IndusInd Bank Ltd Directors Report.

The Board of Directors of the Bank have pleasure in presenting the Twenty-seventh Annual Report covering business and operations of the Bank, together with the Audited Financial Statements for the year ended March 31, 2021.

The financial performance for the year ended March 31,2021 is summarized as under:

(Rs. in crores)
Particulars As on March 31, 2021 As on March 31, 2020
Deposits 256,204.96 202,039.81
Advances 212,595.41 206,783.17
Operating Profit (before Depreciation and Provisions and Contingencies) 12,032.08 11,050.68
Net Profit 2,836.39 4,417.91

The financial year under review was severely impacted by the COVID-19 pandemic, as the entire world was affected in a manner unseen for more than a century. The beginning of the financial year witnessed a country-wide lockdown which was lifted in phases since June 2020. From the unprecedented low level of economic activity and a technical recession in H1 FY 2020-21, the economy started a swift recovery on the back of fiscal measures taken by the Government of India and monetary policy support and regulatory forbearances provided by the Reserve Bank of India. While the economic recovery was progressing well, towards the end of the year a second and more virulent wave of the pandemic has affected some parts of the country.

During the year, the Bank embarked on multiple initiatives to fortify the Balance Sheet such as expanding and granularising the deposit franchise, rebalancing the loan book with a moderate growth year on year, improving the rating and tenor profile of the loan book, and augmenting capital and provision buffers to build resilience. The business of the Bank improved with Deposits growing by 26.81% and Advances by 2.81% over the previous year.

Operating Profit (before Depreciation and Provisions and Contingencies) rose by 8.88% to Rs.12,032.08 crores, as compared to Rs.11,050.68 crores in the previous year.

The Bank significantly increased the provision buffers prudentially so as to mitigate any potential impact arising out of the pandemic. The total Provisions and Contingencies recognised in the Profit and Loss account during the year were Rs.8,890.28 crores, an increase of 40% over Rs.6,354.80 crores recognized during the previous year. Consequently, the Net Profit of the Bank for the year under review, after considering all expenses and Provisions and Contingencies, amounted to Rs.2,836.39 crores, as against Rs.4,417.91 crores in the previous year.

Appropriations

The Directors recommend appropriation of Profit as under:

( in crores)
Operating Profit before Depreciation and Provisions and Contingencies 12,032.08
Less: Depreciation on Fixed Assets 305.41
Less: Provisions and Contingencies inclusive of Income Tax 8,890.28
Net Profit 2,836.39
Profit Brought Forward 13,483.66
Amount available for Appropriation 16,320.05
Transfer to Statutory Reserve 709.10
Transfer to Capital Reserve 130.01
Dividend (including Tax on Dividend) -
Deduction during the year (480.44)
Total Appropriations 391.45
Balance carried over to Balance Sheet 15,928.61

Dividend

The Earning Per Share of the Bank during the year amounted to Rs.38.75.

The RBI vide its Circular dated April 22, 2021, advised that banks may pay dividend on equity shares from the profits for the financial year ended March 31, 2021 subject to the quantum of dividend being not more than fifty percent of the amount determined as per the dividend payout ratio prescribed in Circular dated May 4, 2005. Accordingly, the Board of Directors, in their meeting held on April 30, 2021, have proposed dividend of Rs.5 per equity share. This proposal is subject to the approval of the shareholders at the ensuing 27th Annual General Meeting.

Members may note that the Bank did not declare dividend for the year ended March 31,2020, in compliance with RBI Circulars dated April 17, 2020 and December 4, 2020.

Financial Performance and state of the affairs of the Bank

The year under review was the first year of the new Triennial Planning Cycle of the Bank, (Planning Cycle 5, for Financial Years 2020-23) with the theme "Digitize to Differentiate, Diversify and Create Domain Expertise Underscored by Sustainability (4D+S)". In view of the pandemic, the focus of the Bank during the year under review was in building resilience, fortifying the balance sheet, improving the loan book profile, and granularising the deposit franchise. While Deposits grew by 26.81% year- on-year, the Advances grew only by 2.81% over the previous year and the Bank continued to be liquid. A large part of the retail customers and some of the corporate customers who were impacted by the pandemic availed of the moratorium offered by the Bank on payment of instalments and interest in accordance with the RBI guidelines, and the loan origination activity was largely subdued.

The Total Income of the Bank for the year under review grew by 5.66% to Rs.20,086.51 crores from Rs.19,010.05 crores. Net Interest Income increased by 12.18% to Rs.13,527.89 crores from Rs.12,058.74 crores.

In view of the low level of economic activity, the Non-Interest Income fell 5.65% to Rs.6,558.61 crores from Rs.6,951.31 crores. 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 declined by 19.13% to Rs.4,679.22 crores from Rs.5,785.83 crores during the previous year.

Abundant liquidity available in the system kept the interest rates in a narrow range. While Yield on Advances fell marginally to 11.84% as compared to 11.98% in the previous year, the Cost of Deposits registered a sharper decline to 5.38% from 6.51% a year ago. Consequently, the Net Interest Margin for the year improved to 4.17%.

The Bank expanded its branch network to reach 2,015 branches/banking outlets, as against 1,911 branches/banking outlets at the beginning of the year. The extended network of the Bank comprised 2,872 ATMs, 2,289 branches of Bharat Financial Inclusion Limited (BFIL), and 828 outlets of IndusInd Marketing and Financial Services Private Limited, an associate entity. Revenue per employee during the year improved to Rs.67.72 lakhs.

On account of the significant prudential provision buffers added during the year, the Net Non-Performing Assets of the Bank improved to 0.69% as on March 31,2021 as compared to 0.91% a year ago. Return on Assets for the year stood at 0.90%.

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

• In June 2020, consequent to the rating downgrade of the issuer rating of the Government of India by a notch, Moodys Investors Service downgraded the long-term local and foreign currency deposit ratings of IndusInd Bank to Ba1 from Baa3, the Baseline Credit Assessment to ba2 from ba1, and the outlook was considered negative. Driven by improvement in the capital and funding franchise, and marginal asset quality deterioration because of the economic disruptions from the pandemic, in March 2021, Moodys affirmed the long term local and foreign currency deposit rating of the Bank at Ba1, while adjusting the Baseline Credit Assessment to ba2, and revising the outlook to stable from negative.

• Reserve Bank of India made multiple policy interventions, aimed at the macro economy as well as diverse groups of borrowers, so as to mitigate the adverse effect of the COVID pandemic. In accordance with RBI Circulars dated March 27, 2020, April 17, 2020 and May 23, 2020, a moratorium on loan instalments and interest payable up to six months during the period March 1,2020 until August 31,2020 was offered to eligible borrowers. The moratorium period led a freeze in the days-past-due status and NPA classification. In order to facilitate revival of real sector activities and mitigate the impact on the ultimate borrowers, RBI Circular dated August 6, 2020 provided a window under the Prudential Framework enabling the Bank to implement a Resolution Plan in respect of eligible corporate exposures, while classifying such exposures as Standard, subject to certain specified conditions.

• On September 3, 2020, vide an interim order, the Honble Supreme Court of India barred banks from recognizing new NPA accounts. On March 23, 2021, the Honble Supreme Court pronounced its judgment in the matter, and ordered waiver of interest on interest during the moratorium period on all loan accounts irrespective of whether moratorium was extended or not, and the embargo on NPA recognition vide the interim order was also vacated. In conformity with the SC judgement, RBI on April 7, 2021 advised that all lending institutions shall put in place a Board approved policy to refund/adjust the interest on interest, compound interest and/or penal interest charged to the borrowers during the moratorium period, i.e. between March 1,2020 and August 31,2020. As suggested in the RBI Circular, the Indian Banks Association provided a common methodology for calculation of the amount to be refunded/adjusted for different facilities, and accordingly, the Bank assessed the impact and created a provision of Rs.30 crores, to be refunded/credited to various borrower accounts.

• In order to provide relief to retail borrowers in select segments, the Department of Financial Services, Govt. of India, announced on October 23, 2020, an ex-gratia scheme for payment of difference between compound interest and simple interest for six months between March 1,2020 and August 31,2020. Accordingly, by the due date of November 5, 2020, the Bank credited the borrower accounts for an amount of Rs.121 crores to eligible borrowers and filed a claim with the State Bank of India, the nodal agency. On March 31,2021, the Government of India reimbursed the Bank fully.

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 Rs.1,316.66 crores as against Rs.881.63 crores earned during the previous year. The Net Profit for the year under review amounted to Rs.153.48 crores as against Rs.39.95 crores for the previous year. As a Business Correspondent undertaking, the strength of BFIL lies in its talent pool of trained and motivated employees, that stood at 27,561 as on March 31, 2021.

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 Rs.300.59 crores as against Rs.329.23 crores earned in the previous year. The net profit earned by IMFS during the year under review amounted to Rs.0.88 crores as against Rs.1.05 crores earned in the previous year. IMFS had 12,255 employees on its rolls as on March 31,2021.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, the Bank has drawn up a Consolidated Financial Statement including the Financial Statement of its Subsidiary Company and Associate Company, and such Consolidated Financial Statement is 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 Statement, 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

In the Extraordinary General Meeting held on August 25, 2020, the members approved Preferential Allotment of equity shares of 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, in compliance with the applicable laws and regulations, 4,76,29,768 equity shares were allotted on September 2, 2020 to the Qualified Institutional Buyers and 1,51,17,477 equity shares were allotted on September 4, 2020 to two corporate entities, pursuant to the approval of the Finance Committee on the respective dates.

Consequently, the equity share capital of the Bank increased by Rs.62.75 crores and share premium account by Rs.3,196.39 crores, net of share issue expenses.

Pursuant to the 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 the 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.

During the year, 13,18,331 equity shares of Rs.10 each fully paid were allotted on various dates to the employees who exercised their stock options, and consequently, the share capital of the Bank increased by Rs.1.32 crores and share premium by Rs.53.05 crores.

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

Debentures

The Bank did not issue any debentures during the year under review.

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:

Trustee I:

Name of Debenture Trustees: Catalyst Trusteeship Limited (formerly GDA Trusteeship Ltd.)

Address : GDA House, S. No. 94/95, Plot No. 85, Bhusari Colony (Right), Paud Road, Pune - 411038, Maharashtra, India.
Website : www.catalysttrustee.com
E-mail : dt@ctltrustee.com
Trustee II:
Name of Debenture Trustees : Beacon Trusteeship Limited
Address : 4C&D, Siddhivinayak Chambers, Gandhi Nagar, Opp. MIG Club, Bandra (East), Mumbai - 400 051.
Website : www.beacontrustee.co.in
E-mail : info@beacontrustee.co.in

Tier 2 Capital

The Bank did not issue any Tier 2 Capital instruments during the year. As on March 31,2021, the value of outstanding Tier 2 Capital instruments is Nil.

Deposits

The Bank is a banking company governed by the Banking Regulation Act, 1949, and as such, the provisions of 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:

Particulars March 31, 2021 March 31, 2020
i) Capital Adequacy Ratio (CRAR) 17.38% 15.04%
ii) CRAR- Common Equity Tier 1 Capital 15.55% 13.22%
iii) CRAR- Tier 1 Capital 16.83% 14.57%
iv) CRAR- Tier 2 Capital 0.55% 0.47%

Credit Ratings

Instruments Rating Rating Agency
Domestic Ratings
Infra Bond program AA+ CRISIL
Additional Tier I Bond Program AA CRISIL
Certificates of Deposit Program A1 + CRISIL
Short Term FD Program A1 + CRISIL
Senior Bonds program AA+ India Ratings and Research
Additional Tier I Bond Program AA India Ratings and Research
Short Term Debt instruments A1 + India Ratings and Research
International Ratings
Senior Unsecured MTN Programme Ba1 Moodys Investors Service

Banks Directors

The Banks Board comprised eight Directors as on March 31, 2021, viz., Mr. Arun Tiwari, Non-Independent Non-Executive, Part-time Chairman, six Independent, Non-Executive Directors, viz., Mr. Shanker Annaswamy, Dr. T. T. Ram Mohan, Mrs. Akila Krishnakumar, Mr. Rajiv Agarwal, Mr. Sanjay Asher, and Mrs. Bhavna Doshi, and Mr. Sumant Kathpalia, Managing Director & CEO.

Mr. Sanjeev Kumar Asthana had resigned from the Banks Board with effect from the close of business hours on July 27, 2020, owing to his acceptance of a new role as the CEO of a corporate, impacting his being a Director in the Banks Board with specialised knowledge/practical experience in Agriculture & Rural Economy, as laid down in the Banking Regulation Act, 1949.

(a) Non-Executive, Independent Directors

All Independent Directors have submitted Declarations 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and based on these Declarations, the following Non-Executive Directors continue to be identified as Independent Directors as on March 31,2021:

(i) Mr. Shanker Annaswamy

(ii) Dr. T. T. Ram Mohan

(iii) Mrs. Akila Krishnakumar

(iv) Mr. Rajiv Agarwal

(v) Mr. Sanjay Asher

(vi) Mrs. Bhavna Doshi

In addition, the Banks Board of Directors have, pursuant to Regulation 25(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, obtained Certificate from M/s Bhandari & Associates, Practicing Company Secretaries that the aforesaid Directors meet the Criteria of Independence and are independent of the Management. The Certificate submitted by M/s Bhandari & Associates 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 Obligations and Disclosure Requirements) Regulations, 2015, specified companies are required to have at least one Woman Director in their Board.

Mrs. Akila Krishnakumar (DIN: 06629992), who joined the Board on August 10, 2018 is a Non-Executive, Independent Woman Director, and Chairs some important Committees of the Board.

Mrs. Bhavna Doshi (DIN: 00400508), who joined the Board on January 14, 2020, is a Non-Executive, Independent Woman Director, and Chairs the Stakeholders Relationship Committee.

(c) Chairman of the Board

Mr. Arun Tiwari (DIN: 05345547) assumed charge as Part-time, Non-Executive Chairman of the Bank with effect from January 31,2020, and shall hold office for a period of three years, up to January 30, 2023, as approved by the Reserve Bank of India.

Mr. Tiwari was earlier appointed as Independent, Non-executive Director in the Board of the Bank, on August 10, 2018. Mr. Arun Tiwaris directorship was reclassified as Non-Executive, Non- Independent with effect from October 15, 2019.

The Shareholders had, at the Banks 26th Annual General Meeting, held on September 25, 2020, approved the appointment of Mr. Arun Tiwari as Non-Executive, Non-Independent, Part-time Chairman, for a period of three years with effect from January 31,2020.

(d) Managing Director & CEO

Mr. Sumant Kathpalia (DIN: 01054434) was appointed as Managing Director & CEO of the Bank with effect from March 24, 2020.

The Shareholders had, at the Banks 26th Annual General Meeting, held on September 25, 2020, approved the appointment of Mr. Sumant Kathpalia as Managing Director & CEO of the Bank, for a period of three years with effect from March 24, 2020.

(e) Details of Directors seeking Appointment/Re-appointment/Directors retiring by rotation at the forthcoming AGM

(i) Appointment

Mr. Jayant Deshmukh (DIN: 08697679) was appointed Additional Director in the category of Non-Executive, Independent Director in the Banks Board on July 24, 2021.

Approval of the shareholders is being requested by the Board for the appointment of Mr. Jayant Deshmukh as Non-Executive, Independent Director in the Board of the Bank by passing of an Ordinary Resolution at the ensuing Annual General Meeting.

(ii) Re-appointment

None of the Directors of the Bank are liable for re-appointment at the ensuing AGM.

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

The Bank did not appoint Independent Directors during the year 2020-21.

(iii) Retirement by Rotation

Section 152(6) of the Companies Act, 2013 provides that not less than two-thirds of the total number of directors of a public company shall be liable to retire by rotation, and that one-third of such directors shall retire from office at every Annual General Meeting (AGM) of the Bank.

In accordance with the provisions of the Companies Act, 2013, Mr. Arun Tiwari (DIN: 05345547), Non-Executive, Non-Independent, Part-time Chairman of the Bank, shall be the Director liable to retire by rotation.

Approval of the shareholders is requested by the Board for the re-appointment of Mr. Arun Tiwari, who retires by rotation, and being eligible, offers himself for re-appointment.

As required under Regulation 36(3) of the Listing Regulations, particulars of the Directors retiring by rotation and seeking appointment, re-appointment on retirement by rotation are given in the annexure to the Explanatory Statement attached to the Notice of the AGM.

None of the Directors have been disqualified from being appointed as Director, pursuant to Section 164 of the Companies Act, 2013 or under any other law.

The Board of Directors have received a Certificate from M/s. Bhandari & Associates, Practicing Company Secretaries, pursuant to Regulation 34(3) read with Schedule V para C clause 10 (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 that none of the Directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as Directors on the Board by SEBI, Ministry of Corporate Affairs or any other Statutory Authority.

(f) Cessation of Directorship

Mr. Sanjeev Kumar Asthana (DIN: 00048958) had resigned from the Banks Board with effect from the close of business hours on July 27, 2020, owing to acceptance of a new role as the CEO of a corporate, impacting his being Director in the Banks Board with specialised knowledge/practical experience in Agriculture & Rural Economy, as laid down in the Banking Regulation Act, 1949.

The Board of Directors wish to place on record their appreciation for the valuable contributions made by Mr. Sanjeev Kumar Asthana in the deliberations in the Board meetings during his tenure as Director of the Bank.

(g) Cessation of Director after the end of the year and upto the date of the Report

None of the Directors had demitted office after the end of the year and up to the date of this Report.

Board and Committee Meetings

During the year, nineteen meetings of the Board of Directors and twelve meetings of the Audit Committee of the Board were held, the details of which are given in the Corporate Governance Report, which forms an integral part of this Report.

Mrs. Bhavna Doshi was appointed as Member of the Audit Committee with effect from May 9, 2020. As on March 31,2021, the constitution of the Audit Committee comprised, Mr. Sanjay Asher as Chairman, Mr. Arun Tiwari, Mr. Shanker Annaswamy and Mrs. Bhavna Doshi, as Members.

There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

Details of the composition of the Board and of all its Committees, the Meetings held and attendance of the Directors at such Meetings are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations.

Performance Evaluation of the Board

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Nomination & Remuneration Committee of the Board had laid down the criteria for Performance Evaluation of the Board as a whole, Committees of the Board, Directors individually, and of the Chairman, as well as the process of 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 Board of Directors have, on the recommendation of the Nomination & Remuneration Committee, engaged an external Independent Professional 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, Committees of the Board, Directors individually, and of the Chairman has been evaluated/reviewed by the Nomination & Remuneration Committee, Committee of 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 Directors including but not limited to attendance, participation in the meeting, contribution towards strategies of the Board, etc.

The Policy provides guidelines for the individual Directors to evaluate the Board, its Committees and individual directors.

The Policy on Performance Evaluation is available on the website of the Bank 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 Report on Corporate Governance, which forms an integral part of this Annual Report.

Policy on Appointment and Selection 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 on Appointment & Selection of Directors has been framed in compliance with Section 178 of the Companies Act, 2013, and other applicable regulations under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Banking Regulation Act, 1949.

The Policy shall act as a guideline for the 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 on Appointment & Selection of Directors is hosted on the website of the Bank 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 this Report.

Change in Key Managerial Personnel

During the financial year 2020-21, there was no change in Key Managerial Personnel.

System for Internal Financial Controls and its Adequacy

The Bank operates in a fully computerised environment with a Core Banking Solution, 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 authorisations, 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 and 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 elsewhere in this Report. The other Statutory Information/Disclosures required to be given under the Banking Regulation Act, 1949 and the Companies Act, 2013, as applicable to the Bank, have been laid out in the Schedules/Notes attached and forms part of the Balance Sheet and the Profit and Loss Account.

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 Report.

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 and Discussion 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 industry best 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 in the Management Discussion and Analysis Report

Vigil Mechanism/Whistle Blower Policy

The Bank has in place the Whistle Blower Policy since 2009.

The said Policy is in compliance with RBI Guidelines, provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 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 twice a year.

The Banks Whistle Blower Policy is in synchrony with all statutory and regulatory guidelines on Vigil Mechanism.

Further details about the Vigil Mechanism are furnished in the Report on Corporate Governance, and the current Whistle Blower Policy of the Bank is available on the Banks website at the under-mentioned link:

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, there were no instances of fraud reported by the Auditors pursuant to Section 143(12) of the Companies Act, 2013 to the Audit Committee or the Board of Directors.

Statutory Auditors

M/s Haribhakti & Co. LLP, Chartered Accountants were appointed Statutory Auditors in the 26th Annual General Meeting held on September 25, 2020 for a period of one year, until the conclusion of the next Annual General Meeting. In accordance with extant Guidelines, they are eligible to be reappointed for one more year, and accordingly, it is proposed to reappoint M/s Haribhakti & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 103523W/W100048) as one of the Joint Statutory Auditors of the Bank from the conclusion of this AGM until the conclusion of the next AGM.

Further, M/s M. P. Chitale & Co., Chartered Accountants (ICAI Firm Registration Number 101851W) are proposed to be appointed as one of the Joint Statutory Auditors of the Bank for a period of three years commencing from the conclusion of this AGM, until the conclusion of the 30th Annual General Meeting that would be held during FY 2024-25, subject to the approval of the RBI on annual basis from the conclusion of the 28th AGM.

Independent Auditors Report

M/s Haribhakti & Co. LLP., Statutory Auditors of the Bank, have audited the accounts of the Bank for the year 2020-21 and their Report is annexed. Pursuant to Section 143(3)(i) of the Companies Act, 2013, the 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 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 Audit

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank has appointed M/s Bhandari & Associates, Company Secretaries in Practice, to undertake Secretarial Audit of the Bank for FY 2020-21. The Secretarial Audit Report submitted by M/s Bhandari & Associates is furnished at Annexure II, and forms an integral part of this Report.

The Secretarial Audit Report submitted by M/s Bhandari & Associates for FY 2020-21 does not contain any qualification, reservation or adverse remark.

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 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 upto 7% of the issued Equity Capital 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 Committee of the Board of Directors.

Pursuant to a Composite Scheme of Arrangement with the erstwhile Bharat Financial Inclusion Limited, the shareholders of the Bank approved the IBL Special Incentive ESOS for BFIL Merger 2018 (ESOS 2018) on December 11,2018. ESOS 2018 was approved with a pool of 57,50,000 options which are equity settled 50% of the options vest over a period of three years from the grant date and the remaining options vest over a period of three years from the first anniversary of the grant date. Upon vesting, the options have to be exercised within a maximum period of five years.

As at March 31, 2021, the Compensation Committee of the Bank has granted a total of 5,10,15,642 Options that includes 4,57,27,836 options granted under ESOS 2020 and 52,87,806 options granted under ESOS 2018

Statutory disclosures as required by SEBI (Share Based Employee Benefits) Regulations, 2014 are given at Annexure III, and form an integral part of this Report.

The Annual Certificate on compliance with SEBI (Share Based Employee Benefits) Regulations, 2014 issued by Statutory Auditors of the Bank shall be made available on the website of the Bank, on the day of the AGM.

The Employees Stock Option Plan is administered by the Compensation Committee of the Board.

Statutory disclosures as mandated under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended, have been hosted on the website of the Bank at:

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

Disclosure on compliance with Secretarial Standards

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

Maintenance of Cost Records

Being a Banking Company, the Bank is not required to maintain cost records as per sub- section (1) of Section 148 of the Companies Act, 2013.

Other Disclosures

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

Pan No. Borrower Date of filing Date of admission Is the case filed under RBI direction Resolution status Remarks
AAACC1921B Cox & Kings Ltd. - (Borrower) Cox and Kings Global Services Pvt Ltd. (Corporate Guarantor) 29.06.2020 No Yet to be admitted In the matter of Cox & Kings Limited (borrower), the Bank has filed an application u/s 7 of IBC against the Corporate Guarantor - Cox & Kings Global Services Ltd. for Principal Liability of Borrower on 29.06.2020 before Mumbai NCLT, which is pending for admission.
AAACG0108J Gallium Industries Ltd 30.06.2017 21.07.2017 No Liquidation order passed The liquidation Order was passed on 1 7.1 2.201 8. The liquidator has sold all the assets and distributed the amount to the stakeholders as per claims. The liquidator is in the process of closure of all accounts and dissolution of the company.
The matter is scheduled for hearing on August 26, 2021.

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 31,2021, 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 31,2021 and of the profit of the Bank for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting frauds and other irregularities;

(d) that the Annual Financial Statements have been prepared 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 31,2021, in the prescribed Form MGT-7 is available on the Banks website at the link: https://www.indusind.com/in/en/investors/investor-landing/investor-resources.html

Particulars of Employees

The Bank had 29,661 employees on its rolls as on March 31, 2021.

58 employees employed throughout the year were in receipt of remuneration of Rs.1.02 crore per annum or more, and 12 employees employed for the part of FY 2021 were in receipt of remuneration of Rs.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 information is 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 Annexure may please send an email to the Company Secretary 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 Shares of the Bank.

Details pursuant to 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 IV and form an integral part of this Report.

Policy on Remuneration to Non-Executive Directors

In line with the guidelines contained in RBI Circular dated June 1,2015 on compensation of Non-Executive Directors of private sector banks, and the approval of the Board of Directors, of the Shareholders and of the Reserve Bank of India, wherever applicable, remuneration of Rs.10 lakhs per annum was paid to Non-Executive Directors in the form of Profit-related Commission in addition to Sitting Fees paid for attending meetings of the Board and of various Board Committees.

In line with the guidelines contained in the above-referred RBI Circular, Mr. Arun Tiwari, Non-Independent, Non-Executive, Parttime Chairman of the Bank is paid remuneration of Rs.30 lakhs per annum, as approved by the Nomination & Remuneration Committee of the Board, the Board of Directors and by the Reserve Bank of India.

The annual remuneration payable to a single Non-Executive Director does 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 is hosted on the Banks website at the link given below: https://www.indusind.com/in/en/investors/investor-landing/investor-resources.html

Details on compensation to Whole-time Directors are given under the Report on Corporate Governance, which forms an integral part of this Report.

RBI, vide its Circular dated April 26, 2021 has permitted for higher payment of compensation to Non-Executive Directors (NEDs) in the form of a fixed remuneration commensurate with an individual Directors responsibilities and demands on time and which are considered sufficient to attract qualified competent individuals, subject to maximum of Rs.20,00,000 per annum.

A proposal for payment of compensation to each Non-Executive Director [excluding the Non-Executive (Part-time) Chairperson] of the Bank, by way of fixed remuneration not exceeding Rupees Rs.20,00,000/- (Rupees Twenty Lakhs) per annum, with effect from the Financial Year 2021-2022, is being placed for approval of the Shareholders at the ensuing AGM.

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 on arms length basis and in the ordinary course of business and therefore do not attract the provisions of Section 188 of the Companies Act, 2013.

Further, there are no materially significant Related Party Transactions during the year with any of the Related Parties, viz., Promoters, Directors and 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 is hosted on the Banks website at the below given link:

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 Statement 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 the preparation of the Consolidated Financial Statement, the Standalone Financial Statements of BFIL, the wholly-owned subsidiary, for the year ended March 31,2021, 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 Statement 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 crossfunctional 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

In line with its CSR focus areas, the Bank is committed to various long term community development projects that have a large positive impact. Consistent with the requirements of Section 135 of the Companies Act, 2013 and CSR Rules 2014, the Bank has set up a Board-level CSR Committee to look after the CSR initiatives. The Committee is headed by Mrs. Akila Krishnakumar as the Chairperson, and Mr. Rajiv Agarwal, Mr. Sanjay Asher and Mr. Sumant Kathpalia are the Members.

The composition of the CSR Committee is in accordance with Section 135 of the Companies Act, 2013. The Board at its meeting held on April 7, 2020, approved the integration of sustainability function with the CSR function in CSR Committee and the Committee was renamed as Corporate Social Responsibility & Sustainability Committee

The Banks CSR Policy and strategy direct and govern the Banks activities in focus areas, namely, Environmental Sustainability, Healthcare, Education, Sports, Skills/Livelihood Development and other areas.

In FY 2020-21 the Bank continued its flagship initiative under the water stewardship wherein it undertook water resource development and management through watershed and springshed management, restoration of water bodies like lakes, ponds, tanks, roof rain water harvesting by reviving traditional structures, harvesting of river water and availability and accessibility of safe drinking water through installation of water ATMs. The Bank also extended projects towards environmental sustainability like Urban afforestation, Renewable energy solutions and Waste management.

Under the theme Education, the Bank implemented Academic Improvement Programs in government schools viz., Road to school, Early Language learning which is expected to change the way in which education is delivered. Education centers of Assisted Learning Program helps children cope with their learning gaps and pass the 10th grade. To encourage excellence, the Bank also provides Scholarship support for higher education like engineering, school education and for deserving Young India Fellows.

IndusInd Bank supported inclusiveness of the differently-abled alongwith gender inclusiveness/equality in Sports. The Bank had a separate non-business vertical for Sports which undertook spreading the culture of inclusivity and excellence in sports within and outside the organisation. Currently five excellence programmes namely, IndusInd Para Champions, IndusInd Blind Cricket, IndusInd Girl Power, IndusInd Hockey for her Excellence & Nurturing Rural Champions are being supported.

Under the focus area of Healthcare, IndusInd Bank supported an intervention on reducing cancer burden by providing care, treatment, awareness and prevention services with supply of radiology equipment. The Bank also supports the treatment of children with cancer in Rajasthan, Maharashtra and Goa. IndusInd Bank has set up e-Health Clinics, Mobile Medical Units, etc., to provide affordable primary healthcare to individuals from poor and lower Income Group families. 2 special programs on Mother and Child care and Adolescent Girls Menstrual Health were also rolled out this year.

To promote livelihood, the Bank supports skill development of disabled from marginalized communities in various districts of Karnataka. Similarly, youth from Assam and Rajasthan are trained for an employable skill and placed. The Bank supports long term residential rehabilitation program including skill training for substance abusing street children/ youth. A program on livestock development is also newly launched.

The Bank has continued CSR initiatives of Bharat Financial Inclusion Limited, its wholly- owned subsidiary. Two flagship initiatives, viz., Bharat Sanjeevani (on livestock care) and Pragat (Integrated Development Program including Water, Healthcare and Education) are supported.

In response to COVID, the Bank carried out several activities ranging from distribution of essential supplies to poor families, medical supplies/equipment for health workers and hospitals to contribution to State and Central Government Disaster Relief Funds, etc.

The CSR Initiatives/Projects 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 Rs.94.72 crores towards various CSR activities specified in Schedule VII of the Companies Act, 2013. Rs.26 crores are earmarked on several ongoing projects whose expenditure was delayed due to COVID and will be spent in the subsequent year totaling to Rs.120.72 crores.

The Report on CSR activities undertaken by the Bank is set out at Annexure V and forms an integral part of this Report.

The CSR Policy, amended during the year, 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 Banks website at the link given below: https://www.indusind.com/in/en/csr-home/our-approach/csr-policy.html

Sustainability

In its endeavor to incorporate sustainability in to business, the Bank is diligently setting up processes that reflect its long standing view - "Good Ecology is Good Economics". The Bank recognizes the fact that aligning its products, services and operations with its ESG strategy contributes towards betterment of the environment and society at large and also presents a good business case. The sustainability policy of the Bank lays out guidelines and targets in key areas of the environmental, social, economic and governance aspects. The Bank has committed targets on Environmental, Social and Governance (ESG) aspects and continues to improve the sustainability performance to surpass the ESG targets.

As a socially and environmentally responsible organization, the Bank seeks to specialize the lending portfolio by increasing investments in development sectors and integration of ESG aspects in corporate and consumer banking. The Bank has strengthened financial Inclusion with initiatives like livelihood financing, microfinance, vehicle financing for livelihood and agribusiness. The Bank keeps abreast with latest research on corporate citizenship and responsible banking both globally and locally. The Bank has adopted various reporting platforms and guidance frameworks laid out by Standard Setters such as, International Integrated Reporting Council (IIRC), Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP), Dow Jones Sustainability Index (DJSI), etc., for assessment and accountability in sustainability performance.

The Bank is determined to mitigate climate change impact which is evidenced through committing long term targets and deploying climate strategy to invest in energy efficiency projects and greening the IT systems. The Bank promotes sustainable and ethical procurement practices through selection and on-boarding criteria on ESG compliance for vendors and suppliers. The Bank has demonstrated accountability and transparency through disclosure on materiality analysis, ethical business practices, cyber-security strategy and data privacy management.

This comprehensive sustainability approach has helped IndusInd Banks inclusion in the S&P Dow Jones Sustainability Yearbook 2021, which showcases that the Bank clearly looks beyond profits to focus on its people, the society and the planet.

Business Responsibility Report (BRR)

The Securities & Exchange Board of India have, with effect from December 26, 2019, vide SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2019, mandated the top 1,000 listed entities to include the Business Responsibility Report (BRR) as part of the Annual Report, describing the initiatives taken by the listed entity from an environmental, social and governance perspective, in the format as specified by SEBI.

In view of the above and in compliance with Regulation 34(2) of the Listing Regulations, BRR has been hosted on the Banks website at the link below: https://www.indusind.com/in/en/sustainability.html

Corporate Governance

Corporate Governance is essentially a set of standards, systems, and procedures aimed at effective, honest, transparent, and responsible management of a company within the applicable statutory and regulatory structures.

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 Banks 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 subcommittees 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 an integral part of this Annual Report.

Management Discussion and Analysis Report

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

Significant and Material Orders passed by the Regulators or Courts

There were no significant and material Orders passed by the Regulators/Courts that would impact the going concern status of the Bank and its 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. For the impact of Covid-19 on the performance of the Bank and the Group, refer "Note No. 5.13 of Schedule 18 - Notes forming part of the accounts" of financial statements of the Bank and "Note No. 12 of Schedule 18 - Notes forming part of the accounts" of consolidated financial statements of the Bank.

Awards and Accolades

IndusInd Bank was recognized for its excellence through a number of awards and accolades, across a range of categories. The Bank started off its winning streak with 2 awards at the Finacle Innovations Awards 2020 for technology implementations - Product Innovation and Transformation Excellence. The Bank was awarded with the Infosys Finacle Client Innovations Awards 2020 for Alexa and Chatbot Implementations.

The Bank ended Q1 on a high note, with the Best Financier Award 2019 at the JCB India Annual Financiers Award 2019, along with being ranked 2nd in the Ashok Leyland Product Funding during the year 2020 at Annual Financier Award 2020 from Ashok Leyland.

The Bank was awarded Outstanding Response to COVID-19, Branchless Banking in Global Retail Banking Innovation Awards 2020 - The Digital Banker.

The Bank was bestowed Silver Category in Best Mobile Search Campaign in 11th India Digital Awards - Internet and Mobile Association of India.

The Bank was honoured with the 2020 APAC Innovation Award - Red Hat.

The Bank was also honoured with Most Innovative Companyfor Multi-cloud platform in Business Impact Awards 2020 - Economic Times and vmware.

The Bank was also bestowed with two awards at the CSR Times Awards 2020-21, for the Banks efforts in Rainwater Harvesting in Rajasthan and Road To School Programme in Odisha.

In the fourth quarter, the Bank was featured in the Carbon Disclosure Project (CDP) list for the 6th Consecutive year - the only Bank in India with this honour. Some other honours the Bank was bestowed with in this quarter include, Indus OnTheGo Mobile LOS at Banking Frontiers FINNOVITI Awards 2021 and an inclusion in the S&P DJSI Sustainability Yearbook.

Cautionary Statement

Certain statements in the Directors Report and in the Management Discussion and Analysis document describing the Banks 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.

Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

The Bank has complied with provisions relating to the constitution of Internal Complaints 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 this Report.

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 Banks continued progress in a challenging environment.

For and on behalf of the Board of Directors
Sd/-
Place: Mumbai Arun Tiwari
Date: July 24, 2021 Chairman
DIN: 05345547