonymous reporting thereby enabling lodging of 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 speaking up so that preventive action is initiated.
It is hereby affirmed that the Bank has not denied any of its personnel access to the Chairman of the Audit Committee of the
Board and that the Policy contains adequate provisions protecting Whistle blowers from unfair termination and other unfair
prejudicial and employment practices.
The Audit Committee of the Board has reviewed, on a quarterly basis, a synopsis of the complaints received and the resolution
thereof under the said Policy.
The details of the Whistleblower Policy and Vigil Mechanism are available on the Bank’s website at https://www.axisbank.
com/code-commitment-customers.aspx.
Subsidiary Companies
The Bank does not have any unlisted Indian subsidiary company which could be deemed to be a material subsidiary, in
terms of Regulation 16(1)(c) of the Listing Regulations. Further, the minutes of the Board meetings of all the unlisted subsidiary
companies of the Bank are tabled at the meetings of the Board of Directors of the Bank for its review. Also, the minutes of the
Audit Committee meetings of all the unlisted subsidiary companies of the Bank are tabled at the meetings of the Audit Committee
of the Bank for its review. The Statement of significant transactions / arrangements, if any, entered into by the unlisted subsidiary
companies of the Bank are also tabled at the meetings of the Board of the Bank, for its review.
Policy for determining ‘Material’ Subsidiaries
As required under Regulation 16(1)(c) of the Listing Regulations, the Bank has formulated and adopted a Policy for determining
‘Material’ Subsidiaries, which has been hosted on its website at https://www.axisbank.com/shareholders- corner/corporate-
governance/compliance-report.
Policy for Related Party Transactions
As required under Regulation 23 of the Listing Regulations, the Bank has formulated and adopted a Policy on dealing with
Related Party Transactions, which has been hosted on its website at https://www.axisbank.com/shareholders-corner/corporate-
governance/compliance-report and details thereof have been disclosed in the Annual Report.
88
Annual Report 2017 -18
Prevention of Insider Trading
The Board of Directors of the Bank has formulated and adopted the Share Dealing Code – July 2017 (The Code) and the Code
of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) in line with the standards
prescribed under Schedule B of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015
(Insider Trading Regulations).
The Code prohibits all Designated Persons and Other Connected Persons of the Bank from entering into any trade in securities
of the Bank during the blackout period(s). The commencement and closure of the blackout period(s) is notified to all Designated
Persons and Other Connected Persons through e-mail and HRMS.
The Code requires Designated Persons to obtain pre-clearance of the Compliance Officer for dealing in the Bank’s securities
beyond prescribed threshold limits. Further, it prohibits the purchase / sale / transfer etc., of Bank’s securities by its Designated
Persons, Connected Persons and Other Connected Persons whilst in possession of UPSI relating to the securities of the Bank. The
Designated Persons are also prohibited from entering into contra trades on the floor of the Stock Exchange(s) and from dealing
in securities of the Bank’s Listed Client Companies, during the period(s) notified to them.
The Bank periodically reviews the efficacy of its systems, controls and processes to ensure that access to unpublished price
sensitive information relating to its financial results or that of its securities is on a need to know basis. The Bank also reviews its
Share Dealing Code to meet regulatory requirements and in line with the prevalent best practices.
Companies (Amendment) Act 2017
The Companies (Amendment) Bill, 2017, was passed by the Hon’ble Lok Sabha on 27th July 2017 and by the Hon’ble Rajya
Sabha on 19th December 2017, respectively. Whilst, it has received the assent of the President of India on 3rd January 2018,
the effective dates of various sections covered in the said Bill are being notified by the Ministry of Corporate Affairs. The Bank
will adhere to the relevant provisions of the said Act, as applicable.
Secretarial Standards
The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1)
and Secretarial Standards on General Meetings (SS-2) with effect from 1st October 2017. The Bank is in compliance with the
revised secretarial standards.
New Governance Norms
The Securities and Exchange Board of India (SEBI) had constituted a Committee to review the existing Corporate Governance
framework for listed companies in India. The Committee submitted its report to SEBI on 5th October 2017. The recommendations
which are forward looking have been notified by SEBI on 9th May 2018 and on 10th May 2018. The Bank endeavours to ensure
compliance with the new norms, as applicable.
(3) DISCLOSURES
There were no related party transactions which were of a materially significant nature undertaken by the Bank with its promoters,
directors or management, their subsidiaries or relatives that may have a potential conflict with the interests of the Bank.
The Members of the Senior Management of the Bank have affirmed that they have not entered into any material, financial or
commercial transaction wherein they have personal interest and which may potentially conflict with the interest of the Bank at
large.
There are no instances of non-compliance by the Bank or penalties and strictures imposed by the Stock Exchange(s) or SEBI or
other statutory authorities on any matter related to capital markets during the last three years.
(4) COMPLIANCE
The Bank has complied with all the mandatory requirements as prescribed under the Listing Regulations relating to Corporate
Governance.
89
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The Bank has adopted the non-mandatory requirements relating to maintenance of Chairman’s Office at the Bank’s expense and
reimbursement of expenses incurred by its Non-Executive Chairman in performance of his duties, moving towards a regime of
financial statements with unmodified audit opinion, separation of the office of the Chairman and Managing Director and the
Chief Audit Executive directly reporting to the Audit Committee of the Board.
The Bank has obtained a certificate from M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Mumbai (Registration No.
301003E/E300005) confirming that the Bank has complied with all the mandatory / non-mandatory requirements as stipulated
under the Listing Regulations relating to Corporate Governance. The said certificate is enclosed as annexure to the Directors’
Report.
(5) CODE OF CONDUCT
The Board has formulated and adopted Code of Conduct and Conflict of Interest Norms in Respect of Board of Directors and
the Code of Conduct and Ethics for Senior Management of the Bank.
The said Codes have been hosted on the website of the Bank viz. https://www.axisbank.com/shareholders-corner/corporate-
governance/Compliance-Report.
A certificate issued by the Managing Director & CEO of the Bank confirming that all the Directors and Members of the Senior
Management of the Bank have complied with the said Codes, is annexed to this Report.
90
Annual Report 2017 -18
GENERAL SHAREHOLDER INFORMATION
[Pursuant to Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing
Regulations)]
24th Annual General Meeting
Day/ Date : Wednesday, 20th June 2018
Time
Venue
:
:
10.00 A.M.
J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg,
Ahmedabad 380 015, Gujarat.
Financial Year
The Bank follows the financial year starting from 1st April to 31st March, every year.
Compliance Calendar
The schedule in respect of the meetings of the Board proposed to be held during the financial year 2018-19 to inter alia review and
approve the unaudited / audited financial results of the Bank, in terms of Regulation 33(3)(a), (d) and (f) of the Listing Regulations, is
as under:
Purpose
Audited Annual Financial Results (standalone and consolidated) for the year ended 31st March
2018
Venue
Tentative Date
Corporate Office April/May 2018
Unaudited Financial Results of the Bank for the quarter ending 30th June 2018
Corporate Office
Last week of July 2018
Unaudited Financial Results of the Bank for the quarter / half year ending 30th September 2018 Corporate Office
Last week of October 2018
Unaudited Financial Results of the Bank for the quarter / nine months ending 31st December
2018
Corporate Office
Last week of January 2019
Audited Annual Financial Results (standalone and consolidated) for the year ending 31st March
2019
Corporate Office
Last week of April 2019
After the said financial results of the Bank are reviewed and approved by the Board, the same is disclosed to the Stock Exchange(s)
within the prescribed time limits as stipulated under Regulation 30 read with sub-para 4 of Para A of Part A of Schedule III of the Listing
Regulations.
Book Closure
Pursuant to the provisions of Section 91 of the Companies Act, 2013 and Rule 10 of the Companies (Management and Administration)
Rules, 2014, the Register of Members and the Share Transfer Books of the Bank, will remain closed from Saturday, 2nd June 2018 upto
Wednesday, 20th June 2018 (both days inclusive), for the purpose of 24th Annual General Meeting of the Bank.
Dividend
No dividend has been recommended by the Board of Directors of the Bank for the financial year 2017-18.
Unclaimed Dividends
Pursuant to the provisions of Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, the amount of unpaid dividends that are lying unclaimed for a period of 7
consecutive financial years from the date of its transfer to the unpaid dividend account, is liable to be transferred to the Investors’
Education & Protection Fund (IEPF). Accordingly, the unclaimed dividend amounting to `47,30,544/-, in respect of the financial year
2009-10 was transferred to the IEPF on 9th August 2017. Further, please note that the unclaimed dividend in respect of the financial
year 2010-11 must be claimed by the concerned shareholders on or before 22nd July 2018, failing which it will be transferred to the
IEPF, in accordance with the said Rules.
91
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES The details of the unclaimed dividends as on 31st March 2018 and the last date for claiming the same, prior to its transfer to the IEPF,
are as under:
Financial year
No. of
Shareholders
Unclaimed
dividend as
on 31st March
2018 (In `)
% to total
dividend
declared
Total Amount
of Dividend
Declared
(In `)
Date of
declaration
Last date
for claiming
dividend prior
to its transfer
to the IEPF
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
Total
3,837
4,586
3,460
2,726
4,927
6,155
6,472
47,36,998
53,54,000
55,78,200
59,56,080
77,18,598
94,96,940
1,08,61,685
0.08
0.08
0.07
0.06
0.07
0.08
0.09
5,76,37,96,262
17-06-2011
22-07-2018
6,62,86,55,136
22-06-2012
27-07-2019
8,44,07,35,212
19-07-2013
24-08-2020
9,42,60,65,680
27-06-2014
01-08-2021
10,92,77,37,331
24-07-2015
29-08-2022
11,93,76,13,965
22-07-2016
28-08-2023
11,98,58,43,545
26-07-2017
31-08-2024
32,163
4,97,02,501
65,11,04,47,131
Transfer of Underlying Equity Shares in respect of the Unclaimed Dividends to the IEPF Authority Account
Pursuant to the notification of the relevant provisions of Sections 124 and 125 of the Companies Act, 2013 and the relevant provisions
of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the
unclaimed dividend for the financial year 2009-10 and the underlying equity shares(s) of the Bank, in respect of the said financial year
(where the dividends for all the subsequent seven consecutive financial years have not been claimed by the concerned shareholder),
were liable to be transferred by the Bank to the designated account of the IEPF Authority in accordance with the said Rules.
Accordingly, pursuant to the notification of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Second Amendment Rules, 2017, issued by the Ministry of Corporate Affairs on 13th October 2017, the Bank has transferred
5,35,446 underlying equity shares of `2/- each of the Bank in respect of the said unclaimed dividend, to the designated account
of the IEPF Authority.
The unclaimed dividend(s) for the financial year 2009-10 and the said underlying equity shares can be claimed by the concerned
shareholder(s) of the Bank from the IEPF Authority, subject to compliance with the procedures as prescribed under the said Rules and
they may write to Karvy for any assistance in this regard.
Unclaimed Dividends for FY 2010-11 upto 2016-17
The shareholder(s) of the Bank are requested to verify details of their unclaimed dividends in respect of the financial years from
2010-11 upto 2016-17 and lodge their claim with Karvy, before the last date for claiming dividend prior to its transfer to the IEPF, as
aforesaid.
In case the unclaimed dividend for the financial year 2010-11 is not claimed on or before 22nd July 2018, the said unclaimed dividend
along with the underlying equity share(s) of the Bank in respect of the said financial year [where the dividends for all the subsequent
seven consecutive financial years have not been claimed by the concerned shareholder] will be liable to be transferred by the Bank to
the designated account of the IEPF Authority, in accordance with the said Rules.
Unclaimed Equity Shares
Schedule VI of the Listing Regulations, inter alia, requires every listed company to comply with certain procedures in respect of equity
shares issued by it in physical form pursuant to a public issue or any other issue and which have remained unclaimed for a period of
seven consecutive financial years, for any reason whatsoever.
92
Annual Report 2017 -18 Details of such unclaimed equity shares of the Bank, are as under:
Particulars
FY 2017-18
FY 2016-17
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 the issuer for transfer of shares from Unclaimed Suspense
Account during the year
Number of shares transferred to the concerned shareholder from Unclaimed Suspense Account
during the year
Aggregate number of shareholders at the end of the year
Total outstanding shares in Unclaimed Suspense Account as on 31st March 2018.
29
18,000
1
500
1
500*
29
18,000
–
–
29
18,000
*
Pursuant to the notification on IEPF Second Amendment Rules, issued by the Ministry of Corporate Affairs dated 13th October
2017, the Bank has transferred 5,35,446 unclaimed equity shares of `2 each of the Bank (including the balance 17,000 equity
shares of `2 each of the Bank which were lying in the Unclaimed Suspense Account) to the designated account of the IEPF
Authority, in accordance with the said Rules.
All corporate benefits accruing on the said equity shares viz. bonus shares, split, etc., if any, are also required to be credited to the
designated account of the IEPF Authority. Further, voting rights on the said unclaimed equity shares have been frozen till the concerned
shareholder(s) claims the same.
Equity Shares
The equity shares of the Bank are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The International
Security Identification Number (ISIN) in respect of the said equity shares is INE238A01034. The National Securities Depository Limited
(NSDL) and the Central Depository Services (India) Limited (CDSL) are the Depositories for the equity shares of the Bank. The equity
shares of the Bank have not been suspended from trading on the said Stock Exchanges or by any Regulatory / Statutory Authority.
Stock Exchange Codes
NSE – AXISBANK
National Stock Exchange of India Limited
Exchange Plaza, 5th Floor,
Plot No. C/1, G Block,
Bandra - Kurla Complex,
Bandra (E), Mumbai – 400 051.
Website: www.nseindia.com
BSE – 532215
BSE Limited
1st Floor, New Trading Ring,
Rotunda Building, P. J. Towers,
Dalal Street, Fort, Mumbai – 400 001.
Website: www.bseindia.com
Reuters Codes
Bloomberg Codes
NSE - AXBK.NS
NSE - AXSB IS
BSE- AXISBANK.BO
BSE - AXSB IB
Global Depository Receipts (GDR)
The Bank’s GDRs are listed and traded on London Stock Exchange. The ISIN for the said GDRs is US05462W1099.
Stock Exchange
London Stock Exchange
10 Paternoster Square, London EC4M 7LS, UK
Website: www.londonstockexchange.com
Code
AXB
Bonds issued under Medium Term Note Programme (MTN Programme)
The Bonds issued by the Bank’s MTN programme are listed and traded on Singapore Stock Exchange.
93
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Stock Exchange
Singapore Stock Exchange
Singapore Exchange Securities Trading Limited
(Attention: SGXNet Services, Operations)
11 North Buona Vista Drive #06-07
The Metropolis Tower 2
Singapore 138589
Website: www.sgx.com
Code
–
Listing Fees
The annual listing fees for the financial year 2017-18 have been paid by the Bank to the said Stock Exchanges.
Debt Securities
The debt instruments issued by the Bank in the form of Additional Tier I, Bond Tier II Debt Capital Instrument and Infrastructure Bonds
on a private placement basis are listed on NSE and BSE. The Bonds issued by the Bank under the MTN programme are listed on
Singapore Stock Exchange and the Green Bonds issued by the Bank are listed on London Stock Exchange.
Debenture Trustees
IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R. Kamani Marg,
Ballard Estate, Mumbai - 400 001.
Phone No. +91 - 22 4080 7000.
Website: www.idbitrustee.com
Market Price Data
a)
Equity Shares
SBI Cap Trustee Company Limited
6th Floor, Apeejay House, 3,
Dinshaw Wachha Road,
Churchgate, Mumbai - 400 020.
Phone No. +91 - 22 - 4302 5555.
Website: www.sbicaptrustee.com
The price of the Bank’s Share - High, Low as traded during the financial year 2017-18 on NSE and BSE, are as under:
Month
April, 2017
May, 2017
June, 2017
July, 2017
August, 2017
September, 2017
October, 2017
November, 2017
December, 2017
January, 2018
February, 2018
March, 2018
High (`)
NSE
Low (`)
No. of
Shares traded
High (`)
BSE
Low (`)
No. of
Shares traded
525.00
534.60
525.35
547.50
524.05
526.00
534.65
565.90
567.85
627.60
610.00
539.20
481.00
15,93,66,051
490.25
17,54,09,774
484.45
11,51,16,059
501.25
14,80,01,611
480.00
12,69,71,719
488.30
13,03,35,638
447.50
28,67,76,172
523.00
22,14,25,370
529.10
10,24,35,138
552.50
14,41,83,345
520.00
12,34,34,817
495.20
16,59,42,618
525.00
534.35
525.00
547.00
523.40
525.65
534.40
565.40
566.00
627.50
609.00
539.00
481.00
490.10
484.75
501.45
480.25
488.30
447.80
523.05
528.00
552.85
521.00
495.35
1,05,86,435
1,17,86,508
64,28,613
87,18,985
2,09,51,059
47,79,223
1,59,48,117
1,34,43,794
75,04,786
86,67,069
93,08,139
66,20,860
94
Annual Report 2017 -18
GRAPH IN COMPARISON TO NIFTY & SENSEX
Performance in Comparison to Nifty
Performance in Comparison to Sensex
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
650
600
550
500
450
400
350
300
39,000
37,000
35,000
33,000
31,000
29,000
27,000
25,000
Axis Bank
NIFTY
Axis Bank
SENSEX
650
600
550
500
450
400
350
300
b) GDR
The high and low closing prices of the Bank’s GDRs as traded during the financial year 2017-18 on the LSE, are as under:
Month
April, 2017
May, 2017
June, 2017
July, 2017
August, 2017
September, 2017
October, 2017
November, 2017
December, 2017
January, 2018
February, 2018
March, 2018
High (In USD)
Low (In USD)
No. of GDRs traded
40.30
41.00
40.45
42.30
41.25
40.60
40.85
43.80
44.00
49.10
48.00
41.15
37.35
37.65
37.40
38.75
37.50
37.95
34.20
40.05
40.85
43.15
39.70
38.00
1,52,82,600
1,71,47,595
97,08,210
56,63,695
1,00,37,560
45,54,955
96,63,335
51,43,810
39,65,760
32,49,390
47,37,635
35,85,500
Dematerialization of Shares and Liquidity
The equity shares of the Bank are to be compulsorily traded on the floor of the stock exchanges in electronic form by all investors. The
Bank has entered into agreements with NSDL and CDSL, so as to provide the Members an opportunity to hold and trade in equity
shares of the Bank in electronic form.
As on 31st March 2018, 99.73% of the total issued and paid up equity share capital of the Bank was held by investors in electronic
form and 0.27% of the total issued and paid up equity share capital was held in physical form.
The number of equity shares of the Bank held in physical form which were transferred / processed during the last three financial years,
are as under:
Particulars
2017-18
2016-17
2015-16
Number of transfer deeds
Number of equity shares transferred
141
34,000
135
38,500
202
54,500
As required under Regulation 40(9) of the Listing Regulations, M/s Ahalada Rao. V & Associates, Practicing Company Secretaries,
(C. P. No. 11497), Hyderabad have examined the records relating to share transfer deeds, memorandum of transfers, registers, files
95
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
and other related documents on a half-yearly basis and has issued a certificate confirming compliance with the provisions of the said
Regulations. The certificate has been submitted to the BSE and NSE where the Bank’s equity shares are listed, in terms of the Listing
Regulations and also tabled at the meeting of the Stakeholders Relationship Committee of the Board of Directors of the Bank, for its
review and noting.
Distribution of Shareholding
The distribution of shareholding of the Bank as on 31st March 2018, is as under:
No. of shares
held
Electronic Form
Physical Form
No. of
shareholders
No. of shares
No. of
shareholders
No. of
shares
No. of
shareholders
Total
No. of shares
1-5,000
3,42,136
6,03,57,666
7,479
64,45,151
3,49,615
6,68,02,817
5,001-10,000
10,001-20,000
20,001-30,000
30,001-40,000
40,001-50,000
50,001-1,00,000
1,00,001 and
above
1,226
650
242
145
115
273
820
88,33,798
92,07,065
59,99,848
50,27,608
52,38,676
1,98,44,149
2,44,51,61,375
23
1,72,800
1,249
9
3
0
1
0
0
1,24,300
77,000
0
49,500
0
0
659
245
145
116
273
820
90,06,598
93,31,365
60,76,848
50,27,608
52,88,176
1,98,44,149
% to
capital
2.60
0.35
0.36
0.24
0.20
0.21
0.77
2,44,51,61,375
95.27
Total
3,45,607 2,55,96,70,185
7,515 68,68,751
3,53,122 2,56,65,38,936
100.00
Shareholding pattern
Category wise shareholding pattern of the Bank as on 31st March 2018, is as under:
Category / Shareholder
Sr.
No.
Promoters
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
Life Insurance Corporation of India (LIC)
General Insurance Corporation of India
The New India Assurance Company Limited
National Insurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
Foreign Investors
Overseas Investors (including FIIs/OCBs/NRIs)
Foreign Direct Investment (GDR)
Domestic Financial Institutions
Financial Institutions / Mutual Funds / Banks / NBFC
Others
Total
1
2
3
4
5
6
7
8
9
10
11
96
No. of Shares
held
% of total issued
& paid-up Capital
25,32,70,690
34,94,51,108
3,72,50,000
2,54,03,585
21,34,681
63,30,020
26,26,337
1,31,64,80,211
11,53,42,680
24,27,74,995
21,54,74,629
9.87
13.62
1.45
0.99
0.08
0.25
0.10
51.29
4.49
9.46
8.40
2,56,65,38,936
100.00
Annual Report 2017 -18
Top 20 Shareholders of the Bank as on 31st March 2018, are as under:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Name of the Shareholder
Life Insurance Corporation of India
Administrator of The SUUTI
The Bank Of New York Mellon, DR
Oakmark International Fund
Dodge and Cox International Stock Fund
Europacific Growth Fund
BC Asia Investments VII Limited - FDI
General Insurance Corporation of India
Integral Investments South Asia IV - FDI
Vanguard Emerging Markets Stock Index Fund, A Series of Vanguard International Equity
Index Fund
Lazard Emerging Markets Equity Portfolio
ICICI Prudential Life Insurance Company Limited
Centaura Investments (Mauritius) Pte Ltd.
The New India Assurance Company Limited
15. Government of Singapore
16.
17.
18.
19.
Vanguard Total International Stock Index Fund
Ishares India Index Mauritius Company
Cinnamon Capital Limited
T. Rowe Price International Stock Fund
20. Government Pension Fund Global
Total
No. of
Shares held
% to total issued
& paid up capital
34,94,51,108
25,32,70,690
11,53,42,680
8,40,27,467
7,94,50,400
6,55,87,857
5,56,00,000
3,72,50,000
3,19,00,000
2,85,28,069
2,69,82,778
2,60,34,016
2,55,47,908
2,54,03,585
2,46,67,536
2,40,91,148
2,08,14,778
1,93,64,182
1,86,53,213
1,55,93,452
13.62
9.87
4.49
3.27
3.10
2.56
2.17
1.45
1.24
1.11
1.05
1.01
1.00
0.99
0.96
0.94
0.81
0.75
0.73
0.61
1,32,75,60,867
51.73
Outstanding GDR
The Bank has in the course of international offerings to overseas investors, issued securities linked to ordinary equity shares of the
Bank in the form of Global Depository Receipts (GDRs) in March 2005, April 2005, July 2007 and September 2009. The said GDRs
are listed for trading on the London Stock Exchange. The underlying equity shares represent outstanding GDRs, which have been
included in the equity share capital of the Bank. The number of equity shares representing outstanding GDRs as on 31st March 2018
was 11,53,42,680.
Apart from the above, the Bank has not issued any ADRs during the financial year 2017-18.
Convertible warrants
During the Financial Year 2017-18, the Bank issued 4,53,57,385 convertible warrants convertible into 4,53,57,385 equity shares at
a price of `565.00 per warrant on a preferential basis. The convertible warrants have been issued pursuant to receipt of 25% upfront
payment consideration from the allottees i.e. `141.25 per convertible warrant. The allottees of the convertible warrants can exercise the
option to convert one convertible warrant into one equity share of `2/- each of the Bank within a period of 18 months from the date of
its allotment, i.e. on or before 17th June 2019, by paying balance 75% of the consideration i.e. `423.75 per convertible warrant. In
the event, allottees do not exercise their right to convert the said warrants before the said due date, the said convertible warrants (to the
extent not lodged for conversion) shall lapse and the upfront consideration paid by the warrant holders shall stand forfeited by the Bank.
Investor Services
Registrar & Share Transfer Agent (RTA)
Karvy has been entrusted with the task of administering all aspects relating to investor services. Karvy has appropriate systems to
ensure that requisite service is provided to the investors of the Bank in accordance with applicable corporate and securities laws and
within the adopted service standards. Listed below are the service standards adopted by Karvy in respect of the various services
rendered to the investors of the Bank.
97
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Nature of service being rendered to the Investors of the Bank
Adopted Service Standards
Registration of Nomination
Issue of duplicate dividend warrant(s)
Revalidation of dividend warrant(s)
Revalidation of demand draft(s)
Split/ consolidation of share certificate(s)
Dematerialization of share(s)
Transfer of share(s)
Transmission of share(s)
Consolidation of folio(s)
Change/Deletion/Transposition of Name(s)
Release of unclaimed share(s)
Re-materialization of share(s)
Issue of duplicate share certificate(s)
5 days
5 days
5 days
5 days
7 days
7 days
7 days
7 days
7 days
7 days
7 days
10 days
10 days
Investors are requested to write to the Registered Office of the Bank or to Karvy for availing any of the said services. In terms of
Regulation 34(3) read with Schedule V of the Listing Regulations, the designated email address for correspondence is shareholders@
axisbank.com or einward.ris@karvy.com.
The Company Secretary Department of the Bank has been entrusted with the task of attending to investor queries / complaints and
ensure its redressal in accordance with applicable laws and within the aforesaid service standards.
Share Transfer System
In terms of Regulation 40(2) of Listing Regulations, the Share Committee of the Bank comprising of the Company Secretary and
executives of Company Secretary Department of the Bank has been formed to look into matters relating to transfer of equity shares and
matters related thereto. The resolutions passed by the Share Committee are tabled at the ensuing meeting of the Board of Directors of
the Bank, for its noting.
Investor Grievances
During the year under review, the Bank received 2,821 correspondences from its investors, capital market intermediaries and statutory
/ regulatory authorities, inter alia, in respect of services relating to the securities issued by the Bank by post and through emails
(addressed to designated email address viz. shareholders@axisbank.com and einward.ris@karvy.com).
The details of the investor complaints received and redressed by the Bank during the last 3 financial years, are as under:
Received from
No. of complaints received
2017-18
2016-17
2015-16
No. of complaints unresolved
as on 31st March 2018
SEBI SCORES
Stock Exchanges
NSDL / CDSL
MCA and others
Total No. of complaints received
Total No. of complaints redressed
7
8
-
-
15
15
8
1
-
-
9
9
12
9
-
-
21
21
-
-
-
-
-
-
There was no investor complaint that was unresolved as on 1st April 2017. All the investor complaints received during the year were
resolved and as such there was no investor complaint that was unresolved as on 31st March 2018.
The statement highlighting the status of the investor correspondence(s)/complaint(s) received and resolved during the financial year
2017-18 were tabled at the quarterly meetings of the Stakeholders Relationship Committee of Directors of the Bank, for its review and
noting.
98
Annual Report 2017 -18 Nomination Facility
Section 72 of the Companies Act, 2013, provides that every holder of securities of a company may, at any time nominate, in the
prescribed manner, any person to whom his securities shall vest in the event of his death. Where the securities of a company are held
by more than one person jointly, the joint holders may together nominate any person to whom all the rights in the securities shall vest
in the event of death of all the joint holders.
In view of the above, Shareholders may avail of the Nomination Facility. The relevant Nomination Form is available on the website of
the Bank and the Shareholders may download the same or write to the Bank at its Registered Office or to Karvy, for the same.
Please note that the nomination shall be automatically rescinded on transfer / dematerialization of the shares.
Commodity Price Risk or Foreign Exchange Risk and Hedging Activities:
As an Authorised Dealer, the Bank deals with its customers and interbank participants in permitted foreign exchange and derivative
products in accordance with the extant RBI guidelines.
All these transactions are subject to Board approved trading risk limits including Net Overnight Open Position limit (NOOP), Intraday
Open Position limit, Aggregate Gap Limits (AGL), Value at Risk limits (VaR) and limits on Option Greeks (viz. Delta/Gamma/Vega).
The Bank undertakes hedging transactions to mitigate the foreign exchange and interest rate risk on the Bank’s Balance Sheet.
The valuation and reporting of all Foreign Exchange and derivative contracts is as per applicable accounting guidelines. The Bank
does not undertake trading in any commodity. However, the Bank may be exposed to commodity price risks of customers in its capacity
as a lender.
Green initiatives
Dispatch of documents in Electronic Form
In terms of Rule 18 of the Companies (Management and Administration) Rules, 2014, a company may give notice through electronic
mode including e-mail to those Members who have provided their e-mail address either to their Depository Participant (DP) or to the
Company.
Further, in terms of Regulation 36 of the Listing Regulations, the listed entity is required to send soft copies of its annual report to all
those shareholder(s) who have registered their email address(es) for this purpose.
Accordingly, the Notice convening the 24th Annual General Meeting, the annual report of the Bank for the financial year 2017-18
and the annexures stated therein will be sent by e-mail to those Members who have registered their e-mail address with their DP or
with Karvy.
Members who have not yet registered their e-mail address are requested to do so, at the earliest.
In case of shares held in electronic form and in case of any change in the e-mail address, Members are requested to update the same
with their DP and in case of shares held in physical form, Members are requested to update the same with Karvy.
In case a Member, whose email address has changed, fails to update this new e-mail address, the said documents will be sent to the
existing e-mail address and the said documents will be deemed to have been delivered, in compliance with the relevant provisions of
the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations.
However, in case any Member wishes to receive a physical copy of the said documents, he is requested to write to einward.ris@ karvy.
com or shareholders@axisbank.com duly quoting his DP ID and Client ID or his Folio number, as the case may be, to enable the Bank
to record his decision and provide physical copy of the said documents, free of cost.
Please note that the said documents will also be uploaded on the Bank’s website viz. www.axisbank.com and copies thereof will
be made available for inspection at the Registered Office of the Bank during business hours on all working days except Saturdays,
Sundays, Bank Holidays and Public Holidays up to the date of the ensuing AGM.
We seek your support to the said Green Initiatives, as it is designed to protect our fragile environment.
99
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Means of Communication
After the financial results of the Bank are approved by the Board of Directors, they are disclosed to the Stock Exchanges, in accordance
with Regulation 30 of the Listing Regulations read with sub-para 4 of Para A of Part A of Schedule III of the Listing Regulations.
Thereafter, financial results of the Bank and the presentations made by the Senior Management to the Analysts / Investors are
uploaded on the Bank’s website, www.axisbank.com in accordance with the Listing Regulations.
The financial results of the Bank are generally published in the Economic Times and Gujarat Samachar or Divya Bhaskar on the day
after declaration of the financial results of the Bank.
For the ready reference of the investors of the Bank, a list of frequently asked questions and their answers have been uploaded on
website of the Bank at https://www.axisbank.com/shareholders-corner/investor-faqs.
General Body Meetings
The details of the last three Annual General Meetings are as under:
AGM
21st
22nd
23rd
Date and Day
Time
Location
24th July 2015 – Friday
10.00 a.m.
22nd July 2016 – Friday
10.00 a.m.
26th July 2017 – Wednesday
09.30 a.m.
J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA,
Dr. Vikram Sarabhai Marg, Ahmedabad, Gujarat - 380 015.
J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA,
Dr. Vikram Sarabhai Marg, Ahmedabad, Gujarat - 380 015.
J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA,
Dr. Vikram Sarabhai Marg, Ahmedabad, Gujarat - 380 015.
Special resolutions passed at previous three Annual General Meetings
The details of the special resolution(s) passed at the previous three Annual General Meetings, are as under:
AGM
Date of AGM
Special Resolution(s)
21st
24th July 2015
22nd
22nd July 2016
23rd
26th July 2017
Resolution No. 12 - Increase in Borrowing limits of the Bank upto `1,50,000 crore under Section 180(1)(c) of
the Companies Act, 2013.
Resolution No. 13 - Borrowing / Raising funds in Indian Currency / Foreign Currency by issue of debt
Instruments including but not limited to bonds and non-convertible debentures on a private placement basis, for
an amount of upto `35,000 crore.
Resolution No. 14 - Acquiring and holding equity shares of the Bank, by the Foreign Institutional Investors (FIIs)/
Foreign Portfolio Investors (FPIs)/Non Resident Indians (NRIs), Foreign Direct Investment covering ADRs / GDRs
and indirect foreign investment in any combination thereof, upto 74% of the paid up share capital of the Bank.
Resolution No. 18 – Borrowing / Raising funds in Indian/Foreign Currency by issue of debt instruments
including but not limited to subordinated debt, senior unsecured long term bonds, green bonds, medium term
notes, non-convertible debentures on a private placement basis, for an amount of upto `35,000 crore.
Resolution No. 11 – Borrowing / Raising funds in Indian/Foreign Currency by issue of debt instruments
including but not limited to subordinated debt, senior unsecured long term bonds, green bonds, medium term
notes, non-convertible debentures on a private placement basis, for an amount of upto `35,000 crore.
Procedure for Postal Ballot
In compliance with Regulation 44 of the Listing Regulations and Sections 108, 110 and other applicable provisions of the Companies
Act, 2013, the relevant Rules made thereunder, the Bank provides electronic voting facility to all its Members. The Bank had engaged
the services of Karvy for the said purpose. In terms of the applicable laws, Members have the option to cast their vote either by physical
ballot or e-voting.
The Board of Directors of the Bank is required to appoint a Scrutinizer for conducting the Postal Ballot process in a fair and transparent
manner. The Postal Ballot exercise is conducted in accordance with the provisions of Section 110 of the Companies Act, 2013 read
with Rule 22 of the Companies (Management & Administration) Rules, 2014, as amended.
The Bank dispatches the Postal Ballot Notice and relevant forms along with postage prepaid business reply envelope to those Members
whose names appear on the Register of Members / Statements of Beneficial Holders provided by the Depositories as on the cut-off
date. The postal ballot notice is also sent in electronic form to those Members whose email address is registered with their DP in case
shares are held in electronic form or with Karvy in case shares are held in physical form.
100
Annual Report 2017 -18 The Bank also publishes a notice in the newspaper declaring the details of completion of dispatch and other requirements as mandated
under the aforesaid provisions of the Companies Act, 2013 and the said Rules.
Voting rights are reckoned on the paid-up value of the shares registered in the names of the Members as on the said cut-off date.
Members desiring to exercise their votes by physical postal ballot forms are required to return the forms duly completed and signed
to the Scrutinizer at the address mentioned in the postage prepaid business reply envelope on or before the close of voting period.
Members desiring to exercise their votes by electronic mode are requested to exercise their vote using the e-voting facility before the
close of business hours on the last date of e-voting as set out in the Notice.
The Scrutinizer is required to submit his report to the Chairman, after verification of the records and thereafter the consolidated results
of the voting can be declared by any one of the Directors of the Bank, duly authorised by the Board of Directors, in this regard.
Subsequently, the said results alongwith the report of the Scrutinizer is disclosed to the Stock Exchanges within 48 hours of such
declaration, in terms of Regulation 44(3) of the Listing Regulations, uploaded on the website of the Bank and displayed on the notice
board at the Registered and Corporate Offices of the Bank. The resolution, if passed by requisite majority, shall be deemed to have
been passed on the last date specified by the Company for receipt of duly completed postal ballot forms or e-voting.
Resolutions passed by way of Postal Ballot held during the Financial Year 2017-18
No resolution was passed by way of Postal Ballot during the Financial Year 2017-18.
Resolutions passed in the Extraordinary General Meeting (EGM) of the Bank held during the Financial Year 2017-18, by means of a
Special Resolution:
During the year under review, Extraordinary General Meeting of the Bank was held on 8th December 2017, wherein the approval of
the Members was sought for the following matters, by means of a special resolution.
(1)
(2)
[Resolution No. 1] Issue of : (i) upto 5,56,00,000 Investor 1 Equity Shares of `2/- each of the Bank to BC Asia Investments VII
Limited (Investor 1) (ii) upto 3,19,00,000 Investor 2 Equity Shares of `2/- each of the Bank to Integral Investments South Asia IV
(Investor 2) (iii) upto 4,00,00,000 Investor 3 Convertible Warrants to BC Asia Investments III Limited (Investor 3) on a preferential
basis in terms of the SEBI (ICDR) Regulations, 2009.
[Resolution No. 2] Issue of : (i) upto 59,98,000 Investor 4 Equity Shares of `2/- each of the Bank to New World Fund, Inc.
(Investor 4) (ii) upto 2,26,884 Investor 5 Equity Shares of `2/- each of the Bank to Capital Group New World Fund (LUX) (Investor
5) (iii) upto 53,08,000 Investor 6 Equity Shares of `2/- each of the Bank to American Funds Insurance Series – International
Fund (Investor 6) (iv) upto 4,28,72,967 Investor 7 Equity Shares of `2/- each of the Bank to EuroPacific Growth Fund (Investor 7)
(v) upto 5,65,899 Investor 8 Equity Shares of `2/- each of the Bank to American Funds Insurance Series – International Growth
and Income Fund (Investor 8) (vi) upto 27,86,000 Investor 4 Convertible Warrants to New World Fund, Inc. (Investor 4) (vii) upto
1,05,385 Investor 5 Convertible Warrants to Capital Group New World Fund (LUX) (Investor 5) (viii) upto 24,66,000 Investor
6 Convertible Warrants to American Funds Insurance Series – International Fund (Investor 6) on a preferential basis, in terms of
the SEBI (ICDR) Regulations, 2009.
(3)
[Resolution No. 3] Issue of upto 3,01,58,889 Promoter Investor Equity Shares of `2/- each of the Bank to Life Insurance
Corporation of India, (i.e. a promoter of the Bank) (Promoter Investor) on a preferential basis, in terms of the SEBI (ICDR)
Regulations, 2009.
The Bank had appointed Shri Raghavendar Rao D., Practicing Company Secretary (Membership No. ACS 35788/C.P. No. 13407)
as the Scrutinizer for conducting the e-voting process in a fair and transparent manner.
The brief summary of the EGM results in respect of the said special Resolutions, which was declared on 8th December 2017, are as
under:
Resolution No. 1: Issue of Investor 1 Equity Shares, Investor 2 Equity Shares and Investor 3 Convertible Warrants, on a preferential
basis
No. of votes in favour
No. of votes against
% of votes in favour
% of votes against
1,94,84,60,378
1,90,08,788
99.03
0.97
101
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Resolution No. 2: Issue of Investor 4 Equity Shares, Investor 5 Equity Shares, Investor 6 Equity Shares, Investor 7 Equity Shares,
Investor 8 Equity Shares, Investor 4 Convertible Warrants, Investor 5 Convertible Warrants and Investor 6 Convertible Warrants, on
a preferential basis:
No. of votes in favour
No. of votes against
% of votes in favour
% of votes against
1,96,74,66,118
1,558
99.99
0.01
Resolution No. 3: Issue of Promoter Investor Equity Shares, on a preferential basis
No. of votes in favour
No. of votes against
% of votes in favour
% of votes against
1,96,70,65,644
4,03,297
99.98
0.02
Address for correspondence:
Registered Office
Corporate Office
Registrar & Share Transfer Agent (RTA)
Axis Bank Limited
[CIN:L65110GJ1993PLC020769]
‘Trishul’, 3rd Floor,
Opp. Samartheshwar Temple, Law Garden,
Ellisbridge, Ahmedabad,
Gujarat – 380 006.
Tel. No. : +9179-6630 6161
Fax No. : +9179-2640 9321
Email:shareholders@axisbank.com
Axis Bank Limited
‘Axis House’, C-2,
Wadia International Centre, Pandurang
Budhkar Marg, Worli, Mumbai, Maharashtra
– 400 025.
Tel. No. : +9122-2425 2525
Fax No. : +9122-2425 1800
Email:shareholders@axisbank.com
M/s. Karvy Computershare Private Limited
Unit: Axis Bank Limited
Karvy Selenium Tower B, Plot 31-32,
Gachibowli, Financial District, Nanakramguda,
Hyderabad, Telangana – 500 032.
Tel. No. : +91 40-6716 2222
Fax No. : +91 40-2300 1153
Toll Free No. : 1800-345-4001
Email : einward.ris@karvy.com
102
Annual Report 2017 -18 COMPLIANCE WITH CODE OF CONDUCT AND CONFLICT OF INTEREST NORMS IN RESPECT OF BOARD OF
DIRECTORS AND THE CODE OF CONDUCT AND ETHICS FOR SENIOR MANAGEMENT OF THE BANK FOR THE
FINANCIAL YEAR 2017-18
I confirm that for the year under review, all Directors and Members of the Senior Management of the Bank have affirmed compliance
with the Codes as applicable to them.
Shikha Sharma
Managing Director & CEO
Place : Mumbai
Date : 16th May 2018
103
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Form No. MGT-9
Extract of Annual Return as on the Financial Year ended 31st March 2018
[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules,
2014].
I.
REGISTRATION AND OTHER DETAILS:
i)
ii)
iii)
iv)
v)
vi)
vii)
CIN
Registration Date
Name of the Company
L65110GJ1993PLC020769
3rd December 1993
Axis Bank Limited
Category / Sub-Category of the Company
Company Limited by Shares
Address of the Registered office and contact
details
‘Trishul’ 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden,
Ellisbridge, Ahmedabad,
Gujarat – 380 006.
Phone: +91-79-6630 6161,
Fax: +91-79-2640 9321
Email: shareholders@axisbank.com
Whether listed company – Yes / No
Yes
Name, Address and Contact details of
Registrar and Transfer Agent
Karvy Computershare Private Limited
Unit: Axis Bank Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli,
Financial District, Nanakramguda,
Hyderabad – 500 032.
Phone No. : 1800-345-4001 and +91-40-6716 2222
Fax No. : +91-40 - 2300 1153
Email: einward.ris@karvy.com
II.
PRINCIPAL BUSINESS ACTIVITIES OF THE BANK
Sr.
No.
1
Name and description of main products /
services
NIC Code of the Product/
service
% to total turnover of the
Company
•
•
•
Deposits
Loans
Investments and foreign exchange
Section K : Financial and Insurance
activities
Code : 64191
Not applicable
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sr.
No.
Name of the
Company
Address
CIN/GLN
Holding/
Subsidiary/
Associate
% of
shares
held
Applicable
Section
1
2
3
4
5
Axis Capital Limited Axis House, 8th Floor, Wadia
U51900MH2005PLC157853
Subsidiary 99.99%
2(87)(ii)
Axis Private Equity
Limited
Axis Trustee Services
Limited
Axis Asset
Management
Company Limited
Axis Mutual Fund
Trustee Limited
International Centre Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Axis House, Bombay Dyeing Mills
Compound, Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Axis House, Bombay Dyeing Mills
Compound, Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Axis House, 1st Floor, C-2, Wadia
International Centre, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Axis House, 1st Floor, C-2, Wadia
International Centre, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
U66020MH2006PLC165039
Subsidiary 99.99%
2(87)(ii)
U74999MH2008PLC182264
Subsidiary 99.99%
2(87)(ii)
U65991MH2009PLC189558
Subsidiary 74.99%
2(87)(ii)
U66020MH2009PLC189325
Subsidiary 74.86%
2(87)(ii)
6
Axis Finance Limited Axis House, Ground Floor, Wadia
U65921MH1995PLC212675
Subsidiary 99.99%
2(87)(ii)
International Centre ,Worli,
Mumbai - 400 025
104
Annual Report 2017 -18 Sr.
No.
Name of the
Company
Address
CIN/GLN
Holding/
Subsidiary/
Associate
% of
shares
held
Applicable
Section
7
8
9
Axis Securities
Limited
Axis House, 8th Floor, Wadia
International Centre Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
U74992MH2006PLC163204
Subsidiary 99.99%
2(87)(ii)
Axis Bank UK
Limited
4 Chilswell street, 1st Floor, London
England, EC1Y 4 UP
Foreign Company
(07554558)
Subsidiary
100%
2(87)(ii)
A.TREDS Limited
Axis House, C-2 Wadia International
Centre, P B Marg, Worli, Mumbai - 400
025
U74999MH2016PLC281452
Subsidiary
67%
2(87)(ii)
10
Freecharge Payment
Technologies Private
Limited
Ground Floor, Plot No. 68 Okhla
Industrial Estate, Phase-III New Delhi
South Delhi -110 020
11 Accelyst Solutions
Private Limited
2nd Floor, unit no. 205-206, Plot no.
1 Vaibhav Chambers, Bandra Kurla
Complex Mumbai - 400 051
U74140DL2015PTC275419
Subsidiary
100%
2(87)(ii)
U72900MH2008PTC185202
Subsidiary
100%
2(87)(ii)
12 Axis Capital USA,
LLC.
1675 South State Street, Suite B, Dover,
County of Kent, Delaware -19901
Foreign Company
Step down
Subsidiary
2(87)(ii)
100%
held by
Axis
Capital
Limited
IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)
i)
Category-wise Share Holding
Cate
gory
Code
Category of Shareholder
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
Demat
Physical
Total
Demat
Physical
Total
% of
total
shares
% of
total
shares
% Change
during
the year
(I)
(II)
(III)
(IV)
(V)
(VI)
(VII)
(VIII)
(IX)
(X)
(XI)
(A)
(1)
(a)
(b)
(C)
(d)
(e)
(f)
Promoter and Promoter
Group
Indian
Individual /HUF
Central Government
State Government(s)
Bodies Corporate
-
-
-
-
Financial Institutions / Banks
68,88,02,073
Any Others
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
68,88,02,073
28.76
67,64,66,421
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67,64,66,421
26.36
(2.40)
-
-
-
Sub-Total A(1) :
68,88,02,073
-
68,88,02,073
28.76 67,64,66,421
- 67,64,66,421
26.36
(2.40)
(2)
Foreign
(a)
(b)
(c)
(d)
(e)
NRIs/Foreign Individuals
Others - Individuals
Bodies Corporate
Banks / Financial Institutions
Any Others
Sub-Total A(2) :
-
-
-
-
-
-
TOTAL A=A(1)+A(2)
68,88,02,073
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
68,88,02,073
28.76 67,64,66,421
- 67,64,66,421
26.36
(2.40)
105
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Cate
gory
Code
Category of Shareholder
No. of Shares held at the beginning of the year
No. of Shares held at the end of the year
Demat
Physical
Total
Demat
Physical
Total
% of
total
shares
% of
total
shares
% Change
during
the year
(I)
(II)
(III)
(IV)
(V)
(VI)
(VII)
(VIII)
(IX)
(X)
(XI)
(B)
(1)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Public Shareholding
Institutions
Mutual Funds
16,28,54,328
Banks / Financial Institutions
29,20,751
Central Government
State Government(s)
Venture Capital Funds
-
-
-
Insurance Companies
3,64,54,316
Foreign Institutional Investors
115,54,57,305
Foreign Venture Capital
Funds
(i)
Others (Specify)
-
-
-
-
-
-
-
-
-
-
-
16,28,54,328
6.80
21,25,32,389
29,20,751
0.12
23,30,483
-
-
-
-
-
-
-
-
-
3,64,54,316
1.52
2,64,29,435
115,54,57,305
48.24
122,31,30,379
-
-
-
-
-
8,75,00,000
-
-
-
-
-
-
-
-
-
21,25,32,389
23,30,483
8.28
0.09
1.48
(0.03)
-
-
-
-
-
-
2,64,29,435
1.03
122,31,30,379
47.66
-
-
8,75,00,000
3.41
-
-
-
(0.49)
(0.58)
-
3.41
3.78
Sub-Total B(1) :
135,76,86,700
- 135,76,86,700
56.69 155,19,22,686
- 155,19,22,686
60.47
(2)
(a)
Non-Institutions
Bodies Corporate
i.
Indian
ii. Overseas
(b)
Individuals
6,10,82,582
68,000
6,11,50,582
2.55
6,36,28,325
65,500
6,36,93,825
2.48
(0.07)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i) Individuals holding
9,68,83,533
84,59,992
10,53,43,525
4.40
7,97,13,802
68,03,251
8,65,17,053
3.37
(1.03)
-
-
-
-
-
-
-
-
-
4,78,39,668
2.00
4,76,19,236
17,92,228
1,28,49,979
47,86,032
35,90,688
16,31,115
8,09,744
700
-
0.07
0.54
0.20
0.15
0.07
0.03
-
-
11,41,119
1,52,44,722
29,94,530
28,22,656
15,81,976
6,55,836
750
5,35,446
-
-
-
-
-
-
-
-
-
4,76,19,236
1.86
(0.14)
11,41,119
1,52,44,722
29,94,530
28,22,656
15,81,976
6,55,836
750
0.04
0.59
0.12
0.11
0.06
0.03
-
(0.03)
0.05
(0.08)
(0.04)
(0.01)
-
-
5,35,446
0.02
0.02
17,92,228
1,28,49,979
47,86,032
35,90,688
16,31,115
8,09,744
700
-
23,12,66,269 85,27,992
23,97,94,261
10.01 21,59,38,398 68,68,751 22,28,07,149
8.68
(1.33)
158,89,52,969
85,27,992
159,74,80,961
66.70
176,78,61,084
68,68,751
177,47,29,835
69.15
2.45
nominal share capital
upto `1 lakh
(ii) Individuals holding
4,78,39,668
nominal share capital in
excess of `1 lakh
(c)
Others
HUF
Trusts
Clearing Members
Non Resident Indians
NRI Non-Repatriation
Foreign Bodies-Dr
Foreign Nationals
IEPF
Sub-Total B(2) :
Total B=B(1)+B(2):
(C)
(1)
Shares held by
custodian for GDR
Promoter and Promoter
Group
(2)
Public
Total C:
-
10,87,53,075
10,87,53,075
-
-
-
-
-
-
10,87,53,075
4.54
11,53,42,680
10,87,53,075
4.54
11,53,42,680
-
-
-
-
-
-
11,53,42,680
11,53,42,680
4.49
4.49
0.05
0.05
-
Grand Total (A+B+C) :
238,65,08,117
85,27,992
239,50,36,109
100
255,96,70,185
68,68,751
256,65,38,936
100.00
106
Annual Report 2017 -18
ii)
Shareholding of Promoters
Sr.
No.
Shareholder's Name
Shareholding beginning of
the year 31/03/2017
Shareholding end of
the year 31/03/2018
No. of Shares
% of
total
Shares
of the
Bank
% of Shares
Pledged /
encumbered
to total
Shares
No. of Shares % of
total
Shares
of the
Bank
% of Shares
Pledged /
encumbered
to total
Shares
1
2
3
4
5
6
7
Administrator of the Specified
Undertaking of the Unit Trust of
India - SUUTI
27,48,40,905
11.48
Life Insurance Corporation of India
33,13,08,553
13.83
General Insurance Corporation
of India
The New India Assurance
Company Limited
National Insurance Company
Limited
The Oriental Insurance Company
Limited
United India Insurance Company
Limited
3,99,40,000
1.67
2,61,03,585
1.09
30,63,797
0.13
63,30,020
0.26
72,15,213
0.30
-
-
-
-
-
-
-
25,32,70,690
9.87
34,94,51,108
13.62
3,72,50,000
1.45
2,54,03,585
0.99
21,34,681
0.08
63,30,020
0.25
26,26,337
0.10
-
-
-
-
-
-
-
%
change
in
Share
holding
during
the
year
(1.61)
(0.21)
(0.22)
(0.10)
(0.05)
(0.01)
(0.20)
Total 68,88,02,073
28.76
- 67,64,66,421
26.36
-
(2.40)
iii. Change in Promoters’ Shareholding
Name of the Shareholder
Sr.
No.
Shareholding at the
beginning of the year
Date
No. of Shares % of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of Shares
% of total
shares of the
company
1
Life Insurance
Corporation of India
33,13,08,553
13.83 31-03-2017
33,13,08,553
13.83
14-04-2017
21-04-2017
28-04-2017
05-05-2017
12-05-2017
19-05-2017
20-10-2017
20-10-2017
-288,328
-296,573
Transfer
33,10,20,225
Transfer
33,07,23,652
-40,000
Transfer
33,06,83,652
-100,000
-440,338
Transfer
33,05,83,652
Transfer
33,01,43,314
-66,130
Transfer
33,00,77,184
6,500
-6,500
Transfer
33,00,83,684
Transfer
33,00,77,184
29-12-2017
2,28,57,142
Transfer
35,29,34,326
19-01-2018
95,41,809
Transfer
36,24,76,135
19-01-2018
-9,541,809
Transfer
35,29,34,326
26-01-2018
-311,229
Transfer
35,26,23,097
02-02-2018
-2,050,007
Transfer
35,05,73,090
09-02-2018
16-02-2018
30-03-2018
30-03-2018
-719,621
-402,361
5,000
-5,000
Transfer
34,98,53,469
Transfer
34,94,51,108
Transfer
34,94,56,108
Transfer
34,94,51,108
13.82
13.80
13.80
13.79
13.78
13.77
13.77
13.77
13.76
14.14
13.76
13.75
13.67
13.64
13.62
13.62
13.62
34,94,51,108
13.62 31-03-2018
34,94,51,108
13.62
107
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Name of the Shareholder
Sr.
No.
Shareholding at the
beginning of the year
Date
No. of Shares % of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of Shares
% of total
shares of the
company
Administrator of the
Specified Undertaking of
the Unit Trust of India -
SUUTI
General Insurance
Corporation of India
27,48,40,905
11.48 31-03-2017
27,48,40,905
17-11-2017
-20,351,453
Transfer
25,44,89,452
24-11-2017
-1,218,762
Transfer
25,32,70,690
25,32,70,690
9.87 31-03-2018
3,99,40,000
1.67 31-03-2017
25,32,70,690
3,99,40,000
07-04-2017
03-11-2017
10-11-2017
17-11-2017
-185,000
-400,000
-84,000
-16,000
24-11-2017
-220,000
01-12-2017
15-12-2017
05-01-2018
19-01-2018
-35,000
-150,000
-150,000
-50,000
26-01-2018
-250,000
02-02-2018
16-02-2018
23-02-2018
02-03-2018
09-03-2018
16-03-2018
23-03-2018
-50,000
-83,425
-205,160
-267,035
-194,380
-200,000
-150,000
11.48
10.61
10.56
9.87
1.67
1.66
1.64
1.64
1.64
1.63
1.63
1.62
1.51
1.51
1.50
1.50
1.49
1.48
1.47
1.47
1.46
1.45
1.45
1.09
1.08
1.08
1.06
0.99
0.30
0.30
0.30
0.29
0.29
0.29
0.29
0.28
0.28
0.27
0.27
0.27
0.27
0.26
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
3,97,55,000
3,93,55,000
3,92,71,000
3,92,55,000
3,90,35,000
3,90,00,000
3,88,50,000
3,87,00,000
3,86,50,000
3,84,00,000
3,83,50,000
3,82,66,575
3,80,61,415
3,77,94,380
3,76,00,000
3,74,00,000
3,72,50,000
3,72,50,000
2,61,03,585
2,60,03,585
2,58,28,585
2,54,03,585
2,54,03,585
72,15,213
72,00,213
71,80,213
70,70,213
70,50,213
69,50,213
68,75,589
67,70,589
66,79,296
65,84,296
65,34,296
64,29,296
63,54,296
63,24,296
The New India Assurance
Company Limited
United India Insurance
Company Limited
3,72,50,000
2,61,03,585
1.45 31-03-2018
1.09 31-03-2017
15-09-2017
22-09-2017
29-09-2017
-100,000
-175,000
-425,000
2,54,03,585
0.99 31-03-2018
72,15,213
0.30 31-03-2017
14-04-2017
28-04-2017
-15,000
-20,000
23-06-2017
-110,000
30-06-2017
-20,000
07-07-2017
-100,000
14-07-2017
-74,624
21-07-2017
-105,000
28-07-2017
04-08-2017
11-08-2017
-91,293
-95,000
-50,000
01-09-2017
-105,000
08-09-2017
15-09-2017
-75,000
-30,000
2
3
4
5
108
Annual Report 2017 -18
Name of the Shareholder
Sr.
No.
Shareholding at the
beginning of the year
Date
No. of Shares % of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of Shares
% of total
shares of the
company
22-09-2017
06-10-2017
13-10-2017
20-10-2017
-30,000
-57,000
-310,000
-120,000
27-10-2017
3,57,500
03-11-2017
10-11-2017
17-11-2017
24-11-2017
08-12-2017
15-12-2017
22-12-2017
29-12-2017
05-01-2018
12-01-2018
19-01-2018
-680,000
-760,000
-580,000
-70,000
-300,000
-286,013
-260,000
-120,000
-120,000
-133,556
-98,000
26-01-2018
-100,000
02-02-2018
09-02-2018
-60,850
29,960
6
7
The Oriental Insurance
Company Limited
National Insurance
Company Ltd
26,26,337
63,30,020
63,30,020
30,63,797
0.10 31-03-2018
0.26 31-03-2017
0.25 31-03-2018
0.13 31-03-2017
28-04-2017
-90,000
27-10-2017
6,94,000
10-11-2017
17-11-2017
15-12-2017
22-12-2017
02-02-2018
09-02-2018
16-03-2018
23-03-2018
-200,000
-200,000
-200,000
-200,000
-40,000
-105,000
-500,000
-88,116
21,34,681
0.08 31-03-2018
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
62,94,296
62,37,296
59,27,296
58,07,296
61,64,796
54,84,796
47,24,796
41,44,796
40,74,796
37,74,796
34,88,783
32,28,783
31,08,783
29,88,783
28,55,227
27,57,227
26,57,227
25,96,377
26,26,337
26,26,337
63,30,020
63,30,020
30,63,797
29,73,797
36,67,797
34,67,797
32,67,797
30,67,797
28,67,797
28,27,797
27,22,797
22,22,797
21,34,681
21,34,681
0.26
0.26
0.25
0.24
0.26
0.23
0.20
0.17
0.17
0.16
0.15
0.13
0.12
0.12
0.11
0.11
0.10
0.10
0.10
0.10
0.26
0.25
0.13
0.12
0.15
0.14
0.14
0.13
0.11
0.11
0.11
0.09
0.08
0.08
109
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
iv) Shareholding pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs
and ADRs):
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
1
Oakmark International
Fund
-
-
31-03-17
-
21-04-17
45,23,955
Transfer
45,23,955
28-04-17
54,44,645
Transfer
99,68,600
05-05-17
57,51,200
Transfer
1,57,19,800
12-05-17
20,67,100
Transfer
1,77,86,900
26-05-17
41,17,597
Transfer
2,19,04,497
02-06-17
31,38,176
Transfer
2,50,42,673
09-06-17
33,46,527
Transfer
2,83,89,200
30-06-17
31,53,520
Transfer
3,15,42,720
07-07-17
10,67,880
Transfer
3,26,10,600
14-07-17
17,26,175
Transfer
3,43,36,775
21-07-17
15,88,225
Transfer
3,59,25,000
11-08-17
68,97,200
Transfer
4,28,22,200
18-08-17
66,32,500
Transfer
4,94,54,700
25-08-17
43,39,994
Transfer
5,37,94,694
01-09-17
27,18,285
Transfer
5,65,12,979
08-09-17
17,48,121
Transfer
5,82,61,100
15-09-17
22,84,558
Transfer
6,05,45,658
22-09-17
19,24,242
Transfer
6,24,69,900
29-09-17
53,13,004
Transfer
6,77,82,904
06-10-17
91,01,496
Transfer
7,68,84,400
13-10-17
55,25,963
Transfer
8,24,10,363
20-10-17
3,25,916
Transfer
8,27,36,279
27-10-17
33,58,000
Transfer
8,60,94,279
24-11-17
-4,849,500
Transfer
8,12,44,779
01-12-17
-392,178
Transfer
8,08,52,601
08-12-17
-286,412
Transfer
8,05,66,189
15-12-17
-955,100
Transfer
7,96,11,089
22-12-17
-3,191,910
Transfer
7,64,19,179
19-01-18
-823,900
Transfer
7,55,95,279
26-01-18
-1,035,700
Transfer
7,45,59,579
02-02-18
-4,455,812
Transfer
7,01,03,767
09-03-18
47,93,200
Transfer
7,48,96,967
16-03-18
11,56,600
Transfer
7,60,53,567
23-03-18
35,78,100
Transfer
7,96,31,667
30-03-18
43,95,800
Transfer
8,40,27,467
-
0.19
0.42
0.66
0.74
0.91
1.04
1.18
1.32
1.36
1.43
1.50
1.79
2.06
2.24
2.36
2.43
2.53
2.61
2.83
3.21
3.44
3.45
3.59
3.39
3.37
3.36
3.32
2.98
2.95
2.91
2.73
2.92
2.96
3.10
3.27
8,40,27,467
3.27
31-03-18
8,40,27,467
3.27
110
Annual Report 2017 -18
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
2
Dodge and Cox
International Stock
Fund
-
-
31-03-17
-
31-10-17
19,04,509
Transfer
19,04,509
03-11-17
22,16,500
Transfer
41,21,009
10-11-17
67,48,650
Transfer
1,08,69,659
17-11-17
7,30,317
Transfer
1,15,99,976
01-12-17
49,94,872
Transfer
1,65,94,848
08-12-17
88,86,312
Transfer
2,54,81,160
15-12-17
51,89,736
Transfer
3,06,70,896
22-12-17
29,56,927
Transfer
3,36,27,823
29-12-17
21,60,777
Transfer
3,57,88,600
05-01-18
24,32,210
Transfer
3,82,20,810
12-01-18
20,47,790
Transfer
4,02,68,600
19-01-18
21,25,000
Transfer
4,23,93,600
26-01-18
20,99,333
Transfer
4,44,92,933
02-02-18
37,75,967
Transfer
4,82,68,900
09-02-18
24,04,500
Transfer
5,06,73,400
09-03-18
77,27,947
Transfer
5,84,01,347
16-03-18
45,38,298
Transfer
6,29,39,645
23-03-18
35,97,242
Transfer
6,65,36,887
30-03-18
1,29,13,513
Transfer
7,94,50,400
3
4
5
6
Europacific Growth
Fund
BC Asia Investments VII
Limited - FDI
Integral Investments
South Asia IV - FDI
Vanguard Emerging
Markets Stock Index
Fund, A Series of
Vanguard International
Equity Index Funds
7,94,50,400
3.10
31-03-18
2,13,93,890
0.89
31-03-17
7,94,50,400
2,13,93,890
29-12-17
4,28,72,967
Transfer
6,42,66,857
16-03-18
13,21,000
Transfer
6,55,87,857
6,55,87,857
2.56
31-03-18
-
-
31-03-17
6,55,87,857
-
29-12-17
5,56,00,000
Transfer
5,56,00,000
5,56,00,000
2.17
31-03-18
-
-
31-03-17
5,56,00,000
-
29-12-17
3,19,00,000
Transfer
3,19,00,000
3,19,00,000
1.24
31-03-18
2,55,30,647
1.07
31-03-17
3,19,00,000
2,55,30,647
07-04-17
3,26,782
Transfer
2,58,57,429
21-04-17
1,94,971
Transfer
2,60,52,400
28-04-17
29,980
Transfer
2,60,82,380
05-05-17
2,39,840
Transfer
2,63,22,220
12-05-17
74,950
Transfer
2,63,97,170
19-05-17
1,61,892
Transfer
2,65,59,062
02-06-17
2,80,704
Transfer
2,68,39,766
09-06-17
1,07,755
Transfer
2,69,47,521
-
0.08
0.17
0.45
0.48
0.69
1.06
1.28
1.31
1.40
1.49
1.57
1.65
1.74
1.88
1.98
2.28
2.45
2.59
3.10
3.10
0.89
2.51
2.56
2.56
-
2.17
2.17
-
1.24
1.24
1.07
1.08
1.09
1.09
1.10
1.10
1.11
1.12
1.12
111
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
30-06-17
3,75,097
Transfer
2,73,22,618
07-07-17
1,04,930
Transfer
2,74,27,548
14-07-17
2,48,666
Transfer
2,76,76,214
21-07-17
2,18,403
Transfer
2,78,94,617
28-07-17
04-08-17
11-08-17
74,674
Transfer
2,79,69,291
65,956
Transfer
2,80,35,247
86,942
Transfer
2,81,22,189
25-08-17
5,06,483
Transfer
2,86,28,672
01-09-17
1,07,928
Transfer
2,87,36,600
08-09-17
1,52,898
Transfer
2,88,89,498
15-09-17
1,37,908
Transfer
2,90,27,406
06-10-17
13-10-17
20-10-17
27-10-17
89,940
Transfer
2,91,17,346
92,938
Transfer
2,92,10,284
68,954
Transfer
2,92,79,238
62,958
Transfer
2,93,42,196
22-12-17
-922,085
Transfer
2,84,20,111
26-01-18
1,34,984
Transfer
2,85,55,095
02-02-18
1,20,624
Transfer
2,86,75,719
23-03-18
2,86,75,719
Transfer
5,73,51,438
23-03-18
-28,675,719
Transfer
2,86,75,719
30-03-18
-147,650
Transfer
2,85,28,069
Lazard Emerging
Markets Portfolio
ICICI Prudential Life
Insurance Company
Limited
7
8
112
2,85,28,069
1.11
31-03-18
2,94,91,974
1.23
31-03-17
2,85,28,069
2,94,91,974
29-09-17
-1,198,613
Transfer
2,82,93,361
06-10-17
-680,523
Transfer
2,76,12,838
15-12-17
-630,060
Transfer
2,69,82,778
2,69,82,778
1.05
31-03-18
3,43,30,677
1.43
31-03-17
2,69,82,778
3,43,30,677
07-04-17
6,416
Transfer
3,43,37,093
14-04-17
-725,757
Transfer
3,36,11,336
21-04-17
-493,472
Transfer
3,31,17,864
28-04-17
33,23,981
Transfer
3,64,41,845
05-05-17
-562,840
Transfer
3,58,79,005
12-05-17
19-05-17
-11
Transfer
3,58,78,994
-28,485
Transfer
3,58,50,509
26-05-17
-286,835
Transfer
3,55,63,674
02-06-17
2,08,256
Transfer
3,57,71,930
09-06-17
-227,674
Transfer
3,55,44,256
16-06-17
-8,472
Transfer
3,55,35,784
23-06-17
1,15,808
Transfer
3,56,51,592
1.14
1.14
1.15
1.16
1.17
1.17
1.17
1.19
1.20
1.20
1.21
1.21
1.22
1.22
1.22
1.11
1.11
1.12
2.23
1.12
1.11
1.11
1.23
1.18
1.15
1.12
1.05
1.43
1.43
1.40
1.38
1.52
1.50
1.50
1.50
1.48
1.49
1.48
1.48
1.49
Annual Report 2017 -18
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
30-06-17
4,29,378
Transfer
3,60,80,970
07-07-17
9,84,380
Transfer
3,70,65,350
14-07-17
3,91,888
Transfer
3,74,57,238
21-07-17
-60,884
Transfer
3,73,96,354
28-07-17
1,88,775
Transfer
3,75,85,129
04-08-17
-240,055
Transfer
3,73,45,074
11-08-17
-142,409
Transfer
3,72,02,665
18-08-17
25-08-17
-34,930
Transfer
3,71,67,735
95,713
Transfer
3,72,63,448
01-09-17
-2,504,537
Transfer
3,47,58,911
08-09-17
1,51,375
Transfer
3,49,10,286
15-09-17
-706,125
Transfer
3,42,04,161
22-09-17
37,30,682
Transfer
3,79,34,843
29-09-17
2,78,346
Transfer
3,82,13,189
06-10-17
5,47,925
Transfer
3,87,61,114
13-10-17
20-10-17
-28,181
Transfer
3,87,32,933
80,622
Transfer
3,88,13,555
27-10-17
-5,084,248
Transfer
3,37,29,307
31-10-17
03-11-17
9,749
Transfer
3,37,39,056
-93,839
Transfer
3,36,45,217
10-11-17
-205,104
Transfer
3,34,40,113
17-11-17
-854,878
Transfer
3,25,85,235
24-11-17
-57,192
Transfer
3,25,28,043
01-12-17
-953,108
Transfer
3,15,74,935
08-12-17
15-12-17
-26,329
Transfer
3,15,48,606
-49,573
Transfer
3,14,99,033
22-12-17
-1,186,732
Transfer
3,03,12,301
29-12-17
48,667
Transfer
3,03,60,968
05-01-18
-1,129,197
Transfer
2,92,31,771
12-01-18
-1,017,404
Transfer
2,82,14,367
19-01-18
-780,496
Transfer
2,74,33,871
26-01-18
02-02-18
-10,675
Transfer
2,74,23,196
84,048
Transfer
2,75,07,244
09-02-18
-229,110
Transfer
2,72,78,134
16-02-18
-102,019
Transfer
2,71,76,115
23-02-18
-594,752
Transfer
2,65,81,363
02-03-18
-346,959
Transfer
2,62,34,404
09-03-18
16-03-18
23-03-18
-23,477
Transfer
2,62,10,927
5,723
Transfer
2,62,16,650
-10,815
Transfer
2,62,05,835
1.51
1.55
1.56
1.56
1.57
1.56
1.55
1.55
1.55
1.45
1.46
1.43
1.58
1.59
1.62
1.62
1.62
1.41
1.41
1.40
1.39
1.36
1.36
1.32
1.32
1.31
1.18
1.18
1.14
1.10
1.07
1.07
1.07
1.06
1.06
1.04
1.02
1.02
1.02
1.02
113
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
30-03-18
-171,819
Transfer
2,60,34,016
2,60,34,016
1.01
31-03-18
2,55,47,908
1.07
31-03-17
2,55,47,908
1.00
31-03-18
3,81,37,648
1.59
31-03-17
2,60,34,016
2,55,47,908
2,55,47,908
3,81,37,648
07-04-2017
-49,690
Transfer
3,80,87,958
14-04-2017
11,20,737
Transfer
3,92,08,695
21-04-2017
4,30,611
Transfer
3,96,39,306
28-04-2017
-714,766
Transfer
3,89,24,540
05-05-2017
-416,791
Transfer
3,85,07,749
26-05-2017
-20,676
Transfer
3,84,87,073
02-06-2017
87,471
Transfer
3,85,74,544
09-06-2017
81,179
Transfer
3,86,55,723
23-06-2017
-18,658
Transfer
3,86,37,065
30-06-2017
-1,856,376
Transfer
3,67,80,689
07-07-2017
2,05,650
Transfer
3,69,86,339
04-08-2017
-2,400,119
Transfer
3,45,86,220
11-08-2017
-800,847
Transfer
3,37,85,373
18-08-2017
-21,806
Transfer
3,37,63,567
25-08-2017
-466,986
Transfer
3,32,96,581
01-09-2017
-932,527
Transfer
3,23,64,054
08-09-2017
-902,531
Transfer
3,14,61,523
15-09-2017
-464,749
Transfer
3,09,96,774
22-09-2017
-2,231,083
Transfer
2,87,65,691
29-09-2017
-312,432
Transfer
2,84,53,259
06-10-2017
1,23,020
Transfer
2,85,76,279
20-10-2017
-264,142
Transfer
2,83,12,137
27-10-2017
-147,246
Transfer
2,81,64,891
03-11-2017
2,00,559
Transfer
2,83,65,450
17-11-2017
-473,721
Transfer
2,78,91,729
24-11-2017
-210,110
Transfer
2,76,81,619
01-12-2017
-739,028
Transfer
2,69,42,591
08-12-2017
-406,054
Transfer
2,65,36,537
05-01-2018
10,26,871
Transfer
2,75,63,408
19-01-2018
5,15,115
Transfer
2,80,78,523
26-01-2018
3,73,803
Transfer
2,84,52,326
02-02-2018
1,44,792
Transfer
2,85,97,118
09-02-2018
-55,446
Transfer
2,85,41,672
16-02-2018
-2,998,976
Transfer
2,55,42,696
23-02-2018
-33,085
Transfer
2,55,09,611
1.01
1.01
1.07
1.00
1.59
1.59
1.64
1.65
1.62
1.61
1.61
1.61
1.61
1.61
1.53
1.54
1.44
1.41
1.41
1.39
1.35
1.31
1.29
1.20
1.19
1.19
1.18
1.17
1.18
1.16
1.15
1.12
1.11
1.07
1.09
1.11
1.12
1.11
1.00
0.99
9
10
Centaura Investments
(Mauritius) Pte Ltd
Government of
Singapore
114
Annual Report 2017 -18
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the year
No. of
Shares
% of total
shares
of the
company
02-03-2018
-587,371
Transfer
2,49,22,240
09-03-2018
-457,652
Transfer
2,44,64,588
30-03-2018
2,02,948
Transfer
2,46,67,536
2,46,67,536
0.96 31-03-2018
2,46,67,536
0.97
0.95
0.96
0.96
Note:
1.
2.
Top ten shareholders of the Bank as on March 31st 2018 have been considered, for the above disclosures.
Date of change is the date of the shareholding statement i.e. the date on which the statements of beneficial ownerships is
received from the depositories.
v)
Shareholding of Directors and Key Managerial Personnel:
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the Year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
company
1
Shikha Sharma
5,75,000
0.02
31-03-17
5,50,000
0.02
26-05-17
02-06-17
09-06-17
23-06-17
30-06-17
04-08-17
01-09-17
15-12-17
05-01-18
26-01-18
02-02-18
16-02-18
23-02-18
-25,000
-25,000
-25,000
50,000
25,000
-100,000
1,00,000
-200,000
2,00,000
-100,000
-100,000
1,00,000
1,00,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
2
Srinivasan Varadarajan
10,80,000
5,75,000
0.02
0.05
31-03-18
31-03-17
3
Rajiv Anand
3,80,500
14,00,000
0.05
0.02
31-03-18
31-03-17
10-11-17
23-03-18
30-03-18
1,00,000
1,23,000
97,000
Transfer
Transfer
Transfer
21-04-17
05-05-17
26-05-17
08-09-17
17-11-17
09-02-18
23-03-18
1,48,000
12,000
-35,000
-35,000
-35,000
-35,000
1,00,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
5,00,500
0.02
31-03-18
5,50,000
5,25,000
5,00,000
5,50,000
5,75,000
4,75,000
5,75,000
3,75,000
5,75,000
4,75,000
3,75,000
4,75,000
5,75,000
5,75,000
10,80,000
11,80,000
13,03,000
14,00,000
14,00,000
3,80,500
5,28,500
5,40,500
5,05,500
4,70,500
4,35,500
4,00,500
5,00,500
5,00,500
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.01
0.02
0.02
0.02
0.05
0.05
0.05
0.05
0.05
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
0.02
115
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Sr.
No.
Name of the
Shareholder
Shareholding at the
beginning of the Year
Date
No. of
Shares
% of total
shares
of the
company
Increase/
Decrease
in share
holding
Reason
Cumulative Shareholding
during the Year
No. of
Shares
% of total
shares
of the
company
4
Rajesh Dahiya
30,000
0.00
31-03-17
V R Kaundinya@
6,000
5,000
5,000
Jairam Sridharan
1,59,041
5
6
0.00
0.00
0.00
0.01
09-06-17
16-06-17
24-11-17
01-12-17
15-12-17
22-12-17
09-02-18
16-03-18
31-03-18
31-03-17
31-03-18
31-03-17
24-11-17
16-02-18
-10,000
-20,000
45,000
-20,000
-12,500
-12,500
12,000
-6,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
50,000
30,000
Transfer
Transfer
7
Girish V. Koliyote
2,39,041
0.01
31-03-18
-
-
-
-
31-03-17
31-03-18
30,000
20,000
0
45,000
25,000
12,500
0
12,000
6,000
6,000
5,000
5,000
1,59,041
2,09,041
2,39,041
2,39,041
-
-
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.01
0.01
0.01
-
-
Note: @ Shri V. R. Kaundinya ceased to be a Director of the Bank on expiry of his tenure w.e.f. the close of business hours on 11th October 2017.
V.
INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Particulars
Indebtedness at the beginning of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (I+II+III)
Change in Indebtedness during the financial year
Addition
Reduction
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (I+II+III)
Secured Loans
excluding
deposits
Unsecured
Loans
Deposits
(` in crore)
Total
Indebtedness
1,381.09
1,03,649.78
-
-
2.33
1,538.52
-
-
-
1,05,030.87
-
1,540.85
1,383.42
1,05,188.30
-
1,06,571.72
13,46,562.33
2,64,540.69
(13,41,362.01)
(2,25,759.39)
5,200.32
38,781.30
6,579.28
1,41,436.87
-
-
4.46
2,532.73
-
-
-
-
-
-
16,11,103.02
(15,67,121.40)
43,981.62
1,48,016.14
-
2,537.19
6,583.74
1,43,969.60
-
1,50,553.34
Deposits accepted by the Bank are in normal course of banking business and an operating activity of the Bank and hence not included in the
indebtedness disclosure.
Principal amount represents outstanding balance of borrowings as reported in financial statements as of the beginning and end of the financial
year.
Additions also include the effect of exchange rate fluctuation and net change in interest accrued but not due between the beginning of financial
year and the end of financial year.
Notes:
1.
2.
3.
116
Annual Report 2017 -18
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A.
Remuneration to Managing Director, Whole-time Directors and/or Manager for the financial year 2017-18:
Particulars of Remuneration
Name of MD / WTD / Manager
Total Amount
(in `)
Sr.
No.
Smt. Shikha
Sharma
Shri V.
Srinivasan
Shri Rajiv
Anand
Shri Rajesh
Dahiya
4,51,79,452
3,01,33,426
2,22,78,409
1,56,37,988
11,32,29,275
1.
Gross salary
(a)
Salary as per provisions contained u/s
17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) of the
32,08,204
10,83,946
20,86,639
21,91,364
85,70,153
Income-tax Act, 1961
(c)
Profits in lieu of salary u/s 17(3) of the
Income-tax Act, 1961
-
-
-
-
Stock Options (No. of options)
5,40,000
3,00,000
3,15,000
2,92,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.
3.
4.
5.
Sweat Equity
Commission
- as % of profit
- others
Others
Total (A)
4,83,87,656 3,12,17,372 2,43,65,048
1,78,29,352
12,17,99,428
Ceiling as per the Act*
-
-
-
-
* In terms of provision of the Banking Regulations Act, 1949, the provisions relating to Managerial Remuneration under the
Companies Act, 2013 and the Rules made thereunder are not applicable to the Bank.
B.
Remuneration to other Directors for the financial year 2017-18:
Sr.
No.
Particulars of
Remuneration to
Independent Directors
Dr. Sanjiv
Misra
V. R.
Kaundinya@
Prasad R.
Menon
Samir
Barua
Som Mittal
Rohit
Bhagat
S.
Vishvanathan
Total
Amount
1
2
3
Fee for attending Board /
Committee meetings
12,00,000
7,50,000
24,00,000
22,50,000
16,00,000
18,00,000
22,50,000
1,22,50,000
Commission for FY 2016-17
1,83,562
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
10,00,000
61,83,562
Others, please specify
-
-
-
-
-
-
-
-
Total (1)
13,83,562
17,50,000
34,00,000
32,50,000
26,00,000
28,00,000
32,50,000
1,84,33,562
(in `)
Sr.
No.
Particulars of Remuneration of Independent /Non-
Executive Directors
Rakesh
Makhija
Smt. Ketaki
Bhagwati
Shri B.
Babu Rao*
Smt. Usha
Sangwan*
Shri Stephen
Pagliuca*
(in `)
Total Amount
1
2
3
Fee for attending Board / Committee meetings
Commission for FY 2016-17
Others, please specify
Total (2)
Total (B)=(1+2)
Total Managerial Remuneration (A+B)
25,00,000
10,00,000
-
20,00,000
19,50,000
6,00,000
2,00,000
10,00,000
10,00,000
10,00,000
-
-
-
-
-
72,50,000
40,00,000
-
35,00,000
30,00,000
29,50,000
16,00,000
2,00,000
1,12,50,000
2,96,83,562
15,14,82,990
*
@
Shri B. Babu Rao, Smt. Usha Sangwan and Shri Stephen Pagliuca are Non-Executive (Nominee) Directors of the Bank.
Shri V. R. Kaundinya ceased to be an Independent Director of the Bank on expiry of his tenure w.e.f. the close of business hours on
11th October 2017.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
C.
Remuneration to Key Managerial Personnel other than MD/Manager/WTD for the financial year 2017-18
Particulars of Remuneration
Sr.
No.
1.
Gross salary
Jairam Sridharan,
Chief Financial
Officer
Girish V. Koliyote,
Company Secretary
Total
Amount
(in `)
(a) Salary as per provisions contained u/s 17(1) of the
1,74,59,392
73,23,399
2,47,82,791
Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961
17,79,600
3,76,826
21,56,426
(c) Profits in lieu of salary u/s 17(3) of the Income-tax Act,
1961
Stock Option (No. of options)
1,40,000
26,000
2.
3.
4.
Sweat Equity
Commission
- as % of profit
- others
5.
Others
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,92,38,992
77,00,225
2,69,39,217
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type
Section of the
Companies Act
Brief
Description
Details of Penalty/
Punishment/
Compounding fees
imposed
Authority (Regional
Director/National
Company Law
Tribunal/Court)
Appeal
made
A.
Company
Penalty
Punishment
Compounding
B.
Directors
Penalty
Punishment
Compounding
C. Other Officers in Default
Penalty
Punishment
Compounding
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
118
Annual Report 2017 -18
DISCLOSURE ON REMUNERATION
Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
The information relating to managerial remuneration, in terms of Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are detailed as under: –
(i)
The ratio of the remuneration of each Director of the Bank to the median remuneration of the employees of the Bank for the
financial year 2017-18, are as under;
Name of the Executive Directors
Ratio of remuneration to median remuneration of all employees
Smt. Shikha Sharma, Managing Director & CEO
Shri V. Srinivasan, Deputy Managing Director
Shri Rajiv Anand, Executive Director (Retail Banking)
Shri Rajesh Dahiya, Executive Director (Corporate Centre)
82.9
54.9
42.7
38.1
Note: All confirmed employees (excluding front line sales force), as on 31st March 2018 have been considered.
(ii)
The percentage increase in remuneration of Executive Directors, Chief Financial Officer, Chief Executive Officer and Company
Secretary or Manager, if any, in the financial year 2017-18, are as under;
Name of the Director/Key Managerial Personnel
% increase in the remuneration in the financial year 2017-18
Executive Directors
Smt. Shikha Sharma, Managing Director & CEO
Shri V. Srinivasan, Deputy Managing Director
Shri Rajiv Anand, Executive Director (Retail Banking)
7.5
7.5
7.5
Shri Rajesh Dahiya, Executive Director (Corporate Centre)
15.0
Key Managerial Personnel
Shri Jairam Sridharan, Chief Financial Officer
Shri Girish V. Koliyote, Company Secretary
17.5
11.8
(iii)
The percentage increase in the median remuneration of the said employees of the Bank during the financial year 2017-18, is
as under:
Median remuneration of employees of the Bank increased by 7.57% in the financial year 2017-18, as compared to the financial
year 2016-17.
(iv)
The number of permanent employees on the rolls of the Bank as on 31st March 2018 - The Bank had 59,614 permanent
employees on its rolls, as on 31st March 2018.
(v) Average percentile increase already made in the salaries of employees of the Bank other than its managerial personnel (viz.
Whole Time Directors of the Bank) during the last financial year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial
remuneration.
Average remuneration increase for non-managerial personnel of the Bank during the financial year 2017-18 was 8.61 % and
the average remuneration increase for the said managerial personnel of the Bank was around 8.73%.
Remuneration increase is dependent on the Bank’s performance as a whole, individual performance level and also market
benchmarks.
(vi) Affirmation that the remuneration is as per the remuneration policy of the Bank.
The Comprehensive Remuneration policy of the Bank as approved by the Nomination and the Remuneration Committee of the
Board of Directors of the Bank is in line with Risk Alignment Policy Guidelines issued by the Reserve Bank of India. We affirm
that the remuneration paid to all employees is as per the said Policy of the Bank.
119
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
ACTIVITIES
(As prescribed under Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014)
1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be
undertaken and a reference to the web-link to the CSR policy and projects or programs
The primary purpose of Axis Bank’s CSR philosophy is to make a meaningful and measurable impact on the lives of economically,
physically and socially challenged communities across India, by actively supporting initiatives that aim at creating suitable
conditions for their sustainable livelihoods. As a financial institution, the Bank believes that it can play an active role in stimulating
India’s socio-economic development as well as its ecological balance. The Bank is also making efforts to align its CSR activities
with various Government Schemes.
The CSR activities of the Bank are guided by its Corporate Social Responsibility (CSR) Policy which has been formulated and
adopted by the Bank in compliance with the provisions of Section 135 of the Companies Act, 2013 and is hosted on the Bank’s
website www.axisbank.com.
The CSR activities are pursued through various initiatives undertaken by the Bank or through Axis Bank Foundation (ABF) or in
association with any other Trust or agencies and entities as deemed suitable.
The Bank leverages its geographical spread across the country to undertake such initiatives.
Set up as a Public Charitable Trust in 2006, Axis Bank Foundation (ABF) is the Corporate Social Responsibility (CSR) arm of Axis
Bank Limited. It spearheads the CSR activities of the Bank with a focus on creating Sustainable Livelihoods. ABF had set itself an
ambitious target of creating 1 million sustainable livelihoods by the end of 2017.
Partnering with reputed NGOs across the length and breadth of India since it was set up, ABF has created 1 million livelihoods
in September 2017 of which 63% were women. ABF now aspires to reach out to 2 Million Households by 2025. An illustrative
list of various programs and activities supported by ABF can be accessed at www.axisbankfoundation.org.
ABF, as part of its Sustainable Livelihoods programs, supports promotion and sustenance of rural livelihoods primarily in the
rain-fed regions of the country. Within rural livelihoods initiatives, ABF’s core focus areas are watershed management and
agriculture productivity, livestock enhancement and financial inclusion. These initiatives help in enhancing the agricultural output
in target areas through improved farm practices that lead to increased income. Watershed management activities ensure better
availability of water making multiple cropping possible. Livestock enhancement programs support communities in better livestock
rearing thereby creating an alternative stream of income. ABF is also associated with programs that encourage involvement
in non-farm handicraft activities such as embroidery work, bamboo work, etc. that supplement the farm income and improve
the overall income. Financial Inclusion activities are conducted to help the beneficiaries gain access to banking facilities. Skill
building is a national priority and ABF conducts skilling programs across India for Youths and Persons with Disabilities (PwDs)
and lead them to employment.
Many of the ABF-supported programs are closely aligned with the Government of India’s rural development schemes such as The
Mahatma Gandhi National Rural Employment Guarantee Act and Pradhan Mantri Krishi Sichai Yojana.
During the year, ABF organized its 3rd Annual Conference on 14th March 2018 at Mumbai, with the theme ‘Partnerships for
Sustainable Development Goals’. The inaugural address was by Shri. Devendra Fadnavis, Chief Minister, Maharashtra and its
keynote address was by Shri. Sonam Wangchuk, education reformist and innovator. It featured panel discussions on themes
related to ‘Shared Action for Shared Prosperity’ and ‘Empowering a Million Livelihoods’. The Conference saw a convergence of
participants across varied sectors, ABF’s partner NGOs and thought leaders from the development sector.
The CSR activities directly undertaken by the Bank focus on poverty alleviation, promoting financial literacy and enabling
financial inclusion, environmental sustainability and education and skill development.
During the year, the Bank launched ‘Axis DilSe – Connecting Remote Communities’, an ambitious initiative to reach out to the
remote communities in the Ladakh region of Jammu & Kashmir. The three-year program aims to transform over 100 village
schools in Leh and Kargil districts by creating as well as strengthening physical and educational infrastructure. The initiative
is in alignment with the Government of India’s ‘Border Area Development Program’ (BADP) that aims to promote growth and
development in underserved border villages.
120
Annual Report 2017 -18
The Financial Literacy & inclusion activities focus on providing low income groups in rural and urban India access to financial
services. The Bank has been active in promoting the Government’s various social security schemes and has also supported
opening of accounts under the Atal Pension Yojana.
In alignment with the Government’s Digital India programme and its impetus on digital financial transactions, the Bank introduced
the DigiSupport program as an extension of its ongoing DigiPrayas program, wherein new branches opened in rural or unbanked
geographies aim to educate and empower the villagers/local communities around them. These communities are made familiar
with mainstream banking products and services, digital banking options and ways to enhance cashless transactions. In addition,
the Bank expands its reach through Business Correspondents (BCs) that promote digital banking through use of micro-ATMs and
promote digital financial literacy. During the year, the Bank launched its initiative - ‘Connecting Borders’, in Kohima, Nagaland
by adopting 20 villages where it conducted financial literacy camps.
The Bank has been working towards strengthening India’s MSME sector under its ‘Evolve’ initiative, wherein it engages with the
MSME sector through a series of knowledge sharing and skill development sessions. ‘Thought Factory’, Axis Bank’s Innovation
lab is strongly aligned with the Government’s Startup India initiative and supports start-ups through a structured mentorship
program along with providing them an opportunity to pitch their business ideas to potential investors.
During the year, the Bank won at the FICCI CSR Summit & Awards 2017 in the ‘Women Empowerment’ Category in recognition
of its CSR efforts and impacts created.
For more details on the Bank’s CSR efforts, please refer to the ‘Corporate Social Responsibility’ (CSR) section under ‘Management
Discussion and Analysis’ section of the Annual Report and disclosures made in the Bank’s Sustainability Report and Axis Bank
Foundation’s Annual Report.
2.
The Composition of the CSR Committee: Shri Som Mittal (Chairman), Shri Rajesh Dahiya and Shri Rajiv Anand.
3. Average net profit of the company for last three financial years: `9,341.14 crore
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): `186.82 crore
5. Details of CSR spent during the financial year:
(a)
Total amount spent for the financial year (2017-18): `133.77 crore
(b) Amount unspent, if any: `53.05 crore
(c) Manner in which the amount spent during the financial year is detailed in Annexure A.
6.
In case the company has failed to spend the two per cent of the average net profit of the last three
financial years or any part thereof, the company shall provide the reasons for not spending the amount
in its Board report
Over the years, the Bank has endeavoured to contribute to credible NGO partners and the neediest beneficiaries. The Bank
has been playing an active role in community development even before Corporate Social Responsibility (CSR) was included
in the Companies Act. In 2006, the Bank set up the Axis Bank Foundation (ABF) as a trust to channel its social investments
and the Bank has since been contributing one percent of its previous year’s net profit to the Foundation. The Bank has made
cumulative contributions of `529.79 crore till March 2018, of which nearly `448.29 crore was contributed to the ABF and
its partner NGOs. ABF activities are spread across 178 districts in 21 states across the country, addressing the needs of the
underprivileged sections of society, while focusing on the area of creating sustainable livelihoods.
The Bank also identified new opportunities during the year and made incremental investments in the programs relating to poverty
alleviation, rural development through promoting financial literacy and enabling financial inclusion, environmental sustainability,
education and skill development. The Bank continued to bolster its financial literacy and inclusion activities to mainstream the
unbanked and the under-banked people, especially in rural India while helping customers to gradually transition to a digital way
of undertaking transactions.
During the year 2017-18, the Bank improved its CSR spend ratio to 1.43% of its average net profits of the last three financial
years, as against 1.38% last year, with contribution of `133.77 crore on various CSR activities. The Bank was not able to spend
the entire prescribed CSR amount of 2% of its average net profits of the last three financials years as few of the planned CSR
activities had less than estimated utilization of funds.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Further, in view of its sharper focus on creating sustainable livelihoods, the Bank sought to wind down some of its programs,
especially in the health & education sectors, on account of lesser than desired outcomes. These programs were replaced by
other interventions in the area of sustainable livelihoods during the second half of the year. These programs have long gestation
periods and therefore are expected to see increased spends, in line with their improved outcomes going forward.
Six new programs through reputed partner NGOs were taken up during the year covering various activities, including
environmental sustainability, financial literacy, health, livelihoods and skilling. Through these programs, the Bank reiterated
its commitment to make a deeper penetration in the rural areas and undertake livelihood programs that are sustainable and
replicable across the country. The Bank also collaborated with a reputed NGO to create awareness on the Rights of Persons
with Disabilities (RPWD) Act and to train organizations involved in skilling the Persons with Disabilities (PwDs) to ensure that the
PwDs are included in the workforce.
The proposed spend for an open access solar plant, as part of our environmental sustainability initiatives, could not be completed
during the year on account of pending clearances. We expect contributions towards this initiative to commence in FY 2018-19
as soon as the necessary clearances are obtained.
The Bank, in a pioneering initiative, extended support to the ‘Buddha Fellowship’ program which is an attempt to bridge the
human resource gap faced by the developmental sector by engaging with bright young minds from reputed educational institutes
like the IIM, IIT, etc. to enable the youth to do field work in NGOs and government while being mentored by senior leaders
from corporate and development sector to go on to pursue developmental entrepreneurship. The Bank also reached out to the
low-income groups in the rural areas to provide them with Financial Literacy through a ‘Mass Awareness Camp’ (MAC) that is
designed to involve the entire community to be part of the financial learning process. The Bank also conducted a Health Camp
in the community in which basic diagnostic tests were carried out. The spend on financial literacy and inclusion, however, was
impacted on account of the rationalisation of the number of our Business Correspondent (BC) partners.
The Bank is also supporting the plantation of 3,80,000 trees in around five states to promote environmental sustainability and
to improve the vegetation in common lands while providing livelihoods to the rural poor.
The Bank remains committed to continually explore new opportunities which align to its CSR philosophy and create maximum
impact and incrementally invest in CSR activities to spend the prescribed CSR amount in the subsequent years.
7.
The CSR Committee of the Board of Directors hereby confirms that the implementation and monitoring of
CSR Policy, is in compliance with CSR objectives and CSR Policy of the Bank.
Place: Mumbai
Date: 16th May 2018
Som Mittal
Rajesh Dahiya
Chairman – CSR Committee
Executive Director (Corporate Centre)
122
Annual Report 2017 -18
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T
Annual Report 2017 -18
Form No. MR-3
SECRETARIAL AUDIT REPORT
For the financial year ended 31st March 2018
[Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule no. 9 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014]
To
The Members
Axis Bank Limited
Trishul, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden Ellisbridge,
Ahmedabad – 380 006
Gujarat.
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by Axis Bank Limited -CIN No. L65110GJ1993PLC020769 (hereinafter called the ‘Bank’) for the audit period
covering the financial year ended on 31st March 2018 (the ‘audit period’). Secretarial Audit was conducted in a manner that provided
us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Bank’s books, papers, minute books, forms and returns filed and other records maintained by the Bank
and also the information provided by the Bank, its officers, agents and authorized representatives during the conduct of Secretarial
Audit, we hereby report that in our opinion, the Bank has, during the audit period complied with the statutory provisions listed
hereunder and also that the Bank has proper Board-processes and compliance mechanism in place to the extent, in the manner and
subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Bank for the audit
period, according to the provisions of:
(i)
The Companies Act, 2013 (‘the Act’) and the Rules made thereunder;
(ii)
The Securities Contracts (Regulation) Act, 1956 and the Rules made thereunder;
(iii)
The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv)
The Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct
Investment.
(v)
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
(a)
The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b)
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; except that SEBI has vide
its Directions dated 27th December 2017 came to prima facie inference that the Unpublished Price Sensitive Information
relating to financials of the Bank for the first quarter of 2017-18 was leaked due to inadequacy of the processes, controls,
systems put in place by the Bank and hence, inter alia, directed the Bank to strengthen the same so that such instance of
leakage of unpublished price sensitive information do not recur in the future and to conduct an internal inquiry into the
said leakage and take appropriate action against those responsible for the same. As per the said Directions of the SEBI,
the Bank conducted an inquiry into the matter by appointing an independent external agency. The draft report of the said
external agency was placed at the meetings of Audit Committee and Board of Directors held on 9th April 2018 and the
inquiry report was thereafter submitted to SEBI on 13th April 2018, in terms of the said Directions.
(c)
The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
(d)
The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
125
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
(e)
The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008,
(f)
The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
(g)
The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(h)
The Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992; and
(i)
The Securities and Exchange Board of India (Banker to Issue) Regulations, 1994.
(vi)
The Banking Regulations Act, 1949, as specifically applicable to the Bank.
We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company
Secretaries of India related to Board Meetings and General Meetings.
During the audit period, the Bank has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc.
mentioned above.
During the period under review, provisions of the following regulations were not applicable to the Bank:
(a)
The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(b)
The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; and
(c)
The Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Overseas
Direct Investment and External Commercial Borrowings.
We further report that –
The Board of Directors of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and
Independent Directors. The changes in the composition of the Board of Directors that took place during the audit period were carried
out in compliance with the provisions of the Act.
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least
seven days in advance and where the same were given at shorter notice than seven days, prior consent thereof were obtained,
and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for
meaningful participation at the meeting.
Decisions at the meetings of the Board of Directors of the Bank and at Committees were carried through on the basis of majority. There
were no dissenting views by any member of the Board of Directors of the Bank during the audit period.
We further report that –
There are adequate systems and processes in the Bank commensurate with the size and operations of the Bank to monitor and ensure
compliance with the applicable laws, rules, regulations and guidelines.
We further report that –
During the audit period, the Bank has:
1.
Allotted following Unsecured Non –Convertible Debentures on a Private Placement Basis,
50,000 Unsecured Redeemable Non-Convertible Subordinated Debenture (Series-27) of face value `10 Lakh each at par
aggregating to `5000 Crore (Rupees Five Thousand Crore Only) on 15th June 2017.
35,000 Unsecured Subordinated Perpetual Additional Tier 1 Non-Convertible Debenture (Series-28) of face value `10
Lakh each at par aggregating to `3,500 crore (Rupees Three Thousand Five Hundred Crores Only) on 28th June 2017.
a.
b.
126
Annual Report 2017 -18
2.
3.
4.
Acquired of 100% Equity Capital of Accelyst Solutions Private Limited (“Accelyst”) and Freecharge Payment Technologies Private
Limited (“FPTPL”). The Bank has received approval from Reserve Bank of India (RBI) on 25th September 2017.
Pursuant to the approval of the Board of Directors of the Bank at its meeting held on 26th July 2017, the Bank entered into a
Share Purchase Agreement with Jasper Infotech Private Limited to acquire 100% equity capital of Accelyst and FPTPL. The Bank
has received approval from Reserve Bank of India (RBI) on 25th September 2017.
Approval of shareholders was obtained vide Special Resolution dated 26th July 2017 for Borrowings/Raising funds by issue
of Debt Securities including but not limited to Long Term Bonds, Green Bonds, Non- Convertible Debentures, Perpetual Debt
Instruments and Tier II Capital bonds or such other debt securities as approved by RBI on a private placement basis for an
amount of upto `35,000 crores.
5.
Issued and allotted equity shares and convertible warrants to following Investors on a preferential basis on 18th December 2017:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
5,56,00,000 equity shares of face value `2 each (the “Investor 1 Equity Shares”) to BC Asia Investments VII Limited (the
“Investor 1”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
3,19,00,000 equity shares of face value `2 each (the “Investor 2 Equity Shares”) to Integral Investments South Asia IV
(the “Investor 2”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
4,00,00,000 warrants carrying an option to subscribe to an equivalent number of equity shares of `2 each (the “Investor
3 Convertible Warrants”) to BC Asia Investments III Limited (the “Investor 3”) at a price of `565 (Five Hundred and Sixty-
Five Only) per warrant;
59,98,000 equity shares of face value `2 each (the “Investor 4 Equity Shares”) to New World Fund. Inc (the “Investor 4”)
at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
2,26,884 equity shares of face value `2 each (the “Investor 5 Equity Shares”) to Capital Group New World Fund (LUX)
(the “Investor 5”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
53,08,000 equity shares of face value `2 each (the “Investor 6 Equity Shares”) to American Funds Insurance Series –
International Fund (the “Investor 6”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
4,28,72,967 equity shares of face value `2 each (the “Investor 7 Equity Shares”) to Europacific Growth Fund (the
“Investor 7”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share;
5,65,899 equity shares of face value `2 each (the “Investor 8 Equity Shares”) to American Funds Insurance Series –
International Growth and Income Fund (the “Investor 8”) at a price of `525 (Five Hundred and Twenty-Five Only) per
Equity Share;
27,86,000 warrants carrying an option to subscribe to an equivalent number of equity shares of `2 each (the “Investor 4
Convertible Warrants”) to Investor 4 at a price of `565 (Five Hundred and Sixty-Five Only) per warrant;
1,05,385 warrants carrying an option to subscribe to an equivalent number of equity shares of `2 each (the “Investor 5
Convertible Warrants”) to Investor 5 at a price of `565 (Five Hundred and Sixty-Five Only) per warrant;
24,66,000 warrants carrying an option to subscribe to an equivalent number of equity shares of `2 each (the “Investor 6
Convertible Warrants”) to Investor 6 at a price of `565 (Five Hundred and Sixty-Five Only) per warrant;
2,28,57,142 equity shares of face value `2 each (the “Promoter Investor Equity Shares”) to Life Insurance Corporation of
India (the “Promoter Investor”) at a price of `525 (Five Hundred and Twenty-Five Only) per Equity Share.
Date: 16th May 2018
Place: Mumbai
For BNP & Associates
Company Secretaries
Prakash K. Pandya
Partner
FCS 3901/ CP No. 2311
Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.
127
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Annexure A
To,
The Members,
Axis Bank Limited
Secretarial Audit Report of even date is to be read along with this letter.
1.
The compliance of provisions of all laws, rules, regulations, standards applicable to Axis Bank Limited (the ‘Bank’) is the
responsibility of the management of the Bank. Our examination was limited to the verification of records and procedures on test
check basis for the purpose of issue of the Secretarial Audit Report.
2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Bank. Our
responsibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by
the Bank, along with explanations where so required.
3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness
of the contents of the secretarial and other legal records, legal compliance mechanism and corporate conduct. The verification
was done on test check basis to ensure that correct facts as reflected in secretarial and other records were produced to us. We
believe that the processes and practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the
Secretarial Audit Report.
4. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Bank.
5. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and
major events during the audit period.
6.
The Secretarial Audit Report is neither an assurance as to the future viability of the Bank nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Bank.
For BNP & Associates
Company Secretaries
Prakash K. Pandya
Partner
FCS 3901/ CP No. 2311
Date: 16th May 2018
Place: Mumbai
128
Annual Report 2017 -18
FINANCIAL STATEMENTS
130-262
130
134
214
218
262
Independent Auditor’s report - Standalone Financial Statements
Standalone Financial Statements
Independent Auditor’s report - Consolidated Financial Statements
Consolidated Financial Statements
Form AOC 1
129
INDEPENDENT AUDITOR’S REPORT
To the Members of Axis Bank Limited
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Axis Bank Limited (the ‘Bank’), which comprise the Balance
Sheet as at March 31, 2018, the Profit and Loss Account and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and notes to the financial statements.
Management’s Responsibility for the Financial Statements
The Bank’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with
respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance and cash flows of the Bank in accordance with accounting principles generally accepted in India, including the Accounting
Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016, provision of section 29 of the Banking Regulation Act, 1949 and the circulars,
guidelines and directions issued by Reserve Bank of India (“RBI”) from time to time. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing
and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud
or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account
the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report
under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing,
issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to
the Bank’s preparation of the financial 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 whether the Bank has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting estimates made by the Bank’s Directors, as well as evaluating
the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial
statements together with the notes give the information required by the Banking Regulation Act, 1949 as well as the Act, in the manner
so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs
of the Bank as at March 31, 2018, its profit and cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1.
The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of
the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.
2.
As required sub section (3) of section 30 of the Banking Regulation Act, 1949 and the appointment letter dated 3 August 2017,
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 purpose of our audit and have found them to be satisfactory;
130
Annual Report 2017 -18
(b) The transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and
(c)
The financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing
financial statements are not required to be submitted by the branches; we have visited 172 branches for the purpose of
our audit.
3.
Further, as required by section 143 (3) of the Companies Act, 2013, we further report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
(b)
(c)
(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;
The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with
the books of account;
In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under
section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting
Standards) Amendment Rules, 2016;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in
terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Bank and the operating
effectiveness of such controls, refer to our separate Report in “Annexure 1” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
i.
ii.
The Bank has disclosed the impact of pending litigations on its financial position in its standalone financial statements
- Refer Schedule 12.I, 18.2.2.15 (a) and 18.2.2.15 (f) to the standalone financial statements;
The Bank has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18.2.2.15 (f) to the
standalone financial statements; and
iii.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Bank;
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Viren H. Mehta
Partner
Membership Number: 048749
Place of Signature: Mumbai
Date: 26 April 2018
131
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
ANNEXURE 1 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL
STATEMENTS OF AXIS BANK LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
To the Members of Axis Bank Limited
We have audited the internal financial controls over financial reporting of Axis Bank Limited (“the Bank”) as of March 31, 2018 in
conjunction with our audit of the standalone financial statements of the Bank for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Bank’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over
financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the
“Guidance Note”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Bank’s policies,
the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013; in so far as they
apply to the Bank and the Guidelines issued by the Reserve Bank of India.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Bank's internal financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of
the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal
Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over
financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend
on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Bank's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A Bank's internal financial control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the Bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Bank are
being made only in accordance with authorisations of management and directors of the Bank; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Bank's assets that could have a material
effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
132
Annual Report 2017 -18 Opinion
In our opinion, the Bank has, in all material respects, an adequate internal financial controls system over financial reporting and such
internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over
financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Viren H. Mehta
Partner
Membership Number: 048749
Place of Signature: Mumbai
Date: 26 April 2018
133
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES BALANCE SHEET
AS AT 31 MARCH, 2018
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
Schedule
No.
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1
2
3
4
5
6
7
8
9
10
11
5,133,078
4,790,072
629,319,518
552,835,346
4,536,227,223
4,143,787,878
1,480,161,446
1,050,308,694
262,454,534
262,954,713
6,913,295,799
6,014,676,703
354,810,577
308,579,390
79,738,329
193,982,441
1,538,760,827
1,287,933,704
4,396,503,045
3,730,693,495
39,716,792
37,468,925
503,766,229
456,018,748
6,913,295,799
6,014,676,703
12
7,352,976,985
6,696,258,442
495,656,026
810,553,648
Significant 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 S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 26 April, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
134
Annual Report 2017 -18 PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH, 2018
I
Income
Interest earned
Other income
Total
II
Expenditure
Interest expended
Operating expenses
Provisions and contingencies
Total
III Net Profit For The Year (I - II)
Balance in Profit & Loss Account brought forward from previous year
IV Amount Available For Appropriation
V
Appropriations:
Transfer to Statutory Reserve
Transfer to/(from) Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Dividend paid (includes tax on dividend)
Balance in Profit & Loss Account carried forward
Total
VI
Earnings Per Equity Share
(Face value `2/- per share) (Rupees)
Basic
Diluted
Schedule
No.
Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
13
14
15
16
457,803,123
445,421,579
109,670,865
116,913,107
567,473,988
562,334,686
271,625,818
264,490,420
139,903,398
121,999,053
18 (2.1.1)
153,187,959
139,052,421
564,717,175
525,541,894
2,756,813
36,792,792
244,483,275
237,664,559
247,240,088
274,457,351
689,203
9,198,198
1,034,894
1,016,559
16,158
(871,671)
7,555,740
17,522
14,052,756
14,074,287
230,430,518
244,483,275
247,240,088
274,457,351
1.13
1.12
15.40
15.34
18 (2.2.1)
18 (2.2.2)
18 (2.2.5)
18 (2.2.3)
Significant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Profit and Loss Account
In terms of our report attached.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 26 April, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
135
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH, 2018
Cash flow from operating activities
Net profit before taxes
Adjustments for:
Depreciation on fixed assets
Depreciation on investments
Amortisation of premium on Held to Maturity investments
Provision for Non Performing Assets (including bad debts)
Provision on standard assets
Provision on unhedged foreign currency exposure
(Profit)/loss on sale of fixed assets (net)
Provision for country risk
Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
1,215,715
54,675,647
5,680,974
5,087,979
(2,110,133)
2,386,992
2,819,661
1,352,848
165,987,074
111,570,646
(1,350,017)
3,484,504
(93,000)
(138,800)
163,809
(199,434)
35,506
199,434
Provision for restructured assets/strategic debt restructuring/sustainable structuring
(3,071,587)
2,905,233
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 flow from operating activities
Cash flow from investing activities
Purchase of fixed assets
(Increase)/Decrease in Held to Maturity investments
Purchase of Freecharge business
Increase in Investment in Subsidiaries
Decrease in Investment in Subsidiaries
Proceeds from sale of fixed assets
Net cash used in investing activities
136
(4,433,847)
761,558
164,609,215
182,321,547
(174,381,077)
132,717,737
(811,747,986)
(444,184,140)
392,439,345
564,112,274
(16,147,141)
(96,324,158)
8,353,896
54,110,786
(30,059,243)
(50,831,209)
(466,932,991)
341,922,837
(8,224,338)
(7,426,953)
(89,688,722)
(117,857,686)
(3,954,556)
-
(3,250,000)
(1,167,500)
-
114,565
83,658
64,612
(105,003,051)
(126,303,869)
Annual Report 2017 -18 Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
Cash flow from financing activities
Proceeds from issue of subordinated debt, perpetual debt & upper Tier II instruments (net of
repayment)
81,109,364
55,458,748
Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt & upper Tier II
instruments)
348,743,388
(90,953,843)
Proceeds from issue of share capital
Proceeds from share premium (net of share issue expenses)
Payment of dividend
Net cash generated from financing activities
Effect of exchange fluctuation translation reserve
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes to the Cash Flow Statement:
1. Cash and cash equivalents includes the following
343,006
24,409
87,864,789
3,256,270
(14,052,756)
(14,074,287)
504,007,791
(46,288,703)
(84,674)
(22,838)
(68,012,925)
169,307,427
502,561,831
333,254,404
434,548,906
502,561,831
Cash and Balances with Reserve Bank of India (Refer Schedule 6)
354,810,577
308,579,390
Balances with Banks and Money at Call and Short Notice (Refer Schedule 7)
79,738,329
193,982,441
Cash and cash equivalents at the end of the year
434,548,906
502,561,831
2.
Amount of Corporate Social Responsibility related expenses spent during the year in cash
`126.50 crores (previous year `109.58 crores)
In terms of our report attached.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 26 April, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
137
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
SCHEDULES FORMING PART OF THE BALANCE SHEET
AS AT 31 MARCH, 2018
Schedule 1 - Capital
Authorised Capital
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
4,250,000,000 (Previous year - 4,250,000,000) Equity Shares of `2/- each
8,500,000
8,500,000
Issued, Subscribed and Paid-up capital
2,566,538,936 (Previous year - 2,395,036,109) Equity Shares of `2/- each fully paid-up
[refer Schedule 18(1.1)]
5,133,078
4,790,072
Schedule 2 - Reserves and Surplus
I.
Statutory Reserve
Opening Balance
Additions during the year
II.
Share Premium Account
Opening Balance
Additions during the year
Less: Share issue expenses
III.
Investment Reserve Account
Opening Balance
Additions during the year
Deductions during the year
IV.
General Reserve
Opening Balance
Additions during the year
V.
Capital Reserve
Opening Balance
Additions during the year [Refer Schedule 18 (2.2.1)]
VI.
Foreign Currency Translation Reserve [Refer Schedule 17 (4.5)]
Opening Balance
Additions during the year
Deductions during the year
VII. Reserve Fund
Opening Balance
Additions during the year [Refer Schedule 18 (2.2.2)]
VIII. Balance in Profit & Loss Account
Total
138
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
115,070,523
105,872,325
689,203
9,198,198
115,759,726
115,070,523
170,025,731
166,769,462
88,122,658
(257,869)
3,256,269
-
257,890,520
170,025,731
-
871,671
1,034,894
-
-
(871,671)
1,034,894
-
3,543,100
3,543,100
-
-
3,543,100
3,543,100
18,656,395
1,016,559
19,672,954
11,100,655
7,555,740
18,656,395
997,506
1,020,343
-
(84,674)
912,832
58,816
16,158
74,974
-
(22,837)
997,506
41,294
17,522
58,816
230,430,518
244,483,275
629,319,518
552,835,346
Annual Report 2017 -18 Schedule 3 - Deposits
A.
I.
Demand Deposits
II.
III.
(i) From banks
(ii) From others
Savings Bank Deposits
Term Deposits
(i)
From banks
(ii) From others
Total
B.
I.
Deposits of branches in India
II. Deposits of branches outside India
Total
Schedule 4 - Borrowings
I.
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
31-03-2018
(` in Thousands)
As at
31-03-2017
58,821,218
47,949,171
897,674,284
822,068,294
1,482,020,475
1,260,482,884
125,623,957
112,242,565
1,972,087,289
1,901,044,964
4,536,227,223
4,143,787,878
4,513,153,671
4,108,878,428
23,073,552
34,909,450
4,536,227,223
4,143,787,878
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
61,000,000
12,017,000
-
22,265,000
687,948,202
488,557,527
719,196,244
539,486,167
1,480,161,446
1,050,308,694
65,837,380
13,810,898
#
Borrowings from other banks include Subordinated Debt of `35.00 crores (previous year `35.00 crores) in the nature of Non-Convertible
Debentures and Perpetual Debt of `50.00 crores (previous year NIL) [Also refer Note 18 (2.1.2)]
** Borrowings from other institutions & agencies include Subordinated Debt of `21,170.00 crores (previous year `16,170.00 crores) in the nature
of Non-Convertible Debentures and Perpetual Debt of `6,950.00 crores (previous year `3,500.00 crores) [Also refer Note 18 (2.1.2)]
Borrowings outside India include Upper Tier II instruments of Nil (previous year `389.06 crores) [Also refer Note 18 (2.1.2)]
$
Schedule 5 - Other Liabilities and Provisions
I.
II.
III.
IV.
V.
Bills payable
Inter-office adjustments (net)
Interest accrued
Proposed dividend (includes tax on dividend) [Refer Schedule 18(2.2.5)]
Contingent provision against standard assets
VI. Others (including provisions)
Total
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
49,175,679
39,525,431
-
-
30,348,683
19,614,831
-
-
22,075,241
23,385,751
160,854,931
180,428,700
262,454,534
262,954,713
139
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES 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)
in Current Account
(ii)
in Other Accounts
Total
Schedule 7 - Balances with Banks and Money at Call and Short Notice
I.
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)
Schedule 8 - Investments
I.
Investments in India in -
(i) Government Securities ##
(ii) Other approved securities
(iii) Shares
(iv) Debentures and Bonds
(v)
Investment in Subsidiaries/Joint Ventures
(vi) Others (Mutual Fund units, CD/CP, PTC etc.)
Total Investments in India
II.
Investments outside India in -
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/or joint ventures abroad
(iii) Others (Equity Shares and Bonds)
Total Investments outside India
Grand Total (I+II)
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
52,580,352
63,579,154
208,230,225
183,000,236
94,000,000
62,000,000
354,810,577
308,579,390
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1,199,457
30,987,346
1,423,790
19,594,700
-
-
-
143,221,545
32,186,803
164,240,035
20,263,092
11,537,816
15,750,618
47,551,526
79,738,329
9,689,155
14,755,151
5,298,100
29,742,406
193,982,441
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1,013,545,679
905,980,625
-
-
15,255,309
13,227,530
306,537,689
264,848,859
17,931,421
152,548,130
10,726,865
64,196,202
1,505,818,228
1,258,980,081
26,984,150
24,097,852
2,995,712
2,962,737
2,995,712
1,860,059
32,942,599
28,953,623
1,538,760,827
1,287,933,704
## Includes securities costing `27,588.43 crores (previous year `27,179.69 crores) pledged for availment of fund transfer facility, clearing facility
and margin requirements
140
Annual Report 2017 -18
Schedule 9 - Advances
A.
(i)
Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii)
Term loans#
Total
B.
(i)
Secured by tangible assets$
(ii) Covered by Bank/Government Guarantees&&
(iii) Unsecured
Total
C.
I.
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
(c) Others
Total
Grand Total (CI+CII)
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
128,131,247
67,496,591
1,381,341,566
1,042,273,019
2,887,030,232
2,620,923,885
4,396,503,045
3,730,693,495
3,094,017,064
2,840,548,136
37,502,934
63,995,186
1,264,983,047
826,150,173
4,396,503,045
3,730,693,495
986,081,073
938,737,979
48,271,057
29,134,862
32,204,558
7,233,845
2,792,292,698
2,273,892,697
3,858,849,386
3,248,999,383
78,991,174
26,861,261
32,721,313
25,448,317
77,652,080
91,277,687
348,289,092
338,106,847
537,653,659
481,694,112
4,396,503,045
3,730,693,495
# Net of borrowings under Inter Bank Participation Certificate (IBPC) `1,399.00 crores (previous year Nil), includes IBPC lending `1,303.32 crores
(previous year Nil)
Includes advances against book debts
$
&& Includes advances against L/Cs issued by banks
141
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Schedule 10 - Fixed Assets
I.
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 fixed assets (including furniture & fixtures)
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
I.
II.
III.
IV.
Inter-office adjustments (net)
Interest Accrued
Tax paid in advance/tax deducted at source (net of provisions)
Stationery and stamps
V. Non banking assets acquired in satisfaction of claims
VI. Others#@
Total
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
18,330,983
18,289,466
-
-
41,517
-
18,330,983
18,330,983
1,165,354
304,673
-
1,470,027
16,860,956
860,678
304,676
-
1,165,354
17,165,629
45,796,606
39,665,948
7,573,015
6,645,577
(1,165,234)
(514,919)
52,204,387
45,796,606
28,302,892
23,932,741
5,376,301
4,783,303
(869,734)
(413,152)
32,809,459
28,302,892
19,394,928
17,493,714
3,460,908
2,809,582
39,716,792
37,468,925
(` in Thousands)
As at
31-03-2018
As at
31-03-2017
-
-
56,655,247
52,440,280
17,448,539
4,101,192
3,829
19,790
22,086,151
22,086,151
407,572,463
377,371,335
503,766,229
456,018,748
# Includes deferred tax assets of `6,876.35 crores (previous year `5,062.19 crores) [Refer Schedule 18 (2.2.10)]
@ Includes Priority Sector Shortfall Deposits of `21,479.30 crores (previous year `17,107.12 crores)
142
Annual Report 2017 -18 Schedule 12 - Contingent Liabilities
I.
II.
III.
Claims against the Bank not acknowledged as debts
Liability for partly paid investments
Liability on account of outstanding forward exchange and derivative contracts:
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
5,169,119
216,000
4,702,440
-
a) Forward Contracts
3,148,018,991
2,681,952,183
b)
Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest Rate Futures
1,960,694,522
2,011,141,718
c)
Foreign Currency Options
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
593,425,900
493,833,247
5,702,139,413
5,186,927,148
762,933,813
763,736,463
86,819,823
47,579,859
324,101,256
335,366,639
471,597,561
357,945,893
Grand Total (I+II+III+IV+V+VI) [Refer Schedule 18 (2.2.15)]
7,352,976,985
6,696,258,442
143
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH, 2018
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
I.
II.
III.
IV.
V.
Commission, exchange and brokerage
Profit/(Loss) on sale of investments (net) [Refer Schedule 18(2.2.1)]
Profit/(Loss) on sale of fixed assets (net)
Profit 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 `182.92
crores (previous year `181.89 crores) and net loss on account of portfolio sell downs/
securitisation `0.64 crores (previous year net profit of `3.79 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
Rent, taxes and lighting
Printing and stationery
Advertisement and publicity
Depreciation on bank's property
Directors' fees, allowance and expenses
I.
II.
III.
IV.
V.
VI.
VII. Auditors' fees and expenses
VIII.
IX.
X.
XI.
XII. Other expenditure
Law charges
Postage, telegrams, telephones etc.
Repairs and maintenance
Insurance
Total
144
Year ended
31-03-2018
341,374,719
99,833,027
3,878,262
12,717,115
457,803,123
Year ended
31-03-2018
77,298,752
13,251,603
(163,809)
14,286,958
(` in Thousands)
Year ended
31-03-2017
331,249,593
96,228,239
5,038,389
12,905,358
445,421,579
(` in Thousands)
Year ended
31-03-2017
70,283,094
31,737,897
(35,506)
10,802,458
2,560,608
1,832,842
2,436,753
109,670,865
2,292,322
116,913,107
Year ended
31-03-2018
191,735,198
17,982,554
61,908,066
271,625,818
Year ended
31-03-2018
43,129,556
10,017,106
1,646,269
1,536,459
5,680,974
23,344
18,697
200,587
3,119,630
8,291,777
5,535,110
60,703,889
139,903,398
(` in Thousands)
Year ended
31-03-2017
196,396,260
18,358,479
49,735,681
264,490,420
(` in Thousands)
Year ended
31-03-2017
38,918,640
9,345,921
1,860,164
1,303,362
5,087,979
24,668
17,976
109,057
3,040,845
8,565,421
5,014,831
48,710,189
121,999,053
Annual Report 2017 -18 17 SIGNIFICANT ACCOUNTING POLICIES
FOR THE YEAR ENDED 31 MARCH, 2018
1
2
3
Background
Axis Bank Limited (‘the Bank’) was incorporated in 1993 and provides a complete suite of corporate and retail banking
products. The Bank is primarily governed by the Banking Regulation Act, 1949. The Bank has overseas branches at Singapore,
Hong Kong, DIFC - Dubai, Shanghai and Colombo. During the year, the Bank opened an Offshore Banking Unit at International
Financial Service Centre (IFSC), Gujarat International Finance Tec-City (GIFT City), Gandhinagar, India.
Basis of preparation
The financial statements have been prepared and presented under the historical cost convention on the accrual basis of
accounting in accordance with the generally accepted accounting principles in India to comply with the 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 notified under Section 133 of the Companies Act, 2013 read together with
paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 to
the extent applicable and practices generally prevalent in the banking industry in India.
Use of estimates
The preparation of the financial 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 (including contingent
liabilities) at the date of the financial statements, revenues and expenses during the reporting period. Actual results could differ
from those estimates. The Management believes that the estimates used in the preparation of the financial statements are prudent
and reasonable. Any revisions to the accounting estimates are recognised prospectively in the current and future periods.
4
Significant accounting policies
4.1 Investments
Classification
In accordance with the RBI guidelines, investments are classified at the time 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 classified as HFT securities. As per the RBI guidelines,
HFT securities, which remain unsold for a period of 90 days are reclassified as AFS securities.
Investments that the Bank intends to hold till maturity are classified under the HTM category. Investments in the equity of
subsidiaries/joint ventures are categorised as HTM in accordance with the RBI guidelines.
All other investments are classified as AFS securities.
However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
Others.
Investments made outside India are classified 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 and commission pertaining to investments, paid at the time of acquisition, are charged to the
Profit and Loss Account.
Broken period interest is charged to the Profit and Loss Account.
145
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Cost of investments is computed based on the weighted average cost method.
Valuation
Investments classified 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 on a constant yield to maturity basis. 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 classified 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’)/Financial Benchmark India Private Limited (‘FBIL’), periodically.
Net depreciation, if any, within each category of each investment classification is recognised in the Profit and Loss
Account. The net appreciation if any, under each category of each investment classification is ignored. The depreciation
on securities acquired by way of conversion of outstanding loans is provided in accordance with the RBI guidelines. The
book value of individual securities is not changed consequent to the periodic valuation of investments. Non-performing
investments are identified and provision is made thereon as per RBI guidelines.
Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate 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:
•
•
•
•
•
•
the market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (‘SLR’)
securities included in the AFS and HFT categories is computed as per the Yield-to-Maturity (‘YTM’) rates published
by FIMMDA/FBIL;
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/FBIL 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/
FBIL is adopted for this purpose;
in case of bonds and debentures (including Pass Through Certificates) 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 financials of the
fund. In case the audited financials 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 and
in case of investments in security receipts on or after 1 April, 2017 which are backed by more than 50 percent of
the stressed assets sold by the Bank, provision for depreciation in value is made at the higher of - provisioning rate
required in terms of net asset value declared by the Reconstruction Company (‘RC’)/Securitisation Company (‘SC’)
or the provisioning rate as per the extant asset classification and provisioning norms as applicable to the underlying
loans, assuming that the loan notionally continued in the books of the bank. All other investments in security receipts
are valued as per the NAV obtained from the issuing RC/SCs.
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.
146
Annual Report 2017 -18
Realised gains on investments under the HTM category are recognised in the Profit and Loss Account and subsequently
appropriated to Capital Reserve account (net of taxes and transfer to statutory reserves) in accordance with the RBI
guidelines. Losses are recognised in the Profit and Loss Account. Realised gains/losses on investments under the AFS and
HFT category are recognised in the Profit and Loss Account.
All investments are accounted for on settlement date, except investments in equity shares which are accounted for on trade
date.
Repurchase and reverse repurchase transactions
Repurchase and reverse repurchase transactions in government securities and corporate debt securities including those
conducted under the Liquidity Adjustment Facility (‘LAF’) and Marginal Standby Facility (‘MSF’) with RBI are accounted as
collateralised borrowing and lending respectively. Borrowing cost on repo transactions is accounted as interest expense
and revenue on reverse repo transactions is accounted as interest income.
Short Sales
In accordance with the RBI guidelines, the Bank undertakes short sale transactions in Central Government dated securities.
The short positions are reflected in ‘Securities Short Sold (‘SSS’) A/c’, specifically created for this purpose. Such short
positions are categorised under HFT category and netted off from investments in the Balance Sheet. 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 classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of bills rediscounted, inter-bank participation certificates, specific provisions made towards NPAs, interest in suspense
for NPAs, claims received from Export Credit Guarantee Corporation, provisions for funded interest on term loan classified
as NPAs, provisions in lieu of diminution in the fair value of restructured assets and floating provisions.
NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by the RBI. Advances held
at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of
recovery, but which are standard as per the RBI guidelines, are classified as NPAs to the extent of amount outstanding
in the host country. 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 specified stages of delinquency (90 days or more
of delinquency) under each type of loan, which satisfies the RBI prudential norms on provisioning. Provisions in respect
of agriculture advances classified into sub-standard and doubtful assets are made at rates which are higher than those
prescribed by the RBI. Provisions for advances booked in overseas branches, which are standard as per the RBI guidelines
but are classified as NPAs based on host country guidelines, are made as per the host country regulations.
Restructured assets are classified and provided for in accordance with the guidelines issued by RBI from time to time. In
addition to the above, the Bank on a prudential basis, makes provision for expected losses against advances or other
exposures to specific assets/industry/sector either on a case-by-case basis or for a group of assets, based on specific
information or general economic environment. These are classified 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.
Amounts recovered against debts written off are recognised in the Profit and Loss Account.
The Bank holds provision in accordance with the RBI guidelines, on assets where change in ownership under Strategic
Debt Restructuring (SDR) scheme/Outside SDR scheme has been implemented or Scheme for Sustainable Structuring of
Stressed Asset (S4A) has been implemented. In respect of borrowers classified as non-cooperative and wilful defaulters,
the Bank makes accelerated provisions as per extant RBI guidelines.
For entities with Unhedged Foreign Currency Exposure (UFCE), provision is made in accordance with the guidelines issued
by RBI, which requires to ascertain the amount of UFCE, estimate the extent of likely loss and estimate the riskiness of
unhedged position. This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
The Bank maintains a general provision on standard advances at the rates prescribed by 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.
147
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Under its home loan portfolio, the Bank offers housing loans with certain features involving waiver of Equated Monthly
Installments (‘EMIs’) of a specific period subject to fulfilment of a set of conditions by the borrower. The Bank makes
provision against the probable loss that could be incurred in future on account of waivers to eligible borrowers in respect
of such loans based on actuarial valuation conducted by an independent actuary. This provision is classified 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 classification 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 insignificant, 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 net funded exposure of the Bank
in respect of each country does not exceed 1% of the total assets, no provision is maintained on such country exposure in
accordance with RBI guidelines.
4.4 Securitisation
The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose Vehicle
(‘SPV’). In most cases, post securitisation, 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 flows to Senior
Pass Through Certificate (‘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 notified under Section 133 of the
Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016.
In accordance with RBI guidelines of 7 May, 2012, on ‘Guidelines on Securitisation of Standard Assets’, gain on
securitisation transaction is recognised over the period of the underlying securities issued by the SPV as prescribed under
RBI guidelines. Loss on securitisation is immediately debited to the Profit 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 notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses resulting from year end
revaluations are recognised in the Profit and Loss Account.
Financial statements of foreign branches classified as non-integral foreign operations as per the RBI guidelines are
translated as follows:
•
•
•
Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
exchange rates notified by FEDAI at the Balance Sheet date.
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. Any realised gains or losses on such disposal are recognised in the Profit and Loss
Account.
Outstanding forward exchange contracts including tom/spot contracts (excluding currency swaps undertaken to hedge
foreign currency assets/liabilities and funding swaps which are not revalued) are revalued at year end on PV basis by
discounting the forward value till spot date and converting the FCY amount using the respective spot rates as notified by
FEDAI. The resulting gains or losses on revaluation are included in the Profit and Loss Account in accordance with RBI/
FEDAI guidelines.
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 forward exchange and derivative contracts, guarantees, acceptances, endorsements
and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified by FEDAI.
148
Annual Report 2017 -18
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 Profit and Loss Account
and correspondingly in other assets (representing positive Mark-to-Market) and in other liabilities (representing negative
Mark-to-Market (MTM)) on a gross basis. For hedge transactions, the Bank identifies 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 financial 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. 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 Profit 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 contracts, the final settlement price is taken as the RBI reference rate on the last
trading day of the futures contracts or as may be specified 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 profit/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 and valuation of Interest Rate Futures (IRF) is carried out on the basis of the
daily settlement price of each contract provided by the exchange.
4.7 Revenue recognition
Interest income is recognised on an accrual basis in accordance with AS–9, Revenue Recognition as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014,
the Companies (Accounting Standards) Amendment Rules, 2016 and the RBI guidelines, except in the case of interest
income on non-performing assets and loans under Strategic Debt Restructuring (SDR) scheme and Scheme for Sustainable
Structuring of Stressed Asset (S4A) of RBI, where it is recognised on receipt basis if overdue for more than 90 days.
Income on non-coupon bearing discounted instruments or low-coupon bearing instruments is recognised over the tenor of
the instrument on a constant yield basis.
Guarantee commission is recognized on a pro-rata basis over the period of the guarantee. Locker rent and annual fees for
credit cards are recognised on a straight-line basis over the period of contract. Arrangership/syndication fee is accounted
for on completion of the agreed service and when right to receive is established. Other fees and commission income are
recognised when due.
Interest income on investments in PTCs is recognized on a constant yield basis.
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.
Fees paid/received for Priority Sector Lending Certificates (‘PSLC’) is amortised on straight-line basis over the tenor of the
certificate.
In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book value
(i.e. book value less provisions held), the shortfall is charged to the Profit and Loss Account. If the sale is for a value
higher than the net book value, the excess provision is credited to the Profit and Loss Account in the year the amounts are
received.
The Bank deals in bullion business on a consignment basis. The difference between the price recovered from customers
and cost of bullion is accounted for at the time of sale to the customers. The Bank also deals in bullion on a borrowing and
lending basis and the interest paid/received is accounted on an accrual basis.
4.8 Fixed assets and depreciation/impairment
Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes initial
handling and delivery charges, duties, taxes and incidental expenses related to the acquisition and installation of the asset.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes advances
paid to acquire fixed assets.
Depreciation is provided over the estimated useful life of a fixed asset on the straight-line method from the date of addition.
The management believes that depreciation rates currently used, fairly reflect its estimate of the useful lives and residual
values of fixed assets based on historical experience of the Bank, though these rates in certain cases are different from
lives prescribed under Schedule II of Companies Act, 2013.
Asset
Owned premises
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 fixed assets
Estimated useful life
60 years
3 years
5 years
4 years
8 years
3 years
2 years
10 years
5 years
5 years
5 years
3 years
10 years
Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till the date of
sale.
Profit on sale of premises is appropriated to Capital Reserve Account (net of taxes and transfer to statutory reserve) in
accordance with RBI instructions.
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 flows 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.
4.9 Non-banking assets
Non-banking assets (‘NBAs’) acquired in satisfaction of claims are carried at lower of net book value and net realizable
value.
4.10 Lease transactions
Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are
classified as operating lease. Lease payments for assets taken on operating lease are recognised as an expense in the
Profit and Loss Account on a straight-line basis over the lease term.
4.11 Retirement and other employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged to the
Profit and Loss Account of the year when the contributions to the fund are due and when services are rendered by the
employees. Further, an actuarial valuation is conducted by an independent actuary using the Projected Unit Credit Method
as at 31 March each year to determine the deficiency, if any, in the interest payable on the contributions as compared to
the interest liability as per the statutory rate. Actuarial gains/losses are immediately taken to the Profit and Loss Account
and are not deferred.
150
Annual Report 2017 -18
Gratuity
The Bank contributes towards gratuity fund (defined benefit 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 expatriates) liability with regard to gratuity is provided on the basis of a prescribed method
as per local laws, wherever applicable. Actuarial gains/losses are immediately taken to the Profit and Loss Account and
are not deferred.
Compensated Absences
The Bank provides for compensated absences 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. Actuarial gains/
losses are immediately taken to the Profit and Loss Account and are not deferred.
Superannuation
Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either under
a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan, the Bank
contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC, which undertakes to
pay the lump sum and annuity benefit payments pursuant to the scheme. Superannuation contributions are recognised in
the Profit and Loss Account in the period in which they accrue.
New Pension Scheme (‘NPS’)
In respect of employees who opt for contribution to the ‘NPS’, the Bank contributes certain percentage of the total basic
salary of employees to the aforesaid scheme, a defined contribution plan, which is managed and administered by pension
fund management companies. NPS contributions are recognised in the Profit and Loss Account in the period in which they
accrue.
4.12 Reward points
The Bank runs a loyalty program which seeks to recognize and reward customers based on their relationship with the
Bank. Under the program, eligible customers are granted loyalty points redeemable in future, subject to certain conditions.
In addition, the Bank continues to grant reward points in respect of certain credit cards (not covered under the loyalty
program). The Bank estimates the probable redemption of such loyalty/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.
4.13 Taxation
Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined
in accordance with the relevant provisions of Income Tax Act, 1961. Deferred income taxes reflect 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 assets against
liabilities representing current tax 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 sufficient 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 Profit 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 supported by convincing evidence that such
deferred tax asset can be realised against future profits.
151
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
4.14 Share issue expenses
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
4.15 Earnings per share
The Bank reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and
the Companies (Accounting Standards) Amendment Rules, 2016. Basic earnings per share is computed by dividing the
net profit after tax by the weighted average number of equity shares outstanding for the year.
Diluted earnings per share reflect 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 except where the results are anti-dilutive.
4.16 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
Guidelines’). These Guidelines have been repealed in the month of October, 2014 and were substituted by Securities
and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Scheme is in compliance with the
said regulations. The Bank follows the intrinsic value method to account for its stock based employee compensation plans
as per the Guidelines. 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, if
any, 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.
4.17 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
outflow 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 reflect 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 confirmed 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 outflow 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 outflow of resources is
remote, no provision or disclosure is made.
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and
if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the
period in which the change occurs.
4.18 Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and
short notice.
152
Annual Report 2017 -18
18 NOTES FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH, 2018
(Currency: In Indian Rupees)
1.1 During the year, the Bank raised additional equity capital through a preferential allotment of 165,328,892 shares at a price of
`525.00 per share. As a consequence, the paid-up share capital of the Bank has increased by `33.07 crores and the reserves
of the Bank have increased by `8,620.73 crores after charging of issue related expenses. Further, the Bank also allotted
45,357,385 convertible warrants carrying a right to the convertible warrant holder to apply for, get issued and allotted one (1)
equity share of the Bank of face value `2 each, for cash, at a price of `565.00 per share against which the Bank has received
an amount of `640.67 crores upfront representing 25% of the warrant price. The convertible warrants are exercisable upto 18
months from the date of allotment. The funds mobilised from the equity raising were utilised for enhancing the capital adequacy
ratio and for general corporate purposes.
2.1 Statutory disclosures as per RBI
2.1.1 ‘Provisions and contingencies’ recognised in the Profit and Loss Account comprise of:
For the year ended
Provision for income tax
- Current tax
- Deferred tax (Refer 2.2.10)
Provision for non-performing assets (including bad debts written off and write backs)
Provision for restructured assets/strategic debt restructuring/sustainable structuring
Provision towards standard assets
Provision for depreciation in value of investments
Provision for unhedged foreign currency exposure
Provision for country risk
Provision for other contingencies*
Total
31 March, 2018
31 March, 2017
(` in crores)
1,671.19
(1,825.30)
(154.11)
16,598.71
(307.16)
(135.00)
(211.01)
(9.30)
(19.94)
(443.39)
15,318.80
4,988.90
(3,200.62)
1,788.28
11,157.06
290.53
348.45
238.70
(13.88)
19.94
76.16
13,905.24
* includes contingent provision for advances/other exposures, legal cases and other contingencies
2.1.2 The capital adequacy ratio of the Bank, calculated as per the RBI guidelines (under Basel III) is set out below:
31 March, 2018
(` in crores)
31 March, 2017
Common Equity Tier I
Tier I
Tier II
Total capital
Total risk weighted assets and contingents
Capital ratios
Common Equity Tier I
Tier I
Tier II
CRAR
Amount of equity capital raised
Amount of additional Tier I capital raised of which:
Perpetual Non-Cumulative Preference Shares (PNCPS)
Perpetual Debt Instruments (PDI) (details given below)
Amount of Tier II capital raised of which:
Debt capital instrument (details given below)
Preferential capital instrument
*excluding securities premium of `8,646.70 crores
60,476.35
67,476.27
18,298.59
85,774.86
517,630.78
11.68%
13.04%
3.53%
16.57%
33.07*
-
3,500.00
5,000.00
-
52,555.81
56,039.32
14,565.85
70,605.17
472,313.18
11.13%
11.87%
3.08%
14.95%
-
-
3,500.00
4,230.00
-
153
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
During the year ended 31 March, 2018, the Bank raised debt instruments eligible for Tier-I/Tier-II capital, the details of
which are set out below:
Instrument
Capital
Date of maturity
Period
Coupon
Amount
Subordinated debt
Tier-II
15 June, 2027
120 months
Perpetual debt
Additional Tier I
-*
-
*Call option on expiry of 60 months from the date of allotment
7.66%
8.75%
`5,000 crores
`3,500 crores
During the year ended 31 March, 2017, the Bank raised debt instruments eligible for Tier-I/Tier-II capital, the details of
which are set out below:
Instrument
Capital
Date of maturity
Period
Coupon
Amount
Perpetual debt
Additional Tier-I
-*
-
Subordinated debt
Subordinated debt
Tier-II
27 May, 2026
120 months
Tier-II
23 November, 2026
120 months
*Call option on expiry of 60 months from the date of allotment
8.75%
8.50%
7.84%
`3,500 crores
`2,430 crores
`1,800 crores
During the year ended 31 March, 2018, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital, the details
of which are set out below:
Instrument
Capital
Date of maturity
Period
Upper Tier-II
Tier-II
28 June, 2017*
180 months
Coupon
7.125%
Amount
$60 million
* represents call date
During the year ended 31 March, 2017, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital, the details
of which are set out below:
Instrument
Capital
Date of maturity
Period
Coupon
Amount
Subordinated debt
Upper Tier-II
Perpetual debt
Perpetual debt
Upper Tier-II
Upper Tier-II
Tier-II
Tier-II
Tier-I
Tier-I
Tier-II
Tier-II
Subordinated debt
* represents call date
Tier-II
28 June, 2016
120 months
11 August, 2016*
180 months
30 September, 2016*
16 November, 2016*
-
-
24 November, 2016*
180 months
6 February, 2017*
180 months
9.10%
7.25%
`104.90 crores
$150 million
10.05%
`214.00 crores
7.17%
9.35%
9.50%
$46 million
`200.00 crores
`107.50 crores
30 March, 2017
120 months
10.10%
`250.90 crores
2.1.3 The key business ratios and other information is set out below:
As at
Interest income as a percentage to working funds#
Non-interest income as a percentage to working funds#
Operating profit as a percentage to working funds#
Return on assets (based on working funds#)
Business (deposits less inter-bank deposits plus advances) per employee**
Profit per employee**
31 March, 2018
%
31 March, 2017
%
7.15
1.71
2.43
0.04
`14.84 crores
`0.47 lacs
3.40
7.88
2.07
3.11
0.65
`14.00 crores
`6.68 lacs
2.11
Net non-performing assets as a percentage of net customer assets*
#
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
154
Annual Report 2017 -18
2.1.4 The provisioning coverage ratio of the Bank computed in terms of the RBI guidelines as on 31 March, 2018 was 65.05%
(previous year 64.79%).
2.1.5 Asset Quality
i)
Net non-performing advances to net advances is set out below:
31 March, 2018
%
31 March, 2017
%
Net non-performing advances as a percentage of net advances
3.64
2.27
ii) Movement in gross non-performing assets is set out below:
31 March, 2018
(` in crores)
Advances
Investments
Others
Total
Gross NPAs as at the beginning of the year
20,045.66
1,234.82
Intra Category Transfer
Additions (fresh NPAs) during the year@
Sub-total (A)
Less:-
(i) Upgradations@
(ii)
Recoveries (excluding recoveries made from
upgraded accounts)#
(iii) Technical/Prudential Write-offs
(iv) Write-offs other than those under (iii) above#
Sub-total (B)
Gross NPAs as at the end of the year (A-B)
(537.85)
31,218.46
50,726.27
537.85
2,200.54
3,973.21
4,740.13
169.71
3,836.02
9,773.94
1,499.86
19,849.95
30,876.32
17.13
376.21
37.84
600.89
3,372.32
-
-
21,280.48
-
-
-
33,419.00
54,699.48
-
-
-
4,909.84
3,853.15
10,150.15
-
1,537.70
-
20,450.84
-
34,248.64
@ Over the quarters ended 31 December, 2017 and 31 March, 2018, the Bank has changed its practice of
reporting additions and upgradations to NPAs considering the days past due status of an account at the end of
each day as against at the end of each quarter of a financial year, followed hitherto. Accordingly, the additions/
upgradations to NPAs for FY 2017-18 shown above reflect this change prospectively over the respective periods.
# including sale of NPAs
Gross NPAs as at the beginning of the year
Intra Category Transfer
31 March, 2017
(` in crores)
Advances
Investments
Others*
Total
5,848.48
(42.23)
239.03
45.69
-
6,087.51
(3.46)
-
Additions (fresh NPAs) during the year
19,857.84
1,920.49
3.46
21,781.79
Sub-total (A)
Less:-
(i) Upgradations
(ii)
Recoveries (excluding recoveries made from upgraded
accounts)#
(iii) Technical/Prudential Write-offs
25,664.09
2,205.21
-
27,869.30
1,806.53
559.25
1,824.79
469.01
176.16
35.00
-
-
-
2,365.78
2,000.95
504.01
(iv) Write-offs other than those under (iii) above#
1,518.10
199.98
-
1,718.08
Sub-total (B)
5,618.43
970.39
-
6,588.82
Gross NPAs as at the end of the year (A-B)
20,045.66
1,234.82
-
21,280.48
* represents amount outstanding under application money classified as non-performing asset
# including sale of NPAs
155
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
iii) Movement in net non-performing assets is set out below:
31 March, 2018
(` in crores)
Advances
Investments
Others
Total
Opening balance at the beginning of the year
Additions during the year
Effect of exchange rate fluctuation
Reductions during the year
Interest Capitalisation – Restructured NPA Accounts
Closing balance at the end of the year#
8,487.20
15,539.27
(5.70)
139.35
742.22
(1.91)
(8,202.20)
(253.75)
185.85
16,004.42
(38.62)
587.29
# net of balance outstanding in interest capitalisation-restructured NPA accounts amounting to `300.98 crores
-
-
-
-
-
-
8,626.55
16,281.49
(7.61)
(8,455.95)
147.23
16,591.71
(` in crores)
31 March, 2017
Advances
Investments
Others
Total
Opening balance at the beginning of the year
Additions during the year
Effect of exchange rate fluctuation
Reductions during the year
Interest Capitalisation – Restructured NPA Accounts
Closing balance at the end of the year#
2,518.59
3.55
10,000.70
1,138.60
90.11
(3,977.46)
(144.74)
8,487.20
(0.64)
(870.69)
(131.47)
139.35
-
-
-
-
-
-
2,522.14
11,139.30
89.47
(4,848.15)
(276.21)
8,626.55
# net of balance outstanding in interest capitalisation-restructured NPA accounts amounting to `448.21 crores
iv) Movement in provisions for non-performing assets is set out below:
31 March, 2018
(` in crores)
Advances
Investments
Others
Total
Opening balance at the beginning of the year
Intra-Category Transfer
Provisions made during the year
Effect of exchange rate fluctuation
Transfer from restructuring provision
Write-offs/(write back) of excess provision*
Closing balance at the end of the year
11,244.79
(434.71)
960.93
434.71
15,543.21
1,561.46
5.70
32.84
1.91
-
(11,647.75)
14,744.08
(347.14)
2,611.87
* includes provision utilised for sale of NPAs amounting to `552.14 crores
-
-
-
-
-
-
-
12,205.72
-
17,104.67
7.61
32.84
(11,994.89)
17,355.95
(` in crores)
Opening balance at the beginning of the year
Intra-Category Transfer
Provisions made during the year
Effect of exchange rate fluctuation
Transfer from restructuring provision
Write-offs/(write back) of excess provision*
Closing balance at the end of the year
31 March, 2017
Advances
Investments
Others
Total
3,160.96
(42.23)
9,798.09
(90.11)
59.05
(1,640.97)
11,244.79
232.41
45.69
781.89
0.64
-
(99.70)
960.93
-
3,393.37
(3.46)
-
3.46
10,583.44
-
-
-
-
(89.47)
59.05
(1,740.67)
12,205.72
* includes provision utilised for sale of NPAs amounting to `964.16 crores
156
Annual Report 2017 -18
v) Movement in technical/prudential written off accounts is set out below:
31 March, 2018
31 March, 2017
(` in crores)
Opening balance at the beginning of the year
Add: Technical/Prudential write-offs during the year*
Sub-total (A)
Less: Recovery made from previously technical/prudential written-off accounts
during the year
Less: Sacrifice made from previously technical/prudential written-off accounts
during the year
Sub-total (B)
Closing balance at the end of the year (A-B)
3,221.08
10,150.15
13,371.23
3,627.15
504.01
4,131.16
91.33
339.29
58.64
149.97
13,221.26
570.79
910.08
3,221.08
* includes effect of exchange fluctuation for foreign currency loans written off in earlier years
Total exposure to top four non-performing assets is given below:
vi)
31 March, 2018
31 March, 2017
(` in crores)
Total exposure to top four NPA accounts
5,340.06
4,983.87
vii) Sector-wise advances:
Sector
Sr.
No.
31 March, 2018
31 March, 2017
(` in crores)
Outstanding
Total
Advances
Gross
NPAs
% of Gross
NPAs
to Total
Advances
in that
sector
Gross NPAs
Outstanding
Total
Advances
% of Gross
NPAs to Total
Advances in
that sector
Priority Sector
Agriculture and allied activities
27,636.39
1,086.38
3.93%
25,882.66
A
1
2
Advances to industries sector eligible as
priority sector lending
- Chemical & Chemical products
- Basic Metal & Metal Products
- Infrastructure
3
Services
23,520.58
870.49
3.70%
20,301.02
1,942.47
2,076.66
593.03
45.17
56.08
29.60
2.33%
2.70%
4.99%
-*
1,824.25
549.17
- Professional Services
-*
-*
-*
725.40
9.61
- Banking and Finance other than NBFCs
and MFs
2,042.63
82.38
4.03%
3,496.52
107.06
3.06%
17,192.15
583.39
3.39%
15,904.56
428.02
- Non-banking financial companies (NBFCs)
1,360.01
-
-
1,799.13
- Commercial Real Estate
242.44
45.89
18.93%
226.52
- Trade
4
Personal loans
- Consumer Durables
- Housing
- Vehicle Loans
Sub-total (A)
10,342.95
31,643.30
2,883.75
24,859.04
3,226.47
392.76
530.51
57.72
248.02
178.07
3.80%
7,554.33
1.68%
32,903.26
2.00%
3,801.88
1.00% 23,173.31
5.52%
-*
99,992.42
3,070.77
3.07%
94,991.50
2,149.25
2.26%
157
840.48
630.46
-*
54.36
21.95
3.25%
3.11%
-*
2.98%
4.00%
2.69%
1.32%
-
6.80
264.74
250.29
26.00
123.54
-*
-
3.00%
3.50%
0.76%
0.68%
0.53%
-*
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Sector
Sr.
No.
31 March, 2018
31 March, 2017
(` in crores)
Outstanding
Total
Advances
Gross
NPAs
% of Gross
NPAs
to Total
Advances
in that
sector
Gross NPAs
Outstanding
Total
Advances
% of Gross
NPAs to Total
Advances in
that sector
B
1
2
Non-Priority Sector
Agriculture and allied activities
-
-
-
-
-
-
Industry
132,677.65
22,865.46
17.23% 124,556.99
13,294.97
10.67%
- Chemical & Chemical products
13,869.33
778.97
5.62%
-*
-*
-*
- Basic Metal & Metal Products
19,340.99
3,600.93
18.62% 23,650.81
4,103.34
17.35%
- Infrastructure
3
Services
37,886.52 11,211.30
29.59% 42,621.62
3,405.53
90,635.98
3,563.69
3.93%
67,039.50
3,688.76
7.99%
5.50%
- Professional Services
-*
- Banking and Finance other than NBFCs
and MFs
31,024.41
-*
-
- 11,525.80
-*
7,719.71
1,594.60
20.66%
- Non-banking financial companies (NBFCs)
10,875.27
5.49
0.05%
8,762.60
- Commercial Real Estate
16,094.85
1,469.12
9.13% 14,022.35
12,239.86
514.92
4.07% 11,167.65
131,244.78
1,376.40
1.05%
98,135.43
13,577.70
59,179.13
15,010.29
127.72
785.51
171.63
0.94%
9,712.81
1.33% 51,647.93
1.14%
-*
354,558.43
27,805.55
7.84% 289,731.92
17,896.41
454,550.85
30,876.32
6.79% 384,723.42
20,045.66
-
-
562.33
332.71
912.68
64.05
370.73
-*
-
-
4.01%
2.98%
0.93%
0.66%
0.72%
-*
6.18%
5.21%
- Trade
4
Personal loans
- Consumer Durables
- Housing
- Vehicle Loans
Sub-total (B)
Total (A+B)
Classification of advances into sector is based on Sector wise Industry Bank Credit return submitted to RBI
Figures in italics represent sub-sectors where the outstanding advance exceeds 10% of total outstanding advance to that sector.
* does not exceed 10% of total advances to sector as on 31st March
viii) Divergence in Asset Classification and Provisioning for NPAs
•
•
•
The Bank classifies advances into performing and non-performing advances (NPAs) as per the RBI guidelines.
NPAs are identified and provided for based on RBI’s Prudential Norms on Income Recognition, Asset
Classification and Provisioning.
Based on application of RBI’s prudential norms as stated above, the Bank classified and made the prescribed
provisions against the NPAs as at the end of 31 March, 2017.
As part of its Risk Based Supervision exercise for FY 2016-17 the RBI pointed out certain modifications in the
Banks’ asset classification and provisioning as detailed in the table below:
Sr.No.
Particulars
1
2
3
4
5
6
7
Gross NPAs as on 31 March, 2017, as reported by the Bank
Gross NPAs as on 31 March, 2017, as assessed by RBI
Divergence in Gross NPAs (2-1)
Net NPAs as on 31 March, 2017, as reported by the Bank
Net NPAs as on 31 March, 2017, as assessed by RBI
Divergence in Net NPAs (5-4)
Provisions for NPAs as on 31 March, 2017, as reported by the Bank
(` in crores)
21,280.48
26,913.28
5,632.80
8,626.55
12,943.65
4,317.10
12,205.72
158
Annual Report 2017 -18
Sr.No.
Particulars
8
9
10
11
Provisions for NPAs as on 31 March, 2017, as assessed by RBI
Divergence in provisioning (8-7)
Reported Net Profit after Tax (PAT) for the year ended 31 March, 2017
Adjusted (notional) Net Profit after Tax (PAT) for the year ended 31 March, 2017 after
taking into account the divergence in provisioning
(` in crores)
13,521.42
1,315.70
3,679.28
2,793.95
•
The Bank has duly considered the impact of the above in the Financial Statements for the year ended 31 March, 2018.
2.1.6 During the years ended 31 March, 2018 and 31 March, 2017; none of the loans and advances held at overseas
branches of the Bank have been classified as NPA by any host banking regulator for reasons other than record of
recovery.
2.1.7 Movement in floating 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, 2018
31 March, 2017
(` in crores)
3.25
-
-
3.25
3.25
-
-
3.25
The Bank has not made any draw down out of the floating provision during the current and the previous year.
2.1.8 Provision on Standard Assets
31 March, 2018
31 March, 2017
(` in crores)
Provision towards Standard Assets [includes `26.57 crores (previous year `37.60
crores) of standard provision on derivative exposures]
2,207.52
2,338.58
2.1.9 Details of Investments are set out below:
Value of Investments:
i)
1) Gross value of Investments
a)
In India
b) Outside India
2)
(i)
Provision for Depreciation
a)
In India
b) Outside India
(ii) Provision for Non-Performing Investments
a)
In India
b) Outside India
3) Net value of Investments
a)
In India
b) Outside India
31 March, 2018
31 March, 2017
(` in crores)
153,247.04
3,495.44
127,248.79
2,915.37
(254.54)
-
(2,410.68)
(201.18)
(409.86)
-
(940.93)
(20.00)
150,581.82
3,294.26
125,898.00
2,895.37
159
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
ii) Movement of provisions held towards depreciation on investments:
31 March, 2018
31 March, 2017
(` in crores)
Opening balance
Add: Provisions made during the year
Less: Write offs/write back of excess provisions during the year
Closing balance
409.86
101.60
(256.92)
254.54
iii) Detail of investments category wise
222.62
316.19
(128.95)
409.86
(` in crores)
Particulars
31 March, 2018
31 March, 2017
Government
Securities
Other approved
securities
Shares
Debentures and
Bonds
Subsidiary/Joint
Ventures
Others
Total
HTM
AFS
HFT
Total
HTM
AFS
HFT
Total
88,712.15 13,836.13
1,504.70
104,052.98 80,024.33 12,020.61
962.91
93,007.85
-
-
-
1,612.90
-
-
-
1,612.90
-
-
-
1,326.19
-
-
-
1,326.19
- 24,531.73
6,330.94
30,862.67
- 25,546.34
1,121.10
26,667.44
2,092.71
-
-
2,092.71
1,372.26
-
-
1,372.26
6.65
5,932.38
9,315.79
15,254.82
7.56
5,331.11
1,080.96
6,419.63
90,811.51 45,913.14 17,151.43
153,876.08 81,404.15 44,224.25
3,164.97 128,793.37
2.1.10 A summary of lending to sensitive sectors is set out below:
As at
A.
1)
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 securtised
exposures
a. Residential
b. Commercial real estate
2)
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
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
B.
1.
2.
3.
31 March, 2018
31 March, 2017
(` in crores)
102,152.04
26,414.52
29,328.94
89,904.42
23,505.73
25,330.23
-
75.00
-
75.00
20,522.69
152,078.67
11,680.20
126,989.85
2,510.46
1,429.31
4.70
2.94
1,649.84
1,346.70
160
Annual Report 2017 -18
As at
4.
5.
6.
7.
8.
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
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 flows/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
9.
10. All exposures to Venture Capital Funds (both registered and unregistered)
Total exposure to Capital Market (Total of 1 to 10)
31 March, 2018
31 March, 2017
(` in crores)
3,074.53
4,336.97
5,001.87
5,104.61
6.13
6.09
0.19
25.20
-
-
118.16
12,371.78
-
-
26.77
12,272.69
* excludes investment in equity shares on account of conversion of debt into equity as part of restructuring amounting to `1,838.02 crores
as on 31 March, 2018 (previous year `1,258.11 crores) which are exempted from exposure to Capital Market
2.1.11 As on 31 March, 2018, outstanding receivables acquired by the Bank under factoring stood at `218.73 crores (previous
year `7.10 crores) which are reported under ‘Bills Purchased and Discounted’ in Schedule 9 of the Balance Sheet.
2.1.12 During the years ended 31 March, 2018 and 31 March, 2017 there are no unsecured advances for which intangible
securities such as charge over the rights, licenses, authority etc. have been taken as collateral by the Bank.
2.1.13 Details of Non-SLR investment portfolio are set out below:
i)
Issuer composition as at 31 March, 2018 of non-SLR investments*:
No.
Issuer
Total
Amount
Extent of
private
placement
Extent of
“below
investment
grade”
securities
(5)
661.26
0.30
149.40
1,147.71
-
-
Extent of
“unrated”
securities
(` in crores)
Extent of
“unlisted”
securities
(6)
-
-
-
866.50
-
-
(7)
505.19
347.71
2,875.18
12,622.29
2,092.71
3,757.63
(4)
7,290.45
1,487.28
1,537.42
23,027.05
2,092.71
3,662.10
(2)
Public Sector Units
Financial Institutions
Banks
Private Corporates
Subsidiaries
Others
Provision held towards depreciation on
investments
Provision held towards non performing
investments
(1)
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Total
(3)
8,287.85
3,293.83
3,951.95
31,999.97
2,092.71
5,761.36
(254.30)
(2,611.86)
52,521.51
39,097.01
1,958.67
866.50
22,200.71
Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.
161
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Issuer composition as at 31 March, 2017 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)
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Total
(2)
(3)
(4)
(5)
(6)
(7)
Public Sector Units
Financial Institutions
Banks
8,587.03
7,533.92
175.50
5,901.15
4,247.55
0.30
2,421.00
1,582.35
102.84
-
-
-
6.50
3,907.07
-
Private Corporates
17,210.48
14,451.99
1,353.11
751.31
3,951.72
Subsidiaries
Others
1,429.44
1,429.44
4,017.00
2,210.18
-
-
-
-
1,372.26
2,382.22
Provision held towards depreciation on
investments
Provision held towards non performing
investments
(409.86)
(960.93)
38,195.31
31,455.43
1,631.75
751.31
11,619.77
Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.
*excludes investments in non-SLR government securities amounting to `42.54 crores (previous year `604.04 crores)
ii) Movement in non-performing non SLR investments are set out below:
Opening balance
Additions during the year
Reductions during the year
Closing balance
Total provisions held
31 March, 2018
31 March, 2017
(` in crores)
1,234.82
2,738.39
(600.89)
3,372.32
2,611.86
239.03
1,966.18
(970.39)
1,234.82
960.93
2.1.14 Details of securities sold/purchased (in face value terms) under repos/reverse repos including LAF and MSF transactions:
Year ended 31 March, 2018
Securities sold under repos
i. Government Securities
ii. Corporate debt Securities
Securities purchased under reverse repos
i. Government Securities
ii. Corporate debt Securities
Minimum
outstanding
during the year
Maximum
outstanding
during the year
Daily Average
outstanding
during the year
(` in crores)
As at
31 March,
2018
-
-
-
-
12,683.10
2,675.00
3,578.54
1,023.42
6,488.43
-
19,140.39
1,654.70
8,802.12
50.00
0.27
-
There have been no defaults in making the same set of securities available at the time of 2nd leg settlement of the Term
Reverse Repo during the year ended 31 March, 2018.
162
Annual Report 2017 -18
Year ended 31 March, 2017
Securities sold under repos
i. Government Securities
ii. Corporate debt Securities
Securities purchased under reverse repos
i. Government Securities
ii. Corporate debt Securities
Minimum
outstanding during
the year
Maximum
outstanding during
the year
Daily Average
outstanding during
the year
(` in crores)
As at
31 March, 2017
-
-
-
-
31,372.78
1,365.00
8,220.60
844.78
44.46
1,365.00
23,260.41
5,063.20
19,140.39
-
-
-
There have been no defaults in making the same set of securities available at the time of 2nd leg settlement of the Term
Reverse Repo during the year ended 31 March, 2017.
2.1.15 Details of financial assets sold to Securitisation/Reconstruction companies for Asset Reconstruction:
31 March, 2018
31 March, 2017
(` in crores)
Number of accounts*
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
43^
41.91
67.48
-
25.57
39
2,960.40
2,475.58
-
(484.82)
* Excludes 5 accounts already written-off (previous year 15 accounts)
^ Includes 1 account where debt has been acquired by Reconstruction company as a part of resolution plan under Insolvency and
Bankruptcy Code
# Value of security receipts received as a part of the consideration has been initially recognised at lower of net book value of the financial
asset or redemption value of the security receipts as per RBI guidelines
In accordance with the RBI guidelines on sale of NPAs, banks have the dispensation of amortising the shortfall on sale
of NPAs to Securitisation/Reconstruction companies, if the sale value is lower than the net book value, over the period
specified therein. The Bank has not amortised any such shortfall arising during the years ended 31 March, 2018 and 31
March, 2017.
Particulars
Backed by NPAs sold by the
Bank as underlying
(` in crores)
Total
Backed by NPAs sold by
other banks/financial
institutions/non-banking
financial companies as
underlying
As on 31
March, 2018
As on 31
March, 2017
As on 31
March, 2018
As on 31
March, 2017
As on 31
March, 2018
As on 31
March, 2017
Book value of investments in Security
Receipts (‘SRs’)
2,918.39
1,517.76*
5.58
7.68
2,923.97
1,525.44
*excludes application money of `1,420.35 crores
163
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Particulars
As at 31 March, 2018
(` in crores)
SRs issued within
past 5 years
SRs issued more
than 5 years ago
but within past 8
years
SRs issued more
than 8 years ago
(i)
(ii)
Book value of SRs backed by NPAs sold by the bank
as underlying
Provisions held against (i)
Book value of SRs backed by NPAs sold by other
banks / financial institutions / non-banking financial
companies as underlying
Provisions held against (ii)
Total (i) + (ii)
2,918.06
-
4.33
-
2,922.39
0.33
-
1.25
-
1.58
-
-
-
-
-
Particulars
SRs issued within past
5 years
As at March 31, 2017
SRs issued more
than 5 years ago but
within past 8 years
(` in crores)
SRs issued more than
8 years ago
(i)
(ii)
Book value of SRs backed by NPAs sold by the bank
as underlying
Provisions held against (i)
Book value of SRs backed by NPAs sold by other
banks / financial institutions / non-banking financial
companies as underlying
Provisions held against (ii)
Total (i) + (ii)
1,517.43
-
7.02
-
1,524.45
0.33
-
0.66
-
0.99
-
-
-
-
-
2.1.16 Details of the Non-Performing Financial Assets sold to other banks (excluding securitisation/reconstruction companies):
Number of accounts sold
Aggregate outstanding*
Aggregate consideration received
*Represents principal outstanding as on date of sale
31 March, 2018
31 March, 2017
(` in crores)
2
734.07
615.30
-
-
-
During the years ended 31 March, 2018 and 31 March, 2017 there were no Non-Performing Financial Assets purchased by the Bank
from other banks (excluding securitisation/reconstruction companies).
2.1.17 Details of securitisation transactions undertaken by the Bank are as follows:
Particulars
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
Sr.
No.
1
2
3
164
31 March, 2018
31 March, 2017
(` in crores)
-
-
-
-
Annual Report 2017 -18
Particulars
Sr.
No.
a) Off-balance sheet exposures
First loss
Others
b) On-balance sheet exposures
First loss
Others
4
Amount of exposures to securitisation transactions other than MRR
a) Off-balance sheet exposures
i)
Exposure to own securitizations
First loss
Loss
ii)
Exposure to third party securitisations
First loss
Others
b) On-balance sheet exposures
i)
Exposure to own securitizations
First loss
Loss
ii)
Exposure to third party securitisations
First loss
Others
31 March, 2018
31 March, 2017
(` in crores)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.1.18 The information on concentration of deposits is given below:
31 March, 2018
31 March, 2017
(` in crores)
Total deposits of twenty largest depositors
Percentage of deposits of twenty largest depositors to total deposits
51,886.56
11.44
2.1.19 The information on concentration of advances* is given below:
48,081.76
11.60
(` in crores)
31 March, 2018
31 March, 2017
Total advances to twenty largest borrowers
Percentage of advances to twenty largest borrowers to total advances of the Bank
66,597.41
10.27
65,055.41
11.13
* Advances represent credit exposure (funded and non-funded) including derivative exposure as defined by RBI
2.1.20 The information on concentration of exposure* is given below:
31 March, 2018
31 March, 2017
(` in crores)
Total exposure to twenty largest borrowers/customers
95,610.35
83,229.90
Percentage of exposures to twenty largest borrowers/customers to total exposure on
borrowers/customers
13.21
13.06
* Exposure includes credit exposure (funded and non-funded), derivative exposure, investment exposure (including
underwriting and similar commitments) and deposits placed for meeting short fall in Priority Sector Lending
165
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.21 During the year ended 31 March, 2018, the Bank’s credit exposure to single borrower was within the prudential exposure
limits except in one case, where the single borrower limit was exceeded upto an additional exposure of 5% with the
approval of the Committee of Directors. The details of such case are set out below :
Name of the Borrower
Period
Original exposure ceiling
Limit Sanctioned
% of excess limit sanctioned over original ceiling
Exposure ceiling as on 31 March, 2018
Exposure as on 31 March, 2018
Reliance Industries Limited
August, 2017
11,865.78 crores
15,821.03 crores
33.33%
13,165.49 crores
11,245.72 crores
During the year ended 31 March, 2018, the Bank’s credit exposure to group borrowers was within the Prudential
exposure limits prescribed by RBI.
During the year ended 31 March, 2017, the Bank’s credit exposure to single borrower and group borrowers was within
the prudential exposure limits prescribed by RBI.
2.1.22 Details of Risk Category wise Country Exposure:
Risk Category
Exposure (Net) as at
31 March, 2018
Provision Held as at
31 March, 2018
Exposure (Net) as at 31
March, 2017
Provision Held as at 31
March, 2017
(` in crores)
Insignificant
Low
Moderate
High
Very High
Restricted
Off-Credit
Total
-
25,390.99
3,049.83
4,095.09
573.60
0.28
-
33,109.79
-
-
-
-
-
-
-
-
-
29,144.84
2,301.13
4,014.89
338.60
0.33
-
-
19.94
-
-
-
-
-
35,799.79
19.94
2.1.23 A maturity pattern of certain items of assets and liabilities at 31 March, 2018 and 31 March, 2017 is set out below:
As at 31 March, 2018
Deposits Advances*
Investments Borrowings
Foreign
Currency
Assets
(` in crores)
Foreign
Currency
Liabilities
1 day
2 days to 7 days
8 days to 14 days
9,306.55
2,662.93
33,116.11
-
4,769.53
216.54
23,249.34
7,040.81
2,267.04
8,303.91
5,671.46
2,729.29
8,090.08
3,311.69
5,607.65
1,245.13
1,560.51
1,517.86
15 days to 30 days
12,937.59
12,192.97
4,062.76
2,771.28
7,776.30
2,854.22
31 days and upto 2 months
24,011.63
10,134.53
5,920.81
6,468.16
4,294.17
7,230.06
Over 2 months and upto 3 months
25,695.76
10,919.63
7,538.01
6,795.99
3,285.83
7,922.85
Over 3 months and upto 6 months
35,196.78
18,835.00
7,991.87
19,846.64
6,542.82
17,414.16
Over 6 months and upto 1 year
66,959.06
26,028.57
17,063.60
22,631.53
8,759.21
19,517.46
Over 1 year and upto 3 years
35,569.79
74,775.86
16,784.51
30,112.68
14,199.73
21,008.16
Over 3 years and upto 5 years
16,436.37
58,233.50
9,653.42
23,198.99
11,154.08
9,664.45
Over 5 years
Total
196,169.77
215,514.82
43,870.30
26,641.84
26,061.69
2,755.53
453,622.72
439,650.31
153,876.08
148,016.15
94,075.33
92,830.58
166
Annual Report 2017 -18
As at 31 March, 2017
Deposits
Advances*
Investments
Borrowings
Foreign
Currency
Assets
(` in crores)
Foreign
Currency
Liabilities
1 day
2 days to 7 days
8 days to 14 days
5,561.09
4,738.06
19,038.68
-
232.94
4,682.66
16,154.59
2,942.50
4,119.70
8,619.31
2,478.10
2,055.69
830.97
828.21
1,512.44
1,579.19
1,036.04
976.21
15 days to 30 days
12,706.72
11,382.78
2,776.60
3,429.24
3,547.41
6,458.97
31 days and upto 2 months
18,899.18
7,713.50
4,002.32
5,050.40
3,810.04
2,795.53
Over 2 months and upto 3 months
19,690.06
10,255.26
4,064.54
8,052.01
6,287.42
5,314.49
Over 3 months and upto 6 months
44,667.08
19,616.97
8,436.47
16,414.12
13,001.27
5,926.14
Over 6 months and upto 1 year
67,157.22
23,819.76
14,808.47
19,888.78
20,226.83
8,953.44
Over 1 year and upto 3 years
32,840.70
65,017.59
13,601.13
10,573.26
6,442.15
12,164.41
Over 3 years and upto 5 years
7,036.47
48,160.05
6,943.49
16,806.09
10,226.33
7,933.38
Over 5 years
Total
181,046.37
176,944.78
48,946.28
23,157.79
3,188.15
12,759.54
414,378.79
373,069.35
128,793.37
105,030.87
69,511.02
69,543.96
Classification 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
profile of foreign currency assets and liabilities is excluding off balance sheet items.
* For the purpose of disclosing the maturity pattern, loans and advances that have been subject to risk participation vide
Inter-Bank Participation Certificates (‘IBPCs’) and Funded Risk Participation (‘FRPs’) have been classified in the maturity
bucket corresponding to the contractual maturities of such underlying loans and advances gross of any risk participation.
The IBPC and FRP amounts have been classified in the respective maturities of the corresponding underlying loans.
2.1.24 Disclosure on Restructured Assets
Details of loans subjected to restructuring during the year ended 31 March, 2018 are given below:
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
No. of borrowers
15
-
16
9
40
Type of Restructuring
Asset Classification
Restructured accounts as on April 1
of the FY (Opening Balance)
Movement in balance for accounts
appearing under opening balance
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
Provision thereon
Fresh Restructuring during the year 1,2 No. of borrowers
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
Provision thereon
1,099.10
- 1,546.18
418.83 3,064.11
441.95
36.67
-
11.69
(67.22)
(15.79)
-
-
49.99
-
-
-
-
-
-
-
-
-
-
-
358.33
328.55 1,128.83
48.89
-
-
-
85.56
-
(108.80)
0.77
(96.34)
13.72
(30.09)
-
-
-
-
-
-
-
-
-
-
(53.50)
(45.88)
-
-
49.99
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Type of Restructuring
Asset Classification
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 FY3
Write-offs of restructured accounts
during the FY4,5,6
Restructured accounts as on March
31 of the FY (closing figures)
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
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
1
35.65
31.13
-
(2)
(22.41)
-
(0.03)
(7)
(621.74)
(162.27)
(9.57)
-
(74.49)
(14.25)
7
-
-
-
-
-
-
-
-
-
-
-
-
(1)
(35.65)
(31.13)
-
-
-
-
-
8
1
-
-
-
-
(2)
(22.41)
-
(0.03)
2
785.22
(137.78)
25.70
165.82
3.42
6.97
9.57
(5)
-
(4)
-
(9)
(816.16)
(157.17)
(1,047.82)
(156.43)
(297.87)
(468.55)
18
6
31
427.80
- 1,370.79
124.65 1,923.24
279.33
11.28
-
-
350.31
34.10
663.74
28.37
-
39.65
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Type of Restructuring
Asset Classification
Restructured accounts as on April 1
of the FY (Opening Balance)
Movement in balance for accounts
appearing under opening balance
Others
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
No. of borrowers
350
3
373
91
817
365
3
389
100
857
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
4,522.92
417.74
728.67
693.13 6,362.46 5,622.02
417.74 2,274.85 1,111.96 9,426.57
1,259.47
0.04
155.56
302.82 1,717.89 1,701.42
0.04
513.89
631.37 2,846.72
39.14
22.03
10.80
-
-
-
-
-
71.97
75.81
22.03
59.69
-
-
-
-
-
-
157.53
-
(230.72)
5.28
(17.76)
(0.57)
(243.77)
(219.03)
5.28
(126.56)
0.20
(340.11)
357.60
-
(4.56)
(6.48)
(7.38)
345.66
290.38
-
9.16
(7.38)
292.16
-
(25.36)
(22.01)
(12.66)
(36.57)
-
(71.24)
Provision thereon
(6.22)
(12.66)
168
Annual Report 2017 -18 Type of Restructuring
Asset Classification
Others
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
Fresh Restructuring during the year1,2 No. of borrowers
401
15
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 FY3
Write-offs of restructured accounts
during the FY4,5,6
Restructured accounts as on March
31 of the FY (closing figures)
-
-
-
-
(1)
(206.74)
(14.44)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
416
401
15
368.94
328.36
40.58
19.69
69.68
-
-
-
-
-
-
-
416
368.94
69.68
-
-
-
-
-
-
-
-
-
-
(23)
2
242.39
45.57
-
(25)
-
-
-
-
(2)
(242.39)
(45.57)
-
-
-
-
-
-
-
-
-
(25)
(209.42)
(34.90)
(2.32)
(187.01)
(209.42)
(34.90)
(34.90)
(2.29)
(2.32)
328.36
40.58
19.69
-
1
206.74
14.44
-
(23)
(187.01)
(34.90)
(2.29)
(167)
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
1
188
63
85
(174)
1
196
64
87
(3,770.90)
(418.21) 3,891.70
335.05
37.64 (4,392.64)
(418.21) 4,676.92
197.27
63.34
(1,327.62)
0.29 1,325.39
2.25
0.31 (1,489.89)
0.29 1,491.21
5.67
7.28
Provision thereon
(23.28)
(9.37)
32.65
-
-
(32.85)
(9.37)
42.22
-
-
No. of borrowers
(46)
(1)
(369)
(67)
(483)
(46)
(1)
(374)
(71)
(492)
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
(112.06)
(40.84)
(492.91)
(875.71)
(1,521.52)
(186.55)
(40.84) (1,309.07) (1,032.88) (2,569.34)
(19.86)
-
(71.90)
(293.94)
(385.70)
(34.11)
-
(228.33)
(591.81)
(854.25)
No. of borrowers
516
18
191
87
812
523
18
209
93
843
Amount Outstanding –
Restructured facility
Amount Outstanding –
Other facility
757.33
4.55 3,902.96
151.90 4,816.74 1,185.13
4.55 5,273.75
276.55 6,739.98
268.82
0.33 1,390.05
3.75 1,662.95
548.15
0.33 1,740.36
37.85 2,326.69
Provision thereon
7.35
-
36.97
-
44.32
18.63
-
65.34
-
83.97
Amount outstanding under restructuring facilities and other facilities is as on 31 March, 2018
1.
2.
3.
4.
5.
6.
7.
8.
Amount reported here represents outstanding as on 31 March, 2018. Actual amount subjected to restructuring determined as on
the date of approval of restructuring proposal is `366.76 crores for the FY 2017-18
Includes `51.07 crores of fresh/additional sanction to existing restructured accounts (`0.02 crores under restructured facility and
`51.05 crores under other facility)
Includes accounts which were not attracting higher provisioning and/or additional risk weight at the beginning of FY
Includes accounts partially written-off during the year
Amount outstanding under restructuring facilities and other facilities is as on the date of write-off in the books
Includes `363.46 crores of reduction from existing restructured accounts by way of sale/recovery (`299.57 crores from
restructured facility and `63.89 crores from other facility)
The cumulative value of net restructured advances after reducing the provision held for diminution in fair value and balance in
interest capitalization account upto 31 March, 2018 aggregated `1,087.10 crores
Information appearing under substandard, doubtful and loss category also include accounts slipped into NPAs from restructured
standard advances along with restructured NPAs
169
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Details of loans subjected to restructuring during the year ended 31 March, 2017 are given below:
Type of Restructuring
Asset Classification
Restructured accounts
as on April 1 of the FY
(Opening Balance)
No. of borrowers
Amount Outstanding –
Restructured facility
Movement in balance
for accounts appearing
under opening balance
Fresh Restructuring
during the year 1,2
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 FY3
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
Write-offs of restructured
accounts during the
FY4,5,6
Provision thereon
No. of borrowers
Amount Outstanding –
Restructured facility
Amount Outstanding – Other
facility
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Doubtful
Loss
Total
Sub-
Standard
(` in crores)
37
3,522.19
1,170.57
122.50
-
(365.88)
44.51
(39.55)
-
-
60.55
-
-
-
-
-
(7)
(311.73)
(28.33)
(7.81)
(15)
(1,567.82)
(682.50)
(38.47)
-
(177.66)
(122.85)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
6
53
601.54
97.88
4,221.61
48.63
27.10
-
26.64
1,245.84
-
-
149.60
-
0.75
(0.03)
(365.16)
0.01
(16.67)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44.52
(56.22)
-
-
60.55
-
-
-
-
-
(7)
(311.73)
(28.33)
(7.81)
12
5
2
1,444.96
339.06
216.20
401.62
302.57
38.46
(6)
-
(2)
21.69
(0.01)
(8)
(501.07)
(18.08)
(696.81)
(91.93)
(0.66)
(215.44)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170
Annual Report 2017 -18
Type of Restructuring
Asset Classification
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Doubtful
Loss
Total
Sub-
Standard
(` in crores)
Restructured accounts as
on March 31 of the FY
(closing figures)
No. of borrowers
Amount Outstanding –
Restructured facility
Amount Outstanding – Other
facility
Provision thereon
15
1,099.10
441.95
36.67
Others
-
-
-
-
16
9
40
1,546.18
418.83
3,064.11
358.33
328.55
1,128.83
48.89
-
85.56
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(` in crores)
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Total
Doubtful
Loss
Total
Sub-
Standard
821
1
281
31
1,134
858
1
291
37
1,187
5,211.23
0.04
785.07
68.48
6,064.82
8,733.42
0.04
1,386.61
166.36
10,286.43
Type of Restructuring
Asset Classification
Restructured accounts
as on April 1 of the FY
(Opening Balance)
Movement in balance
for accounts appearing
under opening balance
Fresh Restructuring
during the year1,2
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
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
1,216.63
61.51
-
35.18
429.67
(15.94)
43
-
-
-
-
123.10
17.20
-
10.88
1,350.61
2,387.20
-
-
78.71
184.01
-
-
(0.43)
0.03
34.78
(330.70)
-
-
-
-
0.01
-
2
(0.12)
(13.39)
1
429.57
(29.33)
46
474.18
(55.49)
43
0.01
-
2
171.73
44.30
-
0.32
(0.11)
(30.06)
1
597.63
417.73
33.59
-
22.03
0.01
0.56
-
-
-
-
-
-
-
-
161.56
-
-
-
-
-
(225)
(349.16)
(171.75)
-
1,048.95
597.63
417.73
33.59
-
22.03
0.01
0.56
-
-
-
-
-
-
-
-
161.57
22.59
-
-
-
-
222.11
-
-
-
-
-
(225)
(232)
(349.16)
(660.89)
(171.75)
(200.08)
-
(7.81)
0.01
-
-
-
-
-
-
-
-
-
37.52
2,596.45
-
-
-
0.01
-
-
-
-
-
-
-
-
-
228.31
-
(330.38)
474.09
(85.55)
46
1,048.95
222.12
22.59
-
-
-
-
(232)
(660.89)
(200.08)
(7.81)
171
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Type of Restructuring
Asset Classification
Downgradation of
restructured accounts
during the FY3
Write-offs of
restructured accounts
during the FY4,5,6
Restructured accounts
as on March 31 of the
FY (closing figures)
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
Standard
Sub-
Standard
Others
Doubtful
Loss
Total
Standard
Sub-
Standard
(` in crores)
Total
Doubtful
Loss
Total
No. of borrowers
(203)
-
165
67
29
(218)
-
177
72
31
(821.74)
(0.03)
208.83
646.91
33.97
(2,389.56)
(0.03)
1,653.79
985.97
250.17
(335.61)
0.03
43.68
292.11
0.21
(1,018.11)
0.03
445.30
594.68
6.43
(74)
-
(7)
-
(167)
(44.90)
(86)
(298.39)
(22.29)
(470.90)
(327.88)
44.89
(80)
-
(9)
21.90
(0.01)
(175)
(799.46)
(40.37)
(1,167.71)
(6.43)
(86)
(150.22)
(41.03)
350
-
-
-
-
3
(11.11)
373
(0.18)
(52.32)
(163.88)
(103.04)
91
817
365
3
389
(0.84)
100
(267.76)
857
-
-
-
-
4,522.92
417.74
728.67
693.13
6,362.46
5,622.02
417.74
2,274.85
1,111.96
9,426.57
1,259.47
39.14
0.04
22.03
155.56
10.80
302.82
1,717.89
1,701.42
-
71.97
75.81
0.04
22.03
513.89
59.69
631.37
2,846.72
-
157.53
Amount outstanding under restructuring facilities and other facilities is as on 31 March, 2017:
1.
2.
3.
4.
5.
6.
7.
8.
Amount reported here represents outstanding as on 31 March, 2017. Actual amount subjected to restructuring determined as on the date
of approval of restructuring proposal is `1,001.35 crores for the FY 2016-17
Includes `213.53 crores of fresh/additional sanction to existing restructured accounts (`3.56 crores under restructured facility and
`209.97 crores under other facility)
Includes accounts which were not attracting higher provisioning and/or additional risk weight at the beginning of FY
Includes accounts partially written-off during the year
Amount outstanding under restructuring facilities and other facilities is as on the date of write-off in the books
Includes `881.83 crores of reduction from existing restructured accounts by way of sale/recovery (`716.59 crores from restructured
facility and `165.24 crores from other facility)
The cumulative value of net restructured advances after reducing the provision held for diminution in fair value and balance in interest
capitalization account upto 31 March, 2017 aggregated `5,379.10 crores
Information appearing under substandard, doubtful and loss category also include accounts slipped into NPAs from restructured standard
advances along with restructured NPAs
2.1.25 Disclosure on Flexible Structuring of existing loans
Particulars
No. of borrowers taken up for flexible structuring
Amount of loans taken up for flexible structuring#
- Classified as Standard*
- Classified as NPA*
Exposure weighted average duration of loans taken up for flexible structuring (years)
- Before applying flexible structuring
- After applying flexible structuring
# represents outstanding as on date of sanction of the proposal
* asset classification represents position as on 31 March of the respective year
172
(` in crores)
Year ended
31 March, 2018
Year ended
31 March, 2017
3
8
682.18
290.36
9.43
19.25
1,066.14
803.79
9.22
20.72
Annual Report 2017 -18
2.1.26 Disclosure on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still period)
Particulars
No. of accounts where SDR has been invoked
Amount outstanding #
- Classified as Standard
- Classified as NPA
Amount outstanding with respect to accounts where conversion of debt to equity is pending
- Classified as Standard
- Classified as NPA
Amount outstanding with respect to accounts where conversion of debt to equity has taken
place#
- Classified as Standard
- Classified as NPA
# includes outstanding under equity investments post conversion under SDR
(` in crores)
As at
31 March, 2018
As at
31 March, 2017
-
-
-
-
-
-
-
19
3,807.18
322.40
846.10
214.69
2,961.08
107.71
2.1.27 Disclosure on Change in Ownership outside SDR Scheme (accounts which are currently under the stand-still period)
Particulars
No. of accounts where banks have decided to effect change in ownership
Amount outstanding
- Classified as Standard
- Classified as NPA
Amount outstanding with respect to accounts where conversion of debt to equity/invocation
of pledge of equity shares is pending
- Classified as Standard
- Classified as NPA
Amount outstanding with respect to accounts where conversion of debt to equity/invocation
of pledge of equity shares has taken place
- Classified as Standard
- Classified as NPA
Amount outstanding with respect to accounts where change in ownership is envisaged by
issuance of fresh shares or sale if promoters equity
- Classified as Standard
- Classified as NPA
(` in crores)
As at
31 March, 2018
As at
31 March, 2017
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.1.28 Disclosure on Change in Ownership of Projects under Implementation (accounts which are currently under the stand-still period)
(` in crores)
Particulars
As at
31 March, 2018
As at
31 March, 2017
No. of project loan accounts where banks have decided to effect change in ownership
Amount outstanding
- Classified as Standard
- Classified as standard restructured
- Classified as NPA
-
-
-
-
1
98.87
-
-
173
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.29 Disclosure on Scheme for Sustainable Structuring of Stressed Assets (S4A)
Particulars
(` in crores)
As at
31 March, 2018
As at
31 March, 2017
No. of accounts where S4A has been applied
5
2
Aggregate amount outstanding
- Classified as Standard
- Classified as NPA
Amount outstanding in Part A
- Classified as Standard
- Classified as NPA
Amount outstanding in Part B
- Classified as Standard
- Classified as NPA
Provision Held
- Classified as Standard
- Classified as NPA
486.24
647.52
281.48
409.21
204.76
238.31
107.46
567.79
323.46
-
160.35
-
163.11
-
67.05
-
2.1.30 Disclosure in respect of Interest Rate Swaps (‘IRS’), Forward Rate Agreement (‘FRA’) and Cross Currency Swaps (‘CCS’)
outstanding is set out below:
A ‘FRA’ is a financial contract between two parties to exchange interest payments for ‘notional principal’ amount on settlement
date, for a specified period from start date to maturity date. Accordingly, on the settlement date cash payments based on
contract rate and the settlement rate, which is the agreed bench-mark/reference rate prevailing on the settlement date, are
made by the parties to one another. The benchmark used in the FRA contracts of the Bank is London Inter-Bank Offered Rate
(LIBOR) of various currencies.
An ‘IRS’ is a financial contract between two parties exchanging or swapping a stream of interest payments for a ‘notional
principal’ amount on multiple occasions during a specified period. The Bank deals in interest rate benchmarks like Mumbai
Inter-Bank Offered Rate (MIBOR), Indian Government Securities Benchmark Rate (INBMK), Mumbai Inter-Bank Forward Offer
Rate (MIFOR) and LIBOR of various currencies.
A ‘CCS’ is a financial contract between two parties exchanging interest payments and principal, wherein interest payments
and principal in one currency would be exchanged for an equally valued interest payments and principal in another currency.
Sr.
No.
Items
(` in crores)
As at
31 March, 2018
As at
31 March, 2017
Notional principal of swap agreements
196,069.45
197,871.67
i)
ii)
iii)
iv)
Losses which would be incurred if counterparties failed to fulfill 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)
2,872.20
826.23
2,558.71
903.93
2,695.48
2,947.91
(804.12)
1,228.65
2,379.59
2,086.53
(410.81)
1,056.44
- Interest Rate Swaps/FRAs
- Cross Currency Swaps
v)
Fair value of the swap book (hedging & trading)
- Interest Rate Swaps/FRAs
- Currency Swaps
174
Annual Report 2017 -18
The nature and terms of the IRS as on 31 March, 2018 are set out below:
(` in crores)
Nature
Hedging
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal
Benchmark
Terms
33
4
250
319
350
21
294
353
181
28
5
5
11,698.91 LIBOR
Fixed Receivable v/s Floating Payable
275.00 INBMK
Fixed Receivable v/s Floating Payable
36,726.98 LIBOR
Fixed Receivable v/s Floating Payable
22,201.66 MIBOR
Fixed Receivable v/s Floating Payable
17,107.00 MIFOR
Fixed Receivable v/s Floating Payable
1,659.00 INBMK
Floating Receivable v/s Fixed Payable
41,559.60 LIBOR
Floating Receivable v/s Fixed Payable
17,553.49 MIBOR
Floating Receivable v/s Fixed Payable
9,741.00 MIFOR
Floating Receivable v/s Fixed Payable
5,116.24 LIBOR
Floating Receivable v/s Floating Payable
229.07 LIBOR
229.07 LIBOR
Pay Cap
Receive Cap
1,843
164,097.02
The nature and terms of the IRS as on 31 March, 2017 are set out below:
Nature
Hedging
Hedging
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal
Benchmark
Terms
(` in crores)
39
2
6
259
467
341
25
304
476
225
28
3
1
1
3
12,178.83 LIBOR
Fixed Receivable v/s Floating Payable
907.90 LIBOR
Floating Receivable v/s Fixed Payable
325.00 INBMK
Fixed Receivable v/s Floating Payable
32,773.03 LIBOR
Fixed Receivable v/s Floating Payable
29,645.28 MIBOR
Fixed Receivable v/s Floating Payable
16,724.00 MIFOR
Fixed Receivable v/s Floating Payable
1,909.00 INBMK
Floating Receivable v/s Fixed Payable
36,231.81 LIBOR
Floating Receivable v/s Fixed Payable
25,709.54 MIBOR
Floating Receivable v/s Fixed Payable
12,223.00 MIFOR
Floating Receivable v/s Fixed Payable
4,669.20 LIBOR
Floating Receivable v/s Floating Payable
66.14 LIBOR
197.11 LIBOR
197.11 LIBOR
66.14 LIBOR
Pay Cap
Pay Cap/Receive Floor
Pay Floor/Receive Cap
Receive Cap
2,180
173,823.09
The nature and terms of the FRA as on 31 March, 2018 are set out below:
Nature
Hedging
Nos.
Notional Principal
Benchmark
Terms
1
1
325.88 LIBOR
Floating Receivable v/s Fixed Payable
325.88
(` in crores)
175
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The nature and terms of the FRA as on 31 March, 2017 are set out below:
Nature
Hedging
Nos.
Notional Principal
Benchmark
Terms
2
2
2,107.63 LIBOR
Fixed Receivable v/s Floating Payable
2,107.63
The nature and terms of the CCS as on 31 March, 2018 are set out below:
(` in crores)
(` in crores)
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal Benchmark
Terms
84
70
65
6
37
20
9,787.05 Principal &
Fixed Payable v/s Fixed Receivable
Coupon Swap
6,047.29 LIBOR
7,061.51 LIBOR
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
2,445.14 LIBOR/MIFOR/
Floating Receivable v/s Floating Payable
MIBOR
3,613.89 Principal Only
Fixed Receivable
2,691.67 Principal Only
Fixed Payable
282
31,646.55
The nature and terms of the CCS as on 31 March, 2017 are set out below:
(` in crores)
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal
Benchmark
Terms
85
58
62
3
40
6
5,095.10
Principal &
Coupon Swap
4,646.82 LIBOR
6,247.64 LIBOR
1,011.29
LIBOR/MIFOR/
MIBOR
Fixed Payable v/s Fixed Receivable
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Floating Payable
3,858.99 Principal Only
Fixed Receivable
1,081.11 Principal Only
Fixed Payable
254
21,940.95
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2018 are set out below:
Particulars
Sr.
No.
i)
Notional principal amount of exchange traded interest rate derivatives undertaken during the year
679GS2027 - 6.79% GOI 2027
697GS2026 - 6.97% GOI 2026
759GS2026 - 7.59% GOI 2026
EDM7 - 90 Day Euro Future - June 2017
EDM8 - 90 Day Euro Future - June 2018
EDU7 - 90 Day Euro Future - September 2017
EDU8 - 90 Day Euro Future - September 2018
FFF8 - 30 Days FED Funds - January 2018
TUM7 - 2 Years Treasury Note - June 2017
TUU7 - 2 Years Treasury Note - September 2017
TYM7 - 10 Years US Note - June 2017
TYU7 - 10 Years US Note - September 2017
FVZ7 - 5 Years US Note - December 2017
FVH8 - 5 Years US Note - March 2018
TYH8 - 10 Years US Note - March 2018
176
(` in crores)
As at
31 March, 2018
1,269.52
356.60
29.72
1,629.38
1,629.38
3,258.75
3,258.75
3,258.75
130.35
260.70
162.93
239.84
130.35
130.35
82.12
Annual Report 2017 -18
Particulars
Sr.
No.
TUH8 - 2 Years US Note - March 2018
FVM8 - 5 Years US Note - June 2018
ii)
iii)
iv)
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31 March, 2018
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31 March, 2018
and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives outstanding as on 31 March, 2018 and
“not highly effective”
As at
31 March, 2018
260.70
130.35
16,218.54
Nil
N.A.
N.A.
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2017 are set out below:
Sr.
No.
i)
Particulars
Notional principal amount of exchange traded interest rate derivatives undertaken during the year
(` in crores)
As at
31 March, 2017
697GS2026 - 6.97% GOI 2026
759GS2026 - 7.59% GOI 2026
759GS2029 - 7.59% GOI 2029
761GS2030 - 7.61% GOI 2030
768GS2023 - 7.68% GOI 2023
772GS2025 - 7.72% GOI 2025
788GS2030 - 7.88% GOI 2030
EDH7 - 90 Day Euro Future - March 2017
EDH8 - 90 Day Euro Future - March 2018
EDM7 - 90 Day Euro Future - June 2017
EDM8 - 90 Day Euro Future - June 2018
EDQ6 - 90 Day Euro $ Future - August 2016
EDZ6 - 90 Day Euro Future - December 2016
EDZ7 - 90 Day Euro Future - December 2017
FVH7 - 5Years US Note - March 2017
FVM6 - 5 Years US Note - June 2016
FVU6 - 5 Years US Note - September 2016
TUM6 - 2 Years Treasury Note - June 2016
TUM7 - 2 Years Treasury Note - June 2017
TUU6 - 2 Years Treasury Note - September 2016
TYH7 - 10 Years US Note - March 2017
TYM6 - 10 Years US Note - June 2016
TYM7 - 10 Years US Note - June 2017
TYU6 - 10 Years US Note - September 2016
TYZ6 - 10 Years US Note - December 2016
ii)
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31 March, 2017
EDM7 - 90 Day Euro Future - June 2017
EDM8 - 90 Day Euro Future - June 2018
iii)
iv)
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31 March, 2017
and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives outstanding as on 31 March, 2017 and
“not highly effective”
152.38
4,678.12
186.98
0.10
2.00
3,219.84
1,531.36
12,970.00
12,970.00
8,754.75
8,754.75
1,297.00
9,662.65
907.90
64.85
2,042.78
1,725.01
2,983.10
259.40
3,761.30
453.95
4,344.95
136.19
12,133.43
911.79
93,904.58
1,621.25
1,621.25
3,242.50
N.A.
N.A.
The Bank has not undertaken any transactions in Credit Default Swaps (CDS) during the year ended 31 March, 2018 and 31
March, 2017.
177
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.31 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 financial instruments whose characteristics are derived from an underlying asset, or from interest and
exchange rates or indices. The Bank undertakes over the counter 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 interest rate and currency 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. 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, legal, reputation 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 Office, Treasury Mid Office and Treasury Back Office to
undertake derivative transactions. The customer and interbank related derivative transaction are originated by Transaction
Banking-Derivative sales and Treasury Front Office team respectively which ensures compliance with the trade origination
requirements as per the bank’s policy and the RBI guidelines. The derivative transactions are originated by Treasury Front
Office, 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 identifies 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 Office undertakes
activities such as trade confirmation, settlement, ISDA documentation, accounting, valuation and other MIS reporting.
The derivative transactions are governed by the derivative policy, market risk management policy, hedging policy and the
Asset Liability Management (ALM) policy of the Bank as well as by the extant RBI guidelines. The Bank has also implemented
policy on customer suitability & appropriateness approved by the Board to ensure that derivatives transactions entered into
are appropriate and suitable to the customer. The Bank has also put in place a detailed process flow on documentation
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 allocated. These limits are set up taking
into account market volatility, risk appetite, 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 dealt with in accordance with board approved Risk Appetite Statement. 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 flow 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 fixed rate and floating rate coupon or foreign currency assets/
liabilities. Transactions for hedging and market making purposes are recorded separately. For hedge transactions, the
Bank identifies 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
178
Annual Report 2017 -18
the resulting gain/loss is recorded in the Profit 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.
(c) Provisioning, collateral and credit risk mitigation
Derivative transactions comprise of swaps, FRAs, futures and options which are disclosed as contingent liabilities. Trading
swaps/FRAs/futures/options are revalued at the Balance Sheet date with the resulting unrealised gain or loss being
recognised in the Profit and Loss Account and correspondingly in other assets or other liabilities respectively. Hedged
swaps are accounted for as per the RBI guidelines. In accordance with RBI guidelines, any receivables (crystallised
receivables and positive MTM) under derivatives contracts, which remain overdue for more than 90 days, are reversed
through the Profit 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 on risk exposure in derivatives$:
As at 31 March, 2018
Currency Derivatives
(` in crores)
Interest rate
Derivatives
Particulars
Sr.
No.
Forward
Contracts^
CCS
Options
1
Derivatives (Notional Principal Amount)
a)
b)
For hedging
For trading
2
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, 2018)
a) on hedging derivatives
b) on trading derivatives
Maximum and Minimum of 100*PV01
observed during the year
3
4
5
a) on hedging
i) Minimum
ii) Maximum
b) on Trading
i) Minimum
ii) Maximum
# Only on trading derivatives
@ Includes accrued interest
^ Excluding Tom/Spot contracts
40,335.85
-
-
12,024.79
274,466.05
31,646.55
59,342.59
152,398.11
2,182.90
1,734.30
1,488.58
1,130.94
(2,464.30)
(505.64)
(1,390.53)
(1,685.31)
13,074.02
4,799.22
1,670.63
2,991.32
8.84
7.32
0.10
12.84
0.31
10.19
-
3.68
-
5.32
1.75
3.68
-
97.84
58.15
47.27
-
-
8.50
108.73
51.35
85.73
45.98
64.71
179
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
As at 31 March, 2017
Currency Derivatives
Forward
Contracts^
CCS
Options
(` in crores)
Interest rate
Derivatives
27,154.50
-
-
15,194.36
241,040.72
21,940.95
49,383.32
160,736.36
5,435.98
1,537.28
1,540.08
988.93
(5,429.65)
(480.84)
(1,374.76)
(1,361.16)
15,606.43
4,079.81
1,793.32
3,015.89
2.33
2.15
4.15
1.05
0.01
13.03
-
1.81
-
3.77
0.96
3.68
-
12.35
249.77
63.12
-
-
4.08
94.91
128.43
272.71
27.55
97.29
Particulars
Sr.
No.
1
Derivatives (Notional Principal Amount)
a)
b)
For hedging
For trading
2
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, 2018)
a) on hedging derivatives
b) on trading derivatives
Maximum and Minimum of 100*PV01 observed during
the year
3
4
5
a) on hedging
i) Minimum
ii) Maximum
b) on Trading
i) Minimum
ii) Maximum
# Only on trading derivatives
@ Includes accrued interest
^ Excluding Tom/Spot contracts
$ only Over The Counter derivatives included
The outstanding notional principal amount of Exchange Traded Currency Options as at 31 March, 2018 was Nil (previous
year Nil) and the mark-to-market value was Nil (previous year Nil).
2.1.32 Details of penalty/stricture levied by RBI during the year ended 31 March, 2018 is as under:
Amount
(` in crores)
3.00
Reason for stricture issued/ levy of penalty by RBI
Non-compliance of RBI guidelines on income Recognition and Asset Classification (IRAC) norms.
Penalty was imposed in terms of Section 47A(1)(c) read with Section 46(4)(i) of the Banking
Regulation Act, 1949
Details of penalty/stricture levied by RBI during the year ended 31 March, 2017 is as under:
Amount
(` in crores)
-
Reason for stricture issued/ levy of penalty by RBI
Warning issued by RBI on 27 July, 2016 for certain lapses in adherence to KYC/AML guidelines
on monitoring of transactions in customer accounts and FEMA provisions
Date of payment
of penalty
7 March, 2018
Date of payment of
penalty
-
180
Annual Report 2017 -18
2.1.33 Disclosure of customer complaints
(a) Disclosure of customer complaints relating to Bank’s customers on Bank’s ATMs
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, 2018
31 March, 2017
143
51,096
50,955
284
208
35,009
35,074
143
(b) Disclosure of customer complaints relating to Bank’s customers on other bank’s ATMs
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
(c) Disclosure of customer complaints other than ATM transaction 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
(d) Total 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, 2018
31 March, 2017
1,233
88,301
87,174
2,360
934
80,572
80,273
1,233
31 March, 2018
31 March, 2017
40,808
229,027
245,379
24,456
8,357
222,092
189,641
40,808
31 March, 2018
31 March, 2017
42,184
368,424
383,508
27,100
9,499
337,673
304,988
42,184
The above information does not include complaints redressed within 1 working day and is as certified by the Management
and relied upon by the auditors.
2.1.34 Disclosure of Awards passed by the Banking Ombudsman
31 March, 2018
31 March, 2017
a.
b.
c.
d.
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
-
-
-
-
The above information is as certified by the Management and relied upon by the auditors.
-
-
-
-
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.35 Draw Down from Reserves
During the year ended 31 March, 2018 the Bank has not undertaken any draw down from reserves, except towards issue
expenses incurred for the equity raising through the preferential issue, which have been adjusted against the share premium
account.
During the year ended 31 March, 2017 the Bank has made a draw down out of the Investment Reserve account towards
depreciation on investments in AFS and HFT categories in terms of RBI guidelines.
2.1.36 Letter of Comfort
The Bank has not issued any Letter of Comfort (LoC) on behalf of its subsidiaries during the current and previous year.
2.1.37 Disclosure on Remuneration
Qualitative disclosures
a) Information relating to the bodies that oversee remuneration:
v Name, composition and mandate of the main body overseeing remuneration:
The Nomination 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 co-ordination with the Risk
Management Committee of the Bank, in order to achieve effective alignment between remuneration and risks.
As at 31 March, 2018, the Nomination and Remuneration Committee comprises of the following Non-Executive
Directors:
1.
Shri Prasad R. Menon - Chairman
2.
Shri Rohit Bhagat
3.
Shri Rakesh Makhija
4.
Shri Som Mittal
In respect of Remuneration/HR matters, the Nomination and Remuneration Committee of the Board, functions with
the following main objectives:
a.
Review and recommend to the Board for approval, the overall remuneration framework and associated policy
of the Bank (including remuneration policy for Directors and key managerial personnel) including the level
and structure of fixed pay, variable pay, perquisites, bonus pool, stock-based compensation and any other
form of compensation as may be included from time to time to all the employees of the Bank including the
Managing Director & CEO (MD & CEO), other Whole-Time Directors (WTD) and senior managers one level
below the Board.
b.
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.
c.
Recommend to the Board the compensation payable to the Chairman of the Bank.
d.
e.
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.
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 MD & CEO, the other WTDs, senior
managers one level below the Board and other key roles and their progression to the Board.
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Annual Report 2017 -18
f.
Review and recommend to the Board for approval:
Ø
Ø
the creation of new positions one level below MD & CEO
appointments, promotions and exits of senior managers one level below the MD & CEO
g.
Set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, the other WTDs for
the financial year and over the medium to long term.
h.
Review the performance of the MD & CEO and other WTDs at the end of each year.
i.
j.
Review organisation health through feedback from employee surveys conducted on a regular basis.
Perform such other duties as may be required to be done under any law, statute, rules, regulations etc.
enacted by Government of India, Reserve Bank of India or by any other regulatory or statutory body.
v
External consultants whose advice has been sought, the body by which they were commissioned, and in what areas
of the remuneration process:
The Nomination and Remuneration Committee has commissioned McLagan Aon Hewitt, a globally renowned
compensation benchmarking firm, to conduct market benchmarking of employee compensation. The Bank
participates in the salary benchmarking survey conducted by Aon Hewitt every year. Aon Hewitt collects data from
multiple private sector peer banks across functions, levels and roles which is then used by the Bank to assess market
competitiveness of remuneration offered to Bank employees.
v
A description of the scope of the Bank’s remuneration policy, including the extent to which it is applicable to foreign
subsidiaries and branches:
The Committee monitors the remuneration policy for both domestic and overseas branches of the Bank on behalf of
the Board. However, it does not oversee the compensation policy for subsidiaries of the Bank.
v
A description of the type of employees covered and number of such employees:
Employees are categorised into following three categories from remuneration structure and administration standpoint:
Category 1
MD & CEO and WTDs. This category includes 4 employees.
Category 2
All the employees in the Grade of Vice President and above engaged in the functions of Risk Control and Compliance.
This category includes 28 employees.
Category 3: Other Staff
‘Other Staff’ has been defined as a “group of employees who pose a material risk”. This category includes all the
employees of the Bank in the grade of Executive Vice President (EVP) and above and also few other key business
roles in case they are below the grade of Executive Vice President. This category includes 34 employees.
b) Information relating to the design and structure of remuneration processes:
v
An overview of the key features and objectives of 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 following principles are adopted:
-
Affordability: Pay to reflect productivity improvements to retain cost-income competitiveness
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
-
-
-
-
Maintain competitiveness on fixed pay in talent market
Pay for performance to drive meritocracy through variable pay
Employee Stock Options for long-term value creation
Benefits and perquisites to remain aligned with market practices and provide flexibility
Apart from the above, the compensation structure for MD & CEO and 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:
a)
b)
c)
d)
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 significant 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
Compensation is structured in terms of fixed pay, variable pay and employee stock options (for selective employees),
with a strong linkage of variable pay to performance. The compensation policy of the Bank is approved by the
Nomination and Remuneration Committee. Additional approval from Shareholders and RBI is obtained specifically
for compensation of MD & CEO and WTDs.
v
Whether the remuneration committee reviewed the firm’s remuneration policy during the past year, and if so, an
overview of any changes that were made:
The Nomination and Remuneration committee reviews the Bank’s remuneration policy every year. There were no
major changes made in the remuneration policy during the year.
v
A discussion of how the Bank ensures that risk and compliance employees are remunerated independently of the
businesses they oversee:
The Bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee
and is guided by the individual employee performance. The remuneration is determined on the basis of relevant
risk measures included in the Balanced Scorecard / key deliverables of staff in these functions. The parameters
reviewed for performance based rewards are independent of performance of the business area they oversee and
commensurate with their individual role in the Bank. Additionally, the ratio of fixed and variable compensation is
weighed towards fixed compensation.
184
Annual Report 2017 -18
c) Description of the ways in which current and future risks are taken into account in the remuneration
processes:
v
An overview of the key risks that the Bank takes into account when implementing remuneration measures:
The business activity of the Bank is undertaken within the limits of the following risk measures to achieve the financial
plan:
•
•
•
NPA - net slippages
Ratio of Risk Weighted Assets to Total Assets
Liquidity Coverage Ratio
v
An overview of the nature and type of key measures used to take account of these risks, including risk difficult to
measure:
The Bank has a robust system of measuring and reviewing these risks. The risk parameters are a part of the Balanced
Scorecard used for setting of performance objectives and for measuring performance which includes, besides
financial performance, adherence to internal processes, compliance and people perspectives. Weightage is placed
on not only financial or quantitative achievement of objectives but also on qualitative aspects detailing how the
objectives were achieved.
v
A discussion of the ways in which these measures affect remuneration:
The relevant risk measures are included in the scorecards of MD & CEO and WTDs. Inclusion of the above
mentioned measures ensures that performance parameters are aligned to risk measures at the time of performance
evaluation. The Nomination and Remuneration Committee takes into consideration all the above aspects while
assessing organisational and individual performance and making compensation related recommendations to the
Board.
v
A discussion of how the nature and type of these measures have changed over the past year and reasons for the
changes, as well as the impact of changes on remuneration:
During FY 2017-18, the risk measures were reviewed and certain additional metrics pertaining to stressed loans
were incorporated in the Balanced Scorecards, in view of the asset quality challenges faced by the Banking industry
in recent years.
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 the robust goal setting process to ensure alignment of individual objectives to support the achievement of
business strategy, financial and non-financial goals across and through the organisation. The non-financial goals for
employees includes customer service, process improvement, adherence to risk and compliance norms, operations and
process control, learning and knowledge development.
v
An overview of main performance metrics for Bank, top level business lines and individuals:
The Bank follows a Balanced Scorecard approach for measuring performance for the Bank, top business lines
and individuals. The approach broadly comprises financial, customer, internal processes, compliance and people
perspectives and includes parameters on revenue and profitability, business growth, customer initiatives, operational
efficiencies, regulatory compliance, risk management and people management.
v
A discussion of how amounts of individual remuneration are linked to the Bank-wide and individual performance:
185
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The Bank’s remuneration practices are underpinned by principles of meritocracy and fairness. The remuneration system
strives to maintain the ability to attract, retain, reward and motivate the talent in order to enable the Bank to attain its
strategic objectives within the increasingly competitive context in which it operates. The Bank’s pay-for-performance
approach strives to ensure both internal and external equity in line with emerging market trends. However, the business
model and affordability form the overarching boundary conditions.
The Bank follows a Balanced Scorecard approach for measuring individual performance at Senior levels. The Balanced
scorecard parameters for individuals are cascaded from the Bank’s Balanced Scorecard. The Management Committee or
the Nomination and Remuneration Committee reviews the achievements against the set of parameters which determines
the performance of the individuals. For all other employees, performance appraisals are conducted annually and initiated
by the employee with self-appraisal. The immediate supervisor reviews the appraisal ratings in a joint consultation meeting
with the employee and assigns the performance rating. The final ratings are discussed by a Moderation Committee
comprising of senior officials of the Bank. Both relative and absolute individual performances are considered for the
moderation process. Individual fixed pay increases, variable pay and ESOPs are linked to the final performance ratings.
In addition, the fixed pay increase is also influenced by an employee’s position in the salary range.
v A discussion of the measures the Bank will in general implement to adjust remuneration in the event that performance
metrics are weak:
In cases where the performance metrics are weak or not well defined to measure the performance effectively, the Bank uses
discretion to reward such employees. The remuneration is then influenced by the operational performance parameters of
the Bank along with individual performance achievement.
Whilst determining fixed and variable remuneration, relevant risk measures are included in scorecards of senior employees.
Identified risk parameters that are taken into account are as under:
•
•
•
NPA – net slippages
Ratio of Risk Weighted Assets to Total Assets
Liquidity Coverage Ratio
As a prudent measure, a portion of variable pay if it exceeds a certain threshold is deferred and is paid proportionately
over a period of 3 years. The deferred variable pay amount of reference year would be held back in case of any
misrepresentation or gross inaccuracy resulting in a wrong risk assessment.
e) Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer
term performance:
v
A discussion of the Bank’s policy on deferral and vesting of variable remuneration and, if the fraction of variable
remuneration that is deferred differs across employees or groups of employees, a description of the factors that
determine the fraction and their relative importance:
The deferral of the Variable Pay for the three categories of employees as stated earlier is given below:
Category 1: MD & CEO and WTDs
Variable Pay will not exceed 70% of the Fixed Pay
To ensure that risk measures do not focus only on achieving short term goals, variable payout is deferred. If the
variable pay exceeds 40% of fixed pay, 45% of the variable pay to be deferred proportionately over a period of
three years.
Category 2: All the employees in the Grade of Vice President and above engaged in the functions of Risk Control
and Compliance
-
Variable Pay will be paid on the basis of laid down risk control, compliance and process improvement
parameters in the balanced scorecard / key deliverables of staff in this function
186
Annual Report 2017 -18
-
-
-
-
The parameters will be independent of performance of the business area they oversee and will commensurate
with their key role in the Bank
The ratio of fixed and variable compensation will be weighed towards fixed compensation
Percentage of variable pay to be capped at 70% of fixed pay
Appropriate deferral structure as approved by the Nomination and Remuneration Committee will be applicable
to this category of employees
Category 3: Other Staff
-
-
-
Variable Pay will be paid on the basis of performance against key deliverables and overall business
performance for the financial year
Percentage of variable pay to be capped at 70% of fixed pay
Appropriate deferral structure as approved by the Nomination and Remuneration Committee will be applicable
to this category of employees
v
A discussion of the Bank’s policy and criteria for adjusting deferred remuneration before vesting and (if permitted
by national law) after vesting through claw back arrangements:
The deferred portion of the variable pay may be delayed in the event of an enquiry determining gross negligence
or breach of integrity. The deferred portion is withheld by the Bank till the completion of such enquiries, if any. As
a result, no claw back arrangements are made on the deferred portion of the variable pay.
f)
Description of the different forms of variable remuneration that the Bank utilizes and the rationale
for using these different forms:
v
An overview of the forms of variable remuneration offered:
•
•
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
Employee Stock Options (ESOPs): ESOPs are given to selective set of employees at senior levels based on
their level of performance and role. ESOP scheme has an inbuilt deferred vesting design which helps in
directing long term performance orientation among employees
v
A discussion of the use of different forms of variable remuneration and, if the mix of different forms of variable
remuneration differs across employees or group of employees, a description of the factors that determine the mix
and their relative importance:
Variable pay in the form of performance based bonus is paid out annually and is linked to performance achievement
against balanced performance measures and aligned with the principles of meritocracy. The proportion of variable
pay in total pay shall be higher at senior management levels. The payment of all forms of variable pay is governed
by the affordability of the Bank and based on profitability and cost income ratios. At senior management levels (and
for certain employees with potential to cause material impact on risk exposure), a portion of variable compensation
may be paid out in a deferred manner in order to drive prudent behaviour as well as long term & sustainable
performance orientation. Long term variable pay is administered in the form of ESOPs with an objective of enabling
employee participation in the business as an active stakeholder and to usher in an ‘owner-manager’ culture. The
quantum of grant of stock options is determined and approved by the Nomination and Remuneration Committee, in
terms of the said Regulations and in line with best practices, subject to the approval of RBI. The current ESOP design
has an inbuilt deferral intended to spread and manage risk.
Quantitative disclosures
a) The quantitative disclosures pertaining to the MD & CEO, Whole Time Directors and other risk takers for the year ended
31 March, 2018 and 31 March, 2017 are given below. Other risk takers include all employees in the grade of Executive
Vice President (EVP) and above and also cover certain select roles in case they are below the grade of EVP.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
a.
i)
Number of meetings held by the Remuneration Committee (main body
overseeing remuneration) during the financial year
ii)
Remuneration paid to its members (sitting fees)
Number of employees having received a variable remuneration award during
the financial year
Number and total amount of sign-on awards made during the financial year
Number and total amount of guaranteed bonus awarded during the financial
year, if any
Details of severance pay, in addition to accrued benefits, 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 financial year
Breakdown of amount of remuneration awards for the financial year to show
fixed and variable, deferred and non-deferred, different forms used
31 March, 2018
31 March, 2017
8
7
`15,00,000
`13,50,000
33*
N.A.
N.A.
N.A.
38*
N.A.
N.A.
N.A.
`0.34 crores
(cash bonus)
`0.65 crores
Fixed -
`41.00 crores#
Variable -
`9.78 crores*
`0.99 crores
(cash bonus)
`0.65 crores
Fixed -
`38.19 crores#
Variable -
`11.22 crores*
Deferred - Nil
Deferred - Nil
Non-deferred - `9.78
crores*
Non-deferred -
`11.22 crores*
Number of stock
options granted
during the financial
year - 3,067,750
Number of stock
options granted
during the financial
year - 3,491,000
Total amount of outstanding deferred remuneration and retained remuneration
exposed to ex post explicit and/or implicit adjustments
Total amount of reductions during the financial year due to ex- post explicit
adjustments
Total amount of reductions during the financial year due to ex- post implicit
adjustments
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
* pertains to FY 2016-17 paid to other risk takers (previous years pertains to MD & CEO, WTDs and other risk takers for
FY 2015-16)
# Fixed Remuneration includes basic salary, fixed allowance, leave fare concession, house rent allowance, location pay,
super annuation allowance, certain other allowances and contribution towards provident fund
b) Disclosure for compensation of Non-executive Directors (Except Part-time Chairman):
a.
Amount of remuneration paid during the year (pertains to preceding year)
1.02
0.90
31 March, 2018
31 March, 2017
(` in crores)
188
Annual Report 2017 -18
2.1.38 The details of fees / brokerage earned in respect of insurance broking, agency and bancassurance business undertaken by
the Bank are as under:
Sr.
No.
1.
2.
3.
4.
Nature of Income*
For selling life insurance policies
For selling non-life insurance policies
For selling mutual fund products
Others (wealth advisory, RBI and other bonds etc.)
Total
31 March, 2018
31 March, 2017
(` in crores)
539.49
56.40
388.46
88.48
1,072.83
558.24
32.95
317.44
88.57
997.20
*includes receipts on account of marketing activities undertaken on behalf of bancassurance partners
2.1.39 The Bank has not sponsored any special purpose vehicle which is required to be consolidated in the consolidated financial
statements as per accounting norms.
2.1.40 Amount of total assets, non-performing assets and revenue of overseas branches is given below:
Particulars
Total assets
Total NPAs
Total revenue
31 March, 2018
31 March, 2017
(` in crores)
61,007.58
54,252.62
4,311.02
2,380.67
4,695.18
2,636.36
2.1.41 During the year ended 31 March, 2018 the value of sales/transfers of securities to/from HTM category (excluding one-time
transfer of securities and sales to RBI under OMO auctions) did not exceed 5% of the book value of investments held in HTM
category at the beginning of the year.
During the year ended 31 March, 2017 the value of sales/transfers of securities to/from HTM category (excluding one-time
transfer of securities and sales to RBI under OMO auctions) exceeded 5% of the book value of investments held in HTM
category at the beginning of the year by `11,558.20 crores.
Market value of investments held in HTM category
Excess of book value over market value for which provision is not
made
`82,665.92 crores
Nil
2.1.42 Disclosure on transfers to Depositor Education and Awareness Fund (DEAF)
Particulars
Opening balance of amounts transferred to DEAF
Add : Amounts transferred to DEAF during the year
Less : Amounts reimbursed by DEAF towards claims
Closing balance of amounts transferred to DEAF
31 March, 2018
31 March, 2017
(` in crores)
64.90
34.07
(1.83)*
97.14
41.57
24.23
(0.90)*
64.90
*includes `0.39 crores (previous year `0.21 crores) of claim raised and pending settlement with RBI
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.43 Disclosure on Intra-Group Exposures
Particulars
Total amount of intra-group exposures
Total amount of top-20 intra-group exposures
Percentage of intra-group exposures to total exposure of the Bank on borrowers/customers
31 March, 2018
31 March, 2017
(` in crores)
4,954.82
4,954.80
0.68
3,232.20
3,232.20
0.51
During the years ended 31 March, 2018 and 31 March, 2017, the intra-group exposures were within the limits specified by
RBI.
2.1.44 Unhedged Foreign Currency Exposure
The Bank’s Corporate Credit Policy lays down the framework to manage credit risk arising out of unhedged foreign currency
exposures of the borrowers. Both at the time of initial approval as well as subsequent reviews/renewals, the assessment of
credit risk arising out of foreign currency exposure of the borrowers include details of imports, exports, repayments of foreign
currency borrowings, as well as hedges done by the borrowers or naturally enjoyed by them vis-a-vis their intrinsic financial
strength, history of hedging and losses arising out of foreign currency volatility. The extent of hedge/cover required on the total
foreign currency exposure including natural hedge and hedged positions, is guided through a matrix of internal ratings. The
hedging policy is applicable for existing as well as new clients with foreign currency exposures above a predefined threshold.
The details of un-hedged foreign currency exposure of customers for transactions undertaken through the Bank are monitored
periodically. The Bank also maintains additional provision and capital, in line with RBI guidelines.
During the year ended 31 March, 2018, there is a write back of `9.30 crores (previous year write back of `13.88 crores) in
provision for un-hedged foreign currency exposures. As on 31 March, 2018, the Bank held incremental capital of `220.11
crores (previous year `300.05 crores) towards borrowers having un-hedged foreign currency exposures.
2.1.45 Disclosure on provisioning pertaining to fraud accounts
Number of frauds reported during the year*
Amounts involved
Provisions held at the beginning of the year
Provisions made during the year
Provisions held at the end of the year
Unamortised provision debited from ‘other reserves’ as at the end of the year
31 March, 2018
(` in crores)
31 March, 2017
521
353.97
125.49
228.48
353.97
-
205
72.92
48.63
24.29
72.92
-
*Excluding 2 cases (previous year 4 cases) amounting to `98.96 crores (previous year `407.73 crores) reported as fraud
during the year and subsequently prudentially written off
2.1.46 Detail of Priority Sector Lending Certificates (PSLC) purchased by the Bank are set out below:
Category
PSLC – General
PSLC – Micro Enterprises
PSLC – Small/Marginal Farmers
Total
31 March, 2018
31 March, 2017
(` in crores)
9,416.00
300.00
-
9,716.00
600.00
-
5,000.00
5,600.00
During the years ended 31 March, 2018 and 31 March, 2017, the Bank has not sold any Priority Sector Lending Certificates.
190
Annual Report 2017 -18
2.1.47 Disclosure on Liquidity Coverage Ratio
Qualitative disclosure
The Bank has adopted the Basel III framework on liquidity standards as prescribed by RBI and has put in place requisite
systems and processes to enable periodical computation and reporting of the Liquidity Coverage Ratio (LCR). The mandated
regulatory threshold as per the transition plan is embedded into the Risk Appetite Statement of the Bank thus subjecting LCR
maintenance to Board oversight and periodical review. The Risk department computes the LCR and reports the same to the
Asset Liability Management Committee (ALCO) every month for review as well as to the Risk Management Committee of the
Board.
The Bank computes LCR on a daily basis and in accordance with RBI guidelines the quarterly disclosures of LCR contains data
on the simple average calculated on daily observations over a period of 90 days.
The Bank follows the criteria laid down by RBI for calculation of High Quality Liquid Assets (HQLA), gross outflows and inflows
within the next 30-day period. HQLA predominantly comprises Government securities viz. Treasury Bills, Central and State
Government securities. A relatively smaller part of HQLA is accounted for by the corporate bonds rated AA- and above with
mandated haircuts applied thereto.
The Bank monitors the concentration of funding sources from significant counterparties, significant instruments/products as
part of the asset liability management framework. The Bank adheres to the regulatory and internal limits on Inter-bank liability
and call money borrowings which form part of the ALM policy. The Bank’s funding sources are fairly dispersed across sources
and maturities.
Expected derivative cash outflows and inflows are calculated for outstanding contracts in accordance with laid down valuation
methodologies. Cash flows, if any, from collaterals posted against derivatives are not considered.
Apart from the LCR position in all currencies put together, the Bank monitors the LCR in US Dollar currency which qualifies as
a significant currency as per RBI guidelines.
The liquidity risk management of the Bank is undertaken by the Asset Liability Management group in the Treasury in accordance
with the Board approved policies and ALCO approved funding plans. The Risk department measures and monitors the liquidity
profile of the Bank with reference to the Board approved limits, for both domestic as well as overseas operations, on a static
as well as on a dynamic basis by using the gap analysis technique supplemented by monitoring of key liquidity ratios and
periodical liquidity stress testing. Periodical reports are placed before the Bank’s ALCO for perusal and review.
All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed LCR
computation template.
Quantitative disclosure
Quarter ended
31 March, 2018
Total
Unweighted
Value
(average)
Total
Weighted
Value
(average)
Quarter ended
31 December, 2017
Quarter end
30 September, 2017
Quarter ended
30 June, 2017
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
(` in crores)
High Quality Liquid Assets
1
Total High Quality Liquid Assets (HQLAs)
79,973.26
73,116.53
71,834.98
71,379.76
Cash Outflows
2
(i)
(ii)
3
(i)
Retail Deposits and deposits from small
business customers,
of which:
Stable Deposits
238,884.37
21,478.87
231,420.68
20,762.31
225,670.59
20,248.80
222,834.02
19,970.18
48,191.37
2,409.57
47,595.16
2,379.76
46,365.18
2,318.26
46,264.28
2,313.21
Less Stable Deposits
190,693.00
19,069.30
183,825.52
18,382.55
179,305.41
17,930.54
176,569.74
17,656.97
Unsecured wholesale funding,
of which:
134,036.28
71,532.35
136,167.50
68,709.21
129,994.35
64,211.05
125,377.35
63,394.94
Operational deposits (all counterparties)
40,656.37
10,158.50
44,378.91
11,089.40
40,099.06
10,019.37
36,389.68
9,091.82
191
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Quarter ended
31 March, 2018
Total
Unweighted
Value
(average)
Total
Weighted
Value
(average)
Quarter ended
31 December, 2017
Quarter end
30 September, 2017
Quarter ended
30 June, 2017
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
93,379.91
61,373.85
91,788.59
57,619.81
89,895.29
54,191.68
88,987.67
54,303.12
-
-
805.00
-
-
478.26
-
-
673.91
-
-
618.13
(ii)
Non-operational deposits (all
counterparties)
(iii)
Unsecured debt
Secured wholesale funding
4
5
(i)
(ii)
Additional requirements, of which
37,389.88
28,299.66
49,195.82
38,150.38
34,403.02
22,945.12
30,661.83
22,632.38
Outflows related to derivative exposures
and other collateral requirements
Outflows related to loss of funding on
debt products
26,614.31
26,614.31
33,064.39
33,064.39
21,302.10
21,302.10
21,433.96
21,433.97
311.69
311.69
2,981.08
2,981.08
186.50
186.50
162.21
162.21
(iii)
Credit and liquidity facilities
10,463.88
1,373.66
13,150.35
2,104.91
12,914.42
1,456.52
9,065.66
1,036.20
6
7
8
Other contractual funding obligations
4,128.51
4,038.52
4,003.84
3,913.84
4,035.69
3,945.69
3,591.80
3,501.80
Other contingent funding obligations
224,085.43
8,718.93
222,696.55
8,685.97
211,371.82
8,181.74
205,149.55
7,942.22
Total Cash Outflows
134,873.33
140,699.97
120,206.31
118,059.65
Cash Inflows
9
10
11
12
21
22
23
Secured lending
(eg. reverse repo)
673.75
-
673.52
-
1,323.93
-
2,799.40
-
Inflows from fully performing exposures
36,820.48
22,956.72
35,799.85
21,898.49
30,901.05
20,233.70
30,430.62
19,018.98
Other cash inflows
Total Cash Inflows
Total HQLA
Total Net Cash Outflows
Liquidity Coverage Ratio%
26,488.54
26,488.54
33,485.59
33,289.34
21,315.71
21,315.72
21,412.85
21,412.85
63,982.77
49,445.26
69,958.96
55,187.83
53,540.69
41,549.42
54,642.87
40,431.83
Total adjusted Value
Total adjusted Value
Total adjusted Value
Total adjusted Value
79,973.26
85,428.07
93.61%
73,116.53
85,512.14
85.50%
71,834.98
78,656.89
91.33%
71,379.76
77,627.82
91.95%
Note: 1) Average for all the quarters is simple average of daily observations for the quarter.
2) Classification of inflows and outflows for determining the run off factors 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.
Quarter ended
31 March, 2017
Quarter ended
31 December, 2016
Quarter end
30 September, 2016
Quarter ended
30 June, 2016
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
(` in crores)
69,068.02
73,485.84
62,071.82
57,911.67
High Quality Liquid Assets
1
Total High Quality Liquid Assets
(HQLAs)
Cash Outflows
Retail Deposits and deposits from
small business customers,
of which:
Stable Deposits
223,062.16
19,876.45
227,335.01
20,322.23
214,721.91
19,443.96
206,725.61
18,700.11
48,595.25
2,429.76
48,225.63
2,411.29
40,564.79
2,028.25
39,449.20
1,972.47
Less Stable Deposits
174,466.91
17,446.69
179,109.38
17,910.94
174,157.12
17,415.71
167,276.41
16,727.64
Unsecured wholesale funding,
of which:
Operational deposits (all
counterparties)
114,310.99
57,658.68
105,538.02
51,751.28
107,610.78
51,052.33
104,027.70
52,853.63
31,269.64
7,812.33
33,120.72
8,275.36
35,890.75
8,967.75
32,443.10
8,105.92
2
(i)
(ii)
3
(i)
192
Annual Report 2017 -18
Quarter ended
31 March, 2017
Quarter ended
31 December, 2016
Quarter end
30 September, 2016
Quarter ended
30 June, 2016
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
83,041.35
49,846.35
72,417.30
43,475.92
71,720.03
42,084.58
71,584.60
44,747.71
-
-
462.22
-
-
500.00
-
-
-
-
1,014.84
1,752.55
33,918.61
26,359.82
30,613.59
22,523.69
22,670.54
15,707.75
24,332.56
13,495.84
24,578.76
24,578.76
19,194.47
19,194.47
14,927.66
14,927.67
12,354.13
12,354.13
864.71
8,475.14
864.71
916.35
2,388.52
2,388.52
-
-
-
-
9,030.60
940.70
7,742.88
780.08
11,978.43
1,141.71
(ii)
Non-operational deposits (all
counterparties)
(iii)
Unsecured debt
4
5
(i)
(ii)
Secured wholesale funding
Additional requirements,
of which
Outflows related to derivative
exposures and other collateral
requirements
Outflows related to loss of funding on
debt products
(iii)
Credit and liquidity facilities
6
7
8
Other contractual funding obligations
3,696.81
3,606.81
3,505.93
3,415.93
3,777.42
3,687.42
3,046.03
2,956.03
Other contingent funding obligations
199,879.47
7,735.28
196,561.11
7,658.97
181,755.53
7,110.29
180,297.54
6,994.77
Total Cash Outflows
115,699.26
106,172.10
98,016.59
96,752.93
Cash Inflows
9
10
11
12
21
22
23
Secured lending (eg. reverse repo)
7,332.28
-
9,101.00
-
2,570.67
-
-
-
Inflows from fully performing
exposures
Other cash inflows
Total Cash Inflows
Total HQLA
Total Net Cash Outflows
Liquidity Coverage Ratio %
23,518.10
18,575.43
27,200.87
18,767.80
26,214.48
17,804.76
24,594.96
17,307.41
24,605.83
24,605.83
19,063.95
19,063.95
14,913.06
14,913.06
12,401.32
12,401.32
55,456.21
43,181.26
55,365.82
37,831.75
43,698.21
32,717.82
36,996.28
29,708.73
Total adjusted Value
Total adjusted Value
Total adjusted Value
Total adjusted Value
69,068.02
72,518.00
95.24%
73,485.84
68,340.35
107.53%
62,071.82
65,298.77
95.06%
57,911.67
67,044.20
86.38%
Note: 1)
Average for quarter ended 31 March, 2017 is simple average of daily observations for the quarter. Average for
other quarters represents simple average of monthly observations for the respective quarters.
2)
Classification of inflows and outflows for determining the run off factors 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.
2.2 Other disclosures
2.2.1 During the year, the Bank has appropriated `101.65 crores (previous year `755.57 crores) to the Capital Reserve, net of taxes
and transfer to statutory reserve, being the gain on sale of HTM investments in accordance with RBI guidelines.
2.2.2 During the year, the Bank has appropriated an amount of `1.62 crores (previous year `1.75 crores) to Reserve Fund account
towards statutory reserve in accordance with guidelines issued by Central Bank of Sri Lanka in respect of Colombo branch
operations.
193
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.2.3 Earnings Per Share (‘EPS’)
The details of EPS computation is set out below:
Basic and Diluted earnings for the year (Net profit 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 (`)
31 March, 2018
31 March, 2017
275.68
244.51
0.75
245.26
1.13
1.12
2.00
3,679.28
238.93
0.94
239.87
15.40
15.34
2.00
Dilution of equity is on account of 7,517,504 (previous year 9,429,479) 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 65,000,000 equity shares to eligible
employees. Eligible employees are granted an option to purchase shares subject to vesting conditions. Further, over the period
June 2004 to July 2013, pursuant to the approval of the shareholders at Annual General Meetings, the Bank approved an
ESOP scheme for additional options aggregating 175,087,000. The options vest in a graded manner over 3 years. The
options can be exercised within three/five years from the date of the vesting as the case may be. Within the overall ceiling
of 240,087,000 stock options approved for grant by the shareholders as stated earlier, the Bank is also authorised to issue
options to eligible employees and Whole Time Directors of the subsidiary companies.
246,272,950 options have been granted under the Scheme till the previous year ended 31 March, 2017.
On 15 May, 2017, the Bank granted 6,885,700 stock options (each option representing entitlement to one equity share of
the Bank) to its eligible employees/directors of the Bank/subsidiary companies at a price of `503.00 per option.
Stock option activity under the Scheme for the year ended 31 March, 2018 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
29,711,124
217.33 to 535.00
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
6,885,750
503.00
(810,120)
306.54 to 535.00
(57,910)
217.33 to 289.51
(6,173,935)
217.33 to 535.00
Outstanding at the end of the year
29,554,909
217.33 to 535.00
Exercisable at the end of the year
16,062,159
217.33 to 535.00
383.16
503.00
470.15
275.32
270.47
432.45
378.40
The weighted average share price in respect of options exercised during the year was `524.51
3.98
-
-
-
-
4.22
2.85
194
Annual Report 2017 -18
Stock option activity under the Scheme for the year ended 31 March, 2017 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
35,527,310
217.33 to 535.00
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
7,153,000
469.90
(690,050)
217.33 to 535.00
(74,853)
217.33 to 289.51
(12,204,283)
217.33 to 535.00
Outstanding at the end of the year
29,711,124
217.33 to 535.00
Exercisable at the end of the year
15,934,524
217.33 to 535.00
327.56
469.90
455.72
257.56
268.81
383.16
319.45
The weighted average share price in respect of options exercised during the year was `507.67.
3.33
-
-
-
-
3.98
2.41
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 profit and EPS would be as follows:
Net Profit (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 Profit (Proforma) (` in crores)
Earnings per share: Basic (in ` )
As reported
Proforma
Earnings per share: Diluted (in `)
As reported
Proforma
31 March, 2018
31 March, 2017
275.68
-
(102.86)
172.82
1.13
0.71
1.12
0.70
3,679.28
-
(101.47)
3,577.81
15.40
14.97
15.34
14.92
During the years ended, 31 March, 2018 and 31 March, 2017, no cost has been incurred by the Bank on ESOPs issued to
the employees of the Bank and employees of subsidiaries under the intrinsic value method.
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, 2018
31 March, 2017
1.16%
1.29%
2.57-4.57years
2.57-4.57 years
6.55% to 6.82%
7.15% to 7.39%
31.80% to 33.56%
32.92% to 35.75%
195
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate 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, 2018 is `155.53 (previous year
`153.66).
2.2.5 Proposed Dividend
After making mandatory appropriations to Statutory Reserve, Investment Reserve, Reserve Fund and Capital Reserve, no
profits are available for distribution as dividend for the year ended 31 March, 2018. Accordingly, no dividend has been
recommended by the Board of Directors for the year ended 31 March, 2018.
Dividend paid during the year, represents dividend (`5 per equity share) for the year ended 31 March, 2017 paid pursuant
to approval of shareholders at Annual General Meeting held on 26 July, 2017.
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 identified 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. The Treasury segment also includes the central funding unit.
Constitutes lending to individuals/small businesses through the branch network and other delivery
channels subject to the orientation, nature of product, granularity of the exposure and the quantum
thereof. Retail Banking activities also include liability products, card services, internet banking,
mobile banking, ATM services, depository, financial advisory services and NRI services.
Includes corporate relationships not included under Retail Banking, corporate advisory services,
placements and syndication, 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.
Unallocated assets and liabilities
All items which are reckoned at an enterprise level are classified under this segment such as deferred
tax, money received against share warrants, tax paid in advance net of provision etc.
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 classified under this
segment, 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.
196
Annual Report 2017 -18
Segmental results are set out below:
31 March, 2018
(` in crores)
Treasury
Corporate/
Wholesale
Banking
Retail
Banking
Other
Banking
Business
Total
Segment Revenue
Gross interest income (external customers)
11,825.78
14,607.46
19,347.07
-
45,780.31
Other income
3,088.74
2,812.03
3,988.73
1,077.59
10,967.09
Total income as per Profit and Loss Account
14,914.52
17,419.49
23,335.80
1,077.59
56,747.40
Add/(less) inter segment interest income
49,386.08
5,402.38
17,298.22
-
72,086.68
Total segment revenue
64,300.60
22,821.87
40,634.02
1,077.59
128,834.08
Less: Interest expense (external customers)
13,305.80
810.02
13,046.76
-
27,162.58
Less: Inter segment interest expense
45,761.40
12,352.62
13,972.08
0.58
72,086.68
Less: Operating expenses
Operating profit
383.64
3,731.86
9,753.64
121.20
13,990.34
4,849.76
5,927.37
3,861.54
955.81
15,594.48
Less: Provision for non-performing assets/others*
1,759.93
11,852.41
1,860.57
-
15,472.91
Segment result
Less: Provision for tax
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Net assets
3,089.83
(5,925.04)
2,000.97
955.81
121.57
(154.11)
-
275.68
228,322.23
223,754.56
229,710.81
690.55
682,478.15
8,851.43
691,329.58
230,818.80
132,836.77
263,380.50
25.08
627,061.15
(2,496.57)
90,917.79
(33,669.69)
665.47
63,445.26
823.17
627,884.32
Capital expenditure for the year
Depreciation on fixed assets for the year
15.15
11.36
225.30
169.01
501.71
376.37
15.14
11.36
757.30
568.10
(` in crores)
31 March, 2017
Retail Banking Other Banking
Business
Total
Treasury
Corporate/
Wholesale
Banking
Segment Revenue
Gross interest income (external customers)
11,653.01
15,767.68
17,121.47
-
44,542.16
Other income
4,642.18
2,958.55
3,088.44
Total income as per Profit and Loss Account
16,295.19
18,726.23
20,209.91
1,002.14
1,002.14
11,691.31
56,233.47
Add/(less) inter segment interest income
48,713.22
5,358.37
18,029.89
-
72,101.48
Total segment revenue
65,008.41
24,084.60
38,239.80
1,002.14
128,334.95
Less: Interest expense (external customers)
12,484.43
663.30
13,301.31
-
26,449.04
Less: Inter segment interest expense
47,974.47
11,937.93
12,188.50
0.58
72,101.48
Less: Operating expenses
Operating profit
456.91
4,092.60
3,317.95
8,165.42
8,307.81
4,442.18
117.24
884.32
12,199.91
17,584.52
197
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Less: Provision for non-performing assets/others*
Segment result
Less: Provision for tax
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Net assets
Treasury
Corporate/
Wholesale
Banking
31 March, 2017
Retail Banking Other Banking
Business
Total
1,233.89
2,858.71
10,041.75
(1,876.33)
841.32
3,600.86
-
12,116.96
884.32
5,467.56
1,788.28
-
3,679.28
209,865.71
198,331.45
186,937.38
746.92
595,881.46
5,586.21
601,467.67
194,987.16
118,340.37
232,331.99
42.00
545,701.52
14,878.55
79,991.08
(45,394.61)
704.92
55,762.54
3.61
545,705.13
Capital expenditure for the year
Depreciation on fixed assets for the year
26.75
20.35
210.64
160.27
417.94
318.00
13.37
10.18
668.71
508.80
*represents material non-cash items other than depreciation
Geographic Segments
Domestic
International
Total
31 March, 2018 31 March, 2017 31 March, 2018 31 March, 2017 31 March, 2018 31 March, 2017
(` in crores)
Revenue
Assets
Capital Expenditure
incurred
Depreciation
provided
54,366.73
53,597.11
2,380.67
2,636.36
56,747.40
56,233.47
630,322.00
547,215.05
61,007.58
54,252.62
691,329.58
601,467.67
754.29
667.83
565.53
506.00
3.01
2.57
0.88
2.80
757.30
668.71
568.10
508.80
2.2.7 Related party disclosure
The related parties of the Bank are broadly classified as:
a) Promoters
The Bank has identified the following entities as its Promoters.
•
•
•
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
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.
b) Key Management Personnel
• Ms. Shikha Sharma (Managing Director & Chief Executive Officer)
• Mr. V. Srinivasan (Deputy Managing Director)
• Mr. Rajiv Anand [Executive Director (Retail Banking)]
• Mr. Rajesh Dahiya [Executive Director (Corporate Centre)]
198
Annual Report 2017 -18
c) Relatives of Key Management Personnel
Mr. Sanjaya Sharma, Ms. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr. Prashant
Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Ms. Gayathri Srinivasan, Mr. V. Satish, Ms. Camy Satish,
Ms. Ananya Srinivasan, Ms. Anagha Srinivasan, Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr. S. Ranganathan,
Mr. R. Narayan, Ms. Gitanjali Anand, Ms. Tara Anand, Ms. Nandita Anand, Mr. P.L. Narain, Mr. P. Srinivas, Ms. Ratna
Rao Shekar, Ms. P. Kamashi, Ms. Hemant Dahiya, Ms. Arooshi Dahiya, Ms. Mallika Dahiya, Ms. Jal Medha, Ms. Pooja
Rathi, Mr. Jai Prakash Dahiya.
d) Subsidiary Companies
•
•
•
•
•
•
•
•
•
•
•
Axis Capital Limited
Axis Private Equity Limited
Axis Trustee Services Limited
Axis Asset Management Company Limited
Axis Mutual Fund Trustee Limited
Axis Bank UK Limited
Axis Finance Limited
Axis Securities Limited
A.Treds Limited
Accelyst Solutions Private Limited with effect from 6 October, 2017
Freecharge Payment Technologies Private Limited with effect from 6 October, 2017
e) Step down subsidiary companies
•
Axis Capital USA LLC with effect from 2 August, 2017
Based on RBI guidelines, details of transactions with step down subsidiaries 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, 2018 are given below:
Promoters
Key
Management
Personnel
Relatives
of Key
Management
Personnel
(` in crores)
Subsidiaries
Total
ITEMS/RELATED PARTY
Dividend paid
Dividend received
Interest paid
Interest received
Investment of the Bank
343.52
-
545.58
0.02
-
1.08
-
0.22
0.77
-
-
Investment in non-equity instruments of related party
393.00
Investment of related party in the Bank
1,200.00
33.75
Investment of related party in Hybrid capital/Bonds
of the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Contribution to employee benefit fund
Placement of deposits
Non-funded commitments (issued)
-
-
188.69
868.73
-
16.16
0.05
0.20
-
-
-
1.12
12.18
-
-
-
-
-
0.19
-
-
-
-
-
-
-
-
-
-
-
-
-
256.06
15.48
29.92
325.00
100.00
-
-
-
-
-
15.63
-
-
0.05
344.60
256.06
561.47
30.71
325.00
493.00
1,233.75
-
-
188.69
869.85
27.81
16.16
0.05
0.25
199
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
ITEMS/RELATED PARTY
Promoters
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Subsidiaries
Total
Call/Term lending to related party
Swaps/Forward contracts
Advance granted (net)
Advance repaid
Purchase of loans
Sell down of loans (including undisbursed loan
commitments)
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Refund of Share Capital from related party
Other reimbursements from related party
Other reimbursements to related party
-
-
-
6.50
-
-
105.28
17.42
-
-
-
0.75
-
-
7.99
0.04
-
-
-
0.05
1.29
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
311.94
131.65
858.24
-
18.17
64.87
785.10
264.40
-
-
8.11
3.73
311.94
131.65
866.23
6.54
18.17
64.87
890.38
281.87
1.29
-
8.11
4.48
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2018 are given below:
Items/Related Party
Promoters
(` in crores)
Subsidiaries
Total
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Call/Term lending to related party
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
-
6,213.80
0.43
7.07
-
205.70
135.29
3.35
Investment of related party in Hybrid capital/Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
-
4.33
-
18.31
-
-
0.50
-
-
3.70
-
-
-
3.46
-
312.84
381.55
312.84
6,603.14
-
0.43
0.04
1,016.33
1,041.75
-
-
-
-
-
-
-
-
2,092.71
2,092.71
-
-
0.05
-
-
35.52*
51.85
205.70
135.79
3.40
4,300.00
3.70
35.52
51.85
200
Annual Report 2017 -18
The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March, 2018
are given below:
ITEMS/RELATED PARTY
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment of related party in the Bank
Investment in non-equity instruments of the Bank
Non-funded commitments
Call lending
Swaps/Forward contracts
Investment of related party in Hybrid Capital/Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
Promoters
Key
Management
Personnel
Relatives
of Key
Management
Personnel
(` in crores)
Subsidiaries
Total
10,153.25
17.12
0.43
16.76
-
137.76
393.00
3.39
-
-
-
18.31
-
0.50
-
-
-
-
-
3.70
-
-
5.78
-
830.10
11,006.25
-
0.43
0.09
1,402.57
1,437.73
-
-
-
-
-
-
-
-
-
-
2,092.71
2,092.71
-
100.00
0.05
312.89
3.20
-
-
54.31
80.98
138.26
493.00
3.44
312.89
3.20
4,300.00
3.70
54.31
80.98
The details of transactions of the Bank with its related parties during the year ended 31 March, 2017 are given below:
Items/Related Party
Promoters
(` in crores)
Subsidiaries
Total
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Dividend paid
Dividend received
Interest paid
Interest received
Investment of the Bank
354.69
-
666.31
1.61
-
Investment in non-equity instruments of related party
110.00
0.70
-
0.14
0.55
-
-
Investment of related party in the Bank
-
46.45
Investment of related party in Hybrid capital/Bonds
of the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Contribution to employee benefit fund
Purchase of fixed assets
Sale of fixed assets
1,050.00
70.00
-
758.78
-
15.75
-
-
-
-
-
3.52
11.35
-
-
-
-
-
0.16
-
-
-
-
-
-
-
0.11
-
-
-
-
-
183.28
24.90
14.51
116.75
347.32
-
-
-
-
-
16.91
-
-
-
355.39
183.28
691.51
16.67
116.75
457.32
46.45
1,050.00
70.00
-
762.41
28.26
15.75
-
-
201
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Items/Related Party
Promoters
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Subsidiaries
Total
Placement of deposits
Repayment of deposits
Non-funded commitments (issued)
Call/Term borrowing
Call/Term lending
Swaps/Forward contracts
Advance granted (net)
Advance repaid
Advance to related party against rendering of
services
Receiving of services
Rendering of services
Purchase of equity shares from related party
Refund of Share Capital from related party
Other reimbursements from related party
Other reimbursements to related party
-
-
0.05
-
-
-
0.67
-
-
100.67
2.43
-
-
-
0.41
-
-
-
-
-
-
-
0.20
-
-
0.05
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31.00
31.05
-
10.05
97.59
-
97.18
-
610.55
137.91
-
8.36
10.38
0.18
-
10.05
97.59
0.67
97.38
-
711.22
140.39
-
8.36
10.38
0.59
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2017 are given below:
Items/Related Party
Promoters
(` in crores)
Subsidiaries
Total
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Borrowings from the Bank
Call/Term lending to related party
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
-
-
7,951.11
0.38
13.57
-
56.10
137.76
3.14
Investment of related party in Hybrid capital/Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
Swap/Forward contracts
-
-
-
-
-
-
1.90
-
10.35
-
-
0.41
-
-
0.81
-
-
-
-
-
2.99
-
0.02
-
-
-
-
-
-
-
-
-
-
-
-
-
830.10
8,786.10
-
162.44
0.38
186.38
1,372.26
1,372.26
57.18
-
-
-
-
50.58*
31.24
-
113.28
138.17
3.14
4,300.00
0.81
50.58
31.24
-
202
Annual Report 2017 -18
The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31 March, 2017
are given below:
Items/Related Party
Promoters
(` in crores)
Subsidiaries
Total
Key
Management
Personnel
Relatives
of Key
Management
Personnel
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment of related party in the Bank
Investment in non-equity instruments of the Bank
Non-funded commitments
Call borrowing
Call lending
Swaps/Forward contracts
9,003.33
0.38
25.70
-
141.89
110.00
3.21
-
-
-
Investment of related party in Hybrid Capital/Bonds
of the Bank
4,355.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
10.82
-
10.52
-
0.41
-
-
-
-
-
-
1.37
-
-
3.53
-
0.08
-
-
-
-
-
-
-
-
-
-
-
1,874.66
10,892.34
-
1,327.66
1,391.28
-
347.32
31.00
-
67.75
5.09
-
-
71.04
36.73
0.38
1,363.96
1,391.28
142.30
457.32
34.21
-
67.75
5.09
4,355.00
1.37
71.04
36.73
The transactions with Promoters and Key Management Personnel excluding those under management contracts are in nature
of the banker-customer relationship.
Details of transactions with Axis Mutual Fund and Axis Infrastructure Fund-I, the funds floated 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 defined under the Accounting Standard 18, Related Party Disclosure, as notified under Section 2(2) and
Section 133 of the Companies Act, 2013 and as per RBI guidelines
* Upto 31 December, 2014, the Bank had 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 the period of the schemes. This arrangement, 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.
The significant transactions between the Bank and related parties during the year ended 31 March, 2018 and 31 March,
2017 are given below. A specific related party transaction is disclosed as a significant related party transaction wherever it
exceeds 10% of the aggregate value of all related party transactions in that category:
Particulars
Dividend paid
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
Dividend received
Axis Finance Limited
Axis Capital Limited
(` in crores)
Year ended
31 March, 2018
Year ended
31 March, 2017
165.04
137.42
121.28
102.90
174.43
137.42
94.94
51.45
203
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Particulars
Axis Securities Limited
Axis Trustee Services Limited
Interest paid
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
Interest received
Axis Finance Limited
Axis Bank UK Limited
Life Insurance Corporation of India
Investment of the Bank
Axis Finance Limited
Accelyst Solutions Private Limited
Freecharge Payment Technologies Private Limited
A.Treds Limited
Investment in non-equity instruments of related party
United India Insurance Co. Limited
Axis Finance Limited
National Insurance Co. Limited
Investment of related party in the Bank
Life Insurance Corporation of India
Ms. Shikha Sharma
Mr. V. Srinivasan
Investment of related party in Hybrid capital/Bonds of the Bank
Life Insurance Corporation of India
United India Insurance Co. Limited
Redemption of Hybrid capital/Bonds of the Bank
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
Purchase of investments
United India Insurance Co. Limited
Sale of investments
New India Assurance Co. Limited
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
National Insurance Co. Limited
Management contracts
Axis Securities Limited
Ms. Shikha Sharma
Axis Capital Limited
Mr. V. Srinivasan
Axis Trustee Services Limited
204
Year ended
31 March, 2018
Year ended
31 March, 2017
19.51
12.38
502.36
10.16
15.31
12.47
-
125.00
100.00
100.00
-
393.00
100.00
-
1,200.00
17.36
8.03
-
-
-
-
188.69
421.03
230.00
157.44
35.00
7.05
4.84
3.49
3.12
3.10
17.70
12.38
543.21
73.12
4.91
8.89
1.48
100.00
N.A.
N.A.
16.75
-
347.32
110.00
-
29.66
12.03
1,000.00
50.00
50.00
20.00
-
200.00
390.00
55.09
50.00
6.18
5.42
3.84
3.36
3.43
Annual Report 2017 -18 Particulars
Axis Finance Limited
Contribution to employee benefit fund
Life Insurance Corporation of India
Placement of deposits
Life Insurance Corporation of India
Call/Term lending to related party
Axis Bank UK Limited
Swaps/Forward contracts
Axis Bank UK Limited
Advance granted (net)
Life Insurance Corporation of India
Axis Finance Limited
Advance repaid
Life Insurance Corporation of India
Axis Finance Limited
Purchase of loans
Axis Bank UK Limited
Sell down of loans (including undisbursed loan commitments)
Axis Bank UK Limited
Receiving of services
Axis Securities Limited
The Oriental Insurance Co. Limited
Rendering of services
Axis Asset Management Company Limited
Axis Capital Limited
Axis Bank UK Limited
Sale of foreign exchange currency to related party
Ms. Shikha Sharma
Refund of Share Capital from related party
Axis Securities Europe Limited
Other reimbursements from related party
Axis Capital Limited
Axis Asset Management Company Limited
Axis Securities Limited
Axis Bank UK Limited
Other reimbursements to related party
Axis Securities Limited
Life Insurance Corporation of India
Accelyst Solutions Private Limited
Axis Bank UK Limited
Year ended
31 March, 2018
Year ended
31 March, 2017
-
2.99
16.16
15.75
0.05
-
311.94
10.05
131.65
97.59
-
848.20
6.50
-
18.17
64.87
740.45
66.42
249.67
19.85
1.26
1.29
N.A.
4.10
2.55
0.23
-
2.95
0.75
0.47
0.11
0.67
-
-
97.17
-
-
583.77
75.00
121.38
7.43
1.19
-
8.36
4.73
3.05
0.47
0.41
0.04
0.41
N.A.
0.12
205
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES 2.2.8 Leases
Disclosure in respect of assets taken on operating lease
This comprise of office 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 five years
- Later than five years
Total of minimum lease payments recognised in the Profit 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 Profit 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, 2018
31 March, 2017
(` in crores)
718.43
2,224.30
1,844.71
800.26
4.25
0.60
682.25
2,110.88
1,446.88
756.48
3.80
0.49
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements. There are
generally no undue restrictions or onerous clauses in the agreements.
2.2.9 Other Fixed Assets (including furniture & fixtures)
The movement in fixed 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, 2018
31 March, 2017
(` in crores)
1,059.56
232.10
(0.02)
(857.75)
433.89
166.09
852.85
206.75
(0.04)
(691.66)
367.90
130.88
2.2.10 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:
As at
31 March, 2018
31 March, 2017
(` in crores)
Deferred tax assets on account of provisions for loan losses
6,626.72
4,732.25
Deferred tax assets on account of amortisation of HTM investments
Deferred tax assets on account of provision for employee benefits
Deferred tax assets on account of other items
Deferred tax assets
Deferred tax liabilities on account of depreciation on fixed assets
Deferred tax liabilities on account of other items
Deferred tax liabilities
Net Deferred tax assets
206
11.28
92.73
273.64
7,004.37
103.10
24.92
128.02
6,876.35
12.80
97.45
311.17
5,153.67
91.48
-
91.48
5,062.19
Annual Report 2017 -18
2.2.11 Employee Benefits
Provident Fund
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 deficiency shall be made good by the
Bank. Based on an actuarial valuation conducted by an independent actuary, there is no deficiency as at the Balance Sheet
date.
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss Account and funded
status and amounts recognised in the Balance Sheet for the Provident Fund benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
Balance Sheet
Details of provision for provident fund
Fair Value of Plan Assets
Present Value of Funded Obligations
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Asset (included under Schedule 11 – Other Assets)
Changes in the present value of the defined benefit obligation are as follows:
Change in Defined Benefit Obligation
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
31 March, 2018
31 March, 2017
(` in crores)
88.53
127.95
(171.00)
43.05
88.53
140.05
76.80
115.68
(135.93)
20.25
76.80
136.51
31 March, 2018
31 March, 2017
(` in crores)
2,004.57
(2,004.57)
1,687.15
(1,687.15)
-
-
-
-
-
-
-
-
31 March, 2018
31 March, 2017
(` in crores)
1,687.15
1,437.90
88.53
127.95
12.10
76.80
115.68
20.83
207
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Employees Contribution
Liability transferred from/to other companies
Benefits Paid
Closing Defined Benefit 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)
Employer contribution during the period
Employee contribution during the period
Assets transferred from/to other companies
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments*
31 March, 2018
31 March, 2017
200.77
(14.62)
(97.31)
2,004.57
181.16
(22.88)
(122.34)
1,687.15
31 March, 2018
31 March, 2017
(` in crores)
1,687.15
171.00
(30.95)
88.53
200.77
(14.62)
(97.31)
2,004.57
1,437.90
135.93
0.58
76.80
181.16
(22.88)
(122.34)
1,687.15
(` in crores)
31 March, 2018
31 March, 2017
31 March, 2016
31 March, 2015
31 March, 2014
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan
Assets
2,004.57
2,004.57
-
1,687.15
1,687.15
-
12.10
20.83
(30.95)
0.58
1,437.90
1,437.90
-
12.08
(6.16)
1,240.83
1,240.83
-
(1.78)
(3.99)
1,013.25
1,013.25
-
53.03
41.42
* information provided to the extent available with the Bank
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
31 March, 2018
31 March, 2017
%
53.75
42.16
3.79
0.30
%
53.74
43.47
1.66
1.13
Government securities
Bonds, debentures and other fixed income instruments
Equity shares
Others
208
Annual Report 2017 -18
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
31 March, 2018
31 March, 2017
7.95%
8.90%
7.68%
9.17%
8.55%
7.40%
9.11%
6.93%
9.58%
8.65%
The contribution to the employee’s provident fund (including Employee Pension Scheme) amounted to `148.98 crores (previous
year `133.67crores) for the year.
Superannuation
The Bank contributed `15.91 crores (previous year `15.33 crores) to the employees’ superannuation plan for the year.
National Pension Scheme (NPS)
During the year, the Bank has contributed `3.82 crores (previous year `2.45 crores) to the NPS for employees who had opted
for the scheme.
Leave Encashment
The actuarial liability of compensated absences of accumulated privileged leave of the employees of the Bank is given below:
Actuarial Liability – Privilege Leave
Total Expense included in Schedule 16(I)
Assumptions
Discount rate
Salary escalation rate
Gratuity
31 March, 2018
31 March, 2017
(` in crores)
243.82
47.33
247.46
79.87
7.95% p.a.
7.00% p.a.
7.40% p.a.
7.00% p.a.
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss Account and funded
status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Past Service Cost
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
31 March, 2018
31 March, 2017
(` in crores)
39.07
22.81
(21.68)
(16.24)
28.33
52.29
26.27
32.54
20.15
(18.07)
25.32
-
59.94
16.44
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Balance Sheet
Details of provision for gratuity
Fair Value of Plan Assets
Present Value of Funded Obligations
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Asset (included under Schedule 11 – Other Assets)
Changes in the present value of the defined benefit obligation are as follows:
Change in Defined Benefit Obligation
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Past service cost
Benefits Paid
Closing Defined Benefit 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
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments
31 March, 2018
31 March, 2017
(` in crores)
323.72
(342.56)
(18.84)
(18.84)
-
(18.84)
279.65
(284.83)
(5.18)
5.18
-
(5.18)
31 March, 2018
31 March, 2017
(` in crores)
284.83
39.07
22.81
(11.65)
28.33
(20.83)
342.56
232.55
32.54
20.15
23.68
-
(24.09)
284.83
31 March, 2018
31 March, 2017
(` in crores)
279.65
21.68
4.59
38.63
(20.83)
323.72
232.56
18.07
(1.64)
54.75
(24.09)
279.65
(` in crores)
31 March, 2018
31 March, 2017
31 March, 2016
31 March, 2015
31 March, 2014
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan
Assets
342.56
323.72
(18.84)
4.39
4.59
284.83
279.65
(5.18)
6.64
(1.64)
232.55
232.56
0.01
2.78
(5.36)
206.96
209.49
2.53
1.06
1.27
157.72
163.35
5.63
7.67
2.33
210
Annual Report 2017 -18
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
Government securities
Bonds, debentures and other fixed 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
- 18 to 30 (age in years)
- 31 to 44 (age in years)
- 45 to 59 (age in years)
31 March, 2018
31 March, 2017
%
49.04
28.81
19.71
2.22
0.22
%
37.30
47.98
8.66
3.52
2.54
31 March, 2018
31 March, 2017
7.95% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
7.40% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
The estimates of future salary increases considered in actuarial valuation take account of inflation, 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 certified 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:
31 March, 2018
31 March, 2017
(` in crores)
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
59.40
2.00
(0.15)
(0.27)
60.98
39.82
23.47
-
(3.89)
59.40
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
b) Other liabilities include provision for reward points made on actuarial basis, 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, 2018
31 March, 2017
(` in crores)
110.45
89.05
(55.56)
143.94
127.38
32.17
(49.10)
110.45
31 March, 2018
31 March, 2017
(` in crores)
595.62
342.25
(787.21)
150.66
539.09
1,036.59
(980.06)
595.62
The above provision includes contingent provision for advances/other exposures, legal cases and other contingencies.
2.2.13 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.
2.2.14 Corporate Social Responsibility (CSR)
a) Amount required to be spent by the Bank on CSR during the year `186.82 crores (previous year `196.44 crores).
b) Amount spent towards CSR during the year and recognized as expense in the statement of profit and loss on CSR related
activities is `133.77 crores (previous year `135.39 crores), which comprise of following -
31 March, 2018
31 March, 2017
(` in crores)
Construction/ acquisition of any asset
On purpose other than above
In cash
2.22
124.28
Yet to be paid
in cash (i.e.
provision)
Total
In cash
Yet to be paid
in cash (i.e.
provision)
Total
-
7.27
2.22
2.80
131.55
106.78
10.40
15.41
13.20
122.19
2.2.15 Description of contingent liabilities
a) Claims against the Bank not acknowledged as debts
These represent claims filed 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 authorities and disputed by the Bank. Apart from claims
assessed as possible, the Bank holds provision of `42.70 crores as on 31 March, 2018 (previous year `26.23 crores)
towards claims assessed as probable.
b) Liability for partly paid investments
This represents amounts remaining unpaid towards liability for partly paid investments.
212
Annual Report 2017 -18
c) 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 flows by way of
interest/principal in two currencies, based on ruling spot rates. Interest rate swaps are commitments to exchange fixed
and floating interest rate cash flows. Interest rate futures are standardised, exchange-traded contracts that represent a
pledge to undertake a certain interest rate transaction at a specified price, on a specified 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 specified amount of currency at a specific price within a specified time period or at a specified
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 specified 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 specified price.
d) 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 fulfill
its financial or performance obligations.
e) 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.
f) Other items
Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts remaining
to be executed on capital account, notional principal on account of outstanding Tom/Spot foreign exchange contracts,
commitments towards underwriting and investment in equity through bids under Initial Public Offering (IPO) of corporates
as at the year end, demands raised by statutory authorities (other than income tax) and disputed by the Bank and amount
transferred to Depositor Education and Awareness Fund (DEAF).
The Bank, through one of its overseas branches, had arranged Trade Credit (Buyers Credit loans) against Letters of
Undertaking (LOUs) issued by Punjab National Bank (PNB), which were subsequently alleged as fraudulent by PNB. Prior
to this declaration by PNB, such buyer’s credit loans were sold down in the secondary market by the overseas branch to
various participating banks under Risk Participation Agreements. As on 31 March, 2018, there is no funded exposure
outstanding in the overseas branch pursuant to such sell down. PNB has repaid the aggregate amount of all LOUs due
upto 31 March 2018, pursuant to an undertaking issued to PNB, and made remittance to the overseas branch which has
been passed on for onward payment to the participating banks. Based on the facts and circumstances of the case, internal
findings and legal opinion, the Bank does not expect PNB has any valid right at this point in time, for refund by the Bank
of the aggregate amount paid by PNB towards LOUs due upto 31 March, 2018 . However, as a matter of prudence, the
aggregate amount of LOUs issued by PNB to the overseas branch against which buyer’s credit was extended, aggregating
to `3,847.26 crores has been disclosed as part of Contingent Liabilities in the Balance Sheet.
The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material
foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as required under any law/
accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) in the books
of account and disclosed the same under the relevant notes in the financial statements, where applicable.
2.2.16 Previous year figures have been regrouped and reclassified, where necessary to conform to current year’s presentation.
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 26 April, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
213
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
INDEPENDENT AUDITOR’S REPORT
To the Members of Axis Bank Limited
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Axis Bank Limited (hereinafter referred to as ”the Bank”),
its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), comprising of the consolidated
Balance Sheet as at March 31, 2018, the consolidated Statement of Profit and Loss and consolidated Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the
consolidated financial statements”).
Management’s Responsibility for the Consolidated Financial Statements
The Bank’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirement
of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial
performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India, including
the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the
Companies (Accounting Standards) Amendment Rules, 2016, the provisions of Section 29 of the Banking Regulation Act,1949 and
the circulars, guidelines and directions issued by the Reserve Bank of India (‘RBI’) from time to time. The respective Board of Directors
of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; the
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of
preparation of the consolidated financial statements by the Directors of the Bank, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit,
we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be
included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance
with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the
Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
financial control relevant to the Bank’s preparation of the consolidated financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made by the Bank’s Board of Directors, as well as evaluating the
overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence
obtained by the other auditors in terms of their reports referred to in paragraph (a) of the Other Matters paragraph below, is sufficient
and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial
statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India of the consolidated state of affairs of the Group, as at March 31, 2018, their
consolidated profit, and their consolidated cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by section 143 (3) of the Act, we report, to the extent applicable, that:
(a)
The other auditors whose reports we have relied upon have sought and obtained all the information and explanations which
to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial
statements;
(b)
In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial
statements have been kept so far as it appears from our examination of those books and reports of the other auditors;
214
Annual Report 2017 -18 (c)
(d)
The consolidated Balance Sheet, consolidated Statement of Profit and Loss, and consolidated Cash Flow Statement dealt with by
this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial
statements;
In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Accounting Standards) Amendment
Rules, 2016;
(e) On the basis of the written representations received from the directors of the Bank as on March 31, 2018 taken on record by the
Board of Directors of the Bank and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its
subsidiary companies incorporated in India, none of the directors of the Group’s companies, incorporated in India is disqualified
as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting of the
Bank and its subsidiary companies incorporated in India, refer to our separate report in “Annexure 1” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i.
ii.
The consolidated financial statements disclose the impact of pending litigations on its consolidated financial position of the
Group - Refer Schedule 12.I, 18.2.1.14 (a) and 18.2.1.14 (f) to the consolidated financial statements;
Provision has been made in the consolidated financial statements, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Schedule
18.2.1.14 (f) to the consolidated financial statements in respect of such items as it relates to the Group; and
iii.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund
by the Bank, its subsidiaries, incorporated in India during the year ended March 31, 2018.
Other Matter
(a)
The accompanying consolidated financial statements include total assets of Rs.8,628 crores as at March 31, 2018, and total
revenues and net cash inflows of Rs.1,464 crores and Rs.112 crores respectively for the year ended on that date, in respect of
subsidiaries, which have been audited by other auditors, which financial statements, other financial information and auditor’s
reports have been furnished to us by the management. Our opinion, in so far as it relates amounts and disclosures included in
respect of these subsidiaries, and our report in terms of sub-sections (3) of Section 143 of the Act in so far as it relates to the
aforesaid subsidiaries, is based solely on the reports of such other auditors.
Our opinion above on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements above, is
not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and
the financial statements.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Viren H. Mehta
Partner
Membership Number: 048749
Place of Signature: Mumbai
Date: 16 May 2018
215
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
INDEPENDENT AUDITOR’S REPORT (CONT.)
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL
STATEMENTS OF AXIS BANK LIMTED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
To the Members of Axis Bank Limited
In conjunction with our audit of the consolidated financial statements of Axis Bank Limited as of and for the year ended March 31,
2018, we have audited the internal financial controls over financial reporting of Axis Bank Limited (hereinafter referred to as the
“Bank”) and its subsidiary companies, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Bank, its subsidiary companies which are companies incorporated in India, are responsible for
establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the
Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”). These responsibilities include the
design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly
and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation
of reliable financial information, as required under the Act, in so far as they apply to the Bank and Guideline issued by the Reserve
Bank of India
Auditor’s Responsibility
Our responsibility is to express an opinion on the Bank's internal financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued
by the Institute of Chartered Accountants of India (the “Guidance Note”) and the Standards on Auditing, both, issued by Institute of
Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit
of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was
established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over
financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend
on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports
referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal
financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could
have a material effect on the financial statements.
216
Annual Report 2017 -18 Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, the Bank, its subsidiaries, which are companies incorporated in India, has maintained in all material respects, an
adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Bank
considering the essential components of internal control stated in the Guidance Note.
Other Matters
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over
financial reporting of the Bank, insofar as it relates to 3 subsidiaries companies which are incorporated in India, is based on the
corresponding report of the auditor of such subsidiary incorporated in India.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Viren H. Mehta
Partner
Membership Number: 048749
Place of Signature: Mumbai
Date: 16 May 2018
217
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH, 2018
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
Schedule
No.
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1
2
2A
3
4
5
6
7
8
9
10
11
5,133,078
4,790,072
636,941,012
559,013,433
695,129
613,066
4,556,577,642
4,149,826,752
1,557,670,924
1,124,547,615
280,015,886
275,829,172
7,037,033,671
6,114,620,110
354,810,648
308,579,478
84,297,483
201,081,701
1,530,367,120
1,290,183,496
4,498,436,451
3,811,646,673
40,488,204
38,102,336
528,633,765
465,026,426
7,037,033,671
6,114,620,110
12
7,391,397,673
6,731,485,692
495,656,026
810,553,648
Significant 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 S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 16 May, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
B. Baburao
Director
218
Annual Report 2017 -18 CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH, 2018
I
Income
Interest earned
Other income
Total
II
Expenditure
Interest expended
Operating expenses
Provisions and contingencies
Total
III Net Profit For The Year
Minority interest
IV
Consolidated Net Profit Attributable To Group
Balance in Profit & Loss Account brought forward from previous year
V
Amount Available For Appropriation
VI Appropriations:
Transfer to Statutory Reserve
Transfer to Reserve Fund u/s 45 IC of RBI Act, 1934
Transfer to/(from) Investment Reserve
Transfer to Capital Reserve
Transfer to General Reserve
Transfer to/(from) Reserve Fund
Schedule
No.
Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
13
14
15
16
466,140,592
451,750,929
118,626,154
124,216,034
584,766,746
575,966,963
276,036,927
267,893,474
147,883,644
127,256,277
18 (2.1.1)
156,205,947
141,146,907
580,126,518
536,296,658
4,640,228
39,670,305
(82,063)
(140,020)
4,558,165
39,530,285
248,815,549
240,026,960
253,373,714
279,557,245
689,203
418,800
1,034,894
1,016,558
80,595
16,158
9,198,198
330,600
(871,671)
7,555,740
68,737
17,522
Dividend paid (includes tax on dividend)
18 (2.1.6)
14,574,034
14,442,570
235,543,472
248,815,549
253,373,714
279,557,245
18 (2.1.4)
Balance in Profit & Loss Account carried forward
Total
VII
Earnings Per Equity Share
(Face value `2/- per share) (Rupees)
Basic
Diluted
Significant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Consolidated Profit and Loss Account
In terms of our report attached.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
1.86
1.86
16.54
16.48
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 16 May, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
B. Baburao
Director
219
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH, 2018
Cash flow from operating activities
Net profit before taxes
Adjustments for:
Depreciation on fixed assets
Depreciation on investments
Amortisation of premium on Held to Maturity investments
Provision for Non Performing Assets (including bad debts)
Provision on standard assets
(Profit)/Loss on sale of fixed assets (net)
Provision for country risk
Provision for restructured assets/strategic debt restructuring
Provision on unhedged foreign currency exposure
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 flow from operating activities
Cash flow from investing activities
Purchase of fixed assets
(Increase)/Decrease in Held to Maturity investments
Purchase of Freecharge business
Proceeds from sale of fixed assets
Net cash used in investing activities
220
Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
5,576,753
59,398,037
5,905,799
5,266,715
(2,076,781)
2,441,831
2,853,172
1,401,509
166,305,686
111,570,646
(1,243,679)
3,643,427
167,090
(199,434)
38,846
199,434
(3,071,587)
2,905,233
(93,000)
(138,800)
(4,433,847)
657,383
169,690,172
187,384,261
(77,302,723)
126,928,387
(833,046,826)
(465,397,348)
406,750,890
566,804,821
20,390,878
(102,041,288)
(37,559,206)
61,623,469
(32,826,167)
(53,216,114)
(383,902,982)
322,086,188
(8,549,837)
(7,737,105)
(88,085,436)
(116,759,648)
(3,954,556)
-
120,499
65,195
(100,469,330)
(124,431,558)
Annual Report 2017 -18 Year ended
31-03-2018
(` in Thousands)
Year ended
31-03-2017
Cash flow from financing activities
Proceeds from issue of subordinated debt, perpetual debt & upper Tier II instruments (net of
repayment)
81,109,364
55,458,748
Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt & upper Tier II
instruments)
258,473,945
(69,388,454)
Proceeds from issue of share capital
Proceeds from share premium (net of share issue expenses)
Payment of dividend
Increase in minority interest
Net cash generated from financing activities
Effect of exchange fluctuation translation reserve
343,006
24,409
87,986,544
3,256,270
(14,574,034)
(14,442,570)
82,063
222,520
413,420,888
(24,869,077)
(43,096)
(152,465)
Net cash and cash equivalents taken over on acquisition of Freecharge Business
441,472
-
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes to the Cash Flow Statement:
1. Cash and cash equivalents includes the following
(70,553,048)
172,633,088
509,661,179
337,028,091
439,108,131
509,661,179
Cash and Balances with Reserve Bank of India (Refer Schedule 6)
354,810,648
308,579,478
Balances with Banks and Money at Call and Short Notice (Refer Schedule 7)
84,297,483
201,081,701
Cash and cash equivalents at the end of the year
439,108,131
509,661,179
In terms of our report attached.
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Viren H. Mehta
Partner
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 16 May, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
B. Baburao
Director
221
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH, 2018
Schedule 1 - Capital
Authorised Capital
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
4,250,000,000 (Previous year - 4,250,000,000) Equity Shares of `2/- each
8,500,000
8,500,000
Issued, Subscribed and Paid-up capital
2,566,538,936 (Previous year - 2,395,036,109) Equity Shares of `2/- each fully paid-up [refer
Schedule 18 (1) (a)]
5,133,078
4,790,072
Schedule 2 - Reserves and Surplus
I.
II.
III.
IV.
V.
VI.
Statutory Reserve
Opening Balance
Additions during the year
Share Premium Account
Opening Balance
Additions during the year
Less: Share issue expenses
Investment Reserve Account
Opening Balance
Additions during the year
Deductions during the year
General Reserve
Opening Balance
Additions during the year
Capital Reserve
Opening Balance
Additions during the year
Foreign Currency Translation Reserve [Refer Schedule 17 (4.5)]
Opening Balance
Additions during the year
Deductions during the year
VII. Reserve Fund
Opening Balance
Additions during the year
VIII. Reserve Fund u/s 45 IC of RBI Act, 1934
Opening Balance
Additions during the year
IX.
Balance in Profit & Loss Account
Total
222
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
115,070,523
689,203
115,759,726
170,128,129
88,122,658
(136,114)
258,114,673
-
1,034,894
-
1,034,894
3,863,574
80,595
3,944,169
18,656,395
1,016,558
19,672,953
1,563,747
-
(43,096)
1,520,651
58,816
16,158
74,974
105,872,325
9,198,198
115,070,523
166,871,859
3,256,270
-
170,128,129
871,671
-
(871,671)
-
3,794,837
68,737
3,863,574
11,100,655
7,555,740
18,656,395
1,716,212
-
(152,465)
1,563,747
41,294
17,522
58,816
856,700
418,800
1,275,500
235,543,472
636,941,012
526,100
330,600
856,700
248,815,549
559,013,433
Annual Report 2017 -18 Schedule 2A - Minority Interest
I. Minority Interest
Opening Balance
Increase during the year
Closing Minority Interest
Schedule 3 - Deposits
A.
I.
Demand Deposits
II.
III.
(i) From banks
(ii) From others
Savings Bank Deposits
Term Deposits
(i) From banks
(ii) From others
Total
B.
I.
Deposits of branches in India
II. Deposits of branches/subsidiaries outside India
Total
Schedule 4 - Borrowings
I.
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
31-03-2018
(` in Thousands)
As at
31-03-2017
613,066
82,063
695,129
390,546
222,520
613,066
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
58,788,628
47,922,195
896,457,745
817,318,279
1,482,021,884
1,260,484,706
125,623,957
112,242,565
1,993,685,428
1,911,859,007
4,556,577,642
4,149,826,752
4,509,338,193
4,100,577,380
47,239,449
49,249,372
4,556,577,642
4,149,826,752
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
61,000,000
25,850,612
-
39,285,727
720,233,294
513,644,605
750,587,018
571,617,283
1,557,670,924
1,124,547,615
90,657,346
30,134,771
# Borrowings from other banks include Subordinated Debt of `35.60 crores (previous year `35.00 crores) in the nature of Non-Convertible
Debentures and Perpetual Debt of `50.00 crores (previous year Nil) [Also refer Note 18 (2.1.2)]
** Borrowings from other institutions & agencies include Subordinated Debt of `21,669.40 crores (previous year `16,370.00 crores) in the nature
of Non-Convertible Debentures and Perpetual Debt of `6,950.00 crores (previous year `3,500.00 crores) [Also refer Note 18 (2.1.2)]
$ Borrowings outside India include Upper Tier II instruments of Nil (previous year `389.06 crores) [Also refer Note 18 (2.1.2)]
223
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Schedule 5 - Other Liabilities and Provisions
I.
II.
III.
IV.
V.
Bills payable
Inter-office adjustments (net)
Interest accrued
Proposed dividend (includes tax on dividend) [Refer Schedule 18 (2.1.6)]
Contingent provision against standard assets
VI. Others (including provisions)
Total
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)
in Current Account
(ii) in Other Accounts
Total
Schedule 7 - Balances with Banks and Money at Call and Short Notice
I.
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)
224
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
49,175,679
39,525,430
-
-
32,174,199
20,893,390
-
-
22,482,485
23,678,835
176,183,523
191,731,517
280,015,886
275,829,172
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
52,580,423
63,579,242
208,230,225
183,000,236
94,000,000
62,000,000
354,810,648
308,579,478
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1,313,367
33,925,743
2,250,573
21,371,450
-
-
-
143,221,546
35,239,110
166,843,569
24,898,340
8,409,416
15,750,617
49,058,373
84,297,483
12,531,206
14,755,151
6,951,775
34,238,132
201,081,701
Annual Report 2017 -18
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
1,013,546,179
-
15,255,309
306,537,689
-
156,958,643
1,492,297,820
905,980,625
-
13,228,030
265,277,040
-
69,969,442
1,254,455,137
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
(vi) Others (Mutual Fund units, CD/CP, PTC etc.)
Total Investments in India
Investments outside India in -
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/or joint ventures abroad
(iii) Others (Equity Shares and Bonds)
Total Investments outside India
Grand Total (I+II)
I.
II.
##
26,340,917
-
9,387,442
35,728,359
1,290,183,496
Includes securities costing `27,588.43 crores (previous year `27,179.69 crores) pledged for availment of fund transfer facility, clearing facility
and margin requirements
29,224,533
-
8,844,767
38,069,300
1,530,367,120
Schedule 9 - Advances
A.
(i)
Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii)
Term loans#
Total
B.
(i)
Secured by tangible assets$
(ii) Covered by Bank/Government Guarantees&&
(iii) Unsecured
Total
C.
I.
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
(c) Others
Total
Grand Total [CI+CII]
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
128,131,247
67,496,591
1,374,894,067
1,043,804,891
2,995,411,137
2,700,345,191
4,498,436,451
3,811,646,673
3,196,305,855
2,913,893,698
40,004,436
66,920,973
1,262,126,160
830,832,002
4,498,436,451
3,811,646,673
986,081,073
938,737,979
48,271,057
30,575,770
29,134,862
5,612,644
2,851,146,051
2,317,656,723
3,916,073,951
3,291,142,208
78,991,174
26,861,261
32,721,313
89,146,565
25,448,317
103,681,545
381,503,448
364,513,342
582,362,500
520,504,465
4,498,436,451
3,811,646,673
# Net of borrowings under Inter Bank Participation Certificate (IBPC) `1,399.00 crores (previous year Nil), includes lending under IBPC `1,303.32
crores (previous year Nil)
Includes advances against book debts
$
&& Includes advances against L/Cs issued by banks
225
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Schedule 10 - Fixed Assets
I.
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 fixed assets (including furniture & fixtures)
Gross Block
At cost at the beginning of the year
Additions on acquisition
Additions during the year
Deductions during the year
Total
Depreciation
As at the beginning of the year
Additions on acquisition
Charge for the year
Deductions during the year
Depreciation to date
Net Block
III. Capital Work-in-Progress (including capital advances)
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
18,331,432
18,289,915
-
-
41,517
-
18,331,432
18,331,432
1,165,371
304,680
-
860,688
304,683
-
1,470,051
1,165,371
16,861,381
17,166,061
47,067,750
40,692,916
100,697
7,947,792
(1,204,850)
53,911,389
-
6,933,777
(558,943)
47,067,750
29,052,426
24,543,452
54,155
5,601,119
(905,216)
33,802,484
20,108,905
3,517,918
-
4,962,032
(453,058)
29,052,426
18,015,324
2,920,951
Grand Total (I+II+III)
40,488,204
38,102,336
Schedule 11 - Other Assets
I.
II.
III.
IV.
Inter-office adjustments (net)
Interest Accrued
Tax paid in advance/tax deducted at source (net of provisions)
Stationery and stamps
V. Non banking assets acquired in satisfaction of claims
VI. Others #@$
Total
As at
31-03-2018
-
56,936,207
18,590,140
3,829
(` in Thousands)
As at
31-03-2017
-
52,743,566
5,279,496
19,790
22,086,151
22,086,151
431,017,438
384,897,423
528,633,765
465,026,426
# Includes deferred tax assets of `6,911.32 crores (previous year `5,071.86 crores) [Refer Schedule 18 (2.1.11)]
@ Includes Priority Sector Shortfall Deposits of `21,479.30 crores (previous year `17,107.12 crores)
$ Includes goodwill on consolidation of `293.01 crores (previous year Nil) [Refer Schedule 18 (1) (b)]
226
Annual Report 2017 -18 Schedule 12 - Contingent Liabilities
I.
II.
III.
Claims against the Group not acknowledged as debts
Liability for partly paid investments
Liability on account of outstanding forward exchange and derivative contracts :
As at
31-03-2018
(` in Thousands)
As at
31-03-2017
5,219,729
216,000
4,753,308
-
a) Forward Contracts
3,148,018,991
2,681,952,184
b)
Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest Rate Futures
1,991,159,249
2,031,704,307
c) Foreign Currency Options
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) [Refer Schedule 18 (2.1.14)]
593,425,899
493,833,247
5,732,604,139
5,207,489,738
762,933,313
763,736,463
86,944,398
47,592,829
324,145,235
335,475,904
479,334,859
372,437,450
7,391,397,673
6,731,485,692
227
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH, 2018
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
I.
II.
III.
IV.
V.
Commission, exchange and brokerage
Profit/(Loss) on sale of investments (net)
Profit/(Loss) on sale of fixed assets (net)
Profit 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
`182.92 crores (previous year `181.89 crores) and profit on account of portfolio
sell downs/securitisation `20.50 crores (previous year net profit of `3.79 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
Rent, taxes and lighting
Printing and stationery
Advertisement and publicity
Depreciation on Group's property
Directors' fees, allowance and expenses
I.
II.
III.
IV.
V.
VI.
VII. Auditors' fees and expenses
VIII.
IX.
X.
XI.
XII. Other expenditure
Law charges
Postage, telegrams, telephones etc.
Repairs and maintenance
Insurance
Total
228
Year ended
31-03-2018
349,097,316
100,199,824
3,910,598
12,932,854
466,140,592
Year ended
31-03-2018
87,962,084
13,648,999
(167,089)
14,636,525
-
(` in Thousands)
Year ended
31-03-2017
336,946,444
96,749,715
5,057,855
12,996,915
451,750,929
(` in Thousands)
Year ended
31-03-2017
78,897,946
32,285,565
(38,846)
10,890,953
-
2,545,635
118,626,154
2,180,416
124,216,034
Year ended
31-03-2018
191,943,949
18,600,259
65,492,719
276,036,927
Year ended
31-03-2018
54,144,397
10,342,353
1,694,433
1,663,688
5,905,799
35,374
30,140
201,921
3,286,013
8,780,643
5,544,398
56,254,485
147,883,644
(` in Thousands)
Year ended
31-03-2017
196,406,526
18,800,730
52,686,218
267,893,474
(` in Thousands)
Year ended
31-03-2017
47,420,971
9,599,482
1,895,987
1,411,326
5,266,715
33,774
27,710
110,127
3,197,397
8,805,331
5,022,726
44,464,731
127,256,277
Annual Report 2017 -18 17 SIGNIFICANT ACCOUNTING POLICIES
FOR THE YEAR ENDED 31 MARCH, 2018
1
2
Principles of Consolidation
The consolidated financial statements comprise the financial statements of Axis Bank Limited (‘the Bank’) and its subsidiaries,
which together constitute ‘the Group’. The Bank has overseas branches at Singapore, Hong Kong, DIFC - Dubai, Shanghai and
Colombo. During the year, the Bank opened an Offshore Banking Unit at International Financial Service Centre (IFSC), Gujarat
International Finance Tec-City (GIFT City), Gandhinagar, India.
The Bank consolidates its subsidiaries in accordance with AS 21, Consolidated Financial Statements notified under Section 133
of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016 on a line-by-line basis by adding together the like items of assets, liabilities,
income and expenditure. All significant inter-company accounts and transactions are eliminated on consolidation.
Basis of preparation
a)
The financial statements have been prepared and presented under the historical cost convention on the accrual basis
of accounting in accordance with the generally accepted accounting principles in India to comply with the 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 notified under Section 133 of the Companies Act, 2013
read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards)
Amendment Rules, 2016 to the extent applicable and practices generally prevalent in the banking industry in India.
b)
The consolidated financial statements present the accounts of Axis Bank Limited with its following subsidiaries:
Name
Axis Capital Ltd.
Axis Private Equity Ltd.
Axis Trustee Services Ltd.
Axis Mutual Fund Trustee Ltd.
Axis Asset Management Company Ltd.
Axis Finance Ltd.
Axis Securities Ltd.
Freecharge Payment Technologies Pvt. Ltd.
Accelyst Solutions Pvt. Ltd.
A.Treds Ltd.
Axis Bank UK Ltd.
Axis Capital USA LLC
Relation
Country of
Incorporation
Ownership
Interest
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Step down subsidiary
India
India
India
India
India
India
India
India
India
India
U.K.
USA
100.00%
100.00%
100.00%
75.00%
75.00%
100.00%
100.00%
100.00%
100.00%
67.00%
100.00%
100.00%
c)
The audited financial statements of the above subsidiaries and the unaudited financial statements of the step down
subsidiary have been drawn up to the same reporting date as that of the Bank, i.e. 31 March, 2018.
d) Axis Securities Europe Ltd., a wholly owned subsidiary of the Bank, has been liquidated during the year ended 31 March,
2018.
e) Axis Private Equity Ltd., is in the process of amalgamation with Axis Finance Ltd. and has submitted application for
amalgamation before the National Company Law Tribunal on 13 October, 2017.
f) On 27 March, 2018, the Board of Directors of Accelyst Solutions Pvt. Ltd (‘ASPL’) and Freecharge Payment Technologies
Pvt. Ltd. (‘FCPTL’) approved a scheme for amalgamation of ASPL into and with FCPTL. ASPL and FCPTL have submitted
applications for amalgamation before the National Company Law Tribunal. The appointed date for amalgamation is 7
October, 2017 and the effect of merger will be given on this date.
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Use of estimates
The preparation of the financial 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 (including contingent
liabilities) at the date of the financial statements, revenues and expenses during the reporting period. Actual results could differ
from those estimates. The Management believes that the estimates used in the preparation of the financial statements are prudent
and reasonable. Any revisions to the accounting estimates are recognised prospectively in the current and future periods.
Significant accounting policies
4.1 Investments
Axis Bank Ltd.
Classification
In accordance with the RBI guidelines, investments are classified at the time 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 classified as HFT securities. As per the RBI guidelines,
HFT securities, which remain unsold for a period of 90 days are reclassified as AFS securities.
Investments that the Bank intends to hold till maturity are classified under the HTM category. Investments in the equity of
subsidiaries/joint ventures are categorised as HTM in accordance with the RBI guidelines.
All other investments are classified as AFS securities.
However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
Others.
Investments made outside India are classified 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 and commission pertaining to investments, paid at the time of acquisition, are charged to the
Profit and Loss Account.
Broken period interest is charged to the Profit and Loss Account.
Cost of investments is computed based on the weighted average cost method.
Valuation
Investments classified 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 on a constant yield to maturity basis. 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 classified 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’)/ Financial Benchmark India Private Limited (‘FBIL’), periodically.
Net depreciation, if any, within each category of each investment classification is recognised in the Profit and Loss
Account. The net appreciation if any, under each category of each investment classification is ignored. The depreciation
on securities acquired by way of conversion of outstanding loans is provided in accordance with the RBI guidelines. The
book value of individual securities is not changed consequent to the periodic valuation of investments. Non-performing
investments are identified and provision is made thereon as per RBI guidelines. Treasury Bills, Exchange Funded Bills,
Commercial Paper and Certificate 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:
3
4
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•
•
•
•
•
•
the market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (‘SLR’)
securities included in the AFS and HFT categories is computed as per the Yield-to-Maturity (‘YTM’) rates published
by FIMMDA/ FBIL
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/FBIL 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/
FBIL is adopted for this purpose;
in case of bonds and debentures (including Pass Through Certificates) 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 financials of the
fund. In case the audited financials 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 and
In case investments in security receipts on or after 1 April, 2017 which are backed by more than 50 percent of the
stressed assets sold by the Bank, provision for depreciation in value is made at the is higher of - provisioning rate
required in terms of net asset value declared by the Reconstruction Company (‘RC’)/Securitisation Company (‘SC’)
or the provisioning rate as per the extant asset classification and provisioning norms as applicable to the underlying
loans, assuming that the loan notionally continued in the books of the bank. All other investments in security receipts
are valued as per the NAV obtained from the issuing RC/SCs.
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 Profit and Loss Account and subsequently
appropriated to Capital Reserve account (net of taxes and transfer to statutory reserves) in accordance with the RBI
guidelines. Losses are recognised in the Profit and Loss Account. Realised gains/losses on investments under the AFS and
HFT category are recognised in the Profit and Loss Account.
All investments are accounted for on settlement date, except investments in equity shares which are accounted for on trade
date.
Repurchase and reverse repurchase transactions
Repurchase and reverse repurchase transactions in government securities and corporate debt securities including those
conducted under the Liquidity Adjustment Facility (‘LAF’) and Marginal Standby Facility (‘MSF’) with RBI are accounted as
collateralised borrowing and lending respectively. Borrowing cost on repo transactions is accounted as interest expense
and revenue on reverse repo transactions is accounted as interest income.
Short Sales
In accordance with the RBI guidelines, the Bank undertakes short sale transactions in Central Government dated securities.
The short positions are reflected in ‘Securities Short Sold (‘SSS’) A/c’, specifically created for this purpose. Such short
positions are categorised under HFT category and netted off from investments in the Balance Sheet. 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 are initially recognised at cost which comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
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 classified as current investments. All other investments are classified as long term investments.
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Current investments are carried in the financial 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
Profit 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 classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of bills rediscounted, inter-bank participation certificates, specific provisions made towards NPAs, interest in suspense
for NPAs, claims received from Export Credit Guarantee Corporation, provisions for funded interest on term loan classified
as NPAs, provisions in lieu of diminution in the fair value of restructured assets and floating provisions.
NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by the RBI. Advances held
at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of
recovery, but which are standard as per the RBI guidelines, are classified as NPAs to the extent of amount outstanding
in the host country. 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 specified stages of delinquency (90 days or more
of delinquency) under each type of loan, which satisfies the RBI prudential norms on provisioning. Provisions in respect
of agriculture advances classified into sub-standard and doubtful assets are made at rates which are higher than those
prescribed by the RBI. Provisions for advances booked in overseas branches, which are standard as per the RBI guidelines
but are classified as NPAs based on host country guidelines, are made as per the host country regulations.
Restructured assets are classified and provided for in accordance with the guidelines issued by RBI from time to time.
In addition to the above, the Bank on a prudential basis, makes provision for expected losses against advances or other
exposures to specific assets/industry/sector either on a case-by-case basis or for a group of assets, based on specific
information or general economic environment. These are classified 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.
Amounts recovered against debts written off are recognised in the Profit and Loss account.
The Bank holds provision in accordance with the RBI guidelines, on assets where change in ownership under Strategic
Debt Restructuring (SDR) scheme/Outside SDR scheme has been implemented or Scheme for Sustainable Structuring of
Stressed Asset (S4A) has been implemented. In respect of borrowers classified as non-cooperative and willful defaulters,
the Bank makes accelerated provisions as per extant RBI guidelines.
For entities with Unhedged Foreign Currency Exposure (UFCE), provision is made in accordance with the guidelines issued
by RBI, which requires to ascertain the amount of UFCE, estimate the extent of likely loss and estimate the riskiness of
unhedged position. This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
The Bank maintains a general provision on standard advances at the rates prescribed by 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 specific period subject to fulfilment of a set of conditions by the borrower. The Bank makes
provision against the probable loss that could be incurred in future on account of waivers to eligible borrowers in respect
of such loans based on actuarial valuation conducted by an independent actuary. This provision is classified under
Schedule 5 – Other Liabilities in the Balance Sheet.
Axis Finance Ltd.
Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of specific provisions made towards NPAs. Further, NPAs are classified into sub-standard, doubtful and loss assets
based on the criteria stipulated by the RBI. Provisions for NPAs are made at rates as prescribed by the RBI.
Non-performing loans are written off / provided for, as per management estimates, subject to the minimum provision
required as per Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit
taking Company (Reserve Bank) Directions, 2016.
Provision on Standard Assets i.e. loans and advances is made at 0.40%.
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4.3 Country risk
Axis Bank Ltd.
In addition to the provisions required to be held according to the asset classification 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 insignificant, 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 net funded exposure of the Bank
in respect of each country does not exceed 1% of the total assets, no provision is maintained on such country exposure in
accordance with RBI guidelines.
4.4 Securitisation
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 securitisation, 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 flows to Senior
Pass Through Certificate (‘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 notified under Section 133 of the
Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016.
In accordance with RBI guidelines of 7 May, 2012 on ‘Guidelines on Securitisation of Standard Assets’, gain on
securitisation transaction is recognised over the period of the underlying securities issued by the SPV as prescribed under
RBI guidelines. Loss on securitisation is immediately debited to the Profit 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 notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses resulting from year end
revaluations are recognised in the Profit and Loss Account.
Financial statements of foreign branches classified as non-integral foreign operations as per the RBI guidelines are
translated as follows:
•
•
•
Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
exchange rates notified by FEDAI at the Balance Sheet date.
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. Any realised gains or losses on such disposal are recognised in the Profit and Loss
Account.
Outstanding forward exchange contracts including tom/spot contracts (excluding currency swaps undertaken to hedge
foreign currency assets/liabilities and funding swaps which are not revalued) are revalued at year end on PV basis by
discounting the forward value till spot date and converting the FCY amount using the respective spot rates as notified by
FEDAI. The resulting gains or losses on revaluation are included in the Profit and Loss Account in accordance with RBI/
FEDAI guidelines.
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 forward exchange and derivative contracts, guarantees, acceptances, endorsements
and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified 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 Profit and
Loss Account.
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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 Profit and Loss Account and
correspondingly in other assets (representing positive Mark-to-Market) and in other liabilities (representing negative
Mark-to-Market (MTM)) on a gross basis . For hedge transactions, the Bank identifies 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 financial 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. Pursuant to the RBI guidelines any receivables under derivative contracts comprising of crystallised receivables as
well as positive MTM in respect of future receivables which remain overdue for more than 90 days are reversed through
the Profit 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 final settlement price is taken as the RBI reference rate on the last trading day
of the futures contract or as may be specified 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 profit/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 and valuation of Interest Rate Futures (IRF) is carried out on the basis of the
daily settlement price of each contract provided by the exchange.
4.7 Revenue recognition
Axis Bank Ltd.
Interest income is recognised on an accrual basis in accordance with AS–9, Revenue Recognition as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014,
the Companies (Accounting Standards) Amendment Rules, 2016 and the RBI guidelines except in the case of interest
income on non-performing assets and loans under Strategic Debt Restructuring (SDR) scheme and Scheme for Sustainable
Structuring of Stressed Asset (S4A) of RBI, where it is recognised on receipt basis if overdue for more than 90 days. Income
on non-coupon bearing or low-coupon bearing discounted instruments is recognised over the tenor of the instrument on a
constant yield basis.
Guarantee commission is recognised on a pro-rata basis over the period of the guarantee. Locker rent and annual fees for
credit cards are recognised on a straight-line basis over the period of contract. Arrangership/syndication fee is accounted
for on completion of the agreed service and when right to receive is established. Other fees and commission income are
recognised when due.
Interest income on investments in PTCs is recognized on a constant yield basis.
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.
Fees paid/received for Priority Sector Lending Certificates (‘PSLC’) is amortised on straight-line basis over the tenor of the
certificate.
In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book value
(i.e. book value less provisions held), the shortfall is charged to the Profit and Loss Account. If the sale is for a value
higher than the net book value, the excess provision is credited to the Profit and Loss Account in the year the amounts are
received.
The Bank deals in bullion business on a consignment basis. The difference between the price recovered from customers
and cost of bullion is accounted for at the time of sale to the customers. The Bank also deals in bullion on a borrowing and
lending basis and the interest paid/received is accounted on an accrual basis.
Subsidiaries
Revenue is recognised to the extent that it is probable that the economic benefits will flow 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.
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Dividend income is recognised when the right to receive payment is established by the Balance Sheet date.
Income from sale of investments is determined on weighted average basis and recognised on the trade date basis.
Axis Capital Limited
Brokerage income in relation to stock broking activity is recognised as per contracted rates at the execution of transactions
on behalf of the customers on a trade date basis. Gains/losses on dealing in securities are recognised on a trade date
basis.
Revenue from issue management, loan syndication, financial 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 Trustee Services Limited
Annual Fees for trusteeship services and servicing 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.
Advisory service fees on family office service are recognised as and when the activities defined in the accepted offer letter
are completed.
Axis Asset Management Company Limited
Management fees are recognised on accrual basis at specific 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.
Management fees from Portfolio Management Services, Alternate Investment Fund and Investment advisory fees-offshore
are recognized on an accrual basis as per the terms of the contract with the customers.
Axis Mutual Fund Trustee Limited
Trustee fee is recognised on accrual basis, at the specific rates/amount approved by the Board of Directors of the
Company, within the limits specified under the Deed of Trust, and is applied on the net assets of each scheme of Axis
Mutual Fund.
Axis Finance Limited
Interest and other dues are accounted on accrual basis except in the case of non-performing loans where it is recognised
upon realisation, as per the income recognition and asset classification norms prescribed by the RBI.
Income on discounted instruments is recognised over the tenure of the instrument on a straight-line method.
Axis Securities Limited
Business sourcing and resource management fee is recognised on accrual basis when all the services are performed.
Income from subscription plan to the extent of account opening fees is recognised upfront and balance is amortised over
the validity of plan.
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.
Brokerage income on securities is recognised as per contracted rates at the execution of transactions on behalf of the
customers on the trade date. Gains/losses on dealing in securities are recognised on trade date basis.
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 fixed percentage of the corpus/fixed 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.
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A.Treds Ltd.
Onboarding Fee is one time fee and is recognized at the time of onboarding of Buyer, Seller or financier. Transaction fee
is recurring in nature and is recognised on time proportion basis over the period of tenure of transaction.
Freecharge Payment Technologies Private Ltd.
Revenue from commission income
Merchant Discount Rate (MDR) Revenue from wallet transaction is recognised on the basis of successful pay-out of wallet
usage to the respective merchants. The transactions are settled on a daily basis with the merchant, net of MDR revenue.
The taxes (Service tax / GST) collected on behalf of the government are not economic benefits flowing to the Company,
hence, excluded from revenue.
Revenue from payment and storage service
The revenue from payment & storage service is recognised for providing PG aggregation service and as a payments
platform for transactions of the merchant executed through payment gateway. The Company collects revenue on the basis
of the payment gateway transactions routed through its payment platform on a monthly basis.
Other operating revenue
Revenues from ancillary activities like convenience fee, commission income etc, are recognised upon rendering of services.
Accelyst Solutions Private Ltd.
Revenue from commission income
Revenues from operating an internet portal providing recharge and bill payment services is recognised upon successful
recharge / payment confirmation for the transactions executed. The taxes collected by company on behalf of the
government are not economic benefits flowing to the Company, hence, excluded from revenue.
Other operating revenue
Revenues from ancillary activities e.g. freefund code generation fees, convenience fee, sale of coupons and vendor’s
application installation etc. is recognised upon rendering of services. Upon expiry of validity of freefund codes sold by
company, income is recognised to the extent of value of such codes.
4.8 Scheme expenses
Axis Asset Management Company Ltd.
Fund Expenses
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 Profit and Loss Account.
New fund offer expenses
Expenses relating to new fund offer of Axis Mutual Fund are charged to the Profit and Loss Account in the year in which
they are incurred.
Brokerage
Clawbackable brokerages paid by the Company in advance is charged to the statement of Profit and Loss account over
the claw-back period/tenure of the respective scheme. The unamortized portion of the clawbackable brokerage is carried
forward as prepaid expense.
Upfront brokerage on closed ended and fixed tenure schemes is amortized over the tenure of the respective scheme and
in case of Equity Linked Saving Scheme (ELSS), upfront brokerage is amortized over 3 years. The unamortized portion of
the brokerage is carried forward as prepaid expense. Any other brokerage is expensed out in the year in which they are
incurred.
Brokerage paid on certain PMS products are amortised over the exit load period. Unamortised portion of brokerage is
carried forward as prepaid expenses.
Brokerage paid on Alternate Investment Fund schemes is amortized over the minimum tenure of the scheme. The
unamortized portion of the brokerage is carried forward as prepaid expense.
4.9 Fixed assets and depreciation/impairment
Group
Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes initial
handling and delivery charges, duties, taxes and incidental expenses related to the acquisition and installation of the
asset.
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Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes advances
paid to acquire fixed assets.
Depreciation is provided over the estimated useful life of a fixed asset on the straight-line method from the date of addition.
The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual
values of fixed assets based on historical experience of the Group, though these rates in certain cases are different from
lives prescribed under Schedule II of Companies Act, 2013.
Asset
Owned premises
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 fixed assets
Estimated useful life
60 years
3 years
5 years
4 years
8 years
3 years
2 years
10 years
5 years
5 years
5 years
3 years
10 years
Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till the date of
sale.
Profit on sale of premises is appropriated to Capital Reserve account (net of taxes and transfer to statutory reserve) in
accordance with RBI instructions.
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 flows 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.
4.10 Non-banking assets
Non-banking assets (‘NBAs’) acquired in satisfaction of claims are carried at lower of net book value and net realizable
value.
4.11 Lease transactions
Group
Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are
classified as operating lease. Lease payments for assets taken on operating lease are recognised as an expense in the
Profit and Loss Account on a straight-line basis over the lease term.
4.12 Retirement and other employee benefits
Provident Fund
Axis Bank Ltd.
Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged to the
Profit and Loss Account of the year when the contributions to the fund are due and when services are rendered by the
employees. Further, an actuarial valuation is conducted by an independent actuary using the Projected Unit Credit Method
as at 31 March each year to determine the deficiency, if any, in the interest payable on the contributions as compared to
the interest liability as per the statutory rate. Actuarial gains/losses are immediately taken to the Profit and Loss Account
and are not deferred.
Subsidiaries
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other
than the contribution payable to the provident fund. The Company recognises contribution payable to the provident fund
scheme as an expenditure, when an employee renders the related service.
237
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Gratuity
Axis Bank Ltd.
The Bank contributes towards gratuity fund (defined benefit 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 expatriates) liability with regard to gratuity is provided on the basis of a prescribed method
as per local laws, wherever applicable. Actuarial gains/losses are immediately taken to the Profit and Loss Account and
are not deferred.
Subsidiaries
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation using Projected
Unit Credit Method made at the end of each financial year. Actuarial gains/losses are immediately taken to the Profit and
Loss Account and are not deferred.
Compensated Absences
Group
The Group provides for compensated absences 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. Actuarial gains/
losses are immediately taken to the Profit and Loss Account and are not deferred.
Superannuation
Axis Bank Ltd.
Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either under
a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan the Bank
contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC, which undertakes to
pay the lumpsum and annuity benefit payments pursuant to the scheme. Superannuation contributions are recognised in
the Profit and Loss Account in the period in which they accrue.
New Pension Scheme (‘NPS’)
Group
In respect of employees who opt for contribution to the ‘NPS’, the Group contributes certain percentage of the total basic
salary of employees to the aforesaid scheme, a defined contribution plan, which is managed and administered by pension
fund management companies. NPS contributions are recognised in the Profit and Loss Account in the period in which they
accrue.
4.13 Long Term Incentive Plan (LTIP)
Axis Asset Management Company Ltd.
The Company has initiated Axis AMC - Long Term Incentive plan. The points granted to employees as per the guidelines
laid down in the plan are encashable after they are held for a specified period 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.
4.14 Reward points
Axis Bank Ltd.
The Bank runs a loyalty program which seeks to recognize and reward customers based on their relationship with the
Bank. Under the program, eligible customers are granted loyalty points redeemable in future, subject to certain conditions.
In addition, the Bank continues to grant reward points in respect of certain credit cards (not covered under the loyalty
program). The Bank estimates the probable redemption of such loyalty/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.
4.15 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 relevant provisions of Income tax Act, 1961. In case of overseas subsidiary the local tax laws
prevailing in that country are followed. Deferred income taxes reflect 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 assets against
liabilities representing current tax and the deferred tax assets and deferred tax liabilities relate to the taxes on income
levied by same governing taxation laws.
238
Annual Report 2017 -18
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient 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 Profit 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 supported by convincing evidence that such
deferred tax asset can be realised against future profits.
4.16 Share issue expenses
Group
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
4.17 Earnings per share
Group
The Bank reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and
the Companies (Accounting Standards) Amendment Rules, 2016. Basic earnings per share is computed by dividing the
net profit after tax by the weighted average number of equity shares outstanding for the year.
Diluted earnings per share reflect 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 except where the results are anti-dilutive.
4.18 Employee stock option scheme
Axis Bank Ltd.
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
Guidelines’). These Guidelines have been repealed in the month of October, 2014 and were substituted by Securities
and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Scheme is in compliance with the
said regulations. The Bank follows the intrinsic value method to account for its stock based employee compensation plans
as per the Guidelines. 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, if
any, 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.
4.19 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 outflow 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 reflect 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 confirmed 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 outflow 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 outflow of resources is
remote, no provision or disclosure is made.
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and
if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the
period in which the change occurs.
4.20 Cash and cash equivalents
Group
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and
short notice.
239
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
18 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH, 2018
1
a)
During the year, the Bank raised additional equity capital through a preferential allotment of 165,328,892 shares at a
price of `525.00 per share. As a consequence, the paid-up share capital of the Bank has increased by `33.07 crores and
the reserves of the Bank have increased by `8,620.73 crores after charging of issue related expenses. Further, the Bank
also allotted 45,357,385 convertible warrants carrying a right to the convertible warrant holder to apply for, get issued
and allotted one (1) equity share of the Bank of face value `2 each, for cash, at a price of `565.00 per share against
which the Bank has received an amount of `640.67 crores upfront representing 25% of the warrant price. The convertible
warrants are exercisable upto 18 months from the date of allotment. The funds mobilised from the equity raising were
utilised for enhancing the capital adequacy ratio and for general corporate purposes.
b)
Pursuant to approval from the Board of Directors of the Bank accorded on 26 July, 2017, the Bank had entered into an
agreement with Jasper Infotech Pvt. Ltd. to acquire 100% stake in its subsidiaries viz. Accelyst Solutions Pvt. Ltd. (ASPL)
and Freecharge Payment Technologies Pvt. Ltd. (FPTL), which together constitute the digital payments business under the
“Freecharge” brand. Post receipt of RBI approval for the arrangement, the Bank acquired 100% stake in ASPL and FPTL
on 6 October, 2017, at an aggregate cash consideration of `395.46 crores and consequently the said companies have
become wholly owned subsidiaries of the Bank.
Upon consolidation of these subsidiaries in the consolidated financial statements, the excess of cost of acquisition of the
subsidiaries over the Group’s share in the networth of these subsidiaries as on acquisition date has been recorded as
goodwill on consolidation, amounting to `293.01 crores.
2 Other Disclosures
2.1.1 ‘Provisions and contingencies’ recognised in the Profit and Loss Account comprise of:
For the year ended
Provision for income tax
- Current tax
- Deferred tax (Refer 2.1.11)
Provision for non-performing assets
(including bad debts written off and write backs)
Provision for restructured assets/strategic debt restructuring/ sustainable structuring
Provision towards standard assets
Provision for depreciation in value of investments
Provision for unhedged foreign currency exposure
Provision for country risk
Provision for other contingencies*
Total
31 March, 2018
31 March, 2017
(` in crores)
1,951.55
(1,849.69)
101.86
5,188.84
(3,202.06)
1,986.78
16,630.57
11,157.06
(307.16)
(124.37)
(207.67)
(9.30)
(19.94)
(443.39)
15,620.60
290.53
364.34
244.18
(13.88)
19.94
65.74
14,114.69
* includes contingent provision for advances/other exposures, legal cases and other contingencies
2.1.2 During the year ended 31 March, 2018, the Bank raised debt instruments eligible for Tier-I/Tier-II capital, the details of
which are set out below:
Instrument
Capital
Date of maturity
Period
Coupon
Amount
Subordinated debt
Tier-II
15 June, 2027
120 months
Perpetual debt
Additional Tier I
-*
-
7.66%
8.75%
`5,000 crores
`3,500 crores
*Call option on expiry of 60 months from the date of allotment
240
Annual Report 2017 -18
During the year ended 31 March, 2017, the Bank raised debt instruments eligible for Tier-I/Tier-II capital, the details of
which are set out below:
Instrument
Capital
Date of maturity
Period
Coupon
Amount
Perpetual debt
Additional Tier-I
-*
-
Subordinated debt
Subordinated debt
Tier-II
27 May, 2026
120 months
Tier-II
23 November, 2026
120 months
8.75%
8.50%
7.84%
`3,500 crores
`2,430 crores
`1,800 crores
*Call option on expiry of 60 months from the date of allotment
During the year ended 31 March, 2018, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital, the details
of which are set out below:
Instrument
Capital
Date of maturity
Period
Upper Tier-II
Tier-II
28 June, 2017*
180 months
Coupon
7.125%
Amount
$60 million
* represents call date
During the year ended 31 March, 2017, the Bank redeemed debt instruments eligible for Tier-II capital, the details of
which are set out below:
Instrument
Capital
Subordinated debt
Upper Tier-II
Perpetual debt
Perpetual debt
Upper Tier-II
Upper Tier-II
Subordinated debt
Tier-II
Tier-II
Tier-I
Tier-I
Tier-II
Tier-II
Tier-II
* represents call date
Date of maturity
28 June, 2016
11 August, 2016*
30 September, 2016*
16 November, 2016*
24 November, 2016*
6 February, 2017*
30 March, 2017
Period
120 months
180 months
-
-
180 months
180 months
120 months
Coupon
9.10%
7.25%
10.05%
7.17%
9.35%
9.50%
10.10%
Amount
`104.90 crores
$150 million
`214.00 crores
$46 million
`200.00 crores
`107.50 crores
`250.90 crores
2.1.3 Divergence in Asset Classification and Provisioning for NPAs
•
•
•
The Bank classifies advances into performing and non-performing advances (NPAs) as per the RBI guidelines. NPAs
are identified and provided for based on RBI’s Prudential Norms on Income Recognition, Asset Classification and
Provisioning.
Based on application of RBI’s prudential norms as stated above, the Bank classified and made the prescribed
provisions against the NPAs as at the end of 31 March, 2017.
As part of its Risk Based Supervision exercise for FY 2016-17, the RBI pointed out certain modifications in the Banks’
asset classification and provisioning as detailed in the table below:
Sr. No. Particulars
1
2
3
4
5
6
7
8
9
10
11
Gross NPAs as on 31 March, 2017, as reported by the Bank
Gross NPAs as on 31 March, 2017, as assessed by RBI
Divergence in Gross NPAs (2-1)
Net NPAs as on 31 March, 2017, as reported by the Bank
Net NPAs as on 31 March, 2017, as assessed by RBI
Divergence in Net NPAs (5-4)
Provisions for NPAs as on 31 March, 2017, as reported by the Bank
Provisions for NPAs as on 31 March, 2017, as assessed by RBI
Divergence in provisioning (8-7)
Reported Net Profit after Tax (PAT) for the year ended 31 March, 2017
Adjusted (notional) Net Profit after Tax (PAT) for the year ended 31 March, 2017 after taking into
account the divergence in provisioning
(` in crores)
21,280.48
26,913.28
5,632.80
8,626.55
12,943.65
4,317.10
12,205.72
13,521.42
1,315.70
3,679.28
2,793.95
•
The Bank has duly considered the impact of the above in the Financial Statements for the year ended 31 March,
2018.
241
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.4 Earnings Per Share (‘EPS’)
The details of EPS computation is set out below:
As at
31 March, 2018
31 March, 2017
Basic and Diluted earnings for the year (Net profit 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 (`)
455.82
244.51
0.75
245.26
1.86
1.86
2.00
3,953.03
238.93
0.94
239.87
16.54
16.48
2.00
Dilution of equity is on account of 7,517,504 (previous year 9,429,479) 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 65,000,000 equity shares to
eligible employees. Eligible employees are granted an option to purchase shares subject to vesting conditions. Further,
over the period June 2004 to July 2013, pursuant to the approval of the shareholders at Annual General Meetings, the
Bank approved an ESOP scheme for additional options aggregating 175,087,000. The options vest in a graded manner
over 3 years. The options can be exercised within three/five years from the date of the vesting as the case may be. Within
the overall ceiling of 240,087,000 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.
246,272,950 options have been granted under the Scheme till the previous year ended 31 March, 2017.
On 15 May, 2017, the Bank granted 6,885,700 stock options (each option representing entitlement to one equity share
of the Bank) to its eligible employees/directors of the Bank/subsidiary companies at a price of `503.00 per option.
Stock option activity under the Scheme for the year ended 31 March, 2018 is set out below:
Options
outstanding
Range of
exercise prices
(`)
Weighted
average
exercise price (`)
Outstanding at the beginning of the year
29,711,124
217.33 to 535.00
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
6,885,750
503.00
(810,120)
306.54 to 535.00
(57,910)
217.33 to 289.51
(6,173,935)
217.33 to 535.00
Outstanding at the end of the year
29,554,909
217.33 to 535.00
Exercisable at the end of the year
16,062,159
217.33 to 535.00
383.16
503.00
470.15
275.32
270.47
432.45
378.40
The weighted average share price in respect of options exercised during the year was `524.51.
Weighted
average
remaining
contractual life
(Years)
3.98
-
-
-
-
4.22
2.85
242
Annual Report 2017 -18
Stock option activity under the Scheme for the year ended 31 March, 2017 is set out below:
Options
outstanding
Range of exercise
prices (`)
Weighted
average exercise
price (`)
Outstanding at the beginning of the year
35,527,310
217.33 to 535.00
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
7,153,000
469.90
(690,050)
217.33 to 535.00
(74,853)
217.33 to 289.51
(12,204,283)
217.33 to 535.00
Outstanding at the end of the year
29,711,124
217.33 to 535.00
Exercisable at the end of the year
15,934,524
217.33 to 535.00
327.56
469.90
455.72
257.56
268.81
383.16
319.45
The weighted average share price in respect of options exercised during the year was `507.67.
Weighted
average
remaining
contractual life
(Years)
3.33
-
-
-
-
3.98
2.41
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 profit and EPS would be as follows:
31 March, 2018
31 March, 2017
Net Profit (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 Profit (Proforma) (` in crores)
Earnings per share: Basic (in ` )
As reported
Proforma
Earnings per share: Diluted (in `)
As reported
Proforma
455.82
-
(102.86)
352.96
1.86
1.44
1.86
1.44
3,953.03
-
(101.47)
3,851.56
16.54
16.12
16.48
16.06
During the years ended, 31 March, 2018 and 31 March, 2017, no cost has been incurred by the Bank on ESOPs issued
to the employees of the Bank and employees of subsidiaries under the intrinsic value method.
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, 2018
31 March, 2017
1.16%
1.29%
2.57-4.57 years
2.57-4.57 years
6.55% to 6.82%
7.15% to 7.39%
31.80% to 33.56%
32.92% to 35.75%
Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate 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, 2018 is `155.53 (previous year
`153.66).
243
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.6 Proposed Dividend
After making mandatory appropriations to Statutory Reserve, Investment Reserve, Reserve Fund and Capital Reserve, no
profits are available for distribution as dividend for the year ended 31 March, 2018. Accordingly, no dividend has been
recommended by the Board of Directors for the year ended 31 March, 2018.
Dividend paid during the year, represents dividend (`5 per equity share) for the year ended 31 March, 2017 paid
pursuant to approval of shareholders at Annual General Meeting held on 26 July, 2017.
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 identified 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
Corporate/Wholesale Banking
Other Banking Business
Unallocated assets and
liabilities
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. The Treasury segment also includes the central funding unit.
Constitutes lending to individuals/small businesses through the branch network and other delivery
channels subject to the orientation, nature of product, granularity of the exposure and the quantum
thereof. Retail Banking activities also include liability products, card services, internet banking,
mobile banking, ATM services, depository, financial advisory services and NRI services.
Includes corporate relationships not included under Retail Banking, corporate advisory services,
placements and syndication, project appraisals, capital market related services and cash
management services.
Includes para banking activities like third party product distribution and other banking transactions
not covered under any of the above three segments.
All items which are reckoned at an enterprise level are classified under this segment such as deferred
tax, money received against share warrants, tax paid in advance net of provision etc.
Business segments in respect of operations of the subsidiaries have been identified and reported taking into account the
customer profile, the nature of product and services and the organisation structure.
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 classified
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, 2018
(` in crores)
Treasury
Corporate/
Wholesale
Banking
Retail
Banking
Other
Banking
Business
Total
Segment Revenue
Gross interest income (external customers)
Other income
11,858.83
2,867.70
15,398.90
3,365.49
19,356.33
4,196.21
-
1,433.22
46,614.06
11,862.62
244
Annual Report 2017 -18
Total income as per Profit and Loss Account
Add/(less) inter segment interest income
Total segment revenue
Less: Interest expense (external customers)
Less: Inter segment interest expense
Less: Operating expenses
Operating profit
Less: Provision for non-performing assets/
others*
Segment result
Less: Provision for tax
Net Profit before minority interest and
earnings from Associate
Less: Minority Interest
Add: Share of Profit in Associate
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities(1)
Total liabilities
Net assets
Capital Expenditure for the year
Depreciation on fixed assets for the year
31 March, 2018
Treasury
14,726.53
49,386.08
64,112.61
13,375.62
45,761.40
393.83
4,581.76
1,763.26
Corporate/
Wholesale
Banking
18,764.39
5,402.38
24,166.77
1,155.22
12,352.62
4,004.78
6,654.15
11,894.90
Retail
Banking
23,552.54
17,298.22
40,850.76
13,072.85
13,972.08
9,941.65
3,864.18
1,860.58
Other
Banking
Business
1,433.22
-
1,433.22
-
0.58
448.10
984.54
-
2,818.50
(5,240.75)
2,003.60
984.54
227,258.49
236,010.17
230,592.20
813.36
234,071.37
138,435.00
265,852.74
195.25
(6,812.88)
16.70
11.90
97,575.17
235.20
173.05
(35,260.54)
523.89
389.98
618.11
18.99
15.65
(1) Includes minority interest of `69.51 crores
* represents material non-cash items other than depreciation
(` in crores)
Total
58,476.68
72,086.68
130,563.36
27,603.69
72,086.68
14,788.36
16,084.63
15,518.74
565.89
101.86
464.03
8.21
-
-
455.82
694,674.22
9,029.15
703,703.37
638,554.36
941.60
639,495.96
64,207.41
794.78
590.58
(` in crores)
31 March, 2017
Treasury
Corporate/
Wholesale
Banking
Retail Banking Other Banking
Business
Total
Segment Revenue
Gross interest income (external customers)
11,684.45
16,364.82
17,125.82
-
45,175.09
Other income
4,467.90
3,421.50
3,239.84
Total income as per Profit and Loss Account
16,152.35
19,786.32
20,365.66
1,292.36
1,292.36
12,421.60
57,596.69
Add/(less) inter segment interest income
48,713.22
5,358.37
18,029.89
-
72,101.48
Total segment revenue
64,865.57
25,144.69
38,395.55
1,292.36
129,698.17
Less: Interest expense (external customers)
12,531.94
949.39
13,308.00
Less: Inter segment interest expense
47,974.47
11,937.93
12,188.50
Less: Operating expenses
Operating profit
Less: Provision for non-performing assets/
465.33
3,893.83
1,228.96
3,521.52
8,735.85
10,057.64
8,398.30
4,500.75
841.32
0.01
0.58
340.48
951.29
26,789.34
72,101.48
12,725.63
18,081.72
-
12,127.92
others*
Segment result
Less: Provision for tax
2,664.87
(1,321.79)
3,659.43
951.29
5,953.80
1,986.77
245
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
31 March, 2017
(` in crores)
Treasury
Corporate/
Wholesale
Banking
Retail Banking Other Banking
Business
Total
3,967.03
14.00
-
-
3,953.03
209,880.80
207,804.80
187,276.45
782.46
605,744.51
5,717.50
611,462.01
198,146.86
123,007.05
233,695.38
153.95
555,003.24
11,733.94
84,797.75
(46,418.93)
628.51
56,380.35
78.42
555,081.66
Net Profit before minority interest and
earnings from Associate
Less: Minority Interest
Add: Share of Profit in Associate
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities(1)
Total liabilities
Net assets
Capital Expenditure for the year
Depreciation on fixed assets for the year
26.76
20.84
215.57
166.08
436.60
325.46
18.60
14.29
697.53
526.67
(1) Includes minority interest of `61.31 crores
* represents material non-cash items other than depreciation
Geographic Segments
Particulars
Domestic
International
(` in crores)
Total
31 March,
2018
31 March,
2017
31 March,
2018
31 March,
2017
31 March,
2018
31 March,
2017
Revenue
Assets
55,799.56
54,750.01
2,677.12
2,848.68
58,476.68
57,596.69
635,920.35
551,877.12
67,783.02
59,584.89
703,703.37
611,462.01
Capital Expenditure for the year
785.35
696.65
Depreciation on fixed assets for the
year
585.77
521.32
9.43
4.81
0.88
794.78
697.53
5.35
590.58
526.67
2.1.8 Related party disclosure
The related parties of the Group are broadly classified as:
a)
Promoters
The Bank has identified the following entities as its Promoters.
•
•
•
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
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.
b) Key Management Personnel
• Ms. Shikha Sharma (Managing Director & Chief Executive Officer)
• Mr. V. Srinivasan (Deputy Managing Director)
• Mr. Rajiv Anand [Executive Director (Retail Banking)]
• Mr. Rajesh Dahiya [Executive Director (Corporate Centre)]
246
Annual Report 2017 -18
c)
Relatives of Key Management Personnel
Mr. Sanjaya Sharma, Ms. Usha Bharadwaj, Mr. Tilak Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr.
Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj, Ms. Gayathri Srinivasan, Mr. V. Satish, Ms.
Camy Satish, Ms. Ananya Srinivasan, Ms. Anagha Srinivasan, Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr.
S. Ranganathan, Mr. R. Narayan, Ms. Gitanjali Anand, Ms. Tara Anand, Ms. Nandita Anand, Mr. P.L. Narain, Mr.
P. Srinivas, Ms. Ratna Rao Shekar, Ms. P. Kamashi, Ms. Hemant Dahiya, Ms. Arooshi Dahiya, Ms. Mallika Dahiya,
Ms. Jal Medha, Ms. Pooja Rathi, Mr. Jai Prakash Dahiya.
The details of transactions of the Bank with its related parties during the year ended 31 March, 2018 are given
below:
Items/Related Party
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel
Dividend paid
Interest paid
Interest received
Investment in non-equity instrument of related party
Investment of related party in the Bank
Investment of related party in Hybrid capital/Bonds
of the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Contribution to employee benefit fund
Placement of deposits
Non-funded commitments (issued)
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Other reimbursements from related party
Other reimbursements to related party
343.52
545.58
0.02
393.00
1,200.00
-
-
188.69
868.73
-
16.16
0.05
0.20
-
6.50
105.28
17.42
-
-
0.75
1.08
0.22
0.77
-
33.75
-
-
-
1.12
12.18
-
-
-
7.99
0.04
-
0.05
1.29
-
-
-
0.19
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(` in crores)
Total
344.60
545.99
0.79
393.00
1,233.75
-
-
188.69
869.85
12.18
16.16
0.05
0.20
7.99
6.54
105.28
17.47
1.29
-
0.75
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2018 are given below:
Items/Related Party
Promoters
Borrowings from the Bank
Deposits with the Bank
Placement of deposits
Advances
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
-
6,213.80
0.43
7.07
205.70
135.29
3.35
Investment of related party in Hybrid capital/ Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
-
4.33
-
18.31
-
0.50
-
-
3.70
-
-
-
-
3.46
6,221.59
-
0.04
-
-
-
-
-
-
-
0.43
25.42
205.70
135.79
3.35
4,300.00
3.70
-
-
247
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31
March, 2018 are given below:
Items/Related Party
Promoters
Borrowings from the Bank
Deposits with the Bank
Placement of deposits
Advances
Investment of related party in the Bank
Investment in non-equity instrument of the Bank
Non-funded commitments
-
10,153.25
0.43
16.76
137.76
393.00
3.39
Investment of related party in Hybrid Capital/Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
-
17.12
-
18.31
0.50
-
-
-
3.70
-
-
-
-
5.78
10,176.15
-
0.09
-
-
-
-
-
-
-
0.43
35.16
138.26
393.00
3.39
4,300.00
3.70
-
-
The details of transactions of the Bank with its related parties during the year ended 31 March, 2017 are given
below:
Items/Related Party
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel
Dividend paid
Interest paid
Interest received
Investment in non-equity instrument of related party
354.69
666.31
1.61
110.00
0.70
0.14
0.55
-
Investment of related party in the Bank
-
46.45
Investment of related party in Hybrid capital/Bonds
of the Bank
1,050.00
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Contribution to employee benefit fund
Purchase of fixed assets
Sale of fixed assets
Placement of deposits
Repayment of deposits
Non-funded commitments (issued)
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Other reimbursements from related party
Other reimbursements to related party
70.00
-
758.78
-
15.75
-
-
-
-
0.05
0.67
-
100.67
2.43
-
0.41
-
-
-
3.52
11.35
-
-
-
-
-
-
-
0.20
-
0.05
-
-
248
(` in crores)
Total
355.39
666.61
2.16
110.00
46.45
1,050.00
70.00
-
-
0.16
-
-
-
-
-
-
0.11
762.41
-
-
-
-
-
-
-
-
-
-
-
-
-
11.35
15.75
-
-
-
-
0.05
0.67
0.20
100.67
2.48
-
0.41
Annual Report 2017 -18
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2017 are given below:
Items/Related Party
Borrowings from the Bank
Deposits with the Bank
Placement of deposits
Advances
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
Promoters
-
7,951.11
0.38
13.57
56.10
137.76
3.14
Investment of related party in Hybrid capital/ Bonds
of the Bank
4,300.00
Payable under management contracts
Other receivables (net)
Other payables (net)
-
-
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
-
1.90
-
10.35
-
0.41
-
-
0.81
-
-
-
-
2.99
7,956.00
-
0.02
-
-
-
-
-
-
-
0.38
23.94
56.10
138.17
3.14
4,300.00
0.81
-
-
The maximum balances payable to/receivable from the related parties of the Bank during the year ended 31
March, 2017 are given below:
Items/Related Party
Borrowings from the Bank
Deposits with the Bank
Placement of deposits
Advances
Investment of related party in the Bank
Investment in non-equity instrument of the Bank
Non-funded commitments
Investment of related party in Hybrid Capital/Bonds
of the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
-
9,003.33
0.38
25.70
141.89
110.00
3.21
4,355.00
-
-
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
-
10.82
-
10.52
0.41
-
-
-
1.37
-
-
-
-
3.53
9,017.68
-
0.08
-
-
-
-
-
-
-
0.38
36.30
142.30
110.00
3.21
4,355.00
1.37
-
-
The significant transactions between the Bank and related parties during the year ended 31 March, 2018 and
31 March, 2017 are given below. A specific related party transaction is disclosed as a significant related party
transaction wherever it exceeds 10% of the aggregate value of all related party transactions in that category:
Particulars
Dividend paid
31 March, 2018
31 March, 2017
(` in crores)
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
Interest paid
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
165.04
137.42
502.36
10.16
174.43
137.42
543.21
73.12
249
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Particulars
Interest received
Mr. Rajiv Anand
New India Assurance Co. Limited
Life Insurance Corporation of India
Investment in non-equity instruments of related party
United India Insurance Co. Limited
National Insurance Co. Limited
Investment of related party in the Bank
Life Insurance Corporation of India
Ms. Shikha Sharma
Mr. V. Srinivasan
Investment of related party in Hybrid capital/Bonds of the Bank
Life Insurance Corporation of India
Redemption of Hybrid capital/Bonds of the Bank
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
Purchase of investments
United India Insurance Co. Limited
Sale of investments
New India Assurance Co. Limited
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
National Insurance Co. Limited
Management contracts
Ms. Shikha Sharma
Mr. V. Srinivasan
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Contribution to employee benefit fund
Life Insurance Corporation of India
Placement of deposits
Life Insurance Corporation of India
Advance granted (net)
Mr. Rajesh Dahiya
Life Insurance Corporation of India
Advance repaid
Life Insurance Corporation of India
Ms. Shikha Sharma
Mr. Rajesh Dahiya
Receiving of services
The Oriental Insurance Co. Limited
New India Assurance Co. Limited
Life Insurance Corporation of India
250
31 March, 2018
31 March, 2017
(` in crores)
0.73
0.02
-
393.00
-
1,200.00
17.36
8.03
-
-
-
188.69
421.03
230.00
157.44
35.00
4.84
3.12
2.44
1.78
0.54
0.13
1.48
-
110.00
-
29.66
12.03
1,000.00
50.00
20.00
-
200.00
390.00
55.09
50.00
5.42
3.36
1.50
1.08
16.16
15.75
0.05
7.77
-
6.50
0.04
-
66.42
27.22
10.94
-
-
0.67
-
0.04
0.16
75.00
18.09
4.80
Annual Report 2017 -18 Particulars
Rendering of services
Life Insurance Corporation of India
The Oriental Insurance Co. Limited
New India Assurance Co. Limited
Sale of foreign exchange currency to related party
Ms. Shikha Sharma
Other reimbursements to related party
Life Insurance Corporation of India
31 March, 2018
31 March, 2017
(` in crores)
16.39
0.70
0.33
1.29
0.75
1.45
0.61
0.37
-
0.41
2.1.9 Leases
Disclosure in respect of assets taken on operating lease
This comprise of office premises/ATMs, cash deposit machines, 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 five years
- Later than five years
Total of minimum lease payments recognised in the Profit and Loss Account for
the year
There are no provisions relating to contingent rent.
31 March, 2018
31 March, 2017
(` in crores)
742.66
2,303.58
1,874.37
823.91
700.14
2,175.20
1,470.68
775.41
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
There are generally no undue restrictions or onerous clauses in the agreements
2.1.10 Other Fixed Assets (including furniture & fixtures)
The movement in fixed 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, 2018
31 March, 2017
(` in crores)
1,100.49
247.69
(0.03)
(892.94)
455.21
173.62
887.14
213.39
(0.04)
(719.32)
381.17
136.56
251
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
2.1.11 The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as under:
As at
31 March, 2018
31 March, 2017
(` in crores)
Deferred tax assets on account of provisions for doubtful debts
Deferred tax assets on account of amortisation of HTM investments
Deferred tax assets on account of provision for employee benefits
Deferred tax assets on account of other items
Deferred tax assets
Deferred tax liability on account of depreciation on fixed assets
Deferred tax liabilities on account of other items
Deferred tax liabilities
Net deferred tax asset
2.1.12 Employee Benefits
Group
Provident Fund
6,637.49
11.28
121.38
280.44
7,050.59
103.46
35.81
139.27
6,911.32
4,739.05
12.80
98.36
314.77
5,164.98
92.01
1.11
93.12
5,071.86
The contribution to the employee’s provident fund (including Employee Pension Scheme) of the Group amounted to
`175.11 crores for the year ended 31 March, 2018 (previous year `154.12 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
deficiency shall be made good by the Bank. Based on an actuarial valuation conducted by an independent actuary,
there is no deficiency as at the Balance Sheet date for the Bank.
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss Account
and funded status and amounts recognised in the Balance Sheet for the Provident Fund benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
31 March, 2018
31 March, 2017
(` in crores)
88.53
127.95
(171.00)
43.05
88.53
140.05
76.80
115.68
(135.93)
20.25
76.80
136.51
252
Annual Report 2017 -18
Balance Sheet
Details of provision for provident fund
Fair Value of Plan Assets
Present Value of Funded Obligations
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Asset (included under Schedule 11 – Other Assets)
31 March, 2018
(` in crores)
31 March, 2017
2,004.57
(2,004.57)
-
1,687.15
(1,687.15)
-
-
-
-
-
-
-
Changes in the present value of the defined benefit obligation are as follows:
Change in Defined Benefit Obligation
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Employees Contribution
Liability transferred from/to other companies
Benefits Paid
Closing Defined Benefit 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)
Employer contribution during the period
Employee contribution during the period
Assets transferred from/to other companies
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments*
31 March, 2018
(` in crores)
31 March, 2017
1,687.15
88.53
127.95
12.10
200.77
(14.62)
(97.31)
2,004.57
1,437.90
76.80
115.68
20.83
181.16
(22.88)
(122.34)
1,687.15
31 March, 2018
(` in crores)
31 March, 2017
1,687.15
171.00
(30.95)
88.53
200.77
(14.62)
(97.31)
2,004.57
1,437.90
135.93
0.58
76.80
181.16
(22.88)
(122.34)
1,687.15
(` in crores)
31 March,
2014
31 March,
2018
31 March,
2017
31 March,
2016
31 March,
2015
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
2,004.57
2,004.57
-
12.10
1,687.15
1,687.15
-
20.83
1,437.90
1,437.90
-
12.08
1,240.83
1,240.83
-
(1.78)
1,013.25
1,013.25
-
53.03
Experience Adjustments on Plan Assets
(30.95)
0.58
(6.16)
(3.99)
41.42
* information provided to the extent available with the Bank
253
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
Government securities
Bonds, debentures and other fixed income instruments
Equity shares
Others
Principal actuarial assumptions at the balance sheet date:
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, 2018
31 March, 2017
%
53.75
42.16
3.79
0.30
%
53.74
43.47
1.66
1.13
31 March, 2018
31 March, 2017
7.95%
8.90%
7.68%
9.17%
8.55%
7.40%
9.11%
6.93%
9.58%
8.65%
The Bank contributed `16.12 crores to the employee’s superannuation plan for the year ended 31 March, 2018
(previous year `15.69 crores).
National Pension Scheme (NPS)
During the year, the Bank has contributed `3.82 crores (previous year `2.45 crores) to the NPS for employees who
had opted for the scheme.
Group
Leave Encashment
The actuarial liability of compensated absences of accumulated privileged leave of the employees of the Group is
given below.
31 March, 2018
(` in crores)
Actuarial
liability -
Privilege Leave
Total Expenses
included under
Schedule 16(I)
Assumptions
Discount Rate
Salary
escalation rate
Axis Bank Ltd.
Axis Capital Ltd.
Axis Securities Ltd.
Axis Asset Management Co. Ltd.
Axis Finance Ltd.
A.Treds Ltd.
FreeCharge Payment Technologies Pvt. Ltd.
Accelyst Solutions Pvt. Ltd.
243.82
47.33
0.10
0.66
1.17
0.41
0.05
2.68
0.25
Nil
0.66
0.64
0.05
0.05
0.81
0.19
7.95% p.a.
7.68% p.a.
6.60% p.a.
7.00% p.a.
7.00% p.a.
7.00% p.a.
7.50% p.a.
12.00% p.a.
7.73% p.a.
7.80% p.a.
7.00% p.a.
7.00% p.a.
7.10% p.a.
10.50% p.a.
7.10% p.a.
10.50% p.a.
254
Annual Report 2017 -18
31 March, 2017
(` in crores)
Actuarial liability -
Privilege Leave
Total Expenses
included under
Schedule 16(I)
Assumptions
Discount Rate
Salary escalation
rate
Axis Bank Ltd.
Axis Capital Ltd.
Axis Securities Ltd.
Axis Asset Management Company Ltd.
Axis Finance Ltd.
247.46
0.11
0.27
0.62
0.15
79.87
0.12
0.36
0.28
0.07
7.40% p.a.
6.82% p.a.
6.15% p.a.
6.82% p.a.
7.39% p.a.
7.00% p.a.
7.00% p.a.
7.00% p.a.
9.00% p.a.
7.00% p.a.
Group
Gratuity
The following tables summarize the components of net benefit expenses recognised in the Profit and Loss Account
and the funded status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Past Service Cost
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
Balance Sheet
Details of provision for gratuity
Present Value of Funded Obligations
Present Value of un-funded Obligations
Fair Value of Plan Assets
Unvested Past Service Cost
Net (Liability)/Asset
Amounts in Balance Sheet
Liabilities (included under Schedule 5 - Other Liabilities)
Assets (included under Schedule 11 - Other Assets)
Net (Liability)/Asset
31 March, 2018
31 March, 2017
(` in crores)
41.98
23.92
(22.35)
(15.41)
31.37
59.51
27.19
34.52
21.19
(18.84)
26.79
0.36
64.02
17.17
31 March, 2018
31 March, 2017
(` in crores)
(361.43)
(5.56)
336.33
0.03
(30.63)
30.63
-
(30.63)
(298.44)
(3.01)
290.10
-
(11.35)
11.35
-
(11.35)
255
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Changes in the present value of the defined benefit obligation are as follows:
Change in Defined Benefit Obligation
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Past Service Cost
Liabilities Assumed on Acquisition
Liabilities transferred in
Benefits Paid
Closing Defined Benefit Obligation
Changes in the fair value of plan assets are as follows:
Opening Fair Value of Plan Assets
Expected Return on Plan Assets
Actuarial Gains/(Losses)
Contributions by Employer
Assets transferred in
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments:
31 March, 2018
(` in crores)
31 March, 2017
301.45
41.98
23.92
(10.56)
31.40
1.21
0.57
(22.98)
366.99
246.84
34.52
21.19
25.11
0.19
-
0.17
(26.57)
301.45
31 March, 2018
(` in crores)
31 March, 2017
290.11
22.35
4.85
41.33
0.57
(22.88)
336.33
243.00
18.84
(1.68)
56.52
-
(26.57)
290.11
(` in crores)
31 March, 2018 31 March, 2017
31 March, 2016
31 March, 2015
31 March, 2014
366.99
301.45
246.84
219.95
168.99
336.33
(30.66)
2.90
290.11
(11.34)
7.09
243.00
(3.84)
2.98
219.26
(0.69)
0.76
(4.91)
(1.68)
(5.28)
1.39
171.76
2.77
7.45
2.30
Defined Benefit
Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments
on Plan Liabilities
Experience Adjustments
on Plan Assets
Axis Bank Ltd.
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
Government securities
Bonds, debentures and other fixed income instruments
Money market instruments
Equity shares
Others
256
31 March, 2018
%
31 March, 2017
%
49.04
28.81
19.71
2.22
0.22
37.30
47.98
8.66
3.52
2.54
Annual Report 2017 -18
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 18 to 30 (age in years)
- 31 to 44 (age in years)
- 45 to 59 (age in years)
31 March, 2018
31 March, 2017
7.95% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
7.40% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
The estimates of future salary increases considered take into account the inflation, 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 certified by the actuary and relied upon by the auditors.
Axis Capital Ltd.
31 March, 2018
31 March, 2017
The major categories of plan assets* as a percentage of fair value of total plan
assets - Insurer Managed Funds
100.00
100.00
*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
31 March, 2018
31 March, 2017
7.68% p.a.
7.68% p.a.
7.00% p.a.
10.00%
6.82% p.a.
6.82% p.a.
7.00% p.a.
7.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, 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 `2.36 crores as gratuity in the year 2017-18 (previous year `1.36 crores).
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, 2018
31 March, 2017
7.50% p.a.
6.82% p.a.
N.A.
12.00% p.a.
10.00%
N.A.
9.00% p.a.
10.00%
257
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
Axis Securities Ltd.
31 March, 2018
31 March, 2017
The major categories of plan assets* as a percentage of fair value of total plan
assets - Insurer Managed Funds
100.00
100.00
*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
31 March, 2018
31 March, 2017
6.60% p.a.
7.00% p.a.
7.00% p.a.
7.00%
6.15% p.a.
7.00% p.a.
7.00% p.a.
7.00%
The estimates of future salary increases considered take into account the inflation, 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.
The Company expects to contribute `1.50 crore as gratuity in the year 2017-18 (previous year `1.50 crores)
Axis Finance Ltd.
31 March, 2018
31 March, 2017
The major categories of plan assets* as a percentage of fair value of total
plan assets - Insurer Managed Funds
100.00
100.00
*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
31 March, 2018
31 March, 2017
7.73% p.a.
7.73% p.a.
7.00% p.a.
5.00%
7.39% p.a.
7.39% p.a.
7.00% p.a.
5.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
258
Annual Report 2017 -18
Axis Trustee Services 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, 2018
31 March, 2017
7.35% p.a.
6.85% p.a.
N.A.
N.A.
10.00% p.a.
10.00% p.a.
20.00%
20.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
A.Treds Ltd.
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, 2018
31 March, 2017
7.80% p.a.
N.A.
7.00% p.a.
20.00%
10.00%
5.00%
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
Accelyst Solutions Pvt. 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, 2018
31 March, 2017
7.10% p.a.
N.A.
10.50% p.a.
25.70%
N.A.
N.A.
N.A.
N.A.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
The Company expects to contribute `0.40 crore as gratuity in the year 2017-18.
FreeCharge Payment Technologies Pvt. 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, 2018
31 March, 2017
7.10% p.a.
N.A.
10.50% p.a.
25.70%
N.A.
N.A.
N.A.
N.A.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
259
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
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
31 March, 2018
31 March, 2017
(` in crores)
59.40
2.00
(0.15)
(0.27)
60.98
39.82
23.47
-
(3.89)
59.40
b) Other liabilities include provision for reward points made on actuarial basis, 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, 2018
31 March, 2017
(` in crores)
110.45
89.05
(55.56)
143.94
127.38
32.17
(49.10)
110.45
31 March, 2018
31 March, 2017
(` in crores)
595.62
342.25
(787.21)
150.66
539.09
1,036.59
(980.06)
595.62
The above provision includes contingent provision for advances/other exposures, legal cases and other
contingencies.
2.1.14 Description of contingent liabilities
a) Claims against the Group not acknowledged as debts
These represent claims filed 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 authorities and disputed by the
Group. Apart from claims assessed as possible, the Group holds provision of `43.28 crores as on 31 March,
2018 (previous year `26.61 crores) towards claims assessed as probable.
b)
Liability for partly paid investments
This represents amounts remaining unpaid towards liability for partly paid investments.
c)
Liability on account of forward exchange and derivative contracts
The Group 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 flows by way of interest/principal in two currencies, based on ruling spot rates. Interest
rate swaps are commitments to exchange fixed and floating interest rate cash flows. Interest rate futures
are standardised, exchange-traded contracts that represent a pledge to undertake a certain interest rate
transaction at a specified price, on a specified 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 specified amount of currency at a specific price within a specified time period or at a specified future
260
Annual Report 2017 -18
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 specified 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 specified price.
d) 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 fulfill its financial or performance obligations.
e)
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.
f)
Other items for which the Group is contingently liable
Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts
remaining to be executed on capital account, notional principal on account of outstanding Tom/Spot foreign
exchange contracts, commitments towards underwriting and investment in equity through bids under Initial
Public Offering (IPO) of corporates as at the year end, demands raised by statutory authorities (other than
income tax) and disputed by the Group and the amount transferred to Depositor Education and Awareness
Fund (DEAF).
The Bank, through one of its overseas branches, had arranged Trade Credit (Buyers Credit loans) against
Letters of Undertaking (LOUs) issued by Punjab National Bank (PNB), which were subsequently alleged as
fraudulent by PNB. Prior to this declaration by PNB, such buyer’s credit loans were sold down in the secondary
market by the overseas branch to various participating banks under Risk Participation Agreements. As on 31
March, 2018, there is no funded exposure outstanding in the overseas branch pursuant to such sell down.
PNB has repaid the aggregate amount of all LOUs due upto 31 March, 2018, pursuant to an undertaking
issued to PNB, and made remittance to the overseas branch which has been passed on for onward payment
to the participating banks. Based on the facts and circumstances of the case, internal findings and legal
opinion, the Bank does not expect PNB has any valid right at this point in time, for refund by the Bank of
the aggregate amount paid by PNB towards LOUs due upto 31 March, 2018 . However, as a matter of
prudence, the aggregate amount of LOUs issued by PNB to the overseas branch against which buyer’s credit
was extended, aggregating to `3,847.26 crores has been disclosed as part of Contingent Liabilities in the
Balance Sheet.
The Group has a process whereby periodically all long term contracts (including derivative contracts) are assessed
for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as
required under any law/accounting standards for material foreseeable losses on such long term contracts (including
derivative contracts) in the books of account and disclosed the same under the relevant notes in the financial
statements, where applicable.
2.1.15 Comparative Figures
Previous year figures have been regrouped and reclassified, where necessary to conform to current year’s
presentation.
For Axis Bank Ltd.
Sanjiv Misra
Chairman
Samir K. Barua
Director
S. Vishvanathan
Director
Rakesh Makhija
Director
Shikha Sharma
Managing Director & CEO
Date : 16 May, 2018
Place: Mumbai
Girish V. Koliyote
Company Secretary
Jairam Sridharan
Chief Financial Officer
V. Srinivasan
Deputy Managing Director
B. Baburao
Director
261
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
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S
Annual Report 2017 -18
DISCLOSURES UNDER BASEL III
CAPITAL REGULATIONS (CONSOLIDATED) FOR THE YEAR ENDED 31st MARCH 2018
I.
SCOPE OF APPLICATION AND CAPITAL ADEQUACY
Name of the head of the banking group to which the framework applies: Axis Bank Limited
Axis Bank Limited (the ‘Bank’) is a commercial bank, which was incorporated on 3rd December 1993. The Bank is the controlling
entity for all group entities. The consolidated financial statements of the Bank comprise the financial statements of Axis Bank
Limited and its 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.
(i) Qualitative Disclosures
The list of group entities considered for consolidation is given below:
Name of
the Entity/
Country of
Incorporation
Included
under
Accounting
Scope of
Consolidation
Method of
Consolidation
Included
under
Regulatory
Scope of
Consolidation
Method of
Consolidation
Axis Asset
Management
Company
Limited/India
Axis Bank UK
Limited/UK
Axis Capital
Limited/India
Axis Finance
Limited/India
Axis Mutual
Fund Trustee
Limited/India
Axis Private
Equity Limited/
India
Axis Securities
Limited/India
Axis Trustee
Services
Limited/India
A.Treds
Limited/India
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21-Consolidated
Financial Statements
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Reasons for
difference in
the Method of
Consolidation
Reasons, if
Consolidated
under only
one of the
Scopes of
Consolidation
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
263
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Name of
the Entity/
Country of
Incorporation
Included
under
Accounting
Scope of
Consolidation
Method of
Consolidation
Included
under
Regulatory
Scope of
Consolidation
Method of
Consolidation
FreeCharge
Payment
Technologies
Pvt. Limited
Accelyst
Solutions Pvt.
Limited
Axis Capital
USA LLC. (1)
Yes
Yes
Yes
Consolidated in
accordance with
AS-21-Consolidated
Financial Statements
Consolidated in
accordance with
AS-21-Consolidated
Financial Statements
Consolidated in
accordance with
AS 21-Consolidated
Financial Statements
Yes
Yes
Yes
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with
AS-21- Consolidated
Financial Statements
Consolidated in
accordance with AS
21- Consolidated
Financial Statements
Reasons for
difference in
the Method of
Consolidation
Reasons, if
Consolidated
under only
one of the
Scopes of
Consolidation
NA
NA
NA
NA
NA
NA
* NA – Not Applicable
(1) Step-down subsidiary - Axis Capital Limited, a wholly owned subsidiary of the Bank owns 100% stake in Axis Capital
USA LLC.
There are no group entities that are not considered for consolidation under both the accounting scope of consolidation
and regulatory scope of consolidation.
(ii) Quantitative Disclosures
The list of group entities considered for consolidation as on 31st March 2018 is given below:
Name of the Entity/Country of
Incorporation
Principal Activity of the Entity
Total Balance
Sheet Equity*
(` in millions)
Total Balance
Sheet Assets
Axis Asset Management Company
Limited/India
Asset Management company for Axis
Mutual Fund
Axis Bank UK Limited/UK
Axis Capital Limited/India
Retail Banking, Corporate Banking,
Commercial Banking and Treasury
Services
Merchant
Broking and
Business
Banking,
Institutional
Investment Banking
2,101
5,045
3,585
(USD 55)
67,583
(USD 1,028)
735
13,612
Axis Finance Limited/India
Non-Banking Financial activities
4,808
66,765
Axis Mutual Fund Trustee Limited/
India
Trustee company for Axis Mutual
Fund
Axis Private Equity Limited/India Managing
investments,
venture
Axis Securities Limited/India
capital funds and off-shore funds
Marketing of Retail Asset Products,
Credit Cards and Retail Broking
Axis Trustee Services Limited/
India
Trusteeship services
A. Treds Limited/India
Setting up institutional mechanism
trade
to
receivables of MSME
facilitate financing of
1
15
4
40
1,445
5,367
15
250
729
191
264
Annual Report 2017 -18
Name of the Entity/Country of
Incorporation
Principal Activity of the Entity
Total Balance
Sheet Equity*
Total Balance
Sheet Assets
Freecharge Payment Technologies
Private Limited/India
Operating payment system for semi
closed prepaid payment instrument
Accelyst Solutions Private Limited/
India
Providing and
facilitating online
recharge/ bill payment/ coupon
services, marketing platform for third
parties, distribution of mutual funds
and insurance
Axis Capital USA LLC./USA
* Paid up Equity Capital
Note -
Broker/dealer
channeled to Indian equities
for
investments
5,811
6,797
1,514
1,556
NIL
0.13
(USD 0.002)
There is no capital deficiency in any subsidiary, which is not included in the regulatory scope of consolidation.
As on 31st March 2018, the Bank does not have controlling interest in any insurance entity.
There are no restrictions or impediments on transfer of funds or regulatory capital within the banking group.
II.
CAPITAL ADEQUACY
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 Basel III guidelines, the Bank is required to maintain a minimum Capital to Risk
Weighted Assets Ratio (CRAR) of 9% {11.5% including Capital Conservation Buffer (CCB)}, with minimum Common Equity Tier
I (CET1) of 5.5% (8% including CCB) as on 31st March 2019. These guidelines on Basel III have been implemented on 1st April
2013 in a phased manner. The minimum capital required to be maintained by the Bank for the year ended 31st March 2018 is
10.875% with minimum Common Equity Tier 1 (CET1) of 7.375% (including CCB of 1.875%)
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, profitability 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 2018 is presented below:
Capital Requirements for various Risks
CREDIT RISK
Capital requirements for Credit Risk
- Portfolios subject to standardized approach
- Securitisation exposures
MARKET RISK
Capital requirements for Market Risk
- Standardised duration approach
- Interest rate risk
- Foreign exchange risk (including gold)
- Equity risk
(` in millions)
Amount
401,540
-
34,878
24,407
608
9,863
265
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Capital Requirements for various Risks
OPERATIONAL RISK
Capital requirements for Operational risk
- Basic indicator approach
Note: - Capital requirement has been computed at 9% of RWA
Capital Adequacy Ratios
Common Equity Tier – 1 CRAR
Tier – 1 CRAR
Total CRAR
Amount
44,266
Consolidated
Standalone
11.80%
13.11%
16.58%
11.68%
13.04%
16.57%
III. RISK MANAGEMENT: OBJECTIVES AND ORGANISATION 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 based on approved policies and guidelines. The Bank’s risk governance architecture focuses on
the key areas of risk such as credit, market (including liquidity) and operational risk and quantification of these risks, wherever
possible, for effective and continuous monitoring and control.
Objectives and Policies
The Bank’s risk management processes are guided by well-defined 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:
Board of Directors
Committee of
Directors (COD)
Audit Committee of
the Board (ACB)
Risk Management
Committee (RMC)
Executive Risk Management Committees
Credit & Investment
Committees
CRO
Respective teams work
under these heads of
different components of
risk
Functional area
Committee
Credit risk
Operational risk
Market risk, Liquidity risk
Subsidiary risk
Reputation risk
Business continuity risk
Outsourcing risk
Info Security risk
CRMC
ORMC
ALCO
SGC
RRMC
BCPMC
COC
ISSC
The Bank has put in place policies relating to management of credit risk, market risk, operational risk, information security
risk, reputation risk, subsidiary risk and asset-liability both for the domestic as well as overseas operations along with overseas
subsidiaries as per the respective host regulatory requirements and business needs. 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. The stress scenarios are idiosyncratic, market wide and a combination of both.
266
Annual Report 2017 -18
Structure and Organisation
The Chief Risk Officer reports to the Managing Director and CEO. The Risk Management Committee of the Board oversees the
functioning of the Department. The Department has separate teams for individual components of risk i.e. Credit Risk, Market
Risk (including Treasury Mid Office), Operational Risk, Enterprise Risk, Risk Analytics, Risk Data Management and Information
Security Risk. These teams report to the Chief Risk Officer.
IV. CREDIT RISK
Credit risk refers to the deterioration in the credit quality of the borrower or the counter-party adversely impacting the financial
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 financial 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 defined 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, thorough
due diligence through an appraisal process alongside risk vetting of individual exposures at origination and thorough periodic
review (including portfolio review) after sanctioning. Retail credit to individuals and small business is managed through definition
of product criteria, appropriate credit filters and subsequent portfolio monitoring.
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 specific to
market segments such as large and mid-corporates, SME, financial companies, microfinance companies and project finance to
objectively assess underlying risk associated with such exposures.
The credit rating model uses a combination of quantitative and qualitative inputs to arrive at a ‘point-in-time’ view of the
risk profile 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, 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.
The Bank has put in place a hierarchical committee structure based on the size and rating of the exposures for credit sanction
and review; with sanctioning authority rested with higher level committees for larger and lesser rated exposures. Committee of
Directors (COD) is the topmost committee in the hierarchy which is a sub-committee of the Board.
All management level sanctioning committees require mandatory presence of a representative from Risk Department for quorum.
267
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
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 identified early and classified 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.
Geographic concentration for real estate exposures.
Concentration by Industry: Industry analysis plays an important part in assessing the concentration risk within the loan
portfolio. Industries are classified into various categories based on factors such as demand-supply, input related risks,
government policy stance towards the sector and financial strength of the sector in general. Such categorization 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. Borrowers or portfolios are marked for
early warning when signs of weakness or financial deterioration are envisaged in order that timely remedial actions may be
initiated. In-depth sector specific studies are undertaken on portfolios vulnerable to extraneous shocks and the results are shared
with the business departments. The Bank has a well-defined stress testing policy in place and periodic stress testing is undertaken
on various portfolios to gauge the impact of stress situations on the health of portfolio, profitability and capital adequacy.
Retail lending portfolio is the blended mix of Consumer Lending and Retail Rural Lending Portfolios. Secured products (like
mortgage, wheels business) commands a major share of the Consumer Lending Portfolio, as the Bank continues to grow the
unsecured lending book (personal loans and credit card business) albeit with prudent underwriting practice. The Bank has
developed a robust risk management framework at each stage of retail loan cycle i.e. loan acquisition, underwriting and
collections.
Underwriting strategy relies on extensive usage of analytical scoring models which also takes inputs from bureau. The Bank
uses ‘Rules Engine’ which helps customise business rules thereby aiding in faster decision making without compromising on the
underlying risks. Senior Management takes note of movement and direction of risk reported through information published on
structured dashboards.
Definitions and Classification of Non-Performing Assets
Advances are classified 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 installment 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,
•
•
•
268
Annual Report 2017 -18
•
•
•
•
a loan granted for short duration crops will be treated as an NPA if the installments of principal or interest thereon remain
overdue for two crop seasons,
a loan granted for long duration crops will be treated as an 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 specified 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 classified 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 classified 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 identified by the Bank
or internal or external auditors or during RBI inspection but the amount has not been written off fully.
Definition 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 profit and loss account.
CREDIT RISK EXPOSURES
Total Gross Credit Risk Exposure Including Geographic Distribution of Exposure – Position as on 31st March
2018
Fund Based
Non Fund Based *
Total
Domestic
(Outstanding)
Overseas
(Outstanding)
5,916,764
1,154,909
7,071,673
662,167
62,666
724,833
(` in millions)
Total
6,578,931
1,217,575
7,796,506
* 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 2018
Industry Classification
Banking and Finance*
Infrastructure (excluding Power)
- of which Roads and Ports
- of which Telecommunications
Engineering
Chemicals and Chemical products
- of which Petro Chemicals
- of which Drugs and Pharmaceuticals
Trade
(` in millions)
Amount
Fund Based
(Outstanding)
Non-Fund Based
(Outstanding)
554,170
219,698
76,988
58,114
98,274
154,515
12,645
80,943
223,708
173,002
207,944
20,850
87,758
194,099
128,262
80,916
8,392
41,476
269
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Industry Classification
Power Generation & Distribution
Commercial Real Estate
Iron and Steel
Metal and Metal Products
NBFCs
Cement and Cement Products
Food Processing
Petroleum, Coal Products and Nuclear Fuels
Construction
Professional Services
Computer Software
Vehicles, Vehicle Parts and Transport Equipment
Mining and Quarrying (incl. Coal)
Cotton Textiles
Other Textiles
Rubber, Plastic and their Products
Shipping Transportation & Logistics
Entertainment & Media
Gems and Jewellery
Edibile oils and Vanaspati
Other Industries
Residual Exposures
- of which Other Assets
- of which Banking Book Investments
- of which Retail, Agriculture & Others
(` in millions)
Amount
Fund Based
(Outstanding)
Non-Fund Based
(Outstanding)
182,996
168,902
96,474
108,589
97,415
90,001
99,548
45,313
32,428
54,397
33,151
38,247
43,100
37,339
36,539
30,788
26,340
18,384
19,912
8,726
262,727
3,797,250
354,389
893,280
2,549,582
47,091
12,355
41,091
22,341
17,375
17,167
5,194
57,474
47,700
2,689
15,785
10,274
3,301
3,793
3,100
8,563
4,490
9,356
4,585
14,571
50,020
74,477
38,473
-
36,004
1,217,575
Total
* includes Cash, Balances with RBI and Balances with banks and money at call and short notice
6,578,931
As on 31st March 2018, the Bank’s exposure to the industries stated below was more than 5% of the total gross credit exposure
(outstanding):
Sr. No.
Industry Classification
Percentage of the total gross credit exposure
1.
2.
Banking & Finance
Infrastructure (Excluding Power)
9%
5%
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Annual Report 2017 -18
Residual Contractual Maturity Breakdown of Assets – Position as on 31st March 2018(1)
(` in millions)
Maturity Bucket
Cash
Balances
with RBI
Balances
with other
banks(2)
Investments
Advances
Fixed Assets Other assets
1day
2 to 7 days
8 to 14 days
15 to 30 days
31 days to 2 months
Over 2 months and
upto 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
52,580
-
-
-
-
-
-
-
-
-
-
26,788
94,000
9,713
8,529
7,338
5,993
27,813
13,947
2,474
331,161
25,532
56,076
26,629
72,384
33,423
170
40,628
132,265
1,907
3,126
59,208
105,301
75,380
114,003
16,400
14,612
80,913
199,796
20,325
26,691
171,940
281,231
20,202
448
173,465
771,988
6,220
86,722
5
-
98,101
589,792
438,864
2,181,600
52,580
302,230
91,193
1,551,268
4,508,412
1.
2.
Intra-group adjustments are excluded
Including money at call and short notice
Movement of NPAs (including NPIs) – Position as on 31st March 2018
-
-
-
-
-
-
-
-
76
7
3,088
30,929
15,227
45,902
8,343
2,339
51,269
54,797
60,811
65,109
40,425
40,508
191,697
529,511
Particulars
A.
Amount of NPAs (Gross)
-
-
-
-
-
Substandard
Doubtful 1
Doubtful 2
Doubtful 3
Loss
B.
C.
Net NPAs
NPA Ratios
-
-
Gross NPAs (including NPIs) to gross advances (%)
Net NPAs (including NPIs) to net advances (%)
D.
Movement of NPAs (Gross)
-
-
-
-
Opening balance as on 1st April 2017
Additions
Reductions
Closing balance as on 31st March 2018
(` in millions)
Amount
342,870
79,304
118,119
98,254
23,047
24,146
165,983
7.38%
3.69%
212,805
334,573
(204,508)
342,870
271
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Movement of Specific & General Provision – Position as on 31st March 2018
Movement of Provisions
Specific
Provisions
122,981
171,441
(119,840)
(450)
174,132
(` in millions)
General
Provisions
24,893
-
-
(1,288)
23,605
Opening balance as on 1st April 2017
Provision made in 2017-18(1)(2)
Write-offs
Write-back of excess provision
Closing balance as on 31st March 2018
-
-
-
-
-
1.
2.
Includes release of specific provision of ` 76 million on account of exchange rate fluctuation
Includes impact of exchange rate fluctuation of ` 40 million in general provisions
Details of write-offs and recoveries that have been booked directly to the income statement – for the year
ending 31st March 2018
Write-offs that have been booked directly to the income statement
Recoveries that have been booked directly to the income statement
(` in millions)
Amount
1,939
1,829
NPIs and Movement of Provision for Depreciation on Investments – Position as on 31st March 2018
A.
B.
Amount of Non-Performing Investments
Amount of Provision held for Non-performing investments
Movement of provision for depreciation on investments
- Opening balance as on 1st April 2017
C.
- Provision made in 2017-18
- Write-offs/Write-back of excess provision
- Closing balance as on 31st March 2018
Breakup of NPA by major industries – Position as on 31st March 2018
Particulars
Power Generation & Distribution
Infrastructure (excluding Power)
Iron and Steel
Commercial real estate
Engineering
Chemicals and chemical products
Trade
Cement and cement products
Food Processing
Construction
272
(` in millions)
Amount
33,723
26,119
4,099
1,015
(2,569)
2,545
(` in millions)
Amount
Gross NPA Specific Provision
86,134
47,855
34,751
19,032
13,908
9,827
9,130
8,618
6,940
1,287
37,730
22,739
17,235
9,689
8,817
4,197
4,903
4,548
4,529
772
Annual Report 2017 -18
Particulars
Other metal and metal products
Petroleum coal products and nuclear fuels
Banking and Finance
Retail, Agri & Other Industries
Total
(` in millions)
Amount
Gross NPA Specific Provision
2,026
1,623
1,569
100,170
342,870
1,457
663
1,484
55,369
174,132
Note: Specific provisions include NPA and restructured provisions
General provision in Top 5 industries amounts to ` 5,629 million.
Major industries breakup of specific provision and write-off’s during the current period – for the year
ending 31st March 2018
Industry
Specific Provision in Top 5 industries
(` in millions)
Provision
Write-offs
42,140
15,716
Geography wise Distribution of NPA and Provision – Position as on 31st March 2018
Geography
Domestic
Overseas
Total
(` in millions)
Gross NPA
Specific Provision
General Provision
299,376
43,494
342,870
153,317
20,815
174,132
19,511
4,094
23,605
Credit Risk: Use of Rating Agency under the Standardised Approach
The RBI guidelines on capital adequacy require banks to use ratings assigned by specified External Credit Assessment Agencies
(ECAIs) namely Brickworks, CARE, CRISIL, ICRA, India Ratings, SMERA and Infomerics 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, SMERA and Infomerics 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 rating is 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 uses the
issue rating for its comparable unrated exposures to the same borrower, provided that 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 used where 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 are directly used to assign risk-weight to all unrated exposures of the same borrower.
273
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Details of Gross Credit Risk Exposure (Fund based and Non-fund based) based on Risk-Weight – Position
as on 31st March 2018
Below 100% risk weight
100% risk weight
More than 100% risk weight
Deduction from capital funds
V.
CREDIT RISK MITIGATION
(` in millions)
Amount
5,035,841
1,580,971
1,171,364
8,330
The Bank uses various collaterals both financial as well as non-financial, guarantees and credit insurance as credit risk mitigants.
The main financial collaterals include deposits with banks, National Savings Certificate/Kisan Vikas Patra/Life Insurance Policy
and gold, while main non-financial 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 reduces its credit exposure to counterparty with the value of eligible financial 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 financial 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 2018
Covered by:
- Eligible financial collaterals after application of haircuts
- Guarantees/credit derivatives
VI. SECURITISATION
(` in millions)
Amount
147,481
73,761
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. The Bank has not sponsored any special purpose vehicle which is required to be consolidated in the
consolidated financial statements as per accounting norms.
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 the Fixed Income Money Market and Derivatives Association
(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 profit and loss account. The Bank also provides credit enhancement in the form of cash
collaterals and/or by subordination of cash flows to senior pass through certificate 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’.
The Bank follows the standardized approach prescribed by the RBI for the securitization activities. The Bank uses the ratings
assigned by various external credit rating agencies viz. Brickworks, CARE, CRISIL, ICRA, India Ratings, SMERA and Infomerics
for its securitisation exposures.
274
Annual Report 2017 -18
All transfers of assets under securitisation were effected on true sale basis. However, in the year ended 31st March 2018, the
Bank has not securitized any asset.
A. Banking Book
Details of Exposure Securitised by the Bank and subject to Securitisation Framework
Sr.
No.
i
ii
iii
iv
v
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 millions)
-
-
-
-
-
-
Aggregate amount of Securitisation Exposures Retained or Purchased as on 31st March 2018 is given
below
Sr.
No.
i
ii
iii
iv
v
Type of Securitisation
Retained
Securities purchased
Liquidity facility
Credit enhancement (cash collateral)
Other commitments
On Balance
Sheet
(` in millions)
Off Balance
Sheet
-
-
-
-
-
-
-
-
-
-
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)
(` in millions)
Amount
Capital charge
-
-
-
-
-
-
-
-
-
-
-
-
275
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
B.
Trading Book
Details of Exposure Securitised by the Bank and subject to Securitisation Framework
Sr.
No.
i
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 millions)
Amount
-
Aggregate amount of Securitisation Exposures Retained or Purchased as on 31st March 2018 is given
below
Sr.
No.
i
ii
iii
iv
v
Type of Securitisation
Retained
Securities purchased
- Corporate Loans
- Lease Rental
- Priority Sector (auto pool & micro finance)
Liquidity facility
Credit enhancement (cash collateral)
Other commitments
On Balance
Sheet*
(` in millions)
Off Balance
Sheet
-
-
2,224
22,853
-
-
-
-
-
-
-
-
-
-
* 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
i
ii
Exposures subject to Comprehensive Risk Measure for specific risk
- Retained
- Securities purchased
Exposures subject to the securitisation framework for specific risk
Below 100% risk weight
100% risk weight
More than 100% risk weight
iii
Deductions
- Entirely from Tier I capital
- Credit enhancing I/Os deducted from Total Capital
- Credit enhancement (cash collateral)
VII. MARKET RISK IN TRADING BOOK
(` in millions)
Amount
Capital charge
-
-
-
-
-
-
-
-
25,077
721
-
-
-
-
-
-
-
-
-
-
-
-
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’ price, as well as volatility risk in the option book. 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 guidelines and based on
276
Annual Report 2017 -18
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 and document the best practices.
• Market risk identification through elaborate mapping of the Bank’s main businesses to various market risks.
•
•
Statistical measures like Value at Risk (VaR), supplemented by stress tests, back tests and scenario analysis.
Put in place non-statistical measures/limits on positions, gaps, stop loss, duration and option Greeks etc.
• Management Information System (MIS) for timely market risk reporting to senior management functionaries. Key risk
metrics are presented to the Risk Management Committee of the Board through Risk Dash-Boards.
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, size of the investment and trading portfolio, management experience and the Bank’s risk appetite. These limits are
monitored on an intra-day/daily basis by the Treasury Mid-office 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% confidence 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 efficacy 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 has built 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, Net Open Position and daylight limits are allocated to various currencies and maturities into Individual Gap Limits
to monitor concentrations. Tenor wise duration limits have been set up for different categories within a portfolio. Issuer wise
concentration limits are introduced in case of security 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. Some of the limits like currency wise net open position,
stop loss limits and PV01 limits are allocated dealer-wise also, based on their skill and experience, to avoid build up of positions
in a single dealer’s book.
Liquidity Risk
Liquidity Risk means 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 sufficient 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, intraday liquidity monitoring tools and scenario analysis. The Bank’s ALM policy defines 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 profile of the Bank is
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BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
analysed on a static basis by tracking all cash inflows and outflows in the maturity ladder based on the actual maturity and
expected occurrence predicted through behavioral analysis - (for non-maturity items) of cash flows. The liquidity profile 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.
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.
The Bank has adopted the Basel III framework on liquidity standards as prescribed by RBI and has put in place requisite systems
and processes to enable periodical computation and reporting of the Liquidity Coverage Ratio (LCR).
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, co-operative banks, small finance banks and payment banks for determining maximum permissible exposure limits
for counterparties. The key financials, quality of management and the level of corporate governance are captured in the
counterparty rating model. Counterparty limits are monitored and reported daily and internal triggers have been 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 the financials of the counterparties, business need, past
transaction experiences and market conditions. The Bank has also put in place the ‘Derivatives and 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 profiling, countries are classified under seven categories
i.e. insignificant, low, moderate, high, very high, restricted and off-credit. Risk profiling is based on the ratings provided by
Export Credit Guarantee Corporation of India Ltd. (ECGC), Dun & Bradstreet, Standard & Poor’s Banking Industry Country Risk
Assessment (BICRA), 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 and management of exposures.
As a proactive measure of country risk management, Risk department issues ‘Rating Watch’ from time to time. Further, based
on country-specific 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 each of its overseas branches in Singapore, Hong Kong,
Dubai, Colombo, Shanghai and GIFT city branch (International Banking Unit). These country-specific 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 Office.
278
Annual Report 2017 -18
Capital Requirement for Market Risk – Position as on 31st March 2018
Type
Interest rate risk
Foreign exchange risk (including gold)
Equity position risk
VIII. OPERATIONAL RISK
Strategies and Processes
(` in millions)
Amount of Capital
Required
24,407
608
9,863
Operational Risk (OR) 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
defines the roles and responsibilities of the various stakeholders within the Bank. The Bank also has a detailed framework for
operational risk loss data collection, risk and control self-assessment and key risk indicators.
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, Central Outsourcing
Committee, Business Continuity Planning & Management Committee (BCPMC) and IT Security Committee.
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 dedicated operational risk management
unit ensures 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,
business continuity management and information 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.
Critical risks and major 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 Governance Risk and Compliance platform (SAS-EGRC). The IT platform acts as the single repository of processes
and operational, compliance and financial reporting risks. It facilitates capturing of individual risks and the effectiveness of their
controls, tagging of identified risks to processes and products, originates action plans and acts as a repository of all operational
risk events.
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 sign-off process. Similarly, any changes to the existing products/processes are being vetted by the Change
Management Committee.
Key Risk Indicators (KRIs) have been developed for various Business Units of the Bank for effective monitoring of key operational
risks. KRIs for the branches has also been launched as a new initiative to help branches to manage operational risk better.
279
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
The Bank has adopted BCP and IT Disaster Recovery Policy wherein critical activities and system applications have been
defined, recovery plan is in place for these critical activities and system applications to ensure timely recovery of the Bank’s
critical products and services in the event of an emergency.
Regular tests have been carried out to ascertain BCP preparedness. The test reports are shared with senior management on a
regular frequency. Business Continuity Planning & Management Committee (BCPMC) has been formed comprising of senior
functionaries of the Bank, which monitors BCM framework implementation in the Bank.
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 2018.
IX.
INTEREST RATE RISK IN THE BANKING BOOK (IRRBB)
Interest Rate Risk in the Banking Book is measured and monitored in accordance with the guidelines laid out in the Bank’s Asset
Liability Management (ALM) Policy which is based on the RBI “Guidelines on Banks’ Asset Liability Management Framework
– Interest Rate Risk” dated 4th November 2010. Interest Rate Risk is measured in terms of changes in the value of interest rate
sensitive positions across the whole bank i.e. both in the banking and trading books as described below.
The Bank measures and controls interest risk in the banking book using both Earnings at Risk (EaR) which assesses the sensitivity
of its net interest income to parallel movement in interest rates over the 1 year horizon as well as Market Value of its Equity (MVE)
which measures the sensitivity of the present value of all assets and liabilities to interest rate risk in response to given interest
rate movements. The Bank prepares Interest Rate Sensitivity reports which are reviewed against Regulatory and Internal limits.
Internal limits have been established for (a) Earnings at Risk for a 100 bps parallel shift in interest rates over the horizon of 1
year, and (b) 200 bps parallel shift in interest rates for Market Value of Equity impact. Any review of the internal interest rate
risk limits is approved by the ALCO and is ratified by the Risk Management Committee of the Board.
Bucketing of non-maturity liability items for interest rate risk measurement is based on the behavioral analysis methodology for
identification of core and non-core components. Bucketing rules of core and non-core portions in the interest rate sensitivity
statements are laid out in the ALM policy. The Bank does not use any assumptions for prepayment of loans for preparation of
interest rate risk sensitivity reports.
The findings of the various IRRBB measures are submitted to the ALCO, the 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 2018 are given below:
Earnings Perspective
Currency
INR
USD
Residual
Total
280
(` in millions)
Interest Rate Shock
+200 bps
22,056
(486)
320
21,890
-200 bps
(22,056)
486
(320)
(21,890)
Annual Report 2017 -18
Economic Value Perspective
Currency
INR
USD
Residual
Total
(` in millions)
Interest Rate Shock
+200 bps
29,618
1,518
(11,111)
20,025
-200 bps
(29,618)
(1,518)
11,111
(20,025)
Note: Interest Rate Risk in Banking Book is computed only for banks/bank like entities where the inherent business is maturity
transformation of assets and liabilities, thereby resulting in interest rate mismatch. Other subsidiaries whose core business is not
banking activity, IRRBB need not be computed.
X.
EXPOSURES RELATED TO COUNTERPARTY CREDIT RISK
Counterparty credit limits and exposures 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.
Methodology used to assign economic capital and credit limits for counterparty credit exposures
The Bank currently does not assign economic capital for its counterparty credit exposures. The Bank has adopted a methodology
of computing economic capital within the framework of Individual Capital Adequacy Assessment Process (ICAAP) and assesses
the economic capital requirement within this framework. The Bank is adequately capitalized in terms of projected growth for the
next three years and has sufficient capital buffer to account for Pillar II risks.
Policies for securing collateral and establishing credit reserves
The Bank has a policy framework through its Credit Risk Management policy and Collateral Management Policy which stipulates
the eligible credit risk mitigants and management thereof. The Bank has adopted the Comprehensive Approach as suggested by
RBI, which allows fuller offset of collateral against exposures, by effectively reducing the exposure amount by the value ascribed
to the collateral. Under this approach, the Bank takes eligible financial collateral on an account-by-account basis, to reduce
the credit exposure to counterparty while calculating the capital requirements to take account of the risk mitigating effect of the
collateral. The Bank also has a well-defined NPA management & recovery policy for establishing credit reserves on a prudential
basis apart from being in consonance with the regulatory guidelines.
Policies with respect to wrong-way risk exposures
Wrong way risk associated with counterparty credit exposures can be of two types – General i.e. when the PD of counterparties
is positively correlated with general market risk factors and Specific i.e. when the exposure to a particular counterparty and the
PD of the counterparty providing credit risk mitigation for the exposure are highly correlated. The Bank currently does not have
a complete policy framework to address the wrong way risk. In the interim, the general wrong way risk is taken care of through
monitoring of concentration of counterparty credit exposures on account of derivatives. Also as per the credit risk management
policy, collaterals whose values have a material positive correlation with the credit quality of the borrower is likely to provide little
or no credit protection during stress, are not recognized for credit enhancement, thus mitigating any specific wrong way risk.
Impact of the amount of collateral the Bank would have to provide given a credit rating downgrade
The Bank currently assesses the liquidity impact and related costs of a possible downgrade as part of the bank-wide stress testing
exercise. The Bank has already adopted Credit Value Adjustment (CVA) based on the regulatory guidelines on the asset side for
capital computation purposes. The current regulatory guidelines do not require estimation of changes in collateral requirement
in case of a likely rating downgrade of a Bank and the Bank also does not make such an assessment currently. However, the
Bank is in the process of developing an internal methodology to estimate the changes in liabilities to counterparties in the event
of its rating downgrade.
281
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
IRS/CCS/FRA
60,756
-
60,756
-
60,756
207,812
-
-
(` in millions)
Options
3,912
-
3,912
-
3,912
16,706
-
-
(` in millions)
Amount
Reference No.
263,248
A1 + A2
377,411
B1+B2+B3+B4
+B5+B6-B7
Quantitative Disclosures
Particulars
Gross Positive Fair Value of Contracts
Netting Benefits
Netted Current Credit Exposure
Collateral held (e.g. Cash, G-sec, etc.)
Net Derivatives Credit Exposure
Exposure amount (under CEM)
Notional value of Credit Derivative hedges
Credit derivative transactions that create exposures to CCR
XI. COMPOSITION OF CAPITAL
Particulars
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Common Equity Tier 1 capital: instruments and reserves
Directly issued qualifying common share capital plus related stock surplus (share
premium)
Retained earnings
Accumulated other comprehensive income (and other reserves)
Directly issued capital subject to phase out from CET1 (only applicable to non-joint
stock companies)
Common share capital issued by subsidiaries and held by third parties (amount
allowed in group CET1)
-
-
-
Common Equity Tier 1 capital before regulatory adjustments
640,659
Common Equity Tier 1 capital: regulatory adjustments
Prudential valuation adjustments
Goodwill (net of related tax liability)
Intangibles (net of related tax liability)
Deferred tax assets
Cash-flow hedge reserve
Shortfall of provisions to expected losses
Securitisation gain on sale
Gains and losses due to changes in own credit risk on fair valued liabilities
Defined-benefit pension fund net assets
Investments in own shares (if not already netted off paid-in capital on reported
balance sheet)
Reciprocal cross-holdings in common equity
Investments in the capital of banking, financial and insurance entities that are outside
the scope of regulatory consolidation, net of eligible short positions, where the bank
does not own more than 10% of the issued common share capital (amount above
10% threshold)
Significant investments in the common stock of banking, financial and insurance
entities that are outside the scope of regulatory consolidation, net of eligible short
positions (amount above 10% threshold)
1,190
2,930
B8
-
5,400
-
-
-
-
-
-
785
-
-
-
20
Mortgage servicing rights (amount above 10% threshold)
282
Annual Report 2017 -18
Sr.
No.
21
22
23
24
25
26
26a
26b
26c
Particulars
Deferred tax assets arising from temporary differences (amount above 10% threshold,
net of related tax liability)
Amount exceeding the 15% threshold
of which: significant investments in the common stock of financial entities
of which: mortgage servicing rights
of which: deferred tax assets arising from temporary differences
National specific regulatory adjustments (26a+26b+26c+26d)
Of which: Investments in the equity capital of the unconsolidated insurance
subsidiaries
of which: Investments in the equity capital of unconsolidated non-financial subsidiaries
of which: Shortfall in the equity capital of majority owned financial entities which have
not been consolidated with the bank
26d
of which: Unamortized pension funds expenditures
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional
Tier 1 and Tier 2 to cover deductions
Total regulatory adjustments to Common equity Tier 1
Common Equity Tier 1 capital (CET 1)
Additional Tier 1 capital: instruments
Directly issued qualifying Additional Tier 1 instruments plus related stock surplus (share
premium) (31+32)
of which: classified as equity under applicable accounting standards (Perpetual Non-
Cumulative Preference Shares)
(` in millions)
Amount
Reference No.
-
-
-
-
-
-
-
-
-
-
-
10,305
630,354
70,000
-
of which: classified as liabilities under applicable accounting standards (Perpetual
debt Instruments)
70,000
C1
Directly issued capital instruments subject to phase out from Additional Tier 1
Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by
subsidiaries and held by third parties (amount allowed in group AT1)
of which: instruments issued by subsidiaries subject to phase out
Additional Tier 1 capital before regulatory adjustments
Additional Tier 1 capital: regulatory adjustments
Investments in own Additional Tier 1 instruments
Reciprocal cross-holdings in Additional Tier 1 instruments
Investments in the capital of banking, financial and insurance entities that are outside
the scope of regulatory consolidation, net of eligible short positions, where the
bank does not own more than 10% of the issued common share capital of the entity
(amount above 10% threshold)
Significant investments in the capital of banking, financial and insurance entities that
are outside the scope of regulatory consolidation (net of eligible short positions)
National specific regulatory adjustments (41a+41b)
Of which: Investments in the Additional Tier 1 capital of unconsolidated insurance
subsidiaries
Of which: Shortfall in the Additional Tier 1 capital of majority owned financial entities
which have not been consolidated with the bank
Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover
deductions
Total regulatory adjustments to Additional Tier 1 capital
-
-
-
70,000
-
1
-
-
-
-
-
-
1
283
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
41a
41b
42
43
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES Particulars
Sr.
No.
(` in millions)
Amount
Reference No.
Additional Tier 1 capital (AT1)
Tier 1 capital (T1 = CET1 + AT1) (29 + 44)
69,999
700,353
Tier 2 capital: instruments and provisions
Directly issued qualifying Tier 2 instruments plus related stock surplus
Directly issued capital instruments subject to phase out from Tier 2
115,800
44,550
C2
C2
Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued
by subsidiaries and held by third parties (amount allowed in group Tier 2)
of which: instruments issued by subsidiaries subject to phase out
-
-
Provisions
24,673
D1+D2+D3+D4
Tier 2 capital before regulatory adjustments
185,023
Tier 2 capital: regulatory adjustments
Investments in own Tier 2 instruments
Reciprocal cross-holdings in Tier 2 instruments
Investments in the capital of banking, financial and insurance entities that are outside
the scope of regulatory consolidation, net of eligible short positions, where the
bank does not own more than 10% of the issued common share capital of the entity
(amount above the 10% threshold)
Significant investments in the capital banking, financial and insurance entities that are
outside the scope of regulatory consolidation (net of eligible short positions)
National specific regulatory adjustments (56a+56b)
of which: Investments in the Tier 2 capital of unconsolidated subsidiaries
of which: Shortfall in the Tier 2 capital of majority owned financial entities which have
not been consolidated with the bank
Total regulatory adjustments to Tier 2 capital
Tier 2 capital (T2)
Total capital (TC = T1 + T2) (45 + 58c)
Total risk weighted assets (60a + 60b + 60c)
of which: total credit risk weighted assets
of which: total market risk weighted assets
of which: total operational risk weighted assets
Capital ratios and buffers
Common Equity Tier 1 (as a percentage of risk weighted assets)
Tier 1 (as a percentage of risk weighted assets)
Total capital (as a percentage of risk weighted assets)
Institution specific buffer requirement (minimum CET1 requirement plus capital
conservation and countercyclical buffer requirements, expressed as a percentage of
risk weighted assets)
of which: capital conservation buffer requirement
of which: bank specific countercyclical buffer requirement
of which: G-SIB buffer requirement
Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted
assets)
National minima (if different from Basel III)
National Common Equity Tier 1 minimum ratio (if different from Basel III minimum)
National Tier 1 minimum ratio (if different from Basel III minimum)
-
-
-
-
-
-
-
-
185,023
885,376
5,340,943
4,461,560
387,537
491,846
11.80%
13.11%
16.58%
7.38%
1.88%
-
-
-
5.50%
7.00%
44
45
46
47
48
49
50
51
52
53
54
55
56
56a
56b
57
58
59
60
60a
60b
60c
61
62
63
64
65
66
67
68
69
70
284
Annual Report 2017 -18
Sr.
No.
71
72
73
74
75
76
77
78
Particulars
(` in millions)
Amount
Reference No.
National total capital minimum ratio (if different from Basel III minimum)
Amounts below the thresholds for deduction (before risk weighting)
Non-significant investments in the capital of other financial entities
Significant investments in the common stock of financial entities
Mortgage servicing rights (net of related tax liability)
9.00%
22,371
-
-
Deferred tax assets arising from temporary differences (net of related tax liability)
63,694
Applicable caps on the inclusion of provisions in Tier 2
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to
standardised approach (prior to application of cap)
Cap on inclusion of provisions in Tier 2 under standardised approach
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal
ratings-based approach (prior to application of cap)
79
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach
Capital instruments subject to phase-out arrangement
(only applicable between March 31, 2017 and March 31, 2022)
80
81
82
83
84
85
Current cap on CET1 instruments subject to phase out arrangements
Amount excluded from CET1 due to cap (excess over cap after redemptions and
maturities)
Current cap on AT1 instruments subject to phase out arrangements
Amount excluded from AT1 due to cap (excess over cap after redemptions and
maturities)
Current cap on T2 instruments subject to phase out arrangements
Amount excluded from T2 due to cap (excess over cap after redemptions and
maturities)
* NA – Not Applicable
Notes to the Template
Row No. of the
template
Particular
24,673
55,770
NA
NA
NA
NA
NA
NA
46,288
-
10
19
26b
Deferred tax assets associated with accumulated losses
Deferred tax assets (excluding those associated with accumulated losses) net of Deferred tax
liability
Total as indicated in row 10
If investments in insurance subsidiaries are not deducted fully from capital and instead considered
under 10% threshold for deduction, the resultant increase in the capital of the bank
of which: Increase in Common Equity Tier 1 capital
of which: Increase in Additional Tier 1 capital
of which: Increase in Tier 2 capital
If investments in the equity capital of unconsolidated non-financial subsidiaries are not deducted
and hence, risk weighted then:
(i)
(ii)
Increase in Common Equity Tier 1 capital
Increase in risk weighted assets
50
Eligible Provisions included in Tier 2 capital
Eligible Revaluation Reserves included in Tier 2 capital
Total of row 50
(` in million)
-
5,400
5,400
-
-
-
-
-
-
24,673
-
24,673
285
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
XII. THE RECONCILIATION OF REGULATORY CAPITAL ITEMS AS ON 31st MARCH 2018 IS GIVEN BELOW:
Step 1
Particulars
Sr.
No.
A
I
Capital and Liabilities
Paid-up Capital
Reserves & Surplus
Minority Interest
Total Capital
II
Deposits
of which: Deposits from banks
of which: Customer deposits
III
Borrowings
i. Borrowings in India
(a) From RBI
(b) From banks
(c) From other institutions & agencies
ii. Borrowings Outside India
of which: Capital Instruments
IV
Other liabilities & provisions
B
I
II
III
IV
V
Total
Assets
Cash and balances with Reserve Bank of India
Balance with banks and money at call and short notice
Investments
of which:
Government securities
Shares
Debentures & Bonds
Subsidiaries / Joint Ventures / Associates
Others (Commercial Papers, Mutual Funds etc.)
Loans and advances
Fixed assets
Other assets
of which:
Goodwill and intangible assets
Deferred tax assets (Net)
VI
VII
Goodwill on consolidation
Debit balance in Profit & Loss account
Total Assets
286
Balance sheet
as in financial
statements
(` in millions)
Balance
sheet under
regulatory
scope of
consolidation
5,133
636,941
695
642,769
5,133
636,941
695
642,769
4,556,578
4,556,578
184,413
4,372,165
1,557,671
807,084
61,000
25,851
720,233
750,587
282,050
280,016
184,413
4,372,165
1,557,671
807,084
61,000
25,851
720,233
750,587
282,050
280,016
7,037,034
7,037,034
354,811
84,297
354,811
84,297
1,530,367
1,530,367
1,042,770
1,042,770
16,130
314,508
-
16,130
314,508
-
156,959
156,959
4,498,436
4,498,436
40,488
528,635
40,488
528,635
2,930
69,094
-
-
2,930
69,094
-
-
7,037,034
7,037,034
Annual Report 2017 -18
Step 2
Particulars
Sr.
No.
A
I
Capital and Liabilities
Paid-up Capital
Reserves & Surplus
of which:
Statutory Reserve
Share Premium
Investment Reserve Account
General Reserve
Capital Reserve
Foreign Currency Translation Reserve
of which: considered under capital funds
Reserve Fund
Balance in Profit/Loss A/c
of which: Proposed dividend
Balance sheet
as in financial
statements
Balance
sheet under
regulatory
scope of
consolidation
5,133
636,941
115,760
258,115
1,035
3,944
19,673
1,521
-
1,350
235,543
5,133
636,941
115,760
258,115
1,035
3,944
19,673
1,521
1,140
1,350
235,543
Minority Interest
695
695
of which: amount eligible for CET I
Total Capital
II
Deposits
of which:
Deposits from banks
Customer deposits
III
Borrowings
i. Borrowings in India
(a) From RBI
(b) From banks
(c) From other institutions & agencies
ii. Borrowings Outside India
of which: Capital Instruments
of which:
(a) Eligible AT1 capital
(b) Eligible Tier 2 capital
642,769
642,769
4,556,578
4,556,578
184,413
184,413
4,372,165
4,372,165
1,557,671
1,557,671
807,084
61,000
25,851
720,233
750,587
282,050
807,084
61,000
25,851
720,233
750,587
282,050
70,000
160,350
IV
Other liabilities & provisions
280,016
280,016
of which:
Provision for Standard Advances
Provision for Unhedged Foreign Currency Exposure
Total
22,482
1,123
22,482
1,123
7,037,034
7,037,034
(` in millions)
Reference No.
A1
-
B1
A2
D1
B2
B3
B4
B5
B6
B7
-
-
-
-
-
-
-
-
-
-
-
-
C1
C2
-
D2
D3
287
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Particulars
Sr.
No.
Balance sheet
as in financial
statements
Balance
sheet under
regulatory
scope of
consolidation
Reference No.
B
I
II
Assets
Cash and balances with Reserve Bank of India
Balance with banks and money at call and short notice
Investments
of which:
Government securities
Shares
Debentures & Bonds
Subsidiaries / Joint Ventures / Associates
354,811
84,297
354,811
84,297
1,530,367
1,530,367
1,042,770
1,042,770
16,130
314,508
-
16,130
314,508
-
Others (Commercial Papers, Mutual Funds etc.)
156,959
156,959
III
Loans and advances
4,498,436
4,498,436
floating provision adjusted in loans & advances
IV
V
Fixed assets
Other assets
of which:
Goodwill and intangible assets
Deferred tax assets (Net)
Goodwill on consolidation
Debit balance in Profit & Loss account
VI
VII
Total Assets
DF XIII, XIV & XV
-
40,488
528,635
2,930
69,094
33
40,488
528,635
2,930
69,094
-
-
7,037,034
7,037,034
-
-
-
-
-
-
-
-
-
D4
-
-
B8
-
-
-
Disclosures pertaining to main features of equity and debt instruments, terms and conditions of equity and debt instruments and
remuneration of Key Management Personnel have been disclosed separately on the Bank’s website under the ‘Regulatory Disclosure
Section’. The link to this section is as follows:
https://www.axisbank.com/shareholders-corner/regulatory-disclosure/basel-III-disclosures
XVI. EQUITIES – DISCLOSURE FOR BANKING BOOK POSITIONS
The risk oversight relating to the equity portfolio is part of the overall independent risk management structure of the Bank and is
subjected to the risk management processes and policies approved by the Bank.
In accordance with the RBI guidelines, investments are classified at the time 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 classified as HFT securities. As per the RBI guidelines, HFT
securities, which remain unsold for a period of 90 days are reclassified as AFS securities.
Investments that the Bank intends to hold till maturity are classified under the HTM category. Investments in the equity of
subsidiaries/joint ventures are categorized as HTM in accordance with the RBI guidelines. All other investments are classified
as AFS securities.
288
Annual Report 2017 -18
Equity investments carried under the HTM category are carried at acquisition cost. Realised gains on investments under the HTM
category are recognised in the Profit and Loss Account and subsequently appropriated to Capital Reserve account (net of taxes
and transfer to statutory reserves) in accordance with the RBI guidelines. Losses are recognised in the Profit and Loss Account.
The Bank does not have any equity under the Banking Book.
XVII. COMPARISION OF ACCOUNTING ASSETS AND LEVERAGE RATIO EXPOSURE MEASURE AS ON 31st MARCH
2018
Particulars
Total consolidated assets as per published financial statements
Adjustments for investments in banking, financial, insurance or commercial entities that are consolidated for
accounting purpose but outside the scope of regulatory consolidation
Adjustments for fiduciary assets recognized on the balance sheet pursuant to the operative accounting framework
but excluded from the leverage ratio exposure measure
Adjustments for derivative financial instruments
Adjustment for securities financing transactions(i.e. repos and similar secured lending)
Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off-balance sheet
exposures)
Other adjustments
Leverage ratio exposure
XVIII. LEVERAGE RATIO COMMON DISCLOSURE TEMPLATE AS ON 31st MARCH 2018
Particulars
On-balance sheet exposures
1
2
3
On-balance sheet items(excluding derivatives and SFTs, but including collateral)
(Asset amounts deducted in determining Basel III Tier 1 capital)
Total on-balance sheet exposures(excluding derivatives and SFTs)(sum of lines 1 and 2)
Derivative Exposures
Replacement cost associated with all derivatives transactions (i.e. net of eligible cash variation margin)
Add-on amounts for PFE associated with all derivatives transactions
Gross-up for derivatives collateral provided where deducted from the balance sheet assets pursuant to the
operative accounting framework
(Deductions of receivables assets for cash variation margin provided in derivatives transactions)
(Exempted CCP leg of client-cleared trade exposures)
Adjusted effective notional amount of written credit derivatives
(Adjusted effective notional offsets and add-on deductions for written credit derivatives)
4
5
6
7
8
9
10
11
Total derivative exposures (sum of lines 4 to 10)
224,519
Securities financing transaction exposures
12
13
14
15
16
Gross SFT assets (with no recognition of netting), after adjusting for sale accounting transactions
(Netted amounts of cash payables and cash receivables of gross SFT assets)
CCR Exposure for SFT Assets
Agent transaction exposures
Total securities financing transaction exposures (sum of lines 12 to 15)
Other off-balance sheet exposures
-
-
-
-
-
289
(` in millions)
Amount
7,037,034
-
-
158,712
-
919,510
(9,115)
8,106,141
(` in millions)
Leverage ratio
framework
6,971,228
(9,115)
6,962,112
64,668
159,851
-
-
-
-
-
BUSINESS REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS BASEL III DISCLOSURES
Particulars
17
18
19
Off-balance sheet exposure at gross notional amount
(Adjustments for conversion to credit equivalent amounts)
Off-balance sheet items (sum of lines 17 and 18)
Capital and total exposures
20
21
Tier 1 capital
Total exposures (sum of lines 3,11,16 and 19)
Leverage Ratio
22
Basel III leverage ratio
(` in millions)
Leverage ratio
framework
2,667,006
(1,747,496)
919,510
700,353
8,106,141
8.64%
XIX. RECONCILIATION OF TOTAL PUBLISHED BALANCE SHEET SIZE AND ON BALANCE SHEET EXPOSURE
Particulars
Sr.
No.
Total consolidated assets as per published financial statements
Replacement cost associated with all derivatives transactions, i.e. net of eligible cash variation margin
Adjustment for securities financing transactions (i.e. repos and similar secured lending)
Adjustment for entities outside the scope of regulatory consolidation
On-balance sheet items(excluding derivatives and SFTs, but including collateral)
6,971,228
(` in millions)
Amount
7,037,034
(65,806)
-
-
1
2
3
4
5
290
Annual Report 2017 -18 NOTICE
NOTICE is hereby given that the Twenty Fourth Annual General Meeting of the Members of Axis Bank Limited (the “Bank”) will be
held at 10.00 A.M. on Wednesday, 20th June 2018 at J. B. Auditorium, Ahmedabad Management Association, AMA Complex,
ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad - 380 015, Gujarat, to transact the following businesses:
ORDINARY BUSINESS:
1.
To receive, consider and adopt:
2.
3.
4.
a.
b.
the audited standalone financial statements of the Bank for the financial year ended 31st March 2018 and the Reports of
the Directors and the Auditors thereon; and
the audited consolidated financial statements for the financial year ended 31st March 2018 and the Report of the Auditors
thereon.
To appoint a director in place of Shri Rajiv Anand (DIN 02541753), who retires by rotation and being eligible, has offered
himself for re-appointment.
To appoint a director in place of Shri Rajesh Dahiya (DIN 07508488), who retires by rotation and being eligible, has offered
himself for re-appointment.
To appoint M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai, (Registration No. 103523W/W100048) as the
Statutory Auditors of the Bank and to consider, and in this connection, if thought fit, to pass with or without modification(s), the
following Resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013,
read with the relevant rules made thereunder, Section 30 and all other applicable provisions of the Banking Regulation Act,
1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from time to time, and
any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment thereof, for the time
being in force), approval of the Members of the Bank be and is hereby accorded to the appointment of M/s Haribhakti & Co.
LLP, Chartered Accountants, Mumbai, having Registration Number 103523W/W100048, issued by the Institute of Chartered
Accountants of India, as the Statutory Auditors of the Bank, in place of M/s S. R. Batliboi & Co. LLP, Chartered Accountants,
Mumbai, the retiring auditors of the Bank and to hold office as such from the conclusion of the Twenty Fourth Annual General
Meeting until the conclusion of the Twenty Eighth Annual General Meeting, subject to the approval of the RBI, and on such terms
and conditions, including remuneration, as may be approved by the Audit Committee of the Board of Directors of the Bank.”
SPECIAL BUSINESS:
5.
To consider, and if thought fit, to pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 152 and all other applicable provisions of the Companies Act,
2013, read with the relevant rules made thereunder, applicable provisions of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, Section 10A (2A) and all other applicable provisions
of the Banking Regulation Act, 1949 and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in
this regard, from time to time, and any other applicable laws (including any statutory amendment(s), modification(s), variation
or re-enactment thereof, for the time being in force) and the provisions of the Articles of Association of Axis Bank Limited (the
“Bank”), Shri Stephen Pagliuca (DIN 07995547), who was appointed as an Additional Non-Executive (Nominee) Director
of the Bank pursuant to the nomination received from BC Asia Investments VII Limited, Intergral Investments South Asia IV and
BC Asia Investment III Limited, with effect from 19th December 2017 and who holds office as such upto the date of this Annual
General Meeting, approval of the Members of the Bank be and is hereby accorded to the appointment of Shri Stephen Pagliuca
as the Non–Executive (Nominee) Director of the Bank, for a period of four (4) consecutive years, with effect from 19th December
2017 AND THAT Shri Stephen Pagliuca shall not be liable to retire by rotation during the said period.”
6.
To consider, and if thought fit, to pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197, Schedule V and all other applicable provisions of the Companies
Act, 2013, read with the relevant rules made thereunder, Section 35B and all other applicable provisions of the Banking
Regulation Act, 1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from
time to time and any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment
thereof, for the time being in force) and the provisions of the Articles of Association of Axis Bank Limited (the “Bank”), approval
1
Twenty Fourth Annual Report 2017-18
of the Members of the Bank be and is hereby accorded to the remuneration payable to Dr. Sanjiv Misra (DIN 03075797), as
the Non-Executive (Part-Time) Chairman of the Bank, with effect from 18th July 2018, detailed as under, subject to the approval
of the RBI:
Particulars
Remuneration
Company Car
Touring
Sitting Fees
Amount
` 33,00,000 p.a.
Free use of Bank’s car for official and private purposes.
Travelling and official expenses to be borne by the Bank for Board functions as a Chairman of the Bank.
:
:
:
: As payable to other Non-Executive Directors for attending meetings of the Board and Committees.
“RESOLVED FURTHER THAT the Directors of the Bank be and are hereby severally authorized to execute all such agreements,
documents, instruments and writings as deemed necessary, file requisite forms or applications with statutory/regulatory
authorities, with the power to settle all questions, difficulties or doubts that may arise in this regard, as he/she may in its sole
and absolute discretion deem fit, and to do all such acts, deeds, matters and things as he/she may consider necessary and
desirable and to delegate all or any of its powers herein conferred to any Director(s)/ Officer(s) of the Bank, to give effect to this
Resolution.”
7.
To consider, and if thought fit, to pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 196 and all other applicable provisions of the Companies Act, 2013,
read with the relevant rules made thereunder, Section 35B and all other applicable provisions of the Banking Regulation Act,
1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from time to time and
any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment thereof, for the time
being in force) and the provisions of the Articles of Association of Axis Bank Limited (the “Bank”), approval of the Members of
the Bank be and is hereby accorded to the re-appointment of Smt. Shikha Sharma (DIN 00043265) as the Managing Director
& CEO of the Bank, from 1st June 2018 up to 31st December 2018 (both days inclusive).”
“RESOLVED FURTHER THAT pursuant to the provisions of Section 197, Schedule V and all other applicable provisions of
the Companies Act, 2013, read with the relevant rules made thereunder, Section 35B and all other applicable provisions of
the Banking Regulation Act, 1949, and the rules, guidelines and circulars issued by the RBI, in this regard, from time to time
and any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment thereof, for the
time being in force) and the provisions of the Articles of Association of the Bank, approval of the Members of the Bank, be and
is hereby accorded to the payment of remuneration by way of salary, allowances and perquisites to Smt. Shikha Sharma (DIN
00043265), as the Managing Director & CEO of the Bank, from 1st June 2018 upto 31st December 2018 (both days inclusive),
detailed as under subject to the approval of the RBI:
Particulars
Salary
Leave Fare Concession
Perquisites
House Rent Allowance
Residence
Provident Fund
:
:
:
:
:
Amount
` 3,15,94,000 p.a.
` 14,76,000 p.a.
`1,05,38,000 p.a. (in lieu of Bank’s owned/leased accommodation).
Leased accommodation to be provided by the Bank.
12% of basic pay with equal contribution by the Bank or as may be decided upon by the Board/Trustees,
from time to time.
Gratuity
: One month’s salary for each completed year of service or part thereof (on a pro-rata basis).
Superannuation
: 10% of basic pay p.a.
Travelling Allowances
: As per the Bank’s Policy.
(i)
Group mediclaim facility as available to the other employees of the Bank.
Medical benefits
Club fees
:
:
(ii)
Reimbursement of full medical expenses for self and family.
Membership of two clubs (excluding life membership fees). All official expenses in connection with such
membership incurred would be reimbursed by the Bank.
Conveyance & Telephone
: As per the Bank’s Policy.
2
Twenty Fourth Annual Report 2017-18
Particulars
Amount
Personal Insurance
:
Shall be covered under the Group Savings Linked Insurance Scheme (GSLI) and the Personal Accident Policy
as per the Bank’s Rules.
Newspapers & Periodical
: As per requirement.
Entertainment
Utility Bills
:
:
Expenditure on official entertainment would be on the Bank’s account.
To be reimbursed at actuals up to a limit of ` 3,75,000 p.a.
Furnishing Allowance
: At actuals up to a limit of ` 30,00,000 over a period of three years.
Car
Leave
Stock Options
Variable Pay
Loans
Other terms
: As per the Bank’s Policy.
: As per the Bank’s Rule.
:
Stock options as may be granted by the Nomination and Remuneration Committee, from time to time, subject
to the approval of the RBI.
: As approved by the Nomination and Remuneration Committee/Board, subject to the approval of the RBI.
:
Loan facilities to be provided as per the Bank’s policy, at the rate of interest applicable to other employees.
: As per the Bank’s Staff Rules and as may be agreed by the Board, from time to time.
“RESOLVED FURTHER THAT the Directors of the Bank be and are hereby severally authorized to execute all such agreements,
documents, instruments and writings as deemed necessary, file requisite forms or applications with statutory/regulatory
authorities, with the power to settle all questions, difficulties or doubts that may arise in this regard as he/she may in its sole
and absolute discretion deem fit and to do all such acts, deeds, matters and things as he/she may consider necessary and
desirable and to delegate all or any of its powers herein conferred to any Director(s)/ Officer(s) of the Bank, to give effect to this
Resolution.”
8.
To consider, and if thought fit, to pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197, Schedule V and all other applicable provisions of the Companies
Act, 2013, read with the relevant rules made thereunder, Section 35B and all other applicable provisions of the Banking
Regulation Act, 1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from
time to time and any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment
thereof, for the time being in force) and the provisions of the Articles of Association of Axis Bank Limited (the “Bank”), approval
of the Members of the Bank be and is hereby accorded to the revision in the remuneration by way of salary, allowances and
perquisites payable to Shri V. Srinivasan (DIN 00033882), as the Deputy Managing Director of the Bank, with effect from 1st
June 2018, detailed as under, subject to the approval of the RBI:
Particulars
Salary
Leave Fare Concession
Perquisites
House Rent Allowance
Residence
Provident Fund
:
:
:
:
:
Amount
` 2,23,56,000 p.a.
` 6,05,000 p.a.
` 55,87,000 p.a. (in lieu of Bank’s owned / leased accommodation).
Leased accommodation to be provided by the Bank.
12% of basic pay with equal contribution by the Bank or as may be decided upon by the Board/Trustees,
from time to time.
Gratuity
: One month’s salary for each completed year of service or part thereof (on a pro-rata basis).
Superannuation
: 10% of basic pay p.a.
Travelling Allowances
: As per the Bank’s Policy.
Medical benefits
:
(i)
Group mediclaim facility as available to the other employees of the Bank.
(ii)
Reimbursement of full medical expenses for self and family.
Club fees
: Membership of two clubs (excluding life membership fees). All official expenses in connection with such
membership incurred would be reimbursed by the Bank.
Conveyance & Telephone
: As per the Bank’s Policy.
3
Twenty Fourth Annual Report 2017-18
Particulars
Amount
Personal Insurance
: Shall be covered under the Group Savings Linked Insurance Scheme (GSLI) and the Personal Accident Policy
Newspapers & Periodicals
: As per requirement.
as per the Bank’s Rules.
Entertainment
Utility Bills
:
:
Expenditure on official entertainment would be on the Bank’s account.
To be reimbursed at actuals up to a limit of ` 1,32,000 p.a.
Furnishing Allowance
: At actuals up to a limit of ` 15,00,000 over a period of three years.
Car
Leave
Stock Options
Variable Pay
Loans
Other terms
: As per the Bank’s Policy.
: As per the Bank’s Rule.
:
Stock options as may be granted by the Nomination and Remuneration Committee, from time to time, subject
to the approval of the RBI.
: As approved by the Nomination and Remuneration Committee/Board subject to the approval of the RBI.
:
Loan facilities to be provided as per the Bank’s policy, at the rate of interest applicable to other employees.
: As per the Bank’s Staff Rules and as may be agreed by the Board, from time to time.
“RESOLVED FURTHER THAT the Directors of the Bank be and are hereby severally authorized to execute all such agreements,
documents, instruments and writings as deemed necessary, file requisite forms or applications with statutory/regulatory
authorities, with the power to settle all questions, difficulties or doubts that may arise in this regard as he/she may in its sole
and absolute discretion deem fit and to do all such acts, deeds, matters and things as he/she may consider necessary and
desirable and to delegate all or any of its powers herein conferred to any Director(s)/ Officer(s) of the Bank, to give effect to this
Resolution.”
9.
To consider, and if thought fit to, pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197, Schedule V and all other applicable provisions of the Companies
Act, 2013, read with the relevant rules made thereunder, Section 35B and all other applicable provisions of the Banking
Regulation Act, 1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from
time to time and any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment
thereof, for the time being in force) and the provisions of the Articles of Association of Axis Bank Limited (the “Bank”), approval
of the Members of the Bank be and is hereby accorded to the revision in the remuneration by way of salary, allowances and
perquisites payable to Shri Rajiv Anand (DIN 02541753), as the Executive Director (Retail Banking) of the Bank, for a period
of one (1) year, with effect from 1st June 2018, detailed as under, subject to the approval of the RBI:
Particulars
Salary
Leave Fare Concession
Perquisites
House Rent Allowance
Residence
Provident Fund
Gratuity
Superannuation
Travelling Allowances
Medical benefits
Club fees
Conveyance & Telephone
:
:
:
:
:
:
:
:
:
:
:
4
Amount
` 1,64,84,000 p.a.
` 5,50,000 p.a.
` 54,39,720 p.a. (in lieu of Bank’s owned / leased accommodation)
Leased accommodation to be provided by the Bank.
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 a pro-rata basis)
10% of basic pay p.a.
As per Bank’s Policy.
(i)
Group mediclaim facility as available to the other employees of the Bank.
(ii)
Reimbursement of full medical expenses for self and family.
Membership of two clubs (excluding life membership fees). All official expenses in connection with such
membership incurred would be reimbursed by the Bank.
As per the Bank’s Policy.
Twenty Fourth Annual Report 2017-18
Particulars
Amount
Personal Insurance
Newspapers & Periodical
Entertainment
Utility Bills
Furnishing Allowance
Car
Leave
Employees Stock Options
(ESOP)
Variable Pay
Loans
Other terms
:
:
:
:
:
:
:
:
:
:
:
Shall be covered under the Group Savings Linked Insurance Scheme (GSLI) and the Personal Accident
Policy as per the Bank’s Rules.
As per requirement.
Expenditure on official entertainment would be on the Bank’s account.
To be reimbursed at actuals up to a limit of ` 1,32,000 p.a.
At actual up to a limit of ` 15,00,000 over a period of three years.
As per the Bank’s Policy.
As per the Bank’s Rule.
Stock options as may be granted by the Nomination and Remuneration Committee from time to time,
subject to the approval of the RBI.
As approved by the Nomination and Remuneration Committee/ Board, subject to the approval of the RBI.
Loan facilities to be provided as per the Bank’s Policy, at the rate of interest applicable to other employees.
As per the Bank’s Staff Rules and as may be agreed by the Board, from time to time.
“RESOLVED FURTHER THAT the Directors of the Bank be and are hereby severally authorized to execute all such agreements,
documents, instruments and writings as deemed necessary, file requisite forms or applications with statutory/regulatory
authorities, with the power to settle all questions, difficulties or doubts that may arise in this regard as he/she may in its sole
and absolute discretion deem fit and to do all such acts, deeds, matters and things as he/she may consider necessary and
desirable and to delegate all or any of its powers herein conferred to any Director(s)/ Officer(s) of the Bank, to give effect to this
Resolution.”
10. To consider, and if thought fit, to pass with or without modification(s), the following Resolution, as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197, Schedule V and all other applicable provisions of the Companies
Act, 2013, read with the relevant rules made thereunder, Section 35B and all other applicable provisions of the Banking
Regulation Act, 1949, and the rules, guidelines and circulars issued by the Reserve Bank of India (“RBI”), in this regard, from
time to time and any other applicable laws (including any statutory amendment(s), modification(s), variation or re-enactment
thereof, for the time being in force) and the provisions of the Articles of Association of Axis Bank Limited (the “Bank”), approval
of the Members of the Bank be and is hereby accorded to the revision in the remuneration by way of salary, allowances and
perquisites payable to Shri Rajesh Dahiya (DIN 07508488), as the Executive Director (Corporate Centre) of the Bank, for a
period of one (1) year, with effect from 1st June 2018, detailed as under, subject to the approval of the RBI:
Particulars
Salary
Leave Fare Concession
Perquisites
House Rent Allowance
Residence
:
:
:
:
Amount
` 1,46,50,000 p.a.
` 5,50,000 p.a.
` 48,34,500 p.a. (in lieu of Bank’s owned /leased accommodation)
Leased accommodation to be provided by the Bank.
Provident Fund
: 12% of basic pay with equal contribution by the Bank or as may be decided upon by the Board/Trustees
from time to time.
Gratuity
: One month’s salary for each completed year of service or part thereof (on a pro-rata basis).
Superannuation
: 10% of basic pay p.a.
Travelling Allowances
: As per the Bank’s Policy.
Medical benefits
:
(i)
Group mediclaim facility as available to the other employees of the Bank.
(ii)
Reimbursement of full medical expenses for self and family.
Club fees
: Membership of two clubs (excluding life membership fees). All official expenses in connection with such
membership incurred would be reimbursed by the Bank.
Conveyance & Telephone
: As per the Bank’s Policy.
5
Twenty Fourth Annual Report 2017-18
Particulars
Amount
Personal Insurance
:
Shall be covered under the Group Savings Linked Insurance Scheme (GSLI) and the Personal Accident Policy
as per the Bank’s Rules.
Newspapers & Periodical
: As per requirement.
Entertainment
Utility Bills
:
:
Expenditure on official entertainment would be on the Bank’s account.
To be reimbursed at actuals up to a limit of ` 1,32,000 p.a.
Furnishing Allowance
: At actual up to a limit of ` 15,00,000 over a period of three years.
Car
Leave
: As per the Bank’s Policy.
: As per the Bank’s Rule.
Employees Stock Options
(ESOP)
:
Stock options as may be granted by the Nomination and Remuneration Committee, from time to time, subject
to the approval of the RBI.
Variable Pay
Loans
Other terms
: As approved by the Nomination and Remuneration Committee/ Board, subject to the approval of the RBI.
:
Loan facilities to be provided as per the Bank’s Policy, at the rate of interest applicable to other employees.
: As per the Bank’s Staff Rules and as may be agreed by the Board, from time to time.
“RESOLVED FURTHER THAT the Directors of the Bank be and are hereby severally authorized to execute all such agreements,
documents, instruments and writings as deemed necessary, file requisite forms or applications with statutory/regulatory
authorities, with the power to settle all questions, difficulties or doubts that may arise in this regard as he/she may in its sole
and absolute discretion deem fit and to do all such acts, deeds, matters and things as he/she may consider necessary and
desirable and to delegate all or any of its powers herein conferred to any Director(s)/ Officer(s) of the Bank, to give effect to this
Resolution.”
11. To consider, and if thought fit to, pass with or without modification(s), the following resolution, as a Special Resolution:
“RESOLVED THAT in supersession of the resolution passed by the Members of Axis Bank Limited (the “Bank”) at the Twenty
First Annual General Meeting of the Bank held on 24th July 2015, and pursuant to the provisions of Section 180(1)(c) and all
other applicable provisions of the Companies Act, 2013, read with the relevant rules made thereunder and any other applicable
laws (including any statutory amendment(s), modification(s), variation or re-enactment thereof, for the time being in force) and
the relevant provisions of the Memorandum of Association and Articles of Association of the Bank, approval of the Members
of the Bank be and is hereby accorded to the borrowings by the Bank, from time to time, of all money deemed by them to be
requisite or proper for the purpose of carrying on the business of the Bank, provided however, that apart from deposits of money
accepted from public in the ordinary course of its business, temporary loans repayable on demand or within six months from the
date of the loan, if any, obtained from the Bank’s bankers, the total amount of such borrowings outstanding at any time shall not
exceed ` 200,000 crore (Rupees Two Hundred Thousand crore only) notwithstanding that the money to be borrowed together
with the money already borrowed by the Bank will exceed the aggregate of its paid-up share capital, free reserves and securities
premium.”
“RESOLVED FURTHER THAT the Board be and is hereby authorized to do all such acts, deeds, matters and things as it may
consider necessary and desirable and to delegate all or any of its powers herein conferred to any Committee of the Board of
Director(s), and/or Managing Director, and/or Deputy Managing Director, and /or any other officer(s) of the Bank, to give
effect to this Resolution.”
12. To consider, and if thought fit to, pass with or without modification(s), the following resolution, as a Special Resolution:
“RESOLVED THAT pursuant to Section 42 and all other applicable provisions of the Companies Act, 2013, read with the
relevant rules made thereunder, the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the
applicable provisions of the Banking Regulation Act, 1949, and the rules, guidelines and circulars issued by the Reserve Bank
of India (“RBI”) and/or the Securities and Exchange Board of India, in this regard, from time to time, and any other applicable
laws (including any statutory amendment(s), modification(s), variation or re-enactment thereof, for the time being in force) and
the relevant provisions of the Memorandum of Association and the Articles of Association of Axis Bank Limited (the “Bank”)
and subject to receipt of such approval(s), consent(s), permission(s) and sanction(s) as may be necessary from the concerned
statutory or regulatory authority(ies), approval of the Members of the Bank be and is hereby accorded for borrowing/raising
of funds denominated in Indian rupees or any other permitted foreign currency, by issue of debt securities including, but not
limited to, long term bonds, green bonds, non-convertible debentures, perpetual debt instruments and Tier II Capital Bonds or
such other debt securities as may be permitted under the RBI guidelines, from time to time, on a private placement basis and/
6
Twenty Fourth Annual Report 2017-18
or for making offers and/or invitations thereof, and/or issue(s)/ issuances thereof, on a private placement basis, for a period
of one (1) year from the date hereof, in one (1) or more tranches and/ or series and/ or under one (1) or more shelf disclosure
documents and/ or one (1) or more letters of offer, and on such terms and conditions for each series/ tranches, including the
price, coupon, premium, discount, tenor etc. as deemed fit by the Board of Directors of the Bank (hereinafter referred to as the
“Board”, which term shall be deemed to include any committee(s) constituted/ to be constituted by the Board to exercise its
powers, including the powers conferred by this Resolution), as per the structure and within the limits permitted by the RBI, upto
an amount of ` 35,000 crore (Rupees Thirty Five Thousand crore only) in domestic and/ or overseas market, within the overall
borrowing limits of the Bank.”
“RESOLVED FURTHER THAT the Board be and is hereby authorized to negotiate, modify, finalize the terms and conditions of
the said debt instruments and execute all such agreements, documents, instruments and writings as deemed necessary, including,
the private placement offer letter, information memorandum, disclosure documents, debenture subscription agreement, debenture
trust deed and any other documents as may be required in connection with the offering(s), issuance(s) and/ or allotment(s) of
the said debt instruments on a private placement basis, with the power to settle all questions, difficulties or doubts that may arise
in this regard, as it may in its sole and absolute discretion deem fit, and to do all such acts, deeds, matters and things as it may
consider necessary and desirable and to delegate all or any of its powers herein conferred to any Committee of the Board of
Director(s), and/or Managing Director, and/or Deputy Managing Director, and /or any other officer(s) of the Bank, to give
effect to this Resolution.”
Place: Mumbai
Date: 16th May 2018
Axis Bank Limited
CIN: L65110GJ1993PLC020769
Registered Office:
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad – 380 006, Gujarat.
Website: www.axisbank.com
Phone No. : +91 – 79 – 6630 6161
Fax No. : +91 – 79 – 2640 9321
Email: shareholders@axisbank.com
By Order of the Board
Girish V. Koliyote
Company Secretary
ACS - 14285
7
Twenty Fourth Annual Report 2017-18
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING (MEETING) IS ENTITLED TO
APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER
OF THE BANK. THE INSTRUMENTS APPOINTING 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.
Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send to the
Registered Office of the Bank a certified copy of the latest Board Resolution authorizing their representative to attend and vote
at the Meeting on their behalf.
3.
Proxy shall not have a right to speak at the Meeting and shall not be entitled to vote except on a poll.
4.
A person appointed as Proxy shall act on behalf of not more than 50 Members and holding in aggregate not more than 10% of
the total share capital of the Bank carrying voting rights. However, a Member holding more than 10% of the total share capital
of the Bank carrying voting rights may appoint a single person as a Proxy and such Person shall not act as a Proxy for any other
Person or Member.
5.
Proxy in prescribed Form No. MGT-11, is enclosed herewith.
6.
7.
8.
The Attendance at the Meeting will be regulated through the Attendance Slip and the same will be verified with the records
maintained with the Bank. Members who hold shares in dematerialised form are requested to quote their DP ID and Client ID
number(s) and those who hold shares in physical form are requested to quote their folio number(s) in the Attendance Slip to
facilitate their identification at the Meeting.
The relevant explanatory statement pursuant to the provisions of Section 102 of the Companies Act, 2013, as amended (the
“Companies Act”) in respect of item Nos. 5 to 12 of this Notice is annexed herewith.
Pursuant to the provisions of Section 91 of the Companies Act, 2013, the Register of Members and the Share Transfer Books of
the Bank will remain closed from Saturday, 2nd June 2018 to Wednesday, 20th June 2018 (both days inclusive),
for the purpose of annual genral meeting.
9. Members holding shares in physical form are requested to notify any change in their address, if any, to the Registrar and Share
Transfer Agents, Karvy Computershare Private Limited, Hyderabad (Karvy) at their address mentioned below or to the Registered
Office of the Bank, quoting your Folio number(s).
10. Members holding shares in dematerialised form 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).
Any changes effected by the DP will be automatically reflected in the record maintained by the Depositories.
11. Members may avail of the Nomination facility available under Section 72 of the Companies Act, 2013. The relevant Nomination
Form can be downloaded from the website of the Bank or Members may write to the Bank at its Registered Office, for the same.
12. Members seeking any information with regard to the financial statements of the Bank are requested to write to the Bank at its
Registered Office at an early date to enable the Management to clarify the same at the Meeting.
13. SEBI vide its circular dated 20th April 2018 has made it mandatory for the Bank to collect copy of Income Tax Permanent
Account Number (PAN) and bank account details of all securities holders holding securities in physical form. Accordingly, all
Shareholders holding shares in physical form are requested to submit to Karvy, the said documents duly attested.
14.
In compliance with the provisions of Section 101 of the Companies Act, 2013 read with Rule 18 of the Companies (Management
and Administration) Rules, 2014, this Notice and the Annual Report of the Bank will be sent by e-mail to those Members
who have registered their email address with their DP (in case of electronic shareholding) or with Karvy (in case of physical
shareholding).
We, therefore request the Members to register their email ID with their DP (in case of electronic shareholding) or with Karvy (in
case of physical shareholding) mentioning your demat account / Folio no(s).
8
Twenty Fourth Annual Report 2017-18
However, in case you wish to receive the above documents in physical form, you may write to Karvy at the address mentioned
below or send an email to axisgogreen@karvy.com, mentioning your demat account details / Folio no(s) to enable Karvy to
record your decision and arrange to send the said documents to your registered address, free of cost.
15. The Shareholders may write to the Company Secretary at the Registered Office or to Karvy regarding transfer of shares held in
physical form or for conveying their grievances, if any, at below mentioned addresses:
Axis Bank Limited
CIN: L65110GJ1993PLC020769
Registered Office:
‘Trishul’, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad – 380 006, Gujarat.
Website: www.axisbank.com
Phone No. : +91-79-6630 6161
Fax No. : +91-79-2640 9321
Email: shareholders@axisbank.com
16. Remote E-Voting:
Karvy Computershare Private Limited
Unit: Axis Bank Limited
Karvy Selenium Tower B,
Plot 31-32, Gachibowli,
Financial District, Nanakramguda,
Hyderabad – 500 032.
Phone No. : 1800-345-4001 /+91-40-6716 2222
Fax No. : +91-40 – 2300 1153
Email: einward.ris@karvy.com
Contact Persons:
Shri M.R.V.Subrahmanyam, General Manager (RIS)
Smt. Varalakshmi, Assistant General Manager (RIS)
Shri G. Vasanth Rao Chowdhari, Manager (RIS)
I.
II.
III.
In compliance with Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (the “Listing Regulations”) and Section 108 of the Companies Act, 2013, read with
Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended, the Bank is pleased to provide
remote e-voting facility through Karvy, to enable its Members to cast their votes electronically on all the items as set out in
this Notice. Remote e-voting is optional.
The Bank has appointed Shri Nimai G. Shah (Membership No. 100932) Partner, Chandabhoy & Jassoobhoy, Chartered
Accountants or failing him Shri Gautam N. Shah (Membership No. 012679) Partner, Chandabhoy & Jassoobhoy,
Chartered Accountants as the Scrutinizer for conducting the remote e-voting process in a fair and transparent manner.
The voting rights of the shareholders shall be in proportion of their shareholding to the total issued and paid up equity
share capital of the Bank as on the cut-off date viz. Wednesday, 13th June 2018, subject to the provisions of Section
12 of the Banking Regulation Act, 1949 and RBI Circular No. 97/16.13.100/2015-16 dated 12th May 2016.
IV. A person who is not a Member as on the said cut-off date, will not be entitled to vote and should treat this Notice, for
information purpose only.
V.
The instructions for remote e-voting, are as under:
l
In case of Members receiving Notice by e-mail:
(i)
Enter the login credentials (i.e., User ID & Password) mentioned in the e-mail, your Folio No. / DP ID & Client
ID will be your USER ID. Please note that the password is an initial password.
(ii) Use the following URL for remote e-voting:
From Karvy website: http://evoting.karvy.com
(iii) Shareholders of the Bank holding shares either in physical form or in dematerialized form, as on the cut-off
date, may cast their vote electronically.
(iv) Enter the login credentials. Your Folio No/DP ID & Client ID will be your user ID.
(v) After entering the details appropriately, click on LOGIN.
(vi) You will reach the Password change menu wherein you are required to mandatorily change your password.
The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case
9
Twenty Fourth Annual Report 2017-18
(a-z), one numeric value (0-9) and a special character. The system will prompt you to change your password
and update any contact details like mobile number, email ID etc., on first login. You may also enter the secret
question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended
not to share your password with any other person and take utmost care to keep your password confidential.
(vii) You need to login again with the new credentials.
(viii) On successful login, the system will prompt you to select the EVENT i.e., Axis Bank Limited.
(ix) On the voting page, enter the number of shares as on the said cut-off date under FOR/AGAINST or alternately
you may enter partially any number in FOR and partially any number in AGAINST but the total number in
FOR/AGAINST taken together should not exceed your total shareholding, as on the said cut-off date. You
may also choose the option ABSTAIN.
(x)
Shareholders holding multiple folios/demat account shall choose the voting process separately for each
folios/demat account.
(xi) Cast your vote by selecting an appropriate option and click on SUBMIT. A confirmation box will be displayed.
Click OK to confirm else CANCEL to modify. Once you confirm, you will not be allowed to modify your vote.
During the voting period, Shareholders can login any number of times till they have voted on the Resolution.
(xii) Once the vote on the Resolution is cast by the Shareholder, he shall not be allowed to change it subsequently.
(xiii) Institutional Shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy
(PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. together with attested specimen
signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to
cnjabd@vsnl.net with a copy marked to evoting@karvy.com on or before Tuesday, 19th June
2018.
(xiv) The remote e-voting period shall commence on Saturday, 16th June 2018 (9:00 A.M.) and will end on
Tuesday, 19th June 2018 (5:00 P.M.). During this period Shareholders’ of the Bank, holding shares either
in physical form or in dematerialized form, as on the cut-off date of Wednesday, 13th June 2018, may
cast their vote electronically. The remote e-voting module shall be disabled by Karvy for voting thereafter.
Once the vote on a Resolution is cast by the Shareholder, the Shareholder shall not be allowed to change it
subsequently. Further, the Shareholders who have cast their vote electronically may also attend the Meeting,
however they shall not be able to vote again at the Meeting.
(xv)
In case of any queries, you may refer to the Frequently Asked Questions (FAQs) for Shareholders and remote
e-voting User Manual for Shareholders available at the download section of http://evoting.karvy.com or
contact Karvy Computershare Private Limited at Tel No. 1800 345 4001 (toll free).
l
In case of Members receiving Notice by Post/Courier:
(i)
Initial password is provided, as below, in the attendance slip of the Meeting.
EVENT
(E-Voting Event Number)
USER ID
PASSWORD/PIN
(ii)
Please follow the steps stated at serial Nos. V (ii) to V (xv) above, to cast your vote by electronic means.
VI. Voting will also be conducted after conclusion of the Meeting by way of Poll, to enable any Shareholder who has not cast
their vote through remote e-voting, in accordance with Rule 20 of the Companies (Management and Administration) Rules,
2014, as amended.
VII.
The Scrutinizer shall, immediately after the conclusion of voting at the Meeting, first count the votes cast at the Meeting,
thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in employment of the
Bank and submit not later than 48 hours of the conclusion of the Meeting i.e. not later than Friday, 22nd June 2018,
10
Twenty Fourth Annual Report 2017-18
a Consolidated Scrutinizer’s Report of the total votes cast in favor and against, if any, to any one of the Directors duly
authorized by the Board, who shall countersign the same.
VIII. The Results declared along with the Scrutinizer’s Report will be communicated to the Stock Exchanges immediately after
the said Results are declared by any one of the Directors duly authorized by the Board in this regard, not later than
Friday, 22nd June 2018 and will be uploaded on the Bank’s website i.e. www.axisbank.com and Karvy’s website i.e.
www.karvycomputershare.com. The Results will also be displayed at the Registered and Corporate Offices of the Bank in
accordance with the Secretarial Standards -2 on General Meetings issued by the Institute of Company Secretaries of India.
17. All documents referred to in this Notice and the Explanatory Statements setting out material facts in respect of the item nos. 5 to
12 of the Notice and other Statutory Registers are open for inspection by the Members at the Registered Office of the Bank from
11.00 a.m. to 1.00 p.m. on all working days except Saturdays, Sundays, Public Holidays and National Holidays, from the date
hereof upto and including the date of this Meeting.
18. Route Map for the venue of the Meeting is attached herewith, for your ready reference.
Place: Mumbai
Date: 16th May 2018
By Order of the Board
Girish V. Koliyote
Company Secretary
ACS - 14285
11
Twenty Fourth Annual Report 2017-18
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 SETTING OUT ALL
MATERIAL FACTS RELATING TO SPECIAL BUSINESS AS SET OUT IN ITEMS NOS. 5 TO 12 OF THIS NOTICE
The following explanatory statement contains the material facts relating to the Special Businesses, as set out in this Notice.
ITEM NO. 5:
Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Bank, the
Board of Directors of the Bank approved the appointment of Shri Stephen Pagliuca as an Additional Non-Executive (Nominee) Director
of the Bank (as a Nominee of entities affiliated to Bain Capital), for a period of four (4) consecutive years, w.e.f. 19th December 2017.
The said appointment was made pursuant to the nomination received from BC Asia Investments VII Limited, Integral Investments South
Asia IV and BC Asia Investment III Limited, who were allotted equity shares and convertible warrants of the Bank on a preferential
basis. Under Section 161 of the Companies Act, 2013, read with Article 91 of the Articles of Association of the Bank, he continues
to hold office as an Additional Non-Executive (Nominee) Director of the Bank, until the conclusion of the ensuing Annual General
Meeting.
The NRC at its Meeting held on 25th April 2018 had determined that Shri Stephen Pagliuca is a fit and proper person to be appointed
as a Director of the Bank, as per the norms prescribed by the Reserve Bank of India (“RBI”), and that he fulfils the conditions specified
in the Companies Act, 2013 and the relevant Rules made thereunder, the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) and other rules, guidelines and circulars issued by the
RBI, in this regard, from time to time.
The brief profile of Shri Stephen Pagliuca, in terms of the Regulation 36 (3) of the Listing Regulations and the Secretarial Standard on
General Meeting (SS-2) issued by the Institute of Company Secretaries of India, and details of his remuneration, have been provided
as Annexure 1 to this Notice.
Shri Stephen Pagliuca does not hold any equity shares in the Bank. Shri Stephen Pagliuca is not related to any other Directors or Key
Managerial Personnel of the Bank.
Shri Stephen Pagliuca, if appointed, shall not be liable to retire by rotation during the said period. He will be paid sitting fees and
profit related commission as approved by the Board and Members, from time to time and within the limits as prescribed under the
Companies Act, 2013, the Banking Regulation Act, 1949 and in terms of the Guidelines issued by RBI, in this regard, from time to
time.
The Board recommends the passing of the resolution, as set out in Item No.5 of this Notice.
Except for Shri Stephen Pagliuca and his relatives, none of the other Directors and the Key Managerial Personnel of the Bank and
their relatives are in any way financially or otherwise concerned or interested in the passing of the resolution as set out in Item No. 5
of this Notice.
ITEM NO. 6:
Dr. Sanjiv Misra was appointed as an Independent Director of Axis Bank Limited (“Bank”), with effect from 12th May 2016 and
thereafter as the Non-Executive (Part-Time) Chairman of the Bank for a period of three (3) years, with effect from 18th July 2016, in
terms of the approval granted by the Reserve Bank of India (“RBI”) and the Members of the Bank.
Dr. Sanjiv Misra has contributed immensely during the deliberations at the meetings of the Board and the Committee held during the
year under reference where he is a Member. He has introduced significant measures to enhance standards of governance at the Bank.
He brings to the Board his rich experience and insights. The Bank continues to benefit immensely from his leadership and guidance.
Taking into account the profits of the Bank for the financial year ended 31st March 2018, the Nomination and Remuneration Committee
(NRC) of the Board of Directors of the Bank, at its meeting held on 25th April 2018, reviewed the remuneration being paid to Dr. Sanjiv
Misra as the Non-Executive (Part-time) Chairman of the Bank, and decided to keep his remuneration unchanged and recommended
the same for the approval of the Board.
The Board of Directors of the Bank at its meeting held on 26th April 2018, accepted the said recommendation made by NRC and
approved the remuneration payable to Dr. Sanjiv Misra as the Non-Executive (Part-time) Chairman of the Bank, for a period of one (1)
year, with effect from 18th July 2018, subject to the approval of the RBI and the Members of the Bank.
The brief profile of Dr. Sanjiv Misra, in terms of the Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings (SS-2) issued by the Institute of
Company Secretaries of India, and details of his remuneration last drawn, have been provided as Annexure 1 to this Notice. The
details of his proposed remuneration have been set out in resolution no. 6 of this Notice.
12
Twenty Fourth Annual Report 2017-18 Dr. Sanjiv Misra does not hold any equity share of the Bank. Dr. Sanjiv Misra is not related to any other Directors or Key Managerial
Personnel of the Bank.
The Board recommends the passing of the resolution as set out in Item No. 6 of this Notice.
Except for Dr. Sanjiv Misra and his relatives, none of the other Directors and Key Managerial Personnel of the Bank and their relatives
are in any way financially or otherwise concerned or interested in the passing of the resolution as set out in Item No. 6 of this Notice.
ITEM NO. 7
The current term of Smt. Shikha Sharma, Managing Director & CEO of the Bank is due to expire on 31st May 2018.
Accordingly, as part of the succession planning process of the Bank, the Nomination and Remuneration Committee (NRC) of the Board
of Directors of the Bank at its meeting held on 7th December 2017, taking into account the leadership and strategic direction provided
by Smt. Shikha Sharma in driving the growth and profitability of the Bank in a complex environment and the overall performance of
the Bank, had considered and approved her re-appointment as the Managing Director & CEO of the Bank, for a further period of 3
years, w.e.f. 1st June 2018 up to 31st May 2021 (both days inclusive) and the terms and conditions relating to the said re-appointment,
including remuneration and recommended the same for the approval of the Board.
Pursuant to the said recommendation, the Board Directors of the Bank at its meeting held on 7th December 2017, had considered and
approved the said re-appointment and the terms and conditions in respect thereof, including remuneration, subject to the approval of
the RBI and the Shareholders of the Bank.
At the meeting of the Board of Directors held on 9th April 2018, Smt. Shikha Sharma requested the Board that the period of her re-
appointment as the Managing Director & CEO of the Bank be revised from 1st June 2018 up to 31st December 2018. The Board
considered her request and approved her re-appointment as the Managing Director & CEO of the Bank from 1st June 2018 up to 31st
December 2018 (both days inclusive) and the terms and conditions relating to the said re-appointment, including remuneration, subject
to approval of the RBI and the Shareholders of the Bank, which would also enable the Bank to manage the transition period and
ensure orderly succession for the said post. The RBI has granted its approval to the said re-appointment and the terms and conditions
in respect thereof, including remuneration.
The NRC, at its meeting held on 16th May 2018, reviewed the remuneration being paid to Smt. Shikha Sharma as the Managing
Director & CEO of the Bank, in comparison with the remuneration of CEOs of peer group Banks and recommended a revision in her
remuneration for the period from 1st June 2018 upto 31st December 2018 (both days inclusive), for the approval of the Board.
Pursuant to the said recommendation, the Board at its meeting held on 16th May 2018 approved the revision in the remuneration
by way of salary, allowances and perquisites payable to Smt. Shikha Sharma as the Managing Director & CEO of the Bank, for the
period from 1st June 2018 up to 31st December 2018 (both days inclusive), subject to the approval of the RBI and the Shareholders
of the Bank.
The brief profile of Smt. Shikha Sharma, in terms of the Regulation 36(3) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings (SS-2) issued by the
Institute of Company Secretaries of India, and details of her remuneration last drawn, have been provided as Annexure 1 to this
Notice. The details of her proposed remuneration have been mentioned in Resolution no. 7 of this Notice.
Smt. Shikha Sharma held 5,75,000 equity shares of ` 2/- each of the Bank as on 31st March 2018, allotted to her under the various
employee stock option scheme(s) of the Bank. Smt. Shikha Sharma is not related to any other Directors or Key Managerial Personnel
of the Bank.
The Board recommends the passing of the resolution, as set out in Item No. 7 of this Notice.
Except for Smt. Shikha Sharma and her relatives, none of the other Directors and the Key Managerial Personnel of the Bank and their
relatives are in any way financially or otherwise concerned or interested in the passing of the resolution, as set out in Item No. 7 of
this Notice.
ITEM NO. 8
Shri V. Srinivasan was appointed as the Deputy Managing Director of the Bank for a period of three years w.e.f. 21st December 2015,
in terms of the approval granted by the RBI and the Members of the Bank.
During the year ended 31st March 2018, under the leadership of Shri V. Srinivasan, the Bank has shown growth in advances and
net interest income. Shri V. Srinivasan has demonstrated his ability to take up higher responsibilities. Shri V. Srinivasan is presently
13
Twenty Fourth Annual Report 2017-18 heading the Corporate Banking Portfolio of the Bank which comprises of Corporate Credit, Treasury & Markets, Small and Medium
Enterprise, Business Economic Research, Information Technology & Chief Information Officer, Transaction Banking & International
Retail Department, Financial Institution Group, Corporate Client Coverage Group, Strategic Client Coverage Group, Strategic Initiative
Group, Structured Finance Group & Stressed Assets, Government Coverage Group, New Economy Group, International Banking,
Investor Relations, Finance & Accounts, Business Intelligence Unit, Strategy & New Initiatives.
In light of the above, the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Bank at its meeting held
on 16th May 2018, reviewed the remuneration being paid to Shri V. Srinivasan as the Deputy Managing Director of the Bank in
comparison with the remuneration of Executive Directors of peer group banks and recommended a revision in his remuneration, for
the approval of the Board.
Pursuant to the said recommendation of the NRC, the Board of Directors of the Bank at its meeting held on 16th May 2018, considered
and approved the revision in the remuneration by way of salary, allowance and perquisites payable to Shri V. Srinivasan as the Deputy
Managing Director of the Bank, with effect from 1st June, 2018, subject to the approval of the Members of the Bank and the RBI.
The brief profile of Shri V. Srinivasan, in terms of the Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings (SS-2) issued by the Institute of
Company Secretaries of India, and details of his remuneration last drawn, have been provided as Annexure 1 to this Notice. The
details of his proposed remuneration have been mentioned in resolution no. 8 of this Notice.
Shri V. Srinivasan held 14,00,000 equity shares of ` 2/- each of the Bank as on 31st March 2018, allotted to him under the various
employee stock option scheme(s) of the Bank. Shri V. Srinivasan is not related to any other Directors or Key Managerial Personnel of
the Bank.
The Board recommends the passing of the resolution, as set out in Item No. 8 of this Notice.
Except for Shri V. Srinivasan and his relatives, none of the other Directors and Key Managerial Personnel of the Bank and their relatives
are in any way financially or otherwise concerned or interested in the passing of the resolution, as set out in Item No. 8 of this Notice.
ITEM NO. 9
Shri Rajiv Anand was appointed as the Executive Director (Retail Banking) of the Bank, for a period of three (3) years, with effect from
4th August 2016, in terms of the approval granted by the RBI and the Members of the Bank.
During the year ended 31st March 2018, under the leadership of Shri Rajiv Anand, there has been a rapid growth in the Retail
businesses of the Bank. Shri Rajiv Anand is presently heading the Retail Banking Portfolio of the Bank, which comprises of Retail
Lending, Cards & Acquiring, Branch Banking, Digital Banking & Customer Experience, Marketing, Affluent & NRI Business, Retail
Liabilities and Investment Products, Digital Circle and BBPAG.
In view of the above, the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Bank at its meeting held
16th May 2018, reviewed the remuneration being paid to Shri Rajiv Anand as the Executive Director (Retail Banking) of the Bank in
comparison with the remuneration of Executive Directors of peer group banks and recommended a revision in his remuneration, for
the approval of the Board.
Pursuant to the said recommendation of the NRC, the Board of Directors of the Bank at its meeting held on 16th May 2018, considered
and approved the revision in the remuneration by way of salary, allowance and perquisites payable to Shri Rajiv Anand as the
Executive Director (Retail Banking) of the Bank, for a period of one year, with effect from 1st June, 2018, subject to the approval of
the Members of the Bank and the RBI.
The brief profile of Shri Rajiv Anand, in terms of the Regulation 36 (3) of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings (SS-2), issued by the Institute of
Company Secretaries of India, and details of his remuneration last drawn, have been provided as Annexure 1 to this Notice. The
details of his proposed remuneration have been mentioned in resolution no. 9 of this Notice.
Shri Rajiv Anand held 5,00,500 equity shares of ` 2/- each of the Bank as on 31st March 2018, allotted to him under various
employee stock option scheme(s) of the Bank. Shri Rajiv Anand is not related to any other Directors or Key Managerial Personnel of
the Bank.
The Board recommends passing of the resolution, as set out in Item No. 9 of this Notice.
14
Twenty Fourth Annual Report 2017-18 Except for Shri Rajiv Anand and his relatives, none of the other Directors and the Key Managerial Personnel of the Bank and their
relatives are in any way financially or otherwise concerned or interested in the passing of the resolution, as set out in Item No. 9 of
this Notice.
ITEM NO. 10
Shri Rajesh Dahiya was appointed as the Executive Director (Corporate Centre) of the Bank, for a period of three (3) years, with effect
from 4th August 2016, in terms of the approval granted by the RBI and the Members of the Bank.
During the year ended 31st March 2018, Shri Rajesh Dahiya, effectively managed the broader role as Head - Corporate Centre and
the set of diverse Portfolios which included Internal Audit, Human Resources, Compliance, Company Secretary, Corporate Affairs,
Administration, Corporate Real Estate Services, Chief Business Relations Officer (CBRO), Financial Crime Management, Law and
Retail & Wholesale Banking Operations. In addition, he also oversees the functioning of the Axis Bank Foundation.
In view of the above, the Nomination and Remuneration Committee (NRC) of the Board of Directors of the Bank at its meeting held on
16th May 2018, reviewed the remuneration being paid to Shri Rajesh Dahiya as the Executive Director (Corporate Centre) of the Bank
in comparison with the remuneration of Executive Directors of peer group banks and recommended a revision in his remuneration, for
the approval of the Board.
Pursuant to the said recommendation of the NRC, the Board of Directors of the Bank at its meeting held on 16th May 2018, considered
and approved the revision in the remuneration by way of salary, allowance and perquisites payable to Shri Rajesh Dahiya as the
Executive Director (Corporate Centre) of the Bank, for a period of one year, with effect from 1st June 2018, subject to the approval of
the Members of the Bank and the RBI.
The brief profile of Shri Rajesh Dahiya, in terms of the Regulation 36 (3) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings (SS-2) issued by the
Institute of Company Secretaries of India, and details of his remuneration last drawn, have been provided as Annexure 1 to this
Notice. The details of his proposed remuneration have been mentioned in resolution no.10 of this Notice.
Shri Rajesh Dahiya held 6,000 equity shares of ` 2/- each of the Bank, as on 31st March 2018, allotted to him under the various
employee stock option scheme(s) of the Bank. Shri Rajesh Dahiya is not related to any other Directors or Key Managerial Personnel
of the Bank.
The Board recommends passing of the resolution, as set out in Item No 10 of this Notice.
Except for Shri Rajesh Dahiya and his relatives, none of the other Directors and Key Managerial Personnel of the Bank and their
relatives are in any way financially or otherwise concerned or interested in the passing of the resolution, as set out in Item No. 10 of
this Notice.
ITEM NO. 11
The Members at the 21st Annual General Meeting of Axis Bank Limited (“Bank”) held on 24th July 2015 had approved the borrowing
of sums in excess of its paid-up capital, free reserves and securities premium account not exceeding ` 1,50,000 crore under Section
180 (1)(c) of the Companies Act, 2013 and Article 54 of the Articles of Association of the Bank.
The balance sheet size and net worth of the Bank have increased significantly since the last revision of the borrowing limit on 24th July
2015. Considering the substantial growth in business and operations of the Bank and present and future requirements, approval of
the Members is being sought to increase the limit from ` 1,50,000 crore to ` 200,000 crore, for borrowings (apart from deposits of
money accepted from public in the ordinary course of its business, temporary loans repayable on demand or within six months from the
date of the loan, if any, obtained from the Bank’s bankers) by the Bank, from time to time, under Section 180(1)(c) of the Companies
Act, 2013 and Article 54 of the Articles of Association of the Bank. The Board of Directors of the Bank at its meeting held on 26th April
2018 has approved this proposal, subject to the approval of the Members of the Bank by way of a special resolution, under Section
180(1)(c) of the Companies Act, 2013.
The Board recommends passing of the special resolution, as set out in Item No. 11 of this Notice.
None of the Directors and the Key Managerial Personnel of the Bank and their relatives are in any way financially or otherwise
concerned or interested in the passing of the special resolution, as set out in Item No. 11 of this Notice.
15
Twenty Fourth Annual Report 2017-18 ITEM NO. 12
Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014
provides that a company can issue securities, including but not limited to non-convertible debentures (“NCDs”), on a private placement
basis, subject to the condition that the proposed offer of debt securities or invitation to subscribe to debt securities has been previously
approved by the Members of the company, by means of a special resolution, for each of the offers or invitations. It further provides
that in case of an offer or invitation for NCDs, it shall be sufficient if the company passes a special resolution only once in a year for
all offer(s) or invitation(s) for issue of such NCDs on a private placement basis, during the period of one (1) year, from the date of
passing of such special resolution.
Keeping in view the projections of the Bank in domestic and overseas operations, the Bank may need to raise additional funds in one
or more tranches in Indian as well as overseas market in the form of capital to maintain the desired capital to risk weighted assets ratio
(CRAR) by issue of debt securities denominated in Indian rupees or any other permitted foreign currency (including but not limited to
long term bonds, green bonds, masala bonds, non-convertible debentures, perpetual debt instruments and Tier II capital bonds or such
other debt securities as may be permitted under the Reserve Bank of India (“RBI”) guidelines from time to time), on a private placement
basis and/or for making offers and/or invitations thereof and /or issue(s)/ issuances thereof, on a private placement basis, during the
period of one (1) year, from the date of passing of the special resolution.
Considering the above, the Board of Directors of the Bank at its meeting held on 27th April 2018 has proposed to obtain the consent
of the Members of the Bank for borrowing/raising funds in Indian currency/ foreign currency by issue of debt securities (including, but
not limited to, long term bonds, green bonds, masala bonds, non-convertible debentures, perpetual debt instruments and Tier II capital
bonds or such other debt securities as may be permitted under the RBI guidelines, from time to time) in domestic and/ or overseas
market, in one (1) or more tranches as per the structure and within the limits permitted by the RBI and other regulatory authorities to
eligible investors of an amount not exceeding ` 35,000 crore, on a private placement basis, during a period of one (1) year from
the date of passing of the special resolution. The said debt securities would be issued by the Bank in accordance with the applicable
statutory guidelines, for cash either at par or premium or at a discount to face value depending upon the prevailing market conditions,
rates prevailing for risk free instruments, rates on other competing instruments of similar rating and tenor in the domestic or overseas
market, investor appetite for such instruments etc., as would be approved by the Board or Committee of the Board. The said limit of `
35,000 crore shall be within the overall borrowing limit of ` 200,000 crore as may be approved by the Members of the Bank, under
Section 180(1)(c) of the Companies Act, 2013 as set out in Item No. 11 of this Notice.
The Board recommends passing of the special resolution, as set out in Item No.12 of this Notice.
None of the Directors and Key Managerial Personnel of the Bank and their relatives are in any way financially or otherwise concerned
or interested in the passing of the special resolution, as set out in Item No. 12 of this Notice.
By Order of the Board
Girish V. Koliyote
Company Secretary
ACS - 14285
Place: Mumbai
Date: 16th May 2018
Axis Bank Limited
CIN: L65110GJ1993PLC020769
Registered Office:
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad – 380 006, Gujarat.
Website: www.axisbank.com
Phone No. : +91 – 79 – 6630 6161
Fax No. : +91 – 79 – 2640 9321
Email: shareholders@axisbank.com
16
Twenty Fourth Annual Report 2017-18 ANNEXURE 1
BRIEF PROFILE OF DIRECTORS BEING APPOINTED / RE-APPOINTED OR WHOSE REMUNERATION IS BEING REVISED,
AS SET OUT IN THIS NOTICE, IN TERMS OF THE REGULATION 36 (3) OF THE SECURITIES AND EXCHANGE BOARD
OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND THE SECRETARIAL
STANDARDS – 2 ON GENERAL MEETINGS, ISSUED BY THE INSTITUTE OF THE COMPANY SECRETARIES OF INDIA.
Shri Stephen Pagliuca
Shri Stephen Pagliuca, 63 years, was appointed as an Additional Non-Executive (Nominee) Director of the Bank, with effect from 19th
December 2017. Shri Pagliuca received a B.A. from Duke University and an M.B.A. from Harvard Business School.
Shri Pagliuca is Co-Chair of Bain Capital, a leading global private investment firm with approximately $75 billion in assets under
management. He also serves as the global head of Bain Capital Private Equity’s technology, media, telecommunications and financial
services vertical.
Since joining the firm in 1989, Shri Pagliuca has played a leading role in a wide spectrum of prominent technology, media,
telecommunications and financial services businesses in which Bain Capital Private Equity has made investments. Prior to joining Bain
Capital, Shri Pagliuca was at Bain & Company where he advised many Fortune 500 companies on business strategy and growth
initiatives.
Shri Pagliuca is a Managing General Partner and co-owner of the Boston Celtics. He is also active in a number of charitable and civic
activities. Shri Pagliuca attended 2 Board Meetings of the Bank during the financial year 2017-18. During the financial year 2017-18,
Shri Pagliuca was paid ` 2 lacs as sitting fees for attending the said Board meetings.
The details of directorship held by Shri Stephen Pagliuca in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
Nature of interest
1.
2.
3.
4.
5.
Gartner Inc. (Delaware, USA)
TWCC Holdings Corp. (Virginia, USA)
Virgin Cruises Limited (Bermuda)
Bain Capital, LP (Delaware, USA)
Bain Capital Private Equity, LP (Delaware, USA)
Dr. Sanjiv Misra
Director
Director
Director
Co-Chairman
Managing Director
Dr. Sanjiv Misra, 70 years, was appointed as the Independent Director of the Bank with effect from 12th May 2016 and thereafter
as the Non-Executive (Part-Time) Chairman of the Bank with effect from 18th July 2016. 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 as the 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 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 Office, 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.
Dr. Misra has been 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
fiscal consolidation for the Indian economy. He is currently a Member of the Board of Governors of the Indian Council on Research
in International Economic Relations (ICRIER), an internationally reputed think tank. Dr. Misra has several publications on policy issues
to his credit.
Dr. Misra is a Member of the Risk Management Committee of Directors of the Bank. Dr. Misra attended 9 Board Meetings of the Bank
during the financial year 2017-18. During the financial year 2017-18, Dr. Sanjiv Misra was paid ` 12 lacs sitting fees for attending
17
Twenty Fourth Annual Report 2017-18 the meetings of the Board/Committee in addition to ` 1.83 Lacs paid towards profit related commission for the financial year 2016-17.
The details of the remuneration last drawn by Dr. Misra, (other than sitting fees and profit related commission) as approved by the
Reserve Bank of India (“RBI”) and the Members of the Bank, are as under:
Particulars
Remuneration
Company Car
Touring
Sitting Fees
Amount
` 33,00,000 p.a.
Free use of Bank’s car for official and private purposes.
Travelling and official expenses to be borne by the Bank for Board functions as a Chairman.
:
:
:
: As payable to other Non-Executive Directors.
The details of directorship held by Dr. Sanjiv Misra in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
1.
2.
Akzo Nobel India Limited
Hindustan Unilever Limited
Nature of interest
Director
Director
The details of Membership in Board Committees held by Dr. Sanjiv Misra in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
Name of the Committee
Nature of interest
1.
2.
Akzo Nobel India Limited
Hindustan Unilever Limited
Audit Committee
Audit Committee
Chairman
Member
Smt. Shikha Sharma
Smt. Shikha Sharma, 59 years, is the Managing Director & CEO of Axis Bank, India’s third largest private sector Bank. Smt. Sharma
joined the Bank on 1st June 2009 as the Managing Director & CEO of the Bank. As a leader adept at managing change, she has led
the Bank on a transformation journey from a primarily corporate lender to a Bank with a strong retail deposit franchise and balanced
lending.
Smt. Sharma has done her B.A. (Hons.) in Economics and completed her Post Graduate Diploma in Business Management from the
Indian Institute of Management, Ahmedabad. She has a Post Graduate Diploma in Software Technology from the National Centre for
Software Technology, Mumbai.
Smt. Sharma has more than three decades of experience in the financial sector having begun her career with ICICI Ltd. in 1980.
During her tenure with the ICICI Group, she was instrumental in setting up ICICI Securities. As Managing Director & CEO of ICICI
Prudential Life Insurance Company Ltd., she led the company to become the No. 1 private sector Life Insurance Company in India.
Since 2009, under the leadership of Smt. Sharma as Managing Director & CEO, the Bank’s balance sheet has grown 4 times, with
a focus on granular advances and deposits. The Bank has expanded its branch network from 835 branches to 3,703 branches
(including extension counters) as on 31st March 2018. Retail advances which were 20% of the book in March 2009 now stand at
46% of the book. Smt. Sharma has also focused on building the Bank’s digital capabilities and the Bank is now recognized as a digital
leader. The Bank has also established itself as a leader in debt capital markets, investment banking and is one of the large corporate
lenders in the private sector. In recent years, the Bank is focusing towards building capabilities in transaction banking.
Led by Smt. Sharma, the Bank launched several new businesses. The credit cards business, launched in 2010 has a market share of
11%, ranked 4th in the industry, the broking business launched in 2011 ranks among the top 5 in number of unique customers traded
and Axis Mutual Fund, launched in 2009 ranks among the top 10 mutual funds in India with a market share of over 3%. Axis Capital,
the investment banking arm has maintained its leadership position on equity league table over the last decade.
During the financial years 2011-2017, Axis Bank Foundation, the Bank’s CSR arm, reached out to more than a million participants
taking them to a path of transformation, both economically and socially and is now committed to work with two million households
by the year 2025.
18
Twenty Fourth Annual Report 2017-18 As an acknowledgement of her efforts, Harvard Business School has published a case study on Managing Change at Axis Bank in
2013. Smt. Sharma’s achievements in the financial sector have received wide recognition. She is a recipient of many business awards
notably; she has featured in Fortune Magazine’s list of The Most Powerful Women in Business Outside the US – 2017.
Under Smt. Sharma’s leadership, the Bank has won several accolades: IDRBT Banking Technology Excellence Award 2016 - 2017
for Digital Banking among Large Banks, FICCI CSR Award 2016-17 in the Women Empowerment Category, Best Rewards Program
for the third year in a row at the Loyalty Awards 2017, Best Investment Bank in India (won jointly by Axis Bank and Axis Capital) at
the Finance Asia Country Awards 2017, Best Bank 2016 by Business India, Bank of the Year in India by the Banker Awards 2016,
Socially Aware Corporate of the Year by Business Standard’s Corporate Social Responsibility Awards 2016, Excellence in Corporate
Social Responsibility by CII-ITC Sustainability Awards 2016, Best Digital Bank by the Business Today- KPMG survey 2016 and many
more. The Bank has been ranked no. 1 arranger for rupee denominated bonds as per Bloomberg for 10 consecutive years. The Bank
was also conferred the certificate of recognition for excellence in Corporate Governance by the Institute of Company Secretaries of
India (ICSI), for the year 2015.
Smt. Sharma is the Chairperson of Axis Asset Management Company Ltd. and Axis Capital Ltd. She also chairs the CII’s National
Committee on Banking since 2015. She is a member of Visa’s Senior Client Council, APCEMEA (Asia –Pacific, Central Europe, Middle
East & Africa).
She was a member of the Reserve Bank of India (“RBI”)’s Technical Advisory Committee, RBI’s panel on Financial Inclusion, the
Committee on Comprehensive Financial Services for Small Businesses and Low-Income Household etc. She has been the Co-Chairperson
of FICCI’s Banking & Financial Institutions Committee 2013-15.
As on 31st March 2018, Smt. Sharma is the Chairperson of the Committee of Whole-time Directors and the Review Committee of the Board.
She is also a member of the Special Committee of the Board of Directors for Monitoring of Large Value Frauds, Committee of Directors,
Risk Management Committee, Acquisitions, Divestments & Mergers Committee and IT Strategy Committee of Directors of the Bank. Smt.
Shikha Sharma attended 9 Board Meetings of the Bank, during the financial year 2017-18.
The details of directorship held by Smt. Shikha Sharma in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
1.
2.
Axis Asset Management Company Limited
Axis Capital Limited
Nature of interest
Chairperson
Chairperson
Smt. Shikha Sharma is not a Member of any Board Committee in the said companies.
The details of the remuneration last drawn by Smt. Shikha Sharma, as approved by the Members of the Bank and the RBI are as under:
Salary
House Rent allowance
:
:
` 2,94,53,000 p.a.
` 98,24,000 p.a. (In lieu of Bank's owned/leased accommodation)
All other terms and conditions including perquisites and other allowances being paid to Smt. Shikha Sharma remain unchanged.
Shri V. Srinivasan
Shri V. Srinivasan, 53 years, joined the Bank on 7th September, 2009 as the Executive Director (Corporate Banking). Shri V. Srinivasan
was appointed as the Deputy Managing Director of the Bank, w.e.f. 21st December 2015. Shri V. Srinivasan is an engineer from the
College of Engineering, Anna University, Chennai and completed his Post Graduate Diploma in Business Management, from the Indian
Institute of Management, Calcutta in 1990.
Shri V. Srinivasan has more than two decades of experience in the financial services industry and has worked in the areas of Corporate
Banking, Investment Banking, Treasury and Foreign Exchange Management. He began his career in the financial service industry with
ICICI Ltd., in its Merchant Banking Division in 1990. He was part of the start-up team of ICICI Securities and Finance Company Ltd.
(I-Sec), the joint venture between ICICI Limited and J P Morgan and headed its Fixed Income business.
He has served on various Reserve Bank of India (“RBI”) Committees such as the Technical Advisory Committee, Committee of Repos
and Committee for STRIPS. He has also held the positions of Chairman, Fixed Income Money Market and Derivatives Association of
India (FIMMDA) and Chairman, Primary Dealers Association of India (PDAI). Currently, he is a Member of CII National Council of
19
Twenty Fourth Annual Report 2017-18 Services.
Shri V. Srinivasan is a member of the Committee of Directors, Committee of Whole Time Directors and IT Strategy Committee of the
Board of Directors of the Bank. Shri V. Srinivasan attended 9 Board Meetings of the Bank, during the financial year 2017-18.
The details of directorship held by Shri V. Srinivasan in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
Nature of interest
1
2
3
4
5
6
Axis Trustee Services Limited
Axis Finance Limited
Axis Capital Limited
Axis Private Equity Limited
Axis Bank UK Limited
A.TREDS Limited
Chairman
Chairman
Director
Chairman
Chairman
Chairman
Shri V. Srinivasan is not a Member of any Board Committee in the said companies.
The details of the remuneration last drawn by Shri V. Srinivasan, as approved by the Members of the Bank and the RBI, are as under:
Salary
House Rent allowance
:
:
` 2,08,62,000 p.a.
` 52,14,000 p.a. (In lieu of Bank's owned/leased accommodation)
All other terms and conditions including perquisites and other allowances being paid to Shri V. Srinivasan remain unchanged.
Shri Rajiv Anand
Shri Rajiv Anand, 52 years, joined the Bank on 1st May 2013 from its asset management arm, Axis Asset Management Co. Ltd., where
he was the Managing Director & CEO. He was appointed as the President (Retail Banking) and was elevated as the Group Executive
(Retail Banking) in 2014. He was appointed as the Executive Director (Retail Banking) of the Bank, w.e.f. 4th August 2016. Shri Rajiv
Anand is a Commerce graduate and a Chartered Accountant by qualification.
Over a career spanning more than 25 years, Shri Rajiv Anand has focused on various facets of the financial services industry having
held key management positions at leading global financial institutions. He is widely recognized for his strengths in capital markets and
successfully building new businesses to scale. He has led an award winning investment management team at the erstwhile Standard
Chartered AMC. He was Business Standard Debt Fund Manager of the year in 2004.
As on 31st March 2018, Shri Rajiv Anand is a Member of the Customer Services Committee, Corporate Social Responsibility Committee,
IT Strategy Committee and the Committee of Whole Time Directors of the Bank. Shri Rajiv Anand attended 9 Board Meetings of the
Bank, during the financial year 2017-18.
The details of directorship held by Shri. Rajiv Anand in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
1
2
National Payments Corporation of India
Axis Securities Limited
Nature of interest
Director
Chairman
Shri Rajiv Anand is not a Member of any Board Committee in the said companies.
The details of the remuneration last drawn by Shri Rajiv Anand, as approved by the Members of the Bank and the RBI, are as under:
Salary
House Rent allowance
:
:
` 1,53,78,368 p.a.
` 50,74,861 p.a. (In lieu of Bank's owned/leased accommodation)
All other terms and conditions including perquisites and other allowances paid to Shri Rajiv Anand remain unchanged.
20
Twenty Fourth Annual Report 2017-18 Shri Rajesh Dahiya
Shri Rajesh Dahiya, 50 years, joined the Bank on 1st June 2010. Before joining the Bank, he was associated with Tata Group for 20
years where he handled various responsibilities across functions such as Human Resources, Manufacturing, Exports, Distribution and
Institutional Sales.
Shri Dahiya was appointed as the Executive Director (Corporate Centre) of the Bank, w.e.f. 4th August 2016. He is a qualified engineer
with a Masters in Management from Punjab University.
As on 31st March 2018, Shri Rajesh Dahiya is a Member of the Stakeholders Relationship Committee, Special Committee for
Monitoring of Large Value Frauds, Corporate Social Responsibility and Committee of Whole Time Directors of the Bank. Shri Rajesh
Dahiya attended 9 Board Meetings of the Bank, during the financial year 2017-18.
The details of other directorship of Shri Rajesh Dahiya in other companies, as on 31st March 2018, are as under:
Sr. No. Names of the Companies
1
Axis Private Equity Limited
Nature of interest
Director
Shri Rajesh Dahiya is not a Member of any Board Committee in the said company.
The details of the remuneration last drawn by Shri Rajesh Dahiya, as approved by the Members of the Bank and the RBI, are as under:
Salary
House Rent allowance
:
:
` 1,36,64,082 p.a.
` 45,09,147 p.a. (In lieu of Bank's owned/leased accommodation)
All other terms and conditions including perquisites and other allowances being paid to Shri Rajesh Dahiya remain unchanged.
21
Twenty Fourth Annual Report 2017-18 ROUTE MAP TO THE VENUE OF THE AGM
Venue: J. B. Auditorium, Ahmedabad Management Association, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad -
380 015, Gujarat.
Landmark: Near Indian Institute of Management, Ahmedabad.
Ahmedabad Textile Industries
Research Association (ATIRA)
Ahmedabad Management
Association (AMA)
J. B. Auditorium
AMA Complex, ATIRA,
Dr. Vikram Sarabhai Marg,
Ahmedabad - 380 015,
Gujarat.
N
D
r. Vikra
m S
ara
b
h
ai
M
arg (A
m
b
a
w
a
di-IIM
Panjarapole
Cross Road
-
A R
o
a
d)
Sahajanand
College
Kamdhenu
Complex
A
m
b
a
w
a
d
i (
1
.
6
k
m
)
II
M
-
A
(
0
.
6
k
m
)
Venue Distance from
Railway Station 8 km approx
Airport 14 km approx
22
Twenty Fourth Annual Report 2017-18 Form No. MGT-11
Proxy Form
[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies
(Management and Administration) Rules, 2014, as amended]
CIN
L65110GJ1993PLC020769
Name of the Company
Axis Bank Limited
Registered Office
Name of the Shareholder(s):
Registered Address:
E-mail Address:
Folio No. / Client ID:
‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge, Ahmedabad – 380 006. Gujarat.
Phone No.: +91-79-6630 6161; Fax No.: +91-79-2640 9321
Email Address: shareholders@axisbank.com;
Website Address: www.axisbank.com
DP ID:
I/We, being the holder(s) of .............................................. equity shares of the above named company, hereby appoint
1.
Name:
Address:
E-mail Address:
Signature:
2.
Name:
Address:
E-mail Address:
Signature:
3.
Name:
Address:
E-mail Address:
Signature
or failing him
or failing him
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 24th Annual General Meeting of the Company,
to be held on Wednesday, 20th June 2018 at 10.00 a.m. at J. B. Auditorium, Ahmedabad Management Association, AMA
Complex, ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad 380 015, Gujarat and at any adjournment(s) thereof, in respect of the
resolution(s), as indicated below:
Sr.
No.
1.
Particulars of Resolutions
To receive, consider and adopt :
(a)
the audited standalone financial statements of the Bank
for the Financial Year ended 31st March 2018 and the
Reports of the Directors and the Auditors thereon; and
Sr.
No.
2.
(b)
the audited consolidated financial statements for the
Financial Year ended 31st March 2018 and the Report of
the Auditors thereon.
3.
Appointment of Director in place of Shri Rajesh Dahiya
(DIN 07508488), who retires by rotation and being eligible,
has offered himself for re-appointment.
4.
Particulars of Resolutions
Appointment of Director in place of Shri Rajiv Anand (DIN
02541753) who retires by rotation and being eligible, has
offered himself for re-appointment.
Appointment of M/s. Haribhakti & Co. LLP, Chartered Accountants,
Mumbai, (Registration Number 103523W/W100048) as the
Statutory Auditors of the Bank and to hold office as such from the
conclusion of 24th Annual General Meeting until the conclusion of
28th Annual General Meeting and payment of remuneration as
may be decided by the Audit Committee of the Board.
Sr.
No.
5.
7.
9.
Particulars of Resolutions
Appointment of Shri Stephen Pagliuca as the Non – Executive
(Nominee) Director of the Bank, for a period of 4 consecutive
years, w.e.f. 19th December 2017.
Re-appointment of Smt. Shikha Sharma (DIN 00043265) as
the Managing Director & CEO of the Bank, from 1st June 2018
up to 31st December 2018 (both days inclusive) and the terms
and conditions relating to the said re-appointment, including
remuneration.
Sr.
No.
6.
8.
Particulars of Resolutions
Payment of remuneration to Dr. Sanjiv Misra (DIN 03075797) as
the Non-Executive (Part-Time) Chairman of the Bank, for a period
of one year, w.e.f. 18th July 2018.
Revision in the remuneration payable to Shri V. Srinivasan (DIN
00033882) as the Deputy Managing Director of the Bank, w.e.f.
1st June 2018.
Revision in the remuneration payable to Shri Rajiv Anand
(DIN 02541753) as the Executive Director (Retail Banking) of
the Bank, for period of one year, w.e.f. 1st June 2018.
10.
Revision in the remuneration payable to Shri Rajesh Dahiya
(DIN 07508488) as the Executive Director (Corporate Centre) of
the Bank, for period of one year, w.e.f. 1st June 2018.
11.
Increase in the borrowing limits of the Bank upto ` 200,000
crore, under Section 180 (1) (c) of the Companies Act, 2013.
12.
Borrowing / Raising funds in Indian Currency / Foreign Currency
by issue of Debt Securities including but not limited to long term
bonds, green bonds, masala bonds, non-convertible debentures,
perpetual debt instruments and Tier II capital bonds or such other
debt securities as may be permitted under the RBI guidelines, from
time to time, on a private placement basis, for an amount of upto
` 35,000 crore, during a period of one year, from the date of
passing of this Resolution.
Signed this .................. day of ......................... 2018.
Signature of Shareholder: ___________________________________________________
Affix Revenue
Stamp
Signature of Proxy holder: ___________________________________________________
Note: This form of proxy in order to be effective should be duly stamped, signed, completed in all respects and
deposited at the Registered Office of the Bank, not less than 48 hours before the commencement of this Annual
General Meeting.
Notes
291
Notes
292
Annual Report 2017 -18 "Now Papa
drops me to school
every day.
Thank you"
Your support has helped
Axis Bank Foundation create
more than a million livelihoods and
has reunited many families like Appu's.
RegisteRed Office
cORpORate Office
‘Trishul’, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad - 380 006
Tel. No.: 079-6630 6161
Fax No.: 079-2640 9321
Email: shareholders@axisbank.com
Website: www.axisbank.com
‘Axis House’, C-2, Wadia
International Centre,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Tel. No.: 022-2425 2525
Fax No.: 022-2425 1800
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