About IndusInd Bank Ltd

IndusInd Bank Ltd is one of the new generation private sector banks in India. The Bank's business lines include corporate banking, retail banking, treasury and foreign exchange, investment banking, capital markets, non-resident Indian/high-net-worth individual banking, and information technology. The Bank business divisions include Retail/ Consumer Banking, Consumer Finance, Global Markets Group, Corporate & Commercial Banking, Transaction Banking Group and Investment Banking. The Bank have representative offices in London, Dubai and Abu Dhabi. The bank provides multi-channel facilities, which includes automated teller machines (ATMs), net banking, mobile banking, phone banking, multi-city banking and international debit cards. The Bank has multi-lateral tie-ups with other banks providing access to more than 18000 ATMs for their customers. They enjoy clearing bank status for both major stock exchanges - BSE and NSE - and three major commodity exchanges in the country - MCX, NCDEX, and NMCE. They also offer DP facilities for stock and commodity segments. IndusInd Bank Ltd was incorporated in the year 1994 and was promoted by Mr Srichand P Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group. The Bank started their operations with a capital amount of Rs 1,000 million among which Rs 600 million was donated by the Indian Residents and Rs.400 million was raised by the Non-Resident Indians. The bank is a pioneer in launching internet banking. They are rated as one of the Top Performing Banks in various survey reports. During the year 2001-02, the Bank increased their network from 36 to 77. During the year 2002-03, the Bank entered into electronic money transfer arrangements with MoneyGram International Ltd, USA and Zoha Inc USA for attracting beneficiaries of small value remittance from overseas. Thus, they became the first to implement the RBI-Electronic Funds Transfer scheme. Also, they entered into bullion trading activities and financial services to Indian entities setting up joint ventures and wholly-owned subsidiaries abroad. IndusInd Enterprises & Finance Ltd, a Non-Banking Finance company and one of the promoters of the Bank amalgamated with the Bank with effect from July 11, 2003. As a result, IndusInd Information Technology Ltd became a subsidiary of the Bank. During the year, the bank increased their network to 127 from 77 outlets. During the year 2003-04, the Bank opened their representative office in Dubai. They launched their debit card with the name International Power Card. They opened 8 new branches and 2 new extension counters during the year. Also, a total of 31 new ATMs were installed, which includes 15 on-site ATMs and 16 off-site ATMs. Ashok Leyland Finance Ltd, a leading Non-Banking Finance company merged with the Bank with effect from June 11, 2004. During the year 2004-05, the Bank signed an agreement with NCDEX as clearing banker. They launched various innovative products and services, which includes International Mahila Card, Mobile Top-ups, Utility Bill Payment etc. They opened second representative office in London. Also, the Bank entered bilateral tie-up with Corporation Bank and with UTI Bank, in which the Bank's customer can utilize their ATMs across the country. During the year 2006-07, the Bank added a number of new business and product lines which includes the launch of Indus Gold and Indus Gift Card and E-Remittance facility. They made a tie-up with Religare Securities for extending Portfolio Management services. They also made a tie up with Aviva Life Insurance for bancassurance. The Bank opened 33 branches and set up 41 offsite ATMs during the year. During the year 2007-08, the Bank signed an agreement with National Multi Commodity Exchange Ltd (NMCE) to become their clearing bank. They made a strategic tie-up with Religare Securities for offering a value-added 3-in-1 savings accounts-linked package to customers - comprising a savings bank account, a depository account, and an Internet trading account. Also, they made a strategic partnership with Cholamandalam MS for bancassurance. During the year 2007-08, the Bank was awarded the highest A1+ rating for their Certificates of Deposit by ICRA and the highest P1+ rating for their Fixed Deposits and Certificates of Deposit by CRISIL. They also received recognition by BSE and NASSCOM Foundation for the Best Corporate Social Responsibility Practice Category. In July 2008, the Bank was awarded The Smart Workplace Award by Economic Times in association with Acer and Intel for enhancing the productivity of the employees through optimum use of resources as well as technology. During the year 2008-09, the Bank launched various new products and services which were targeted at building wealth management capabilities as well as enhancing the existing banking channels. The Bank launched the Gold and Investment verticals, which contributed in excess of Rs 5 crore of revenue in the first year of operations. They also launched two new channels - Wealth Relationship Managers and the Central Acquisition Team (CAT). The Bank commenced the process of opening 'new look branches' to enhance the banking experience of customers and to provide personal attention to their needs. They already opened five branches with the new look at Bandra, Kolkata, Ludhiana, Vadodara and Lucknow. The Consumer Banking opened their new Administrative Office in Gurgaon. Also, the Bank's Consumer Finance Division moved into their own four-storey building at G. N. Chetty Road in Chennai. In August 2008, the Bank acquired the micro-finance portfolio from SKS Mircofinance. In October 2008, they signed a co-partner agreement with World Gold Council for joint promotion of packaged and certified gold coins and ingots in India. In November 2008, the Bank entered into an agreement with TVS Motor Company where the Bank will provide structured inventory funding to TVS Motors' dealers. In January 2009, they entered into a MoU with CRISIL to rate the Bank's clients. During the year 2009-10, the Bank opened 30 new branches and 141 ATMs as a part of the strategy of expanding banking network to different locations in the country. The Bank re-launched the Non-Resident (NR) business, which acquired 12,000 new NR clients within a short span and also mobilized significant FCNR book and savings account book. During the year, the Corporate Office in Mumbai moved into new spacious premises at One Indiabulls Centre, Elphinstone Road (W), Mumbai. The Bank continued the process of opening new-look branches/off-site ATMs at various locations, viz., branches in Chennai, Secunderabad, Phagwara, Coimbatore, Pune, Hapur and off-site ATMs in 114 locations enhancing the customer experiences at primary touchpoints. During the year 2010-11, the Bank opened 90 new branches and set up 97 ATMs. As at the year ended March 31, 2011, the Bank had a total of 300 branches spread across 212 geographical locations and 594 ATMs, inclusive of 340 off-site ATMs. In October 2011, the Bank entered into an arrangement with Moscow-based commercial bank JCB Unistream for India bound remittances. In February 2011, they signed MoU with Mahindra & Mahindra Ltd in which the Bank will be one of the preferred financiers for the entire range of vehicles sold by Mahindra & Mahindra Ltd and also extend passenger and commercial vehicle finance to their customers. In June 2011, the Bank signed an agreement with Atos Worldline India (Venture Infotek) for point of sale (POS) acquiring solutions. During the year 2011-12, the Bank opened 100 new branches and 106 ATMs. As at the end of the year, the Bank had a total of 400 branches spread across 270 geographical locations and 692 ATMs inclusive of 345 off-site ATMs. The Bank launched three new services: Cash-on-Mobile, Direct Connect and Quick Redeem during the year. These new services are aimed at making banking easy and convenient for the customers. The Bank purchased the Credit Cards business of Deutsche Bank during the year. The launch of IndusInd Bank's Credit Cards business through this acquisition has fast tracked the Cards' business growth plans. On 24 July 2012, IndusInd Bank and Suzuki Motorcycle India Pvt. Ltd. (SMIPL) signed MOU whereby IndusInd Bank will be the preferred financier to extend retail finance to SMIPL's two wheeler customers across the country. On 16 August 2012, IndusInd Bank announced the launch of its foreign currency pre-paid travel card - the Indus Forex card. On 13 December 2012, IndusInd Bank announced the successful implementation of Finacle core banking across all its branches to facilitate the delivery of state-of-the-art banking services. IndusInd Bank on 1 April 2013 was included in the NIFTY 50 benchmark index of the National Stock Exchange (NSE). On 29 May 2013, IndusInd Bank and American Express announced the formation of a strategic partnership with the launch of the new IndusInd Bank Iconia American Express credit card. On 4 August 2014, Jet Airways, India's premier international airline, and IndusInd Bank announced a strategic partnership to launch a suite of Jet Airways IndusInd Bank co-branded credit cards. On 29 September 2014, IndusInd Bank inaugurated its first digital branch at IndusInd Cybercity Rapid Metro station, Gurgaon. With this launch, IndusInd Bank became the first bank in India to have a fully digital branch at a metro station, whose branding rights are owned by the bank. On 10 April 2015, IndusInd Bank announced that it has entered into an agreement with Royal Bank of Scotland N.V. to acquire its diamond and jewellery financing business in India and related deposits portfolio. On 27 July 2015, IndusInd Bank announced that it had completed the acquisition of Royal Bank of Scotland's diamond and jewellery financing business in India. The acquired loan portfolio is approximately Rs 4100 crore. On 20 May 2015, Worldpay, the global leader in payments, announced that it has partnered with IndusInd Bank to offer domestic acquiring services in India. On 3 July 2015, IndusInd Bank completed the allotment of 5.12 crore equity shares to Qualified Institutional Buyers (QIBs) at issue price of Rs 845 per share, thereby raising Rs 4327.98 crore. On 6 August 2016, IndusInd Bank completed the allotment of 87.81 lakh equity shares to the promoters of the bank on a preferential basis at issue price of Rs 857.20 per equity share, thereby raising Rs 752.74 crore. On 12 January 2016, IndusInd Bank announced that it has partnered with online payment solution leader PayU India to redefine the digital experience for Indian consumers, by bringing the full suite of consumer banking products online and powering the same through payment innovations and online eco-systems enabled by PayU India. On 23 May 2016, IndusInd Bank announced that it had signed a Corporate Agency agreement for distributing Reliance General Insurance's insurance products to its customers. On 12 July 2016, IndusInd Bank announced the opening of an International Banking Unit (IBU) at the Gujarat International Finance Tec-City (GIFT City) to meet the requirements of offshore banking operations from India. IndusInd Bank's International Banking Unit (IBU) will provide the bank access to international financial markets and will allow IndusInd Bank to deliver a complete range of products to its clients with foreign currency funding requirements. On 14 March 2017, IndusInd Bank announced that it has entered into an agreement with Infrastructure Leasing and Financial Services Ltd. (IL&FS), the promoter shareholders of IL&FS Securities Services Ltd., (ISSL), to acquire 100% of ISSL. ISSL is a leading capital market intermediary for professional clearing, depository and custodial services. On 29 March 2017, IndusInd Bank announced extension of its agreement with Lohia Auto Industries. IndusInd Bank would be the s preferred financier for retail vehicle finance for all Lohia 3-wheeler electric and diesel models. On 8 June 2017, Overseas Private Investment Corporation (OPIC) and IndusInd Bank executed a finance agreement for a $225 million loan supporting the expansion of the IndusInd Bank's micro, small, and medium enterprise (MSME) lending programs across India. On 15 September 2017, Asian Development Bank (ADB) signed a loan of up to $200 million with IndusInd Bank to provide finance to low income women borrowers in rural India. The 7-year senior loan will go towards IndusInd Bank's microfinance activities. On 14 October 2017, IndusInd Bank and Bharat Financial Inclusion announced a merger of the two entities to create a stronger and more sustainable platform for financial inclusion. The scheme contemplates merger of Bharat Financial with IndusInd and simultaneous transfer of Bharat Financial Inclusion's Business Correspondent operations into a Wholly Owned Subsidiary of IndusInd to be incorporated after receipt of requisite regulatory approvals. Bharat Financial Inclusion's shareholders will receive 639 shares of IndusInd Bank for every 1,000 shares of Bharat Financial Inclusion. Bharat Financial Inclusion is among the largest microfinance companies in India with presence across 16 states covering 1 lakh villages. In the Extraordinary General Meeting held on August 25, 2020, the members approved Preferential Allotment of equity shares of Rs. 10 each, fully paid, at a price of Rs. 524 per equity share, to five Qualified Institutional Buyers and two corporate entities including one of the promoters. Accordingly, 4,76,29,768 equity shares were allotted on September 2, 2020 to Qualified Institutional Buyers and 1,51,17,477 equity shares were allotted on September 4, 2020 to two corporate entities, pursuant to approval of Finance Committee on respective dates. Consequently, the equity share capital of the Bank increased by Rs. 62.75 crores. Pursuant to Composite Scheme of Arrangement with Bharat Financial Inclusion Limited, the Bank allotted 1,57,70,985 Share Warrants to the Promoters of the Bank on July 6, 2019, on receipt of subscription amount at 25% of the price of Rs. 1,709 per Share Warrant. Each Share Warrant was convertible to one equity share of the Bank fully paid, upon exercise of the option by paying the remaining amount. On February 18, 2021, the promoters exercised the option of conversion and paid Rs. 2,021.45 crores, being the remaining consideration of 75% of the price of Share Warrants. Consequently, the Bank allotted 1,57,70,985 equity shares of Rs 10 each fully paid at a price of Rs 1,709 per equity share, and the share capital increased by Rs 15.77 crores and share premium by Rs 2,679.49 crores. As on 31 March 2022, the bank had a network of 2265 branches and 2767 ATMs across the country. The Bank added 250 branches during the year, increasing the branch count to 2,265. As on March 31, 2022, the Bank held Assets Under Management (AUM) of Rs. 2,22,255 crores of its customers through products like Mutual Funds, Portfolio Management Service (PMS), Alternate Investment Fund (AIF) and Demat. The Bank also mobilised insurance premium of Rs. 2,372 crores for Life and Non-Life products, for the year ended March 31, 2022. The Bank launched Green Deposits for its retail and bulk customers. As on 31 March 2023, the bank had a network of 2606 branches and 2878 ATMs across the country. The Bank added 341 branches during the year, increasing the branch count to 2606. As on March 31, 2023, the Bank held Assets Under Management (AUM) of Rs. 1,82,208 crores of its customers through products like Mutual Funds, Portfolio Management Service (PMS), Alternate Investment Fund (AIF) and Demat accounts.

IndusInd Bank Ltd Chairman Speech

" Your Bank is deeply committed to delivering sustainable value to all its stakeholders, including customers, employees, and society at large. "

Dear Shareholders,

I am delighted to address you as we reflect upon the remarkable performance of IndusInd Bank Limited and navigate through the ever-evolving economic landscape. It is my privilege to present the annual report for FY2023.

A Dynamic Landscape

The global economic outlook remains both challenging and promising, as we emerge from a tumultuous year. We have witnessed stronger-than-expected growth in advanced economies despite multiple global shocks. Re-opening of the Chinese economy is also expected to aid global recovery. However, we anticipate muted global economic activity due to the lagged effects of last year's coordinated monetary tightening by major global central banks led by the US Federal Reserve. Recent stress in the banking sector of advanced economies is also likely to further tighten bank lending standards, adversely impacting credit supply and overall growth. There are growing concerns in global financial markets over governance, sustainable growth, stability of markets and rapid technological evolution. Global regulators are closely monitoring the developments in Generative Artificial Intelligence and Machine Learning and its use or misuse. This mandates urgent reskilling of market players, regulators and policy makers. The extant climate crises require significant investment in sustainable finance for mitigation, adaptation and building resilience.

The extreme volatility of interest rates has a direct impact on domestic markets and also leaves repercussions on international markets. Emergent risks from crypto need global consensus on issues around property rights, custody, transfer, and valuation. Apart from this, concerns also stand tall around the lack of regulatory supervision and crypto insolvency, exponentially compounding risks for financial regulators. These risks and fast emerging technological developments, including Artificial Intelligence, defy sovereign boundaries and sectoral silos. Managing the growing milieu of "Known Risks" in addition to potential cyber threats and more importantly the new universal "Unknown Risks" requires an urgent need to forge a global consensus and institutional cooperation that transcends geographical boundaries.

India's increasing global credibility and stature make it a potential leader in establishing an international regulatory alliance to create a more modern global regulatory framework that considers the interests of Emerging Economies and the Global South. The opportunity presented by India's presidency of the G20 in 2023 allows for the building of consensus in a world currently marked by polarized divisions. If successful, this initiative could have significant positive consequences on a global scale.

Amidst the challenges, central banks and authorities have taken decisive action to mitigate the impact on the broader financial system and emerging economies. While global inflation is easing from its peak last year, core inflation persists in several developed economies, nudging central banks to remain watchful. In fact, inflation is projected to remain above targets in many countries throughout 2023 and 2024. Moreover, subdued demand and the shift from goods to services are dampening global trade. Compounding these issues are protracted geopolitical tensions and divergent global positions on multilateral matters, which increase the risks of geo-economic fragmentation and impact international capital flows.

In this global backdrop, the Indian economy shines as a beacon of hope. The real GDP growth is projected to be in the range of 6 to 6.5% this fiscal year, contributing over 15% to global growth, according to the International Monetary Fund (IMF) projections. Although growth in India is expected to be moderate compared to the previous fiscal year's 7.2%, the impact of tighter financial conditions is expected to be felt in the second half. Nevertheless, the ongoing recovery in the services sector, resurgence in rural demand robust consumption outlook and improved conditions for capital formation and investments from public and private sources, will support strong growth.

Looking Ahead with Confidence

While private consumption growth may witness a temporary weakness in some sectors, we anticipate an overall sustained improvement in consumer sentiment due to a steady pickup in employment and other macroeconomic factors. The strength of rural consumption recovery hinges on the outcome of monsoons, which are predicted to be normal, although some uncertainty remains due to El Nino. The easing of CPI inflation over the year, to around 5% in FY2024 from 6.7% in FY2023, will provide support to consumption as well. Government capital expenditure (CapEx) will play a critical role in driving capital formation, with a substantial increase in budgeted capital spending during FY2024. The moderation in commodity prices, the government's focus on CapEx, healthy balance sheets of banks and corporates, and robust credit growth will foster private investment activity. Encouragingly, RBI's enterprise surveys indicate higher investment intentions of manufacturing companies during the year. The economic outlook for India is promising, relative to most other leading economies.

Robust Performance

IndusInd Bank continues to deliver robust performance and this was seen in outcomes of the recently concluded 3-year Planning Cycle 5 (PC-5 over FY2020-23). The key balance sheet metrics in terms of capital adequacy, liquidity, retail deposit mobilisation, provision coverages etc. are at their healthiest levels in the past several years. Having achieved the balance sheet strengthening, the Bank cautiously moved on to accelerating growth.

This is reflected in the Balance Sheet footage of `4,57,837 crores (14% Y-o-Y growth), deposits of ` 3,36,120 crores (15% Y-o-Y increase) and loans of `2,89,924 crores (21% Y-o-Y increase) as of March 2023. As a consequence, the Bank's Total Income stood at `44,541 crores, compared to `38,167 crores in the previous year. Operating expenses were `11,346 crores, and Pre-Provision Operating Profit rose to `14,419 crores. Net Profit soared to `7,443 crores (55% Y-o-Yincrease).

The Bank has now also announced a strategy for the next Planning Cycle 6 (PC-6) spanning FY2023-26. The PC-6 strategy is "Market Share with Diversification" with a focus on Growth, Granularity and Governance. The strategy will be executed through continuing Retailization of deposits, diversifying areas of domain expertise, scaling sub-scale businesses, accelerating Digital initiatives and delivering value to our esteemed customers, while continuously imbibing ESG principles in the businesses. Bank believes the current operating environment is conducive to sturdy growth and thus confident of achieving the ambitions laid out in the PC-6 strategy.

Resilience in the Face of Challenges

While we embrace the healthy growth outlook, we remain cognizant of the persistent risks. Weak external demand, geo-economic fragmentation impacting trade and capital flows, and protracted geopolitical tensions pose challenges. However, we believe that the risks to growth are balanced, with strong domestic drivers sustaining growth while a challenging global economic environment acts as a headwind.

Our macroeconomic stability, characterized by easing inflation, manageable external financing requirements, strong external buRs. ers, including adequate foreign exchange reserves, and a stable policy environment, provides a solid foundation to complement our domestic growth impulses. In this dynamic environment, I take pride in highlighting the resilience of IndusInd Bank.

A Better Future in Mind

IndusInd Bank is actively expanding its ESG impact throughout its operations. We are proud to announce that IndusInd Bank has been recognized as the ‘Best Bank in India for ESG-FY2023' by Asiamoney for the second consecutive year, afirming our commitment to sustainability and responsible banking practices. We have embedded ESG principles throughout our business, launching products that promote sustainability across sectors such as Retail Banking, Corporate Banking, CFD, Digital Banking and Microfinance. With integrated ESG risk assessments and a board-approved policy and governance system, we prioritize ethical practices and responsible lending while monitoring exposure to high ESG risk industries.

IndusInd Bank is the sole Indian bank chosen for the TNFD (Task Force on Nature-related Financial Disclosures) Pilot program, showcasing our dedication to managing biodiversity-related risks. Our goal is to become a carbon-neutral Bank by 2032, with all PIONEER branches now LEED certified. Inclusive practices extend beyond our internal operations, as evidenced by the launch of all-women branches, the employment of neurologically diverse individuals, and a board composition that promotes gender equality. We ensure credibility and reliability in our sustainability reporting by aligning our policies with the latest ESG trends and obtaining third-party assurance.

As we move forward, your Bank remains steadfastly dedicated to its core values of trust, transparency and excellence. We are focused on continuously strengthening our corporate governance practices, effectively managing risks, building the highest levels of compliance, fair and ethical practices within the Bank. Given fast-evolving market opportunities, risks and global technological changes, the Bank is fully prepared to respond with alacrity and dexterity. We recognize the need to constantly reskill our 38,179 highly talented and enthusiastic employees who adroitly adapt to market changes. I am delighted to say that your Bank was certified as a "Great Place to Work" by the Great Place to Work Institute? a reputed global body involved in the assessment of company culture and people practices across sectors and countries. We stay fully committed to building an ethos that cherishes diversity, strong core values and integrity of purpose.

Your Bank is deeply committed to delivering sustainable value to all its stakeholders, including customers, employees, and society at large.

I extend my heartfelt gratitude to our esteemed shareholders, loyal customers, dedicated employees, regulators and all supportive stakeholders for their unwavering trust and support. Together, we shall navigate the fast-evolving landscape, overcome challenges, and expeditiously seize new opportunities to drive the growth and success of IndusInd Bank.

With warm regards,

Sunil Mehta

Chairman

IndusInd Bank Ltd Company History

IndusInd Bank Ltd is one of the new generation private sector banks in India. The Bank's business lines include corporate banking, retail banking, treasury and foreign exchange, investment banking, capital markets, non-resident Indian/high-net-worth individual banking, and information technology. The Bank business divisions include Retail/ Consumer Banking, Consumer Finance, Global Markets Group, Corporate & Commercial Banking, Transaction Banking Group and Investment Banking. The Bank have representative offices in London, Dubai and Abu Dhabi. The bank provides multi-channel facilities, which includes automated teller machines (ATMs), net banking, mobile banking, phone banking, multi-city banking and international debit cards. The Bank has multi-lateral tie-ups with other banks providing access to more than 18000 ATMs for their customers. They enjoy clearing bank status for both major stock exchanges - BSE and NSE - and three major commodity exchanges in the country - MCX, NCDEX, and NMCE. They also offer DP facilities for stock and commodity segments. IndusInd Bank Ltd was incorporated in the year 1994 and was promoted by Mr Srichand P Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group. The Bank started their operations with a capital amount of Rs 1,000 million among which Rs 600 million was donated by the Indian Residents and Rs.400 million was raised by the Non-Resident Indians. The bank is a pioneer in launching internet banking. They are rated as one of the Top Performing Banks in various survey reports. During the year 2001-02, the Bank increased their network from 36 to 77. During the year 2002-03, the Bank entered into electronic money transfer arrangements with MoneyGram International Ltd, USA and Zoha Inc USA for attracting beneficiaries of small value remittance from overseas. Thus, they became the first to implement the RBI-Electronic Funds Transfer scheme. Also, they entered into bullion trading activities and financial services to Indian entities setting up joint ventures and wholly-owned subsidiaries abroad. IndusInd Enterprises & Finance Ltd, a Non-Banking Finance company and one of the promoters of the Bank amalgamated with the Bank with effect from July 11, 2003. As a result, IndusInd Information Technology Ltd became a subsidiary of the Bank. During the year, the bank increased their network to 127 from 77 outlets. During the year 2003-04, the Bank opened their representative office in Dubai. They launched their debit card with the name International Power Card. They opened 8 new branches and 2 new extension counters during the year. Also, a total of 31 new ATMs were installed, which includes 15 on-site ATMs and 16 off-site ATMs. Ashok Leyland Finance Ltd, a leading Non-Banking Finance company merged with the Bank with effect from June 11, 2004. During the year 2004-05, the Bank signed an agreement with NCDEX as clearing banker. They launched various innovative products and services, which includes International Mahila Card, Mobile Top-ups, Utility Bill Payment etc. They opened second representative office in London. Also, the Bank entered bilateral tie-up with Corporation Bank and with UTI Bank, in which the Bank's customer can utilize their ATMs across the country. During the year 2006-07, the Bank added a number of new business and product lines which includes the launch of Indus Gold and Indus Gift Card and E-Remittance facility. They made a tie-up with Religare Securities for extending Portfolio Management services. They also made a tie up with Aviva Life Insurance for bancassurance. The Bank opened 33 branches and set up 41 offsite ATMs during the year. During the year 2007-08, the Bank signed an agreement with National Multi Commodity Exchange Ltd (NMCE) to become their clearing bank. They made a strategic tie-up with Religare Securities for offering a value-added 3-in-1 savings accounts-linked package to customers - comprising a savings bank account, a depository account, and an Internet trading account. Also, they made a strategic partnership with Cholamandalam MS for bancassurance. During the year 2007-08, the Bank was awarded the highest A1+ rating for their Certificates of Deposit by ICRA and the highest P1+ rating for their Fixed Deposits and Certificates of Deposit by CRISIL. They also received recognition by BSE and NASSCOM Foundation for the Best Corporate Social Responsibility Practice Category. In July 2008, the Bank was awarded The Smart Workplace Award by Economic Times in association with Acer and Intel for enhancing the productivity of the employees through optimum use of resources as well as technology. During the year 2008-09, the Bank launched various new products and services which were targeted at building wealth management capabilities as well as enhancing the existing banking channels. The Bank launched the Gold and Investment verticals, which contributed in excess of Rs 5 crore of revenue in the first year of operations. They also launched two new channels - Wealth Relationship Managers and the Central Acquisition Team (CAT). The Bank commenced the process of opening 'new look branches' to enhance the banking experience of customers and to provide personal attention to their needs. They already opened five branches with the new look at Bandra, Kolkata, Ludhiana, Vadodara and Lucknow. The Consumer Banking opened their new Administrative Office in Gurgaon. Also, the Bank's Consumer Finance Division moved into their own four-storey building at G. N. Chetty Road in Chennai. In August 2008, the Bank acquired the micro-finance portfolio from SKS Mircofinance. In October 2008, they signed a co-partner agreement with World Gold Council for joint promotion of packaged and certified gold coins and ingots in India. In November 2008, the Bank entered into an agreement with TVS Motor Company where the Bank will provide structured inventory funding to TVS Motors' dealers. In January 2009, they entered into a MoU with CRISIL to rate the Bank's clients. During the year 2009-10, the Bank opened 30 new branches and 141 ATMs as a part of the strategy of expanding banking network to different locations in the country. The Bank re-launched the Non-Resident (NR) business, which acquired 12,000 new NR clients within a short span and also mobilized significant FCNR book and savings account book. During the year, the Corporate Office in Mumbai moved into new spacious premises at One Indiabulls Centre, Elphinstone Road (W), Mumbai. The Bank continued the process of opening new-look branches/off-site ATMs at various locations, viz., branches in Chennai, Secunderabad, Phagwara, Coimbatore, Pune, Hapur and off-site ATMs in 114 locations enhancing the customer experiences at primary touchpoints. During the year 2010-11, the Bank opened 90 new branches and set up 97 ATMs. As at the year ended March 31, 2011, the Bank had a total of 300 branches spread across 212 geographical locations and 594 ATMs, inclusive of 340 off-site ATMs. In October 2011, the Bank entered into an arrangement with Moscow-based commercial bank JCB Unistream for India bound remittances. In February 2011, they signed MoU with Mahindra & Mahindra Ltd in which the Bank will be one of the preferred financiers for the entire range of vehicles sold by Mahindra & Mahindra Ltd and also extend passenger and commercial vehicle finance to their customers. In June 2011, the Bank signed an agreement with Atos Worldline India (Venture Infotek) for point of sale (POS) acquiring solutions. During the year 2011-12, the Bank opened 100 new branches and 106 ATMs. As at the end of the year, the Bank had a total of 400 branches spread across 270 geographical locations and 692 ATMs inclusive of 345 off-site ATMs. The Bank launched three new services: Cash-on-Mobile, Direct Connect and Quick Redeem during the year. These new services are aimed at making banking easy and convenient for the customers. The Bank purchased the Credit Cards business of Deutsche Bank during the year. The launch of IndusInd Bank's Credit Cards business through this acquisition has fast tracked the Cards' business growth plans. On 24 July 2012, IndusInd Bank and Suzuki Motorcycle India Pvt. Ltd. (SMIPL) signed MOU whereby IndusInd Bank will be the preferred financier to extend retail finance to SMIPL's two wheeler customers across the country. On 16 August 2012, IndusInd Bank announced the launch of its foreign currency pre-paid travel card - the Indus Forex card. On 13 December 2012, IndusInd Bank announced the successful implementation of Finacle core banking across all its branches to facilitate the delivery of state-of-the-art banking services. IndusInd Bank on 1 April 2013 was included in the NIFTY 50 benchmark index of the National Stock Exchange (NSE). On 29 May 2013, IndusInd Bank and American Express announced the formation of a strategic partnership with the launch of the new IndusInd Bank Iconia American Express credit card. On 4 August 2014, Jet Airways, India's premier international airline, and IndusInd Bank announced a strategic partnership to launch a suite of Jet Airways IndusInd Bank co-branded credit cards. On 29 September 2014, IndusInd Bank inaugurated its first digital branch at IndusInd Cybercity Rapid Metro station, Gurgaon. With this launch, IndusInd Bank became the first bank in India to have a fully digital branch at a metro station, whose branding rights are owned by the bank. On 10 April 2015, IndusInd Bank announced that it has entered into an agreement with Royal Bank of Scotland N.V. to acquire its diamond and jewellery financing business in India and related deposits portfolio. On 27 July 2015, IndusInd Bank announced that it had completed the acquisition of Royal Bank of Scotland's diamond and jewellery financing business in India. The acquired loan portfolio is approximately Rs 4100 crore. On 20 May 2015, Worldpay, the global leader in payments, announced that it has partnered with IndusInd Bank to offer domestic acquiring services in India. On 3 July 2015, IndusInd Bank completed the allotment of 5.12 crore equity shares to Qualified Institutional Buyers (QIBs) at issue price of Rs 845 per share, thereby raising Rs 4327.98 crore. On 6 August 2016, IndusInd Bank completed the allotment of 87.81 lakh equity shares to the promoters of the bank on a preferential basis at issue price of Rs 857.20 per equity share, thereby raising Rs 752.74 crore. On 12 January 2016, IndusInd Bank announced that it has partnered with online payment solution leader PayU India to redefine the digital experience for Indian consumers, by bringing the full suite of consumer banking products online and powering the same through payment innovations and online eco-systems enabled by PayU India. On 23 May 2016, IndusInd Bank announced that it had signed a Corporate Agency agreement for distributing Reliance General Insurance's insurance products to its customers. On 12 July 2016, IndusInd Bank announced the opening of an International Banking Unit (IBU) at the Gujarat International Finance Tec-City (GIFT City) to meet the requirements of offshore banking operations from India. IndusInd Bank's International Banking Unit (IBU) will provide the bank access to international financial markets and will allow IndusInd Bank to deliver a complete range of products to its clients with foreign currency funding requirements. On 14 March 2017, IndusInd Bank announced that it has entered into an agreement with Infrastructure Leasing and Financial Services Ltd. (IL&FS), the promoter shareholders of IL&FS Securities Services Ltd., (ISSL), to acquire 100% of ISSL. ISSL is a leading capital market intermediary for professional clearing, depository and custodial services. On 29 March 2017, IndusInd Bank announced extension of its agreement with Lohia Auto Industries. IndusInd Bank would be the s preferred financier for retail vehicle finance for all Lohia 3-wheeler electric and diesel models. On 8 June 2017, Overseas Private Investment Corporation (OPIC) and IndusInd Bank executed a finance agreement for a $225 million loan supporting the expansion of the IndusInd Bank's micro, small, and medium enterprise (MSME) lending programs across India. On 15 September 2017, Asian Development Bank (ADB) signed a loan of up to $200 million with IndusInd Bank to provide finance to low income women borrowers in rural India. The 7-year senior loan will go towards IndusInd Bank's microfinance activities. On 14 October 2017, IndusInd Bank and Bharat Financial Inclusion announced a merger of the two entities to create a stronger and more sustainable platform for financial inclusion. The scheme contemplates merger of Bharat Financial with IndusInd and simultaneous transfer of Bharat Financial Inclusion's Business Correspondent operations into a Wholly Owned Subsidiary of IndusInd to be incorporated after receipt of requisite regulatory approvals. Bharat Financial Inclusion's shareholders will receive 639 shares of IndusInd Bank for every 1,000 shares of Bharat Financial Inclusion. Bharat Financial Inclusion is among the largest microfinance companies in India with presence across 16 states covering 1 lakh villages. In the Extraordinary General Meeting held on August 25, 2020, the members approved Preferential Allotment of equity shares of Rs. 10 each, fully paid, at a price of Rs. 524 per equity share, to five Qualified Institutional Buyers and two corporate entities including one of the promoters. Accordingly, 4,76,29,768 equity shares were allotted on September 2, 2020 to Qualified Institutional Buyers and 1,51,17,477 equity shares were allotted on September 4, 2020 to two corporate entities, pursuant to approval of Finance Committee on respective dates. Consequently, the equity share capital of the Bank increased by Rs. 62.75 crores. Pursuant to Composite Scheme of Arrangement with Bharat Financial Inclusion Limited, the Bank allotted 1,57,70,985 Share Warrants to the Promoters of the Bank on July 6, 2019, on receipt of subscription amount at 25% of the price of Rs. 1,709 per Share Warrant. Each Share Warrant was convertible to one equity share of the Bank fully paid, upon exercise of the option by paying the remaining amount. On February 18, 2021, the promoters exercised the option of conversion and paid Rs. 2,021.45 crores, being the remaining consideration of 75% of the price of Share Warrants. Consequently, the Bank allotted 1,57,70,985 equity shares of Rs 10 each fully paid at a price of Rs 1,709 per equity share, and the share capital increased by Rs 15.77 crores and share premium by Rs 2,679.49 crores. As on 31 March 2022, the bank had a network of 2265 branches and 2767 ATMs across the country. The Bank added 250 branches during the year, increasing the branch count to 2,265. As on March 31, 2022, the Bank held Assets Under Management (AUM) of Rs. 2,22,255 crores of its customers through products like Mutual Funds, Portfolio Management Service (PMS), Alternate Investment Fund (AIF) and Demat. The Bank also mobilised insurance premium of Rs. 2,372 crores for Life and Non-Life products, for the year ended March 31, 2022. The Bank launched Green Deposits for its retail and bulk customers. As on 31 March 2023, the bank had a network of 2606 branches and 2878 ATMs across the country. The Bank added 341 branches during the year, increasing the branch count to 2606. As on March 31, 2023, the Bank held Assets Under Management (AUM) of Rs. 1,82,208 crores of its customers through products like Mutual Funds, Portfolio Management Service (PMS), Alternate Investment Fund (AIF) and Demat accounts.

IndusInd Bank Ltd Directors Reports

Dear Shareholders,

The Board of Directors of the Bank have pleasure in presenting the Twenty-Ninth Annual Report of IndusInd Bank Limited (the Bank) covering business and operations of the Bank, together with the Audited Financial Statements for the year ended March 31, 2023.

The financial performance for the year ended March 31, 2023 is summarized as under:

(Rs.in crores)

The Bank demonstrated traction in operating performance metrics, like disbursements, resource mobilization through deposits, growth in operating profit, and better asset quality.

Our deposits grew by 14.56% while loan growth accelerated to 21.28% for the year. Balance sheet footage crossed `4.5 trillion mark as of March 31, 2023.

The Bank maintained healthy profitability amidst a challenging operating environment, with improvement in operating profit before provisions and contingencies by 12.29% (i.e., `14,346.48 crores from `12,775.75 crores in Previous Year). Net Interest Margin of the Bank stood at 4.27%. Further, total Provisions and Contingencies decreased by 14.79% from `8,164.63 crores to `6,956.77 crores. The net profit increased to `7,389.72 crores, as against `4,611.12 crores in the Previous Year.

Appropriations

The Directors recommend appropriation of Profit as under:

(Rs.in crores)

Dividend

The Earning Per Share (EPS) of the Bank during the year showed an improvement to `95.32 compared to `59.57 in the Previous Year.

The Board of Directors, in their meeting held on April 24, 2023, have recommended dividend of `14.00 per equity share of `10 each (140% of Face Value) for the year ended March 31, 2023 (Dividend for the year 2021-22 was `8.50 per equity share of `10 each). This proposal is subject to the approval of the shareholders at the ensuing 29th Annual General Meeting.

Dividend declared in the current year is in line with the Dividend Distribution Policy of the Bank. The Dividend Distribution Policy of the Bank can be accessed from Bank's website at: https://www.indusind.com/content/dam/indusind-corporate/ investor-resource/PoliciesoftheBank/IndusInd-Bank-Limited-Dividend-Distribution-Policy.pdf

Financial performance and state of the affairs of the Bank

The year under review was the last year of the Triennial Planning Cycle of the Bank, (Planning Cycle 5, for Financial Years 2020-23) with the theme "Digitize to DiRs. erentiate, Diversify and Create Domain Expertise Underscored by Sustainability (4D+S)".The focus of the Bank during the year under review was towards building resilience, fortifying the Balance Sheet, Scaling up Domains of Expertise, Investing in New Growth Engines, Loan Disbursement acceleration driven by retail businesses, Expanding Network, Human Capital mobilization, Maintaining Credit Quality, Building Robust Retail Deposit Franchise, Leveraging Deep Rural Distribution and Leapfrog Digital Banking. While Deposits grew by 14.56% year-on-year (with CASA improving by 7.47%), Advances grew by 21.28% over the Previous Year, and the Bank continued to maintain Liquidity Coverage Ratio above statutory requirements.

Total Income (net of interest expense) of the Bank for the year under review grew by 15.33% to `25,758.49 crores from

`22,335.04 crores during the Previous Year. Net Interest Income increased by 17.27% to `17,592.12 crores from `15,000.84 crores during the Previous Year.

Given the economic activities that has almost "recouped" what it lost, "renewed", and "re-energized" what had stalled during the pandemic, the Non-Interest Income increased by 11.35% to

`8,166.37 crores from `7,334.20 crores a year ago. Core Fee Income such as, commission, exchange, loan processing and account management fees, fees on Investment Banking and distribution of third-party products, and earnings from foreign exchange business increased by 30.64% to `7,685.33 crores from

` 5,882.89 crores during the Previous Year.

With long-term inflation, borrowing costs remained higher for longer period and lengthen the tightening cycle. While Yield on Advances rose to 11.68% as compared to 11.56% in the Previous Year, the Cost of Deposits increased to 5.32% from 4.78% a year ago.

The Bank expanded its branch network and has 2,606 branches/ banking outlets, as against 2,265 branches/ banking outlets at the beginning of the year. The extended network of the Bank included 2,878 ATMs, 3,303 branches of Bharat Financial Inclusion Ltd. ("BFIL"), and 582 outlets of IndusInd Marketing and Financial Services Private Limited, an associate entity. Revenue (net of interest expense) per employee stood at `67.47 lakhs.

The Net Non-Performing Assets of the Bank improved to 0.59% as on March 31, 2023 as compared to 0.64% a year ago.

During the year business performance of the Bank improved due to which, Return on Assets for the year stood at 1.81% as against 1.28% in the Previous Year.

Some of the significant events during the year are listed below:

• The Bank has reported highest ever profit since inception. Also, Balance Sheet size surpassed `4.5 trillion mark as of March 31, 2023.

• The Bank has exercised call option and redeemedRs. Additional Tier 1 Bonds of `1,000 crores on April 18, 2022.

• The Bank has launched Home Loan product. The end-toend process for the product launch was implemented including the customer service related processes for Home Loan product.

• The Bank is live on RBI's pilot project of Central Bank Digital CurrencyRs. (CBDC).

• 2 DBUs (Digital Banking Units) one being PPR Market Jalandhar – DBU and other being Chengalpattu – DBU were launched with 23 services.

• CBDT TIN 2.0 Collection of Direct Taxes:

TIN 2.0 is an initiative by Income Tax Department of India (ITD) which will be part of IEC (Integrated e-Filing and CPC) for tax collection, processing, monitoring and accounting of direct taxes. IndusInd Bank has been authorized for collection of direct taxes under the Agency Bank License. As an Agency Bank, IndusInd Bank will perform collection of Taxes, Reporting and Remittance to the regulators. The tax collection process for CBDT will cover online modes of payment and at branches of the bank.

• I ndusInd Bank has been certified "Great Place to Work".

• Bank has finalized The Triennial Business Plan for Planning Cycle 6 covering 2023-26 with 3G Stategy i.e., Growth, Granularity, Governance.

Change in the Nature of Business

During the year under review, there has been no change in the nature of business of the Bank.

Performance of Subsidiary and Associate Company

During the year under review, Bharat Financial Inclusion Limited ("BFIL"), the wholly owned subsidiary of the Bank, earned revenue of `1,735.53 crores as against `1,637.21crores earned during the Previous Year. The Net Profit for the year under review amounted to `53.42 crores as against `193.52 crores a year ago. As a Business Correspondent undertaking, the strength of BFIL lies in its talent pool of trained and motivated employees that stood at 36,842 as on March 31, 2023.

IndusInd Marketing and Financial Services Private Limited (IMFS) is an Associate Company of the Bank as 30% of its share capital is held by the Bank. IMFS is engaged in the business of providing manpower services, and during the year under review, earned a revenue of `475.55 crores as against `419.72 crores earned in the Previous Year. The net profit earned by IMFS during the year under review amounted to `1.21 crores as against `1.33 crores earned in the Previous Year. IMFS had 12,828 employees on its rolls as on March 31, 2023.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, the Bank has drawn up Consolidated Financial Statements including the Financial Statements of its Subsidiary Company and financial results of Associate Company, and such Consolidated Financial Statements are included in this Annual Report.

In accordance with the fourth proviso to Section 136(1) of the Companies Act, 2013, the Standalone Financial Statements and the Consolidated Financial Statements, including audited accounts of BFIL and IMFS and all other documents required to be attached thereto have been hosted on the website of the Bank at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

A statement containing the salient features of the financial position of the Subsidiary and Associate Company in Form AOC-1 is enclosed as ‘Annexure' to the Financial Statements.

The Bank does not have any joint venture company and the subsidiary is not a material subsidiary in terms of SEBI (LODR) Regulations.

Share Capital

During the year, authorized capital of the Bank was at `1,000.00 crores.

The issued, subscribed and paid-up share capital of the Bank as at March 31, 2023 is `775.90 crores comprising of 77,58,95,198 equity shares of face value of `10 each.

During the year under review, the Bank has allotted 12,32,035 equity shares of `10 each pursuant to exercise of options by option holders under its various Employee Stock Option Schemes (‘ESOS'). The equity shares allotted under ESOS ranks pari-passu with the existing equity shares issued and allotted by the Bank. The share capital of the Bank increased by `1.23 crores and share premium by `84.48 crores on account of the said allotment.

The Bank has not issued any equity shares with differential voting rights.

Debentures

Being a Scheduled Commercial Bank, compliance with SEBI Circular No.: SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018 on fund-raising by issuance of Debt Securities by Large Entities is not applicable to the Bank.

In compliance with Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the names of the Debenture Trustees with their contact details are given below:

Tier 1 Capital

During the current year, the Bank has not raised any non-equity Tier 1 capital. The Bank has redeemed unsecured, redeemable, subordinated Tier 1 Basel III compliant non-convertible taxable Bonds by exercising the call option on April 18, 2022 of `1,000 crores.

Tier 2 Capital

During the current year, the Bank has not raised any Tier 2 capital. As on March 31, 2023, the value of outstanding Tier 2 Capital instruments is `2,800 crores.

Deposits

The Bank is a banking company governed by the Banking Regulation Act, 1949, and as such, the provisions under the Companies Act, 2013 relating to acceptance of Public Deposits are not applicable.

Capital Adequacy

The Bank continues to be adequately capitalized. The Capital Adequacy Ratio of the Bank, calculated under the Basel III Capital Regulations mandated by RBI, is set out below:

Credit Ratings

Bank's Directors

The Bank's Board comprised ten Directors as on March 31, 2023, i.e., nine Non-Executive, Independent Directors, viz., Mr. Sunil Mehta, Part-time Chairman, Mr. Shanker Annaswamy, Dr. T. T. Ram Mohan, Mrs. Akila Krishnakumar, Mr. Rajiv Agarwal, Mr. Sanjay Asher, Mrs. Bhavna Doshi, Mr. Jayant Deshmukh, Mr. Pradeep Udhas, and Mr. Sumant Kathpalia, Managing Director & CEO.

(a) Non-Executive, Independent Directors

All Independent Directors have submitted a declaration that they meet the criteria of independence as laid down under sub-section (6) of Section 149 of the Companies Act, 2013. In compliance with Regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Listing Regulations], and based on these Declarations, the following Non-Executive Directors continue to be identified as Independent Directors as on March 31, 2023:

1. Mr. Sunil Mehta

2. Mr. Shanker Annaswamy

3. Dr. T. T. Ram Mohan

4. Mrs. Akila Krishnakumar

5. Mr. Rajiv Agarwal

6. Mr. Sanjay Asher

7. Mrs. Bhavna Doshi

8. Mr. Jayant Deshmukh

9. Mr. Pradeep Udhas

Pursuant to Regulation 25(9) of SEBI Listing Regulations, the Bank's Board of Directors have also obtained a Certificate from M/s Alwyn Jay & Co., Practicing Company Secretaries, that the aforesaid Directors meet the ‘Criteria of Independence' and are independent of the Management. The said Certificate is furnished at Annexure I, and forms an integral part of this Report.

(b) Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013, read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and Regulation 17 of SEBI Listing Regulations, specified companies are required to have at least one Woman Director on their Board.

Details of the Women Independent Directors are as under: Mrs. Akila Krishnakumar (DIN: 06629992), who joined the Board on August 10, 2018, is a Non-Executive, Independent Woman Director of the Bank. Mrs. Akila Krishnakumar is the Chairperson of the Compensation and Nomination & Remuneration Committee, Customer Service Committee, Vigilance Committee and Corporate Social Responsibility & Sustainability Committee. Mrs. Akila Krishnakumar is also a Member of the I.T. Strategy Committee and the Review Committee (for identification of Non-Cooperative Borrowers and Wilful Defaulters).

Mrs. Bhavna Doshi (DIN: 00400508), who joined the Board on January 14, 2020, is a Non-Executive, Independent Woman Director of the Bank. Mrs. Bhavna Doshi is the Chairperson of the Audit Committee of the Board, and a Member of the Finance Committee, Stakeholders' Relations' Committee, Risk Management Committee, and Special Committee (for monitoring large value frauds).

• Appointment/ Re-appointment of Directors

Pursuant to the recommendation of the Compensation and Nomination & Remuneration Committee (C&NRC), the Board of Directors have appointed/ re-appointed the following Directors:

• Mr. Pradeep Udhas (DIN: 02207112):

The Shareholders of the Bank had, at the 28th Annual General Meeting held on August 19, 2022, approved the appointment of Mr. Pradeep Udhas as Non-Executive, Independent Director of the Bank, for a period of four consecutive years, with effect from June 9, 2022 up to June 8, 2026 (both days inclusive). In accordance with Section 149(13) of the Companies Act, 2013, Mr. Pradeep Udhas is not liable to retire by rotation.

• Mrs. Akila Krishnakumar (DIN: 06629992): The Shareholders of the Bank had, at the 28th Annual General Meeting held on August 19, 2022, approved the re-appointment of Mrs. Akila Krishnakumar as Non-Executive, Independent Director of the Bank, for a second term of four consecutive years, with effect from August 10, 2022 up to August 9, 2026 (both days inclusive). In accordance with Section 149(13) of the Companies Act, 2013, Mrs. Akila Krishnakumar is not liable to retire by rotation.

• Mr. Rajiv Agarwal (DIN: 00336487): The Board of Directors had, at their meeting held on January 18, 2023, approved the re-appointment of Mr. Rajiv Agarwal as Non-Executive, Independent Director of the Bank, for a second term of four consecutive years, with effect from March 15, 2023 up to March 14, 2027 (both days inclusive), subject to the approval of the Shareholders of the Bank.

The Shareholders of the Bank had, on February 27, 2023, approved the re-appointment of Mr. Rajiv Agarwal as Non-Executive, Independent Director, by passing of a Special Resolution through Postal Ballot. In accordance with Section 149(13) of the Companies Act, 2013, Mr. Rajiv Agarwal is not liable to retire by rotation.

• Mr. Sunil Mehta (DIN: 00065343): The Board of Directors had, at their meeting held on January 30, 2023, approved the appointment of Mr. Sunil Mehta as Additional Director in the capacity of Non-Executive, Independent Director and Part-time Chairman of the Bank, with effect from January 31, 2023 up to January 30, 2026 (both days inclusive), i.e., for a tenure of 3 years, as approved by Reserve Bank of India vide letter dated January 25, 2023.

The Shareholders of the Bank had, on April 6, 2023, approved the appointment of Mr. Sunil Mehta as Non-Executive, Independent Director and Part-time Chairman of the Bank, for a period of 3 years, with effect from January 31, 2023 up to January 30, 2026 (both days inclusive), by passing of a Special Resolution through Postal Ballot. In accordance with Section 149(13) of the Companies Act, 2013, Mr. Sunil Mehta is not liable to retire by rotation.

• Mr. Sumant Kathpalia (DIN: 01054434): The Board of Directors of the Bank had, at their meeting held on September 15, 2022, approved the re-appointment of

Mr. Sumant Kathpalia as Managing Director & CEO of the Bank with effect from March 24, 2023, subject to approval of Reserve Bank of India and the Shareholders of the Bank.

Reserve Bank of India had, vide letter dated March 10, 2023, approved the re-appointment of Mr. Sumant Kathpalia as the Managing Director & CEO of the Bank for a further period of 2 years, with effect from March 24, 2023 up to March 23, 2025 (both days inclusive).

The Shareholders of the Bank had, on June 6, 2023, approved the re-appointment of Mr. Sumant Kathpalia as Managing Director & CEO of the Bank, with effect from March 24, 2023 up to March 23, 2025 (both days inclusive), by passing of an Ordinary Resolution through Postal Ballot. Mr. Sumant Kathpalia being a Non-Independent Director, is liable to retire by rotation.

• Mr. Arun Khurana (DIN: 00075189): The Board of Directors had, at their meeting held on June 28, 2023, recommended the appointment of Mr. Arun Khurana, Deputy CEO of the Bank, as Additional Director, in the capacity of Executive Director, (i.e., Whole-time Director) of the Bank, for a period of 3 years, with effect from such date or such other period, subject to approval of Reserve Bank of India, at a remuneration as may be approved by Reserve Bank of India and subject to approval of the Shareholders of the Bank.

• Retirement by Rotation

In compliance with Section 152 of the Companies Act, 2013, Mr. Sumant Kathpalia (DIN: 01054434), Managing Director & CEO of the Bank, will retire by rotation at the ensuing Annual General Meeting, and is eligible for re-appointment.

A resolution seeking approval of the Shareholders for Mr. Sumant Kathpalia's re-appointment, forms part of the Notice of this Annual General Meeting. A brief Resume of Mr. Kathpalia is furnished in the Report on Corporate Governance for information of the Shareholders.

As required under Regulation 36(3) of the SEBI

Listing Regulations, particulars of Directors seeking appointment/ re-appointment, as aforesaid, are given in the Annexure to the Statement attached to the Notice convening the 29th Annual General Meeting, which forms part of the Annual Report.

Pursuant to the provisions of Section 164 of the Companies Act, 2013, none of the Directors have been disqualified from being appointed as ‘Director' of the Bank.

In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, the Bank has obtained a Certificate from M/s Alwyn Jay & Co., Practicing Company Secretaries, confirming that none of the Directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as Directors of the companies, either by the SEBI or the MCA or any other statutory/ regulatory authorities. The said Certificate is attached as Annexure II to this

Report.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

The Independent Directors appointed/re-appointed during the year were subject to due diligence by the Compensation and Nomination & Remuneration Committee, based on parameters of qualification, expertise, track record, integrity and such other parameters as stipulated under the extant norms prescribed by the Reserve Bank of India.

Based on the recommendation of the Compensation and Nomination & Remuneration Committee, the Board of Directors have, after conducting their own assessment, opined that the Independent Directors, appointed/ re-appointed during the year, possess the necessary integrity, expertise and experience, and that their appointment/ re-appointment, is in the interest of the Bank.

• C essation of Directors during the year under review Mr. Arun Tiwari (DIN: 05345547) ceased to be Part-time

Chairman of the Bank on conclusion of his tenure on January 30, 2023.

The Board places on record its sincere appreciation for

Mr. Tiwari's leadership, and the contribution made by him as Chairman of the Board.

• Cessation of Directors after the end of the year under review and up to the date of this Report

None of the Directors have demitted office after the end of the financial year 2022- 2023, and up to the date of this Report.

Board and Committee Meetings

During the year, 23 meetings of the Board of Directors and 19 meetings of the Audit Committee of the Board were held, the details of which are given in the Corporate Governance Report, which forms part of the Annual Report.

Mr. Pradeep Udhas was appointed Non-Executive, Independent Director on the Board of the Bank for a period of four consecutive years, from June 9, 2022 up to June 8, 2026 (both days inclusive), and was inducted as a Member of the Audit Committee of the Board.

As on March 31, 2023, the Audit Committee of Board comprised the following Independent Directors, Mrs. Bhavna Doshi (Chairperson), Mr. Sanjay Asher, Mr. Shanker Annaswamy and Mr. Pradeep Udhas.

During the year, there were no instances where the recommendations of the Audit Committee were not accepted by the Board.

Details of composition of the Board and its Committees, Meetings held, and Attendance of the Directors at such Meetings, are provided in the Corporate Governance Report, which forms part of the Annual Report.

The intervening gap between the meetings of the Board and Committees, was within the period as prescribed under the provisions of the Companies Act, 2013 and the SEBI Listing Regulations.

Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Compensation and Nomination & Remuneration Committee of the Board had laid down the criteria for Performance Evaluation of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Directors, the Chairman and the Committees of the Board, as well as the process for such evaluation.

The Bank has aligned its Board Evaluation Framework in line with the Guidance Note on Board Evaluation issued by SEBI as per Circular dated January 5, 2017.

The Bank has engaged an external Independent Professional agency for conducting the Performance Evaluation exercise.

The Board of Directors has carried out the annual evaluation of the performance of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Directors, the Chairman and the Committees of the Board.

The performance of the Board as a whole, Individual Directors including Independent Directors, Non-Independent Director, the Chairman and the Committees of the Board have been evaluated/ reviewed by the Compensation and Nomination & Remuneration Committee, by the Independent Directors and by the Board of Directors.

The Board has formulated a policy on Performance Evaluation which details the various aspects that are to be considered for evaluating the performance of the Board, including but not limited to attendance, participation in the meeting, contribution towards strategies of the Board, etc.

The policy on Performance Evaluation provides a guideline for the individual Directors to evaluate the Board, its Committees and individual directors.

The policy on Performance Evaluation is available on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

The Statement indicating the manner in which the evaluation exercise was conducted is included in the Corporate Governance Report, which forms part of this Annual Report.

Policy for Selection and Appointment of Directors

The Board of Directors are at the helm of the Bank and an enlightened Board creates a culture of leadership and provides a long-term policy approach to improve the quality of governance.

The policy for Selection and Appointment of Directors has been formulated and adopted by the Bank, in terms of Section 178 of the Companies Act, 2013, the relevant provisions of the SEBI Listing Regulations, Section 10A of the Banking Regulation Act, 1949 and the Guidelines issued by the RBI, in this regard, from time to time.

The policy for Selection and Appointment of Directors shall act as a guideline for the Compensation and Nomination & Remuneration

Committee for determining the qualifications, positive attributes, independence of Directors and matters related thereto, to recommend appointment and removal of Directors, to the Board of the Bank.

The policy for Selection and Appointment of Directors has been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

Familiarization Programs for Independent Directors

Various programs were undertaken for familiarizing the Independent Directors of the Bank, details of which are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

Change in Key Managerial Personnel

During the financial year 2022-23, the following changes took place in Key Managerial Personnel of the Bank:

i) Company Secretary:

Mr. Girish Koliyote had, for personal reasons, resigned as Company Secretary and Key Managerial Personnel (KMP) of the Bank, with effect from the close of business hours on Friday, June 17, 2022.

Mr. Anand Kumar Das was designated as the ‘Deputy

Company Secretary' of the Bank with effect from June 9, 2022. He was also appointed as the ‘Compliance Officer of the Bank' with effect from June 20, 2022, in terms of Regulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and under the relevant provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015 and as the Nodal Officer of the Bank, in terms of Rule 2A of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

The Board of Directors had, at their meeting held on

December 16, 2022, approved the appointment of Mr. Anand Kumar Das as ‘Company Secretary' and ‘Key Managerial Personnel' (‘KMP') of the Bank with effect from December 16, 2022. Mr. Anand Kumar Das shall continue to be the ‘Compliance Officer of the Bank' in terms of Regulation 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and under the relevant provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, and as the Nodal Officer of the Bank, in terms of Rule 2A of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

Adequacy of internal financial controls related to financial statements

The Bank operates in a fully computerized environment with a Core Banking Solution system, supported by diverse application platforms for handling special businesses, such as Treasury, Trade Finance, Credit Cards, Retail Loans, etc. The process of recording of transactions in each of the application platforms is subject to various forms of controls such as, in-built system checks,

Maker – Checker authorizations, independent post-transaction reviews, etc. The Financial Statements are prepared based on computer system outputs. The responsibility of preparation of Financial Statements is entrusted to a dedicated unit which is completely independent. This unit does not originate accounting entries except for limited matters such as, Share Capital, Taxes and Transfers to Reserves. The Bank has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of Financial Statements, and that such internal financial controls were adequate and were operating effectively during the year.

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

The information on conservation of energy and technology absorption pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is mentioned below.

Conservation of Energy:

Considering the nature of its activities as an entity in the Financial Services sector, the Bank has voluntarily taken steps towards conservation of energy, details of which are furnished in Principle 6 of Section E of the Business Responsibility and Sustainability Report which has been hosted on the Bank's website at: https://www.indusind.com/in/en/sustainability.html

Technology Absorption:

The Bank has made optimum use of Information Technology in its operations. Details pertaining to Technology Absorption have been explained in the Management Discussion and Analysis Report which forms an integral part of the Annual Report.

Foreign Exchange Earnings and Outgo:

The provisions relating to 134 (3) (m) of the Companies Act, 2013, on particulars relating to Foreign Exchange Earnings and Outgo are not applicable to a Banking company and as such, no disclosure is being made in this regard.

Risk Management

The Bank has an Enterprise-wide Risk Management (ERM) framework in place. The integrated Risk Management Department covers, Credit Risk, Market Risk, Assets-Liabilities Management (ALM) and Operational Risk across all verticals, independent of business functions.

Risk Management functions in the Bank have been aligned with best industry practices, supported by advanced risk measurement and analytical systems which enable proactive risk management and monitoring. Risk Management is continually enhanced in line with changes in operating environment and regulations.

The Bank has a comprehensive framework of Risk Management Policies which specify the risk appetite, risk measurement methodologies, and monitoring and control measures for the respective business segments. The policies have been designed keeping risk appetite as the central objective, and business strategies have been aligned to risk policies.

The Bank has set up a Board-level Committee, viz., ‘Risk Management Committee' to examine risk policies and procedures developed by the Bank and monitor adherence to risk parameters and prudential limits set for different portfolios/ products/ segments.

Details of Risk Management Models and Frameworks implemented by the Bank are mentioned under ‘Management Discussion and Analysis'.

Vigil Mechanism/ Whistle Blower Policy

The Bank has in place the ‘Whistle Blower Policy' since 2009. The policy is in compliance with RBI Guidelines, provisions of the Companies Act, 2013, and the SEBI Listing Regulations. The Vigil Mechanism at the Bank requires submission of Quarterly Reviews before the Audit Committee of the Board, and placing of Annual Reviews before the Audit Committee and the Board of Directors. The policy also incorporates suggestions of the Protected Disclosure Scheme for Private Sector and Foreign Banks, instituted by Reserve Bank of India.

The Board of Directors of the Bank have constituted a Board-level Committee, viz., the Vigilance Committee, which conducts overview of cases of vigilance nature arising out of actions of the employees of the Bank. The Committee meets at least thrice a year.

The Bank's Whistle Blower Policy is in sync with all statutory and regulatory guidelines.

Further details about the Vigil Mechanism are furnished in the Report on Corporate Governance and the Whistle Blower Policy of the Bank has been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html > Policies & Codes >> Whistle Blower Policy

Reporting of Fraud, by the Auditors

During the year under review, pursuant to Section 143(12) of the Companies Act, 2013 neither the statutory auditors nor the secretarial auditor of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.

Statutory Auditors

M/s M S K A & Associates, Chartered Accountants (ICAI Firm Registration Number 105047W) and M/s M. P. Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W), were the Joint Central Statutory Auditors of the Bank for the year ended March 31, 2023.

The Joint Central Statutory Auditors have not made any qualification/ reservation/ adverse remarks or disclaimer in their report for FY 2022-23.

As per RBI guidelines issued on April 27, 2021, a Statutory Auditor can conduct audit of a Scheduled Commercial Bank for a maximum period of 3 years at a time. Statutory Auditor would not be eligible for re-appointment in the same Entity for six years (two tenures) after completion of full or part of one term of the audit tenure.

Members may note that appointment of M/s. M. P. Chitale & Co., Chartered Accountants was approved by the members in the 27th AGM of the Bank held on August 26, 2021, for a period of three (3) consecutive years, i.e., until the conclusion of the 30th AGM, subject to approval from the RBI on annual basis.

M/s. M. P. Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W) are re-appointed as Joint Statutory Auditors of the Bank for FY 2023-24, being their third year of appointment.

Appointment of M/s M S K A & Associates, Chartered Accountants (ICAI Firm Registration Number 105047W) was approved by the members in the 28th AGM of the Bank held on August 19, 2022, for a period of three (3) consecutive years, i.e., until the conclusion of the 31st AGM, subject to approval from the RBI on annual basis.

M/s M S K A & Associates, Chartered Accountants (ICAI Firm Registration Number 105047W) are re-appointed as Joint Statutory Auditors of the Bank for FY 2023-24, being their second year of appointment.

Independent Auditors' Report

M/s M S K A & Associates and M/s M. P. Chitale & Co., Joint Central Statutory Auditors of the Bank, have audited the accounts of the Bank for the year 2022-23 and their Report is enclosed and forms part of the Annual Report. Pursuant to Section 143(3)(i) of the Companies Act, 2013, the Joint Central Statutory Auditors have also reported on the adequacy and operating effectiveness of internal financial controls system over financial reporting, which has been enclosed as ‘Annexure A' to the Independent Auditors' Report.

Significant Audit observations, if any, and corrective actions taken by the Management are presented to the Audit Committee of the Board from time to time.

There are no qualifications, reservations or adverse remarks or disclaimers made in the Auditors' Report.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had appointed M/s Alwyn Jay & Co., Company Secretaries in Practice, to undertake Secretarial Audit of the Bank for the FY 2022-23. The Secretarial Audit Report submitted by M/s Alwyn Jay & Co. is furnished at Annexure III, and forms an integral part of this Report. There are no qualifications, reservations, adverse remarks or disclaimers made by the secretarial auditor of the Bank, in its Report.

Employees Stock Option Scheme

The Bank had instituted the Employees Stock Option Scheme (ESOS-2020) to enable its employees, including Whole-time Directors, to participate in the capital appreciation and future growth of the Bank. Under the Scheme, Options can be granted, which upon exercise could give rise to the issuance of a number of shares up to 7% of the aggregate number of paid-up equity shares of the Bank from time to time. The eligibility and number of Options to be granted to an employee is determined on the basis of criteria laid down in the Scheme and is approved by the Compensation and Nomination & Remuneration Committee of the Board of Directors.

An aggregate of 5,33,77,879 Options, comprising 6.88% of the Bank's paid-up Equity Capital, have been granted under the Scheme. Statutory disclosures as required under Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 are given at Annexure IV, and form an integral part of this Report.

The Annual Certificate on compliance with the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021 issued by the Secretarial Auditor of the Bank shall be hosted on the Bank's website, as the 29th Annual General Meeting will be held through Video Conference facility.

The Employees Stock Option Plan is administered by the Compensation and Nomination & Remuneration Committee of the Board.

Statutory disclosures as mandated under Regulation 14 of the SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021, have been hosted on the website of the Bank at:

https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

Compliance with Secretarial Standards

The Bank has complied with the provisions of the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, and has put in place systems which are adequate and are operating effectively.

Maintenance of Cost Records

Being a banking company, provisions of Section 148(1) of the Companies Act, 2013, relating to maintenance of cost records is not applicable to the Bank.

Proceedings under Insolvency and Bankruptcy Code

Details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review, along with their status as at the end of the financial year:

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, the Directors make the following statement in terms of Section 134(3)(c) and 134 (5) of the Companies Act, 2013: (a) that in the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any; (b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and that 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 March 31, 2023, and of the profit of the Bank for the year ended on that date; (c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting frauds and other irregularities;

(d) tha t the Annual Financial Statements have been on a ‘going concern' basis; (e) that proper internal financial controls were in place and that the financial controls were adequate and operating effectively; and (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Annual Return

Pursuant to Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return of the Bank as on March 31, 2023, in the prescribed Form MGT-7 is available on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

Particulars of Employees

The Bank had 38,179 employees on its rolls as on March 31, 2023.

101 employees employed throughout the year were in receipt of remuneration of `1.02 crores per annum or more, and 17 employees employed for the part of the FY 2023 were in receipt of remuneration of `8.50 lakh per month or more.

The information containing particulars of employees pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, the above details are not being sent along with this Annual Report to the Members of the Bank in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining the details may please send an email to the Secretarial Team at investor@indusind.com.

None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the Equity Share Capital of the Bank.

Details of remuneration of Directors and Employees in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, are given at Annexure V which forms an integral part of this Report.

Policy on Remuneration to Non-Executive Directors

The Bank has formulated and adopted a policy on Remuneration to Non-Executive Directors of the Bank in accordance with the guidelines prescribed in RBI Circular dated April 26, 2021, on compensation of Non-Executive Directors of private sector banks.

The Independent Non-Executive Directors of the Bank were paid Fixed Remuneration of `20 lakhs per annum, and Sitting Fees for attending meetings of the Board and various Board Committees held during the year under review.

During the year under review, Mr. Arun Tiwari, Part-time Chairman of the Bank, was paid fixed remuneration on pro rata basis, @ `30 lakhs per annum, as approved by the Reserve Bank of India and the Shareholders, as well as Sitting Fees for attending meetings of the Board and various Board Committees, up to his tenure, which concluded on January 30, 2023.

During the year under review, Mr. Sunil Mehta, Part-time Chairman of the Bank, was paid fixed remuneration on pro rata basis, @ `30 lakhs per annum, with effect from January 31, 2023, i.e., from the date of his appointment as Chairman of the Bank, as approved by the Reserve Bank of India, and the Shareholders through Postal Ballot. Mr. Sunil Mehta was also paid Sitting Fees for attending meetings of the Board and various Board Committees from the date of his appointment on the Board of the Bank. Mr. Sunil Mehta has also been provided with a car for offcial use.

The annual remuneration payable to a single Non-Executive Director of the Bank did not exceed 50% of the total annual remuneration payable to all Non-Executive Directors.

No Stock Options were granted to the Non-Executive Directors.

The ‘Policy on Remuneration to Non-Executive Directors' has been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html #policies-and-codes

Details on remuneration paid to the Managing Director of the Bank, are given under the Corporate Governance Report, which forms part of the Annual Report.

Particulars of Loans, Guarantees or Investments outstanding

Pursuant to Section 186(11) of the Companies Act, 2013, loans made, guarantees given, securities provided or acquisition of securities by a banking company in the ordinary course of its business are exempted from the disclosure requirement under Section 134(3)(g) of the Companies Act, 2013.

Particulars of Contracts or Arrangements with Related Parties

All transactions entered with ‘Related Parties' during the year under review were conducted on an ‘arm's length basis' and in the ‘ordinary course of business' of the Bank, and therefore does not attract the provisions of Section 188 of the Companies Act, 2013.

Further, there are no materially significant Related Party Transactions entered by the Bank during the year under review, with any of its Related Parties, viz., Promoters, Directors, Key Management Personnel, Subsidiary and other related entities including IMFS, an Associate Company, which may have potential conflict with the interest of the Bank at large.

In view of the above, the disclosure under Form AOC-2 is not applicable to the Bank.

The policy on Related Party Transactions as approved by the Board of Directors has been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html >>Policies & Codes >> Related Party Transaction Policy

Consolidated Financial Statements

In accordance with Section 129 (3) of the Act, Consolidated Financial Statements comprising financial statements of IndusInd Bank Limited (‘the Bank'), Bharat Financial Inclusion Limited (formerly known as IndusInd Financial Inclusion Limited) ("BFIL") ("the Subsidiary") and IndusInd Marketing and Financial Services

Private Limited ("IMFS") ("the Associate") has been prepared and is included in the Annual Report.

In accordance with 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 also been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

Further, the audited annual accounts of the Subsidiary of the Bank has been hosted on the Bank's website at: https://www.indusind.com/in/en/investors/investor-landing/ investor-resources.html

In the preparation of the Consolidated Financial Statements, the Standalone Financial Statements of BFIL, the wholly-owned subsidiary for the year ended March 31, 2023, have been considered on a line by line basis by adding together like items of assets, liabilities, income and expenses, in accordance with AS 21.

In accordance with AS 23, the Standalone Financial Statements of IMFS, an associate in which the Bank has a 30% stake, has been considered in the Consolidated Financial Statements by adopting ‘Equity Method'.

Indian Accounting Standards (Ind AS)

The Reserve Bank of India (RBI) issued a circular in February 2016, requiring Scheduled Commercial Banks to implement Indian Accounting Standards (Ind AS) from April 1, 2018. Vide a press release dated April 5, 2018 the implementation was deferred by one year. The legislative amendments recommended by the Reserve Bank towards implementation of Ind AS are still under consideration of the Government of India. Accordingly, RBI had, through a notification dated March 22, 2019, deferred the Ind AS implementation until further notice.

Pursuant to the RBI Circular dated February 11, 2016, the Bank formed a Steering Committee, comprising members from cross-functional areas, for the purpose of reviewing and monitoring the progress of implementation. The Bank had set up a Working Group under the guidance of the Steering Committee and has conducted Gap Assessment and identified the differences between the current accounting framework and Ind AS, including the identification of the accounting policy options provided under Ind AS 101, First Time Adoption. The Bank had engaged the services of a professional firm with international experience in the field, to assist in the project of implementation of Ind AS. The Bank has obtained licenses for IT systems to automate Expected Credit Losses and Effective Interest Rate calculations towards implementation of Ind AS and the project is currently under implementation. The Bank continues to organize trainings for its teams across business and support functions. The Audit Committee of the Board of Directors has an oversight on the progress of the Ind AS implementation. Further, there may be regulatory guidelines and/or clarifications in some of the critical areas with respect to application of Ind AS, which the Bank will need to incorporate in its implementation project as and when those are issued.

In accordance with RBI directions, the Bank has been submitting standalone pro forma Ind- AS financial statements along with other computations to the RBI, from time to time.

Corporate Social Responsibility and Sustainability Corporate Social Responsibility

The Bank is committed to various interventions through multiple CSR projects and programs that have long-term and sustainable impact, in line with its CSR strategy. As per the requirements of Section 135 of the Companies Act, 2013 and CSR Rules 2014, the Bank has a Board-level CSR & Sustainability Committee to look after the CSR initiatives. The Committee is headed by Mrs. Akila Krishnakumar as the Chairperson, Mr. Rajiv Agarwal, Mr. Sanjay Asher and Mr. Sumant Kathpalia as Members.

The composition of the CSR & Sustainability Committee is in accordance with Section 135 of the Companies Act, 2013.

Continuing with the CSR policy and strategy under Sattvam, the brand name, under which the Bank conducts all its CSR activities, under the Bank's projects now encompass the length and breadth of India, enabled by deep collaboration with NGOs and community-based groups.

The CSR framework is built on the following Key Principles:

• Long-term commitment: 3-5 years' commitment on systemic changes, objectives and outcomes.

• Scale for Impact: Create scalable and replicable models/ theory of change.

• Community Ownership: Ensuring accountability, relevance, awareness and empowerment of local communities through their continuous engagement.

• Collaboration: Establishing a multi-stakeholder forum, bringing together local institutions, district offcials, sectoral experts and community influencers to ensure increased collaboration.

• Convergence: Bringing together of Knowledge and Resources to ensure existing support mechanisms (such as Government Schemes) are leveraged effectively for community-centric development and rapid scale and achievement of outcomes.

• Technology & Innovation: Integrating innovative solutions into the Program for enhanced project delivery, efficient reporting and better scalability.

The meticulous design of our CSR strategy ensures that it seamlessly aligns with the National Development Agenda and the United Nation's 2030 Sustainable Development Goals.

We have a two-pronged approach to CSR implementation - the Flagship CSR Programme is designed to improve the quality of life of rural communities in the selected districts aligned with the Government's Aspirational Districts Programme. In parallel, the Strategic Projects comprise of short-term to mid-term projects that empower and benefit marginalised groups, vulnerable populations and weaker sections of society. By combining our flagship and strategic programmes, we have adopted a truly holistic approach towards the nation's development.

Our Flagship CSR Programme is a ‘Holistic Rural Development Programme' and aims to improve the income levels and standard of living in the selected Aspirational Districts of Niti Aayog, over a period of 5-10 years, in multiple focus areas, including enhancing and creating Livelihood in Agriculture, Water, allied & non-farm value chains, FPO (Farmer Producer Organizations), Skilling, collaborative efforts in Health, Education & Basic Infrastructure. Climate-resilience and women's socio-economic development is at the core of the Flagship CSR Programme. It seeks to achieve this goal by impacting economic empowerment of communities and improving efficiency in natural resource management.

Strategic Projects, which comprise of projects of short-term to mid-term duration projects, continue to work in line with the Bank's commitment to social upliftment and environmental sustainability. These projects focus on three overarching themes: Environment, Education and Sports and include biodiversity conservation, renewable energy, water stewardship, scholarships, remedial classes, foundational literacy & numeracy, inclusive sports for women, the differently-abled and the underprivileged.

Under ‘Other Areas of Special Interest', the Bank supports various healthcare, livelihood & skilling programs and also extends support to Armed Forces Veterans, Widows and their families.

Furthermore, the Bank supports CSR initiatives of Bharat Financial Inclusion Limited, its wholly-owned subsidiary. Two major initiatives, viz., Bharat Sanjeevani (on livestock care) and Pragat (Integrated Development Program including Water, Healthcare and Education) are supported by the Bank.

The CSR Initiatives/ Projects that are undertaken by the Bank are in accordance with Schedule VII of the Companies Act, 2013.

Companies, on the basis of criteria prescribed under Section 135 of the Act, are required to spend at least two per cent of their Average Net Profits made during the three immediately preceding financial years, in pursuance of their Corporate Social Responsibility Policy. Accordingly, the Bank spent `108.51 crores against adjusted budget of `107.52 crores, towards various CSR activities specified in Schedule VII of the Companies Act, 2013.

The Report on CSR activities undertaken by the Bank during the year under review, is set out in Annexure VI and forms an integral part of this Report.

The CSR Policy, is framed basis the activities permitted under Schedule VII of the Companies Act, 2013. Details of the CSR Policy and initiatives adopted by the Bank on CSR, are available on Bank's website at: https://www.indusind.com/in/en/csr-home/our-approach/csr-policy.html

Sustainability

The Bank understands that the inclusion of sustainable practices is key for surviving and thriving in the long run and therefore, the Bank is diligently looking at adopting business products, practices, processes and operations that reflect its long-standing view - "Good Ecology is Good Economics".

The Bank upholds sustainability in every aspect of its functioning, devising various board committees, councils and teams and the sustainability theme is embedded across our diverse Businesses, Risk and Operations units. At the apex lies the CSR and Sustainability Committee of the Board, followed by the Sustainability Council and the Sustainability Unit. The centralized Sustainability unit works closely with various stakeholders in developing the ESG strategy for each department.

The Bank prepares its strategic objectives in 3-year planning cycles, which are further segmented into yearly and quarterly ambitions. One of the key pillars of the three-year (FY24 to FY26) Planning Cycle-6 (PC6) is ‘Imbibing ESG into Business'.

ESG targets are also being included in the targets of Business Units (BUs) to demonstrate Bank's commitment towards promoting sustainability-linked initiatives in its business and banking operations. These business targets are discussed and approved by Bank's Board and then integrated with the KPIs of the BUs and KMPs (Key Managerial Persons).

As a responsible lender, the Bank has also integrated ESG considerations into its Credit Appraisal process. Various ESG linked products and solutions have been offered to our retail and corporate clients. This comprehensive approach has resulted in the Bank maintaining its leadership position in the FY 2022 rankings by CDP and S&P Global within the cohort of the top five private sector banks in India as well as maintaining its inclusion in the S&P Dow Jones Sustainability Yearbook 2022 for a third consecutive year.

Business Responsibility and Sustainability Report (BRSR)

As per SEBI Listing Regulations, the Business Responsibility and Sustainability Report ("BRSR") shall form part of the Directors' Report.

The Bank has provided BRSR, which indicates the Bank's performance against the principles of the ‘National Guidelines on Responsible Business Conduct'. This would enable the Members to have an insight into environmental, social and governance initiatives of the Bank.

In view of the above, and in compliance with Regulation 34(2) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report forms part of this Annual Report and is also hosted on the Bank's website at: https://www.indusind.com/in/en/sustainability/esg-ratings-and-reporting.html

Corporate Governance

The Bank believes that Corporate Governance is a reflection of its value system, encompassing its culture, its policies, and its relationships with the stakeholders. Responsible and ethical corporate conduct is integral to the way the Bank does its business.

The Bank also believes that consistent implementation of good corporate governance practices contributes towards developing and sustaining the best operating systems and processes.

Integrity, transparency and accountability are the basic tenets of Corporate Governance. The Bank acknowledges the need to uphold the integrity of every transaction it enters into, and believes that honesty in its internal conduct would be judged by its external behavior.

The Bank has adopted the industry best practices of Corporate Governance and aims to continue banking on the highest principles of governance and ethics. At IndusInd, Corporate Governance is more than just adherence to the statutory and regulatory requirements. It is equally about focusing on voluntary practices that underlie the highest levels of transparency.

The Governance framework is driven by the objective of enhancing long-term stakeholder value, without compromising on Ethical Standards and Corporate Social Responsibilities.

The Bank's guiding principles are also articulated through its Code of Business Conduct and various initiatives taken to maintain transparency by communicating with the Shareholders on developments in the Bank. The Bank has also set up various sub-Committees of the Board to bring in more efficacy and transparency in the workings.

The Bank continues to focus on better, complete and timely disclosures to the Stock Exchanges for dissemination to the Stakeholders. Detailed disclosures regarding corporate governance are provided in the Corporate Governance Report, which forms part of the Annual Report.

Management Discussion and Analysis Report

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

Significant and Material Orders Passed by Regulators or Courts or Tribunal Impacting the ‘Going Concern' Status and Operations of the Bank

During FY 2022-23, no significant and/ or material order was passed by any regulator, court or tribunal against the Bank, which could impact its going concern status or future operations.

Material Events that have happened after the Balance Sheet date

No material changes and commitments affecting the financial position of the Bank have occurred between the end of the financial year of the Bank to which the Financial Statements relate and the date of this Report.

Awards and Accolades

1) DIGIT AL CX AWARD

• IndusInd Bank was bestowed with highly Acclaimed award for Outstanding Digital CX Payments & Collection Services" at the Digital CX Awards 2022

2) ASIAMONEY BEST BANK AWARD 2022

• IndusInd Bank was adjudged as the BEST BANK FOR ESG – INDIA at the ASIAMONEY BEST BANK AWARD 2022

3) CELENT MODEL BANK 2022

• IndusInd Bank recognized as ‘Celent Model Bank' award under the category–‘Payments System Transformation' for building a best-in class Enterprise Payments Hub (EPH)

4) ET CX AWARD 2022

• IndusInd Bank was recognized as one of the most customer centric brand and was awarded at the 3rd Edition of ET CX Summit 2022

5) Governance Now 5th India BFSI Conclave & Awards

• IndusInd Bank awarded by ‘Governance Now' under the category – ‘SME Connect' for initiating ‘Indus Credit for Business'.

6) The Asset Triple Asian Awards 2022

• IndusInd Bank was awarded Best SCF Solution for various clients at The Asset Triple Asian Awards 2022

7) MeitY-Digidhan Dashboard for Digital Payments

• MeitY has ranked IndusIndBank #1 amongst Private Banks for FY22 on its Digidhan Dashboard for Digital Payments

8) Marksmen

• IndusInd Bank was honored as "Most Preferred Workplace 2022–23 by Marksmen"

9) Euro money 2022 Market Leaders Award

• IndusInd Bank is proud to be ranked as a Market Leader for ESG in India by Euromoney 2022

10) Global Transaction Banking Innovation Awards 2022

• Best Transaction Banking Innovation Lab

• Best ERP Integration Initiative

• Outstanding Use of Technology in Cash and Liquidity Management

11) Escorts Kubota Ltd

• Escorts Kubota Ltd. recently awarded IndusInd Bank – TFE Team for being the Number 1 Financier for 2 consecutive Financial years

12) Bharat FinTech Summit 2023

• IndusInd Bank won the Best CIO award at the recently concluded Bharat FinTech Summit 2023

13) 10th Payments Industry Awards, 2023

• IndusInd Bank's Indus Merchant Solutions App was awarded the Best Merchant Acquirer of the Year at the 10th Payments Industry Awards, 2023

• EazyDiner IndusInd Bank Credit Card has been awarded the Best co-brand card at the 10th Edition Payments Industry Awards, 2023

Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Bank has complied with the extant provisions relating to the constitution of Internal Committees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The disclosures relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is included in the Corporate Governance Report, which forms an integral part of the Annual Report.

Cautionary Statement

Certain statements in the Directors' Report and in the Management Discussion and Analysis document describing the Bank's objectives, estimates and expectations may be ‘forward-looking statements' within the meaning of applicable Securities Laws and Regulations. Actual results could differ substantially from those expressed or implied. Important factors that could make a difference include economic conditions in the domestic and overseas markets, changes in Laws/ Regulations, and other incidental factors.

Annexures

The following documents are annexed to the Directors' Report: (i) Certificate on Declaration of Independence of Directors from Company Secretary in Practice.

(ii) Certificate from Secretarial Auditor on disqualification of directors pursuant to Regulation 34(3) of the SEBI Listing Regulations.

(iii) Secretarial Audit Report of the Bank, for the financial year ended March 31, 2023.

(iv) Statutory Disclosures regarding administration of ESOPs for the financial year ended March 31, 2023.

(v) Disclosure on remuneration pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(vi) Annual Report on CSR activities undertaken by the Bank during the financial year ended March 31, 2023, in terms of Notification dated January 22, 2021, issued by the MCA.

Acknowledgements

The Directors are grateful to the Shareholders for the trust and confidence reposed by them in the Bank.

The Directors are also grateful to the Reserve Bank of India, the Ministry of Corporate Affairs, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and the Stock Exchanges, for the guidance and support extended by them to the Bank.

The Board thanks its valued Customers for their patronage, and looks forward to the growing of this mutually supportive relationship in future.

The Board expresses its deep sense of appreciation to all employees for their excellent performance, strong work ethic, and untiring commitment, which qualities have contributed to the Bank's continued progress in a challenging environment.

For and on behalf of the Board of Directors

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