IDBI Bank Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of IDBI Bank Limited (‘the Bank'), which comprise the Balance Sheet as at March

31.2025, 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 the significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Financial Statements”).

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 the 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 from time to time, in the manner so required for banking companies 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 of the Standalone Financial Statements in accordance with the Standards on Auditing (‘SAs') specified under Section 143 (10) of the Act. Our responsibilities under those Standards are further described in the

‘Auditor’s 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, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters (KAM) are those matters that, in our professional judgment, were of most significance in the audit of the standalone financial statements of the current year. 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:

Key Audit Matters

How KAM was addressed in our audit

Recognition and Measurement of Deferred Tax Asset

Please refer to Note 18(B)(8) of the Standalone Financial Statements. The Bank has recognised a net deferred tax asset of Rs.5,982 Crores as of March 31st, 2025, after a net reversal of Rs.2,978 Crores during the year. The recognition of deferred tax involves judgement regarding the likelihood of realisation of these assets, particularly whether there will be sufficient taxable profits in future periods that will support the recognition of these assets. Given the degree of judgement involved in considering these deferred tax assets as recoverable or otherwise, we consider this to be a Key Audit Matter.

Our audit procedures involved gaining an understanding of the applicable tax laws and relevant regulations applicable to the Bank. Our audit procedures included:

• Evaluation of policies used for recognition and measurement of deferred tax assets in accordance with AS 22 Accounting for Taxes on Income;

• Assessment of the probability of the availability of profits based on assumptions and other parameters used by the Management against which the Bank will be able to use this deferred tax asset in the future, with reference to forecast as noted by the Audit Committee of the Board of Directors.

• Assessed the method for determining the Deferred Tax Asset with reference to applicable tax rates and tested the arithmetical accuracy.

Income Recognition and Asset Classification of Advances (IRAC) and provisioning as per regulatory norms

Please Refer to Schedule 9, read with relevant Notes to the Standalone Financial Statements, and Asset Quality in respect of movement of NonPerforming Assets (NPAs) and related provisions.

As required under prudential norms issued by the Reserve Bank of India (RBI) in respect of asset classification and provisioning pertaining to advances, and relevant circulars, notifications and directions issued by the RBI

Our audit approach included testing the design and operating effectiveness of internal controls and substantive audit procedures in respect of asset classification and provisioning pertaining to advances. In particular:

• Evaluated the Bank's internal control system in adhering to the relevant RBI guidelines regarding income recognition, asset classifcation and provisioning pertaining to advances;

which were collectively considered by the Bank till March 31, 2025, the Bank classifies advances into performing and non-performing advances (NPA), which consists of Standard, Sub-standard, Doubtful and Loss categories and makes appropriate provisions.

The Classification, Provisioning and Write off of Advances, is a Key Audit Matter as the Bank has significant credit risk exposure to a large number of borrowers across various sectors, products, industries and geographies. There is a high degree of complexity, uncertainty and judgment involved in recoverability of advances, the nature of transactions and estimation of provisions thereon and identification of accounts to be written off. The Bank applies both quantitative as well as qualitative factors prescribed by the regulations.

Considering the nature of

• Tested key IT systems/ applications used and their design and implementation as well as operational effectiveness of relevant controls, in relation to asset classification (standard, substandard, doubtful and loss) with reference to their days-past-due (DPD) status (including consideration of nonfinancial parameters of NPA, sufficiency of credits in working capital loans, restructuring guidelines, the Regulatory Package and Resolution framework) and provisioning pertaining to advances;

• Test checked advances to examine the validity of the recorded amounts, loan documentation, examined the statement

the transactions, regulatory

of accounts, indicators

requirements, existing business

of impairment,

environment, estimation /

impairment provision for

judgment involved in assessing

non-performing assets,

the financial condition of

and compliance with

borrowers as well as valuation of

income recognition,

securities, we have determined

asset classification and

this as Key Audit Matter.

provisioning pertaining to advances in terms of applicable RBI guidelines;

• Reviewed account

statements and other related information of the borrowers selected based on quantitative and qualitative risk factors.

• We have also carried

out visits to branches / offices and examination of documentation and other records.

• For the selected non

performing advances, we assessed Management’s forecast and inputs of recoverable cash flows, borrower's

audited financial

statements, valuation of underlying security and collaterals, estimation of recoverable amounts on default and other sources of repayment;

• Tested the Bank's processes for making provision on advances for compliance with RBI regulations and internally laid down policies for provisioning;

• Undertaken the

walkthrough for the automated E-NPA system and tested the core functionality for selected samples considering the audit universe.

• Validated the parameters used to calculate collective provisions with reference to IRAC norms and the Regulatory Package;

• Tested provision created for fraud accounts as at March 31, 2025 as per the RBI circular;

• Re-performed the calculation of provisions, for a sample of retail and corporate portfolios, as part of our substantive audit procedures, to determine the accuracy of the same; (Collective for standard portfolio and case specific for non performing portfolio).

• Discussed with the

management of the Bank on sectors where there is perceived credit risk and the steps

taken by management

to mitigate the risks pertaining to identified stress sectors

• Assessed the adequacy of disclosures against the RBI Guidelines

Information Technology (IT)

Systems and Controls over

financial reporting

The Bank's key financial

Our

Audit procedures with

accounting and reporting

respect to this matter included:

processes are highly dependent on Core Banking, IRAC, Treasury Solutions and other supporting software and hardware controls. There exists a risk that gaps in

For testing the IT general controls (ITGC), application controls (ITAC) and IT dependent manual controls.

the IT control environment could result in the financial accounting and reporting records being materially misstated. Hence the IT controls are required to ensure that applications process data as expected and that changes are made in

•

We have planned, designed and carried out the desired audit procedures and sample checks, taking into consideration the IT systems of the Bank.

an appropriate manner. The

•

Obtained a comprehensive

Bank's IT control framework

understanding of IT

includes automated, semi-

applications landscape

automated and manual controls

implemented at the

designed to address identified

Bank. It was followed by

risks. IT controls are stated in

process understanding,

Entity Level Controls (ELC), IT

mapping of applications

General Controls (ITGC) and

to the same and

IT Application Controls (ITAC).

understanding financial

Such controls contribute to risk

risks posed by people-

mitigation of erroneous output data.

process and technology.

We have identified IT Controls

•

The key IT Testing

Framework as a Key Audit

procedures includes

Matter as the Bank's business is

various parameters

highly dependent on technology.

such as Completeness,

The IT environment is complex

Validity, Identification/

and the design and operating

Authentication,

effectiveness of IT controls have

Authorization, Integrity

a direct impact on its financial

and Accountability.

reporting process. Such

Focus of testing

controls provide assurance on

automated controls

the integrity and completeness

from applications was whether the

of data processed through

controls prevent or

various IT applications which

detect unauthorized

are used for the preparation of

transactions and support

financial reports.

financial objectives including completeness, accuracy, authorization and validity of transactions.

•

In ITGC testing, on sample basis, we reviewed control areas such as User Access Management, Change Management, and other aspect of IT operational controls. This includes testing that request for access to systems were reviewed and authorised. We have also reviewed system of recording the audit trials on a sample basis and also reviewed the reports obtained by the bank on the Audit trial system for critical applications.

•

For ITAC, we carried out on sample basis, compliance tests of system functionality in order to assess the accuracy of system calculations.

•

In addition to the above, the design and operating effectiveness of certain automated controls, that were considered as key internal system controls over financial reporting were tested. Using various techniques such as inquiry, review of documentation / record / reports

•

In addition, we have also relied on IS audit conducted by internal audit department of the Bank.

Transition to Revised RBI Guidelines for

Investment Portfolio

Please refer to Schedule 8 read

Our

audit procedure involved

with relevant Note 18(A)(3)(g)

gaining an understanding of the

relating to transition to new RBI

approach adopted by the Bank

Circular related to Investments.

for

transition to the new RBI

The Bank has made

Circular.

investments in Government

•

We have reviewed the

Securities, Bonds, Debentures,

internal note of the Bank,

Shares, Security Receipts, and

duly approved by the

other approved securities. With

Board, describing the

effect from April 01, 2024, the

approach for transition

Bank has adopted the revised

to the new RBI Circular;

guidelines issued by RBI for classification, valuation and operation of investment portfolio and accordingly, re-classified its investment portfolio.

Valuation of investments, classification, identification of

•

Carried out inquiry with the management to understand the

approach adopted by the Bank for transition to the new RBI Circular;

Reviewed the

•

non-performing investments and provisioning related to investments are critical

rationale considered for classification of each category of the securities;

functions.

Derivatives are valued through models with external inputs. The

•

Evaluated and

derivatives portfolio of the Bank

understood the Bank's

primarily includes transactions

internal control system to

which are executed on behalf

comply with the relevant

of its clients (and are covered

RBI guidelines regarding

on a back-to-back basis) and

valuation, identification

transactions to hedge the

of NPIs, provisioning /

Bank's interest rate and foreign

depreciation related to

currency risk.

investments;

The Bank has also classified its

•

Review of relevant

derivatives portfolio based on

document / records /

the fair value hierarchy as Level

reports;

1, Level 2 and Level 3.

•

Perused minutes of

We have identified the transition

the Board and its

to the revised RBI Guidelines

Committee meetings

for Classification, Valuation

regarding transition to

and Operation of Investment Portfolio and derivatives as the

the new RBI Circular;

Key Audit Matter considering its

•

Reviewed compliance

high degree of complexity and

with the relevant RBI

judgements involved.

•

Circulars;

Reviewed the Accounting Policy of the Bank;

•

Independently verified valuation of investments of the Bank as on March 31,2025;

•

Reviewed, on test-check basis, price considered for valuation of derivatives to understand reasonableness of the valuation methodologies used by the Bank;

•

Assessed the appropriateness of the related disclosures in the financial statements for transition to the new RBI Circular.

Information other than the standalone financial statements and Auditor’s Report thereon
The Bank's management and Board of Directors are responsible for preparation of Other Information. The other information comprises the Management Discussion and Analysis, Business Responsibility and Sustainability Report, Directors' Report forming part of the Annual Report, Corporate Governance Report but does not include the Standalone Financial Statements, Consolidated Financial Statements and our auditor's report thereon. The other information is expected to be made available to us after the date of this auditor's 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 other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

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

The Bank's 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 of the Bank in accordance with the recognition and measurement principles laid down in Accounting Standards specified under Section 133 of the Act read with Companies (Accounting Standards) Rules, 2021 as amended, in so far as they apply to banks, provisions of Section 29 of the Banking Regulation Act, 1949 and the circulars and guidelines issued by Reserve Bank of India (‘RBI') from time to time, as applicable to the Bank. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act and the 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 Bank's 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 Bank's financial reporting process.

Auditor’s 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 Auditor's 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 due 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 adequate 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 in the standalone financial statements made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Director's 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 Bank's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's 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 Auditor's 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 of the current year and are therefore the key audit matters. We describe these matters in our auditor's 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 Matter
The Standalone Financial Statements for the year ended March 31, 2024, have been audited by the predecessor auditors, whose report dated May 4, 2024 had expressed an unmodified opinion. The above report has been furnished to us by the management and has been relied upon by us for the purpose of our audit of the Standalone Financial Statements.

Our opinion 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 read with Companies (Accounting Standard) Rules, 2021, as amended, 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) The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of preparing financial statements are not required to be submitted by the branches. Our audit has been carried out centrally as the necessary records and data required for the purpose of our audit are centrally made available. Further, during the course of our audit, we have visited 37 domestic branches and a GIFT City IBU, Gandhinagar branch (Overseas) which, in aggregate, comprise of 36% of the gross advances of the Bank, to examine the records maintained at such branches for the purpose of our audit, in compliance with the extant RBI Circular.

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;

(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 accounting policies prescribed by RBI;

(e) 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 is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) 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'.

4) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

(a) the Bank has disclosed the impact of pending litigations as at March 31, 2025 on its financial position in its standalone financial statements - Refer Note No. 18(B) (12)(C) read with Note 12 to the standalone financial statements;

(b) the Bank has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 18(B) (12)(B) to the standalone financial statements;

(c) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank during the year ended March 31,2025.

(d) (i) The management of the Bank has represented

that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts (Refer Note No. 18(C)(VII)), no funds have been advanced 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 person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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;

(ii) The management of the Bank has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts (Refer Note No. 18(C)(VII)) no funds have been received by the Bank from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, the Bank shall, whether, 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

(iii) Based on such audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) above contain any material misstatement.

(e) As stated in Note 18(B)(7)(B) to the Standalone Financial Statements:

• During the year, the final dividend declared and paid by the Bank is in compliance with section 123 of the Act.

• The Bank has not declared any interim dividend during the year.

• The Board of Directors of the Bank have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

(f) Based on our examination which included test checks, the Bank has used accounting software for maintaining its books of account which, as applicable, have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail has been preserved by the Bank as per the statutory requirements for record retention.

With respect to the matter to be included in the Auditors' Report under section 197(16) of the Act; the Bank is a banking company as defined under Banking Regulation Act, 1949. Accordingly, the requirements prescribed under Section 197 of the Companies Act, 2013 (the ‘Act') do not apply by virtue of Section 35B(2A) of the Banking Regulation Act, 1949.

frt -k1 For Suri & Co.

-Ft™) TtenrtR/Chartered Accountants wf Wto wn/(FRN - 004283S)

4OT3R eft.

Natarajan V.

-RtTR/Partner -. -f./M.No. 223118

UDIN: 25223118BMJLEA1719