IndusInd Bank Ltd Auditor Reports

To the Members of IndusInd Bank Limited

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the accompanying standalone financial statements of IndusInd Bank Limited (the Bank), which comprise the Balance Sheet as at March 31, 2025, and the Profit and Loss Account, and the Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by Section 29 of the Banking Regulation Act, 1949 as well as the Companies Act, 2013 (the Act) and circulars and guidelines issued by the Reserve Bank of India, in the manner so required for banking companies (RBI Guidelines) and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with Companies (Accounting Standards) Rules, 2021 as amended to the extent applicable, of the state of affairs of the Bank as at March 31, 2025, and its profit, and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us, are sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matters

We draw attention to schedule 18(17.1) to 18(17.6) to the standalone financial statements, which explain that the Board commissioned an investigation/ reviews into the alleged discrepancies, covering the following significant matters:

a) Internal Trades Derivative Accounting under the head Other Assets amounting to Rs1,959.98 crores being accumulated notional profits since FY 2015-16 have been written off as a prior period item in the current financial year.

b) Incorrect accounting and subsequent reversal of cumulative interest income of Rs673.82 crore and Fee Income of Rs172.58 crores within the current financial year.

c) Certain incorrect Manual Entries posted in the Other Assets and Other Liabilities pertaining to prior years amounting to Rs 595 crores has been set off during the current financial year.

The resultant findings from the investigation / review reports, in summary, revealed an involvement of senior Bank officials, including former Key Management Personnel (KMP), in overriding key internal controls across the aforesaid functions/ areas, and a concealment from the Board and the statutory auditors of the wrongful accounting practices adopted, over such period of time, as indicated in the respective investigation/ review reports.

Basis our evaluation of the findings in the above mentioned reports, in particular the likely involvement of senior management in the above matters, we have reasons to believe that suspected offences involving fraud may have been committed and thereby we have reported these matters to the Central Government under Section 143 (12) of the Companies Act, 2013 read with Rule 13(1) to (4) of the Companies (Audit and Auditors Rules), 2014.

We draw attention to schedule 18(17.9) to the standalone financial statements, which explains that in light of the findings and adjustments noted above, in particular the override of management controls by KMPs, the Board of Directors initiated an internal review of material financial statement account captions and directed the Management and the Internal Audit Department to perform additional procedures such as reconciliations of system reports and listings with balances reflected in general ledger, test checks over such items in the listing and certain digital procedures over and above. Based on the above review, rectifications/ reclassifications including those relating to prior-period items were made to the accompanying standalone financial statements.

We draw attention to schedule 18(17.7) and 18(17.9) to the standalone financial statements, which state that the Bank is currently in the process of determining the accountability of the persons involved in the discrepancies and irregularities mentioned in the Emphasis of Matter paragraphs with reference to schedule 18(17.1) to 18(17.6) above and assessing the resultant legal or penal implications, if any, that may arise thereon.

Our opinion on the standalone financial statements is not modified with respect to these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31, 2025. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Banks Management and Board of Directors are responsible for the other information. The other information comprises the Pillar 3 Disclosures under the New Capital Adequacy Framework (Basel III disclosures), which we obtained prior to the date of this auditors report, and Directors Report including Annexures to Directors Report which is part of the Annual report (collectively called as Other Information) but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there Is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Banks Management and Board of Directors are responsible for the matters stated in section 134(5} of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance, and cash flows ofthe Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Companies (Accounting Standards} Rules, 2021 as amended to the extent applicable, and RBI Guidelines. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act, Banking Regulation Act, 1949 and RBI Guidelines for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Banks ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Banks financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether d ue to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3}(i} of the Act, we are also responsible for expressing our opinion on whether the Bank has internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management in the standalone financial statements.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Banks ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended March 31, 2025 and are therefore, the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

The audit of standalone financial statements for the year ended March 31, 2024 was conducted by one of the predecessor joint statutory auditors and one of the current joint statutory auditors of the Bank, who expressed an unmodified opinion on those standalone financial statements vide their report dated April 25, 2024. Our opinion on the standalone financial statements is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of Section 29 of the Banking Regulation Act, 1949 and Section 133 of the Act and relevant rules issued thereunder.

2. As required by sub-section (3) of section 30 of the Banking Regulation Act, 1949, we report that:

a. We have sought and obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory;

b. The transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and

c. Since the key operations of the Bank are automated with the key applications integrated to the core banking systems, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are available therein. However, during the course of our audit we have visited 75 branches to examine the records maintained at such branches for the purpose of our Audit.

3. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books, except for the matters stated in the paragraph 3(i)(vi) below on reporting under Rule 11(g);

c. The Standalone Balance Sheet, the Standalone Profit and Loss Account and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies Accounting Standard Rules, 2021 as amended, to the extent they are not inconsistent with the guidelines prescribed by RBI;

e. The matters described in the Adverse Opinion paragraph in Annexure A, in our opinion, may have an adverse effect on the functioning of the Bank;

f. On the basis of the written representations received from the directors as on March 31,2025 taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2025 from being appointed as a director in terms of Section 164(2) of the Act;

g. The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 3(b) above on reporting under Section 143(3)(b) and paragraph 3(i)(vi) below on reporting under Rule 11(g);

h. With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Bank and the operating effectiveness of such controls, refer to our separate Report in Annexure A;

i. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Bank has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer schedule 12, 17(17) and 18(15.3) to the standalone financial statements;

(ii) The Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer schedule 17(5), 17(17), 18(3), 18(4.1) and 18(15.3) to the standalone financial statements;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank during the financial year ended March 31, 2025 - Refer schedule 18(15.5);

(iv) (a) The Management has represented that, to the best of its knowledge and belief, other than as disclosed in the schedule 18(15.15)(1) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Bank to or in any other persons or entities, including foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Bank (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, other than as disclosed in the schedule 18(15.15)(2) to the standalone financial statements, no funds have been received by the Bank from any persons or entities, including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Bank shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) of Rule 11(e) as provided under (a) and (b) above, contain any material mis-statement.

(v) The dividend declared and paid during the year by the Bank is in compliance with Section 123 of the Act; and

(vi) Based on our examination which included test checks, the Bank has used certain accounting softwares for maintaining its books of account (including two accounting softwares managed and maintained by a third-party software service provider) which have a feature of recording the audit trail (edit log) facility, except that as explained in schedule 18(18) to the standalone financial statements, no audit trail feature was enabled at the database level in respect of two accounting softwares to log any direct data changes.

Further, where enabled and except for certain softwares as explained in the aforesaid Note, the audit trail feature has been operated for all relevant transactions recorded in the accounting softwares. Also, in the absence of sufficient appropriate audit evidence and as fully explained in the aforesaid Note, during the course of our audit and considering SOC report, we did not come across any instance of audit trail feature being tampered with in respect of such accounting softwares. Additionally, the audit trail of prior year has been preserved by the Bank as per the statutory requirements for record retention to the extent it was enabled and recorded in previous year except for certain softwares as explained in the aforesaid Note.

4. In our opinion and to the best of our information and according to the explanations given to us, the provisions of Section 197 of the Act are not applicable to the Bank by virtue of Section 35B(2A) of the Banking Regulation Act, 1949. Accordingly, the reporting under Section 197(16) of the Act regarding payment/ provision for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act, is not applicable.

Annexure A to the Independent Auditors Report

[Referred to in paragraph 3(h) under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the members of IndusInd Bank Limited on the standalone financial statements (hereinafter referred to as standalone financial statements) for the year ended March 31, 2025]

Report on the Internal Financial Controls with reference to Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the Act)

We have audited the internal financial controls with reference to standalone financial statements of IndusInd Bank Limited (the Bank) as of March 31, 2025 in conjunction with our audit of the financial statements of the Bank for the year ended on that date.

Adverse Opinion

In our opinion, because of the possible effects of the material weaknesses described below on the achievement of the objectives of the control criteria, the Bank has not maintained adequate and effective internal financial controls with reference to the standalone financial statements as at March 31, 2025, based on the internal control with reference to financial statements criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI).

We have considered the material weaknesses identified and reported below in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Bank for the year ended March 31, 2025, and these material weaknesses does not affect our opinion on the standalone financial statements of the Bank.

Basis for Adverse Opinion

As explained in schedule 18(17) on the standalone financial statements for the year ended March 31,2025, particularly override of controls by erstwhile Key Managerial Personnel and senior bank personnel, the Bank had initiated investigations/ reviews, which led to identification of several deficiencies in the internal controls with reference to maintenance of books of account and preparation of standalone financial statements. These indicate that the control environment was ineffective as at March 31, 2025.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control with reference to standalone financial statements, such that there is a reasonable possibility that a material misstatement of the Banks annual or interim standalone financial statements will not be prevented or detected on a timely basis.

Management and Board of Directors Responsibility for Internal Financial Controls

The Banks Management and Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Bank considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Banks policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Banks internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adeq uacy of internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that because of significance of the matters described in the basis for adverse opinion paragraph above and the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our adverse opinion on the Banks internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

A Banks internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A Banks internal financial control with reference to standalone financial statements includes those policies and procedures that {1} pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the bank; {2} provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the bank are being made only in accordance with authorizations of management and directors of the bank; and {3} provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the banks assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.