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)
| Particulars |
As on |
As on |
|
March 31, 2023 |
March 31, 2022 |
| Deposits |
3,36,438.14 |
2,93,681.35 |
| Advances |
2,89,923.68 |
2,39,051.53 |
| Operating Profit (before Provisions and
Contingencies) |
14,346.48 |
12,775.75 |
| Net Profit |
7,389.72 |
4,611.12 |
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)
| Operating Profit before Provisions and
Contingencies |
14,346.48 |
| Less: Provisions and Contingencies
inclusive of Income Tax |
6,956.76 |
| Net Profit |
7,389.72 |
| Profit Brought Forward |
18,923.15 |
| Amount available for Appropriation |
26,312.87 |
| Transfer to Statutory Reserve |
1,847.43 |
| Transfer to Capital Reserve |
10.19 |
| Dividend Paid |
658.89 |
| Transfer to investment fluctuation reserve
account |
3.00 |
| Total Appropriations |
2,519.51 |
| Balance carried over to Balance Sheet |
23,793.36 |
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:
| Trustee I: |
|
| Name of Debenture Trustee |
: 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 |
| Email |
: dt@ctltrustee.com |
| Trustee II: |
|
| Name of Debenture Trustee |
: Beacon Trusteeship Limited |
| Address |
: 4C&D, Siddhivinayak Chambers, Gandhi
Nagar, Opp. MIG Club, Bandra (East), Mumbai – 400 051. |
| Website |
: www.beacontrustee.co.in |
| Email |
: info@beacontrustee.co.in |
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:
| Particulars |
March 31, 2023 |
March 31, 2022 |
| i) Capital Adequacy Ratio (CRAR) |
17.86% |
18.42% |
| ii) CRAR- Common Equity Tier 1 Capital |
15.93% |
15.96% |
| iii) CRAR- Tier 1 Capital |
16.37% |
16.80% |
| iv) CRAR- Tier 2 Capital |
1.49% |
1.62% |
Credit Ratings
| Instruments |
Rating |
Rating Agency |
| Domestic Ratings |
|
|
| Infra Bond program/Tier II Bonds |
Rs. Rs. AA+ |
CRISIL |
| Additional Tier I Bond Program |
AA |
CRISIL |
| Certificates of Deposit Program |
Rs. A1+ |
CRISIL |
| Short Term FD Program |
Rs. A1+ |
CRISIL |
| Senior Bonds program /Tier II Bonds |
Rs. Rs. AA+ |
India Ratings and |
|
|
Research |
| Additional Tier IRs. Bond Program |
AA |
India Ratings and |
|
|
Research |
| International Ratings |
|
|
| Senior Unsecured MTN Programme |
Ba1 |
Moody's Rs. Investors |
|
|
Service |
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:
Pan No |
Borrower |
Date of Filing the case |
Date of admission |
Is the case filed under RBI
direction? |
Resolution status (RP/
Liquidation/ Delay/ Yet to be Admitted) |
Remarks |
AAACG0108J |
Gallium Industries Ltd |
30/06/2017 |
21/07/2017 |
No |
Liquidation order passed |
The application for
dissolution of Gallium Industries Ltd. is pending before the Hon'ble NCLT. |
AAACC1921B |
Cox & Kings
Ltd(Borrower) Cox and Kings Global Services Pvt Ltd. (Corporate Guarantor) |
29/06/2020 |
05/01/2023 |
No |
Admitted |
In the matter of Cox &
Kings Limited (Borrower), an application u/s 7 of IBC has been filed against the Corporate
Guarantor, Cox & Kings Global Services Ltd., which has been admitted on January 5,
2023, and the Bank has filed its claim. The CIRP process is going on. |
AAACW6349M |
Siti Network Ltd
(Borrower) Zee Entertainment Enterprises Ltd (DSRA Guarantor) |
25/01/2022 |
22/02/2023 |
No |
Admitted/ Stayed |
In the matter of Siti
Network Limited (Borrower), an application u/s 7 of IBC has been filed against the
Corporate/ DSRA Guarantor, Zee Entertainment Enterprises Limited, on January 25, 2022,
before Mumbai NCLT, which is admitted vide Order dated February 22, 2023. However, vide
Order dated February 24, 2023, NCLAT directed a stay on said Order. Meanwhile, DSRA
guarantor has approached the Bank for a settlement and the Bank has entered into a
settlement. |
AAACW6349M |
SITI Networks Limited |
30/04/2022 |
22/02/2023 |
No |
Admitted/ Stayed |
The matter has been stayed
by NCLAT vide Order dated March 7, 2023. The Bank is pursuing the matter. |
AABCA5291P |
CoRs. ee Day Global Limited |
09/04/2022 |
|
No |
Yet to be admitted |
The Bank has filed an
application u/s 7 against the Borrower, CoRs. ee Day Global Limited, and has claimed full
dues. |
AACCH3475M |
Hacienda Projects Pvt.
Ltd. |
05/05/2022 |
|
No |
Admitted/ Stayed |
The matter has been stayed
by NCLAT vide Order dated November 28, 2022. The Bank is pursuing the matter. |
AADCC5681P |
Cloud 9 Projects Pvt. Ltd. |
05/05/2022 |
|
No |
Yet to be admitted |
The Bank has filed an
application u/s 7 against the Borrower and has claimed full dues. |
AADCT5306Q |
Fidere Facilities
Management Pvt. Ltd |
16/02/2023 |
|
No |
Yet to be admitted |
The Bank has filed an
application u/s 7 against the Borrower and has claimed full dues. |
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
|
sd/- |
|
Sunil Mehta |
| Place : Mumbai |
Chairman |
| Date : July 20, 2023 |
DIN: 00065343 |