Dear Shareholders,

The Board of Directors takes great pleasure to present the 98th Annual Report on the business and operations of Dhanlaxmi Bank Limited (“the Bank”), together with the audited accounts for the financial year ended March 31, 2025. The Report highlights the performance and achievements of the Bank during the year along with the new initiatives undertaken by the Bank.

The Bank's performance Highlights for the financial year ended March 31, 2025 are as follows: Rs in Crore

The Bank has 261 branches as on 31^st March, 2025 spread across 14 States and 2 Union Territories. Out of 261 branches, 20 branches are in rural category, 112 in Semi Urban, 71 in Urban and 58 in Metropolitan Category. The Bank had 282 ATMs/CRMs and 17 Business Correspondents as on March 31, 2025.

Total business of the Bank improved by 14.31% to reach Rs28219.11 Crore as on 31.03.2025, from Rs24687.21 Crore as on 31.03.2024.

Deposits recorded a growth of 12.06%, reaching Rs16,013.45 Crore as of March 31, 2025, compared to Rs14290.31 Crore as of March 31, 2024. The CASA to total deposits ratio as of March 31, 2025, was 29.02%.

Gross advances stood at Rs12,205.66 Crore as of March 31, 2025, compared to Rs10396.90 Crore as of March 31, 2024, registering a growth of 17.40%. The CD ratio as of March 31, 2025, was 76.22%.

The total income (Interest Income + Non-Interest Income) as of March 31, 2025, was Rs1489.09 Crore, compared to Rs1359.55 Crore as of March 31, 2024, registering a growth of 9.53%. Interest income increased by 9.35% year-on-year, reaching Rs1319.88 Crore as of March 31, 2025, compared to Rs1206.99 Crore as of March 31, 2024. Similarly, non-interest income increased by 10.91% year-on-year, reaching Rs169.20 Crore as of March 31, 2025, compared to Rs152.56 Crore as of March 31, 2024. Changes in interest rates have impacted the Net Interest Income (NII) of the Bank, which has increased by 5.42% on a year-over-year (YoY) basis. Interest expenses have increased by 11.76% YoY to Rs836.59 Crore as of March 31, 2025, from Rs748.54 Crore as of March 31, 2024. Operating expenses also increased by Rs15.64 Crore, to Rs557.39 Crore as on March 31, 2025 from Rs541.75 Crore as on March 31, 2024. Cost to Income Ratio as on March 31, 2025 was 85.42% against 88.66% as on March 31, 2024. Operating profit during the year was Rs95.10 Crore as against Rs69.26 Crore during the previous year. The Bank declared a net Profit of Rs66.64 Crore during the year under report and for the previous year, the Bank had declared a net profit of Rs57.82 Crore.

Bank's Paid-up capital and reserves was Rs1395.29 Crore as on 31.03.2025. The capital adequacy ratio as per Basel III was 16.12% with Core CRAR of 15.24%.

During the financial year 2024·25, the Bank undertook the following fund-raising activities aimed at building up its financial strength, improving regulatory compliance, and supporting future growth strategies. These initiatives underscore the Bank's commitment to disciplined capital management and proactive stakeholder engagement.

The Bank successfully concluded a Rights Issue, thereby raising Rs297.54 Crore through the allotment of 14,16,86,767 equity shares. Offered at Rs21 per equity share, the issue provided eligible shareholders an entitlement of 14 shares for every 25 held as on the record date, i.e., December 27, 2024. The Rights Issue was open from January 8 to January 28, 2025, and it received an enthusiastic response from investors, resulting in a massive oversubscription of 1.64 times of upto Rs487.96 Crore. The primary objective of this capital-raising initiative was to enhance the Bank's Tier-I capital and to finance its future growth plans, particularly in lending and investment activities.

The Bank completed the full redemption of its Series XV Basel III compliant subordinated Lower Tier II Bonds (ISIN: INE680A08081) of Rs150.00 Crore on March 29, 2025, which was the scheduled maturity date.

The shareholders of the Bank had, at the Extraordinary General Meeting held on March 18, 2025, approved the resolution authorizing the Board of Directors to issue Redeemable Secured and/or Unsecured Non-Convertible Debentures (NCDs), including but not limited to subordinated debentures, bonds, Basel III compliant Tier 2 Bonds, and other eligible debt securities, up to an aggregate limit of Rs300 Crore, in one or more tranches, within a period of one year from the date of approval of the resolution. Subsequently, the Bank issued and allotted 150 redeemable, non-convertible unsecured debentures (Basel III compliant Tier II Bonds) (ISIN: INE680A08099) aggregating to Rs150 Crore on private placement basis. The proceeds of the issue will be utilized by the Bank for its regular business activities and for augmenting Tier 2 Capital and over all capital for strengthening its capital adequacy and for enhancing its long-term resources.

The Board expresses its gratitude to the shareholders and other stakeholders for their continued trust and participation in the above capital-raising exercise. The Board also extends its sincere thanks to the Merchant Bankers, Legal Counsels, Trustees to the Bond Issue, Registrar and Transfer Agents, the Bankers to the Issue and the Bank's Central Statutory Auditors for the successful completion of the above issue of securities. The Board also acknowledges the support and guidance of all the Regulators and the Stock Exchanges. The details of the issue of equity shares as well as issue of bonds are included in the Report on Corporate Governance forming part of the Directors' Report.

The Board of Directors of the Bank has not recommended any dividend for the financial year 2024-2025.

Gross NPA and Net NPA percentage stood at 2.98% and 0.99% respectively as on 31.03.2025 against 4.05% and 1.25% as on 31.03.2024.

The provision coverage ratio (PCR) as on 31.3.2025 was 88.84% which was 88.32% in the previous year.

Our Vision: “Banking on Relationships forever”.

Our Mission: To Become a Strong and Innovative Bank with Integrity and Social Responsibility to Maximize Customer Satisfaction as well as that of the Employees, Shareholders and the Society.

The Bank accords high importance to the quality of customer service rendered across its branches / offices. The Bank initiated a series of measures during the year through deployment of technology and significantly enhancing service quality. A well-defined and full-fledged Customer Grievance Redressal Mechanism has been put in place in the Bank.

The Customer Service Committees comprising of Bank personnel as well as our constituents monitor the implementation of customer service measures periodically. Customer Service Committee of the Board has been formed at the apex level and committees at branches for monitoring service quality and bringing about improvements in this area on an ongoing basis. The Bank has a 24 x 7 Phone Banking Call Centre at Chennai to cater to customer needs across the country. In the financial year 2024·25, the Bank registered 13,538 complaints, as against 6,032 complaints in 2023·24. The rise in the number of complaints is attributable to a change in reporting methodology, wherein complaints resolved within the next working day were also included in the complaint statement.

• Introduced of Goods and Service Tax (GST) payments through Online and offline modes.

• Introduced Direct Tax Payments through online and offline modes.

• Introduced Non-Callable Term Deposit products with higher returns.

• Introduced New NRE Savings Bank Account Product Dhanam Global Connect, to increase the HNI-NRI portfolio.

• Release of upgraded version of account opening software DCAMS 2.0 resulting in instant account opening.

• Launched a new Fee Management System, Pay Smart 2, to facilitate the smooth processing of fees and related transactions for our educational institution customers, in partnership with Career Book, a leading provider of school and college fee management ERP solutions.

• Re-launched Dhanam Term Loan Against Digital Receivables with modified product guidelines.

• Lead Generation & Monitoring System (LGMS) upgraded with Automated Sanction Note Generation, to reduce the work load at branches and sanctioning offices.

• Re-Introduced Mobile Banking application “Dhan Smart” with UPI features.

• Introduced Loan repayment facility using Corporate Internet Banking facility and Unified Payments Interface (UPI).

• Introduced new features in retail net banking and mobile banking platforms: Home Loan Interest Certificates, TDS Certificates, Credit Card Auto Debit register, TD & RD Deposit Calculator, EMI Calculator, E statement Subscription, etc.

The Equity shares of the Bank are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Bank confirms that it has paid the listing fees to the Stock Exchanges for the financial year 2025-26.

The Bank supports and pursues the ‘Green Initiative' of the Ministry of Corporate Affairs. All the documents including the notice and explanatory statement of Annual General Meeting, Audited Financial Statements, Directors' Report and Auditors' Report are being sent electronically to all shareholders who have registered their e-mail addresses with their Depository Participants or with the Bank / Registrar & Transfer Agents. Shareholders holding shares in electronic form are requested to update their e-mail addresses in their respective DP accounts. Shareholders holding shares in physical form are requested to update their e-mail addresses with Bank's Registrar and Transfer Agents by a written request for enabling the Bank to ensure electronic dispatch the aforesaid documents. A letter providing the web-link, including the exact path, where complete details of the Annual Report is available is also being sent to those shareholder(s) who have not so registered their e-mail addresses in their addresses registered with the Bank / Registrar & Transfer Agents / Depository Participants.

The composition of the Board of Directors of the Bank is in accordance with the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Banking Regulation Act, 1949, guidelines issued by the Reserve Bank of India and the best practices of Corporate Governance. As on March 31, 2025, the Board of Bank comprised of 10 Directors including the Chairman, Managing Director & CEO, Executive Director, 4 non-executive Independent Directors, one non-executive non-independent Director and 2 Additional Directors appointed by the Reserve Bank of India under Section 36AB of the Banking Regulation Act, 1949. Our Chairman is also an Independent Non-Executive Director.

All the Directors have rich experience and specialized knowledge in various sectors like banking, risk management, agriculture & rural economy, small scale industry, information technology, economics, accountancy, etc. The remuneration / sitting fees paid to the Directors during the year are disclosed in the Report on Corporate Governance.

There were 5 independent Directors on the Board of the Bank as on March 31, 2025. Declarations have been taken from all the Independent Directors as required under the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and RBI guidelines. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are the persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the Management.

There is no change in any of the above information from March 31, 2025 to the date of this Report.

Detailed profiles of all the Board Members are available on the Bank's website at https://www.dhanbank.com/board-of-directors.

1. Sri Ajith Kumar K.K. took charge as Managing Director & CEO of the Bank for a period of three years with effect from June 20, 2024, subsequent to the approval of Reserve Bank of India, and the appointment was approved by the Shareholders of the Bank vide postal ballot on September 17, 2024.

2. The term of office of Shri Shivan J.K. as Managing Director & CEO of the Bank concluded on June 19, 2024.

3. Dr. Jineesh Nath C.K. was appointed as Additional Director on the Board of the Bank w.e.f. July 31, 2024 and appointed as Non-Independent Director liable to retire by rotation by the Shareholders at the 97th Annual General Meeting (AGM) of the Bank held on September 30, 2024. The Board of Directors of the Bank has placed the proposal for re-appointment of Dr. Jineesh Nath C.K. as Non-Independent Director liable to retire by rotation for approval of the Shareholders at the 98th Annual General Meeting (AGM) of the Bank to be held on Monday, September 29, 2025.

4. The term of office of Sri D.K. Kashyap was extended by Reserve Bank of India for a further period of two years from September 28, 2024 to September 27, 2026 or till further orders, whichever is earlier.

5. Sri P. Suriaraj took charge as Executive Director of the Bank for a period of three years with effect from January 20, 2025, subsequent to the approval of Reserve Bank of India, and the appointment was approved by the Shareholders of the Bank in the Extra-Ordinary General Meeting of the Bank held on March 18, 2025.

6. Sri Ashutosh Khajuria was appointed as Director (Non-Executive Independent) on the Board of the Bank w.e.f. March 22, 2025 and his appointment as Independent Director for a period of 5 years w.e.f. March 22, 2025 was approved by the Shareholders of the Bank vide postal ballot on June 16, 2025.

7. Sri Sreesankar Radhakrishnan, who was an Independent Director, resigned from the Board of the Bank w.e.f. March 03, 2025 due to personal reasons. Sri Sreesankar Radhakrishnan has vide e-mail dated March 10, 2025 confirmed to the Bank that there are no material reasons for resignation other than his pre occupation with his current professional assignments which required more attention and time from him. The letter of resignation tendered by Sri Sreesankar Radhakrishnan and the subsequent confirmation were shared by the Bank promptly to the Stock Exchanges for dissemination to the public.

As on March 31, 2025, the Bank had a 5-member Audit Committee of the Board (including 2 RBI Additional Directors). All the five members of the Committee were non-executive Directors, with Sri G. Rajagopalan Nair, Ms. Vardhini Kalyanaraman, Sri Jineesh Nath C.K., Sri D.K. Kashyap and Sri C. Nageswara Rao as the Members of the committee. As Sri Sreesankar Radhakrishnan, who was the Chair of the Committee, had resigned from the Board on March 03, 2025, the Committee did not have a permanent Chairperson till May 09, 2025, when Ms. Vardhini Kalyanaraman was appointed by the Board as the Chairperson of the Committee. As on the date of this Report, the composition of the Committee remains the same with the only change being the appointment of Ms. Vardhini Kalyanaraman as Chairperson of the Committee. The composition as well as the terms of reference of the Committee are in accordance with the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Banking Regulation Act, 1949 and the guidelines issued by Reserve Bank of India.

The Bank has duly obtained necessary declarations from each independent Director under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence as laid down in the Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The Bank has also obtained the ‘Fit & Proper' declarations from all Directors as prescribed under the guidelines issued by Reserve Bank of India. Pursuant to the notification of the Ministry of Corporate Affairs dated October 22, 2019, an online data bank for the independent directors (“Data Bank”) has been rolled out by the Indian Institute of Corporate Affairs. All the Independent Directors of the Bank have registered themselves in the Data Bank.

The Nomination & Remuneration Committee recommends the appointment / reappointment / continuation of Directors to the Board after conducting due diligence of the Directors on the basis of the “fit & proper” criteria prescribed under the guidelines issued by Reserve Bank of India along with the provisions of the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Nomination Policy approved by the Board. The Board will take the appropriate action based on the recommendations of the Nomination & Remuneration Committee of the Board. The criteria for determining qualifications, positive attributes and independence of Directors to be appointed / re-appointed or for continuation of Directors include, inter-alia, the following:

• Ensuring that the appointment / re-appointment / continuation is in conformity with the provisions of the Banking Regulation Act, 1949, RBI guidelines, Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

• Ensuring that the criteria for independence of Directors as stated in the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is complied with, in case of independent Directors.

• Ensuring that the person does not attract any disqualification as per the Banking Regulation Act, 1949, RBI guidelines, Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

• Special knowledge or practical experience in various fields as enumerated in Section 10A(2)(a) of the Banking Regulation Act, 1949 or any other field which may be useful to the Bank;

• Professional knowledge and experience;

• Experience in the field of banking / finance sectors;

• Interest in NBFCs and other entities;

• Relatives connected with the Bank;

• Fund and non-fund facilities availed from the Bank;

• Defaults, if any, by the Director or interested entities with respect to the credit facilities availed from any Bank;

• Professional achievements relevant to the office of Directorship;

• Prosecution, if any, pending or commenced or resulting in conviction in the past against the director and / or against any of the interested entities for violation of economic laws and regulations;

• Criminal prosecution, if any, pending or commenced or resulting in conviction in the past against the Director;

• Any other factors as the Nomination & Remuneration Committee may think fit for the purpose of considering the appointment / re-appointment / continuation as Director.

The Bank has a Board approved Compensation Policy which deals with the compensation & benefits of the Employees of the Bank.

The objectives of the Compensation Policy of the Bank inter-alia includes, to provide a fair and persistent basis for motivating, inspiring and rewarding the employees appropriately, according to their jobs/role size, performance, accomplishments, contribution, skill, aptitude and competence to implement standards on sound compensation practices and incentives and to provide effective governance of compensation payable to the employees, alignment of compensation with prudent risk taking and effective supervisory oversight. The disclosure requirement of the remuneration is separately provided in “Disclosure under Basel III norms.”

The Board considers the recommendations of the Nomination & Remuneration Committee and approves the remuneration, with or without modifications, subject to regulatory approvals. The remuneration payable to MD & CEO / Whole-time Directors is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration to MD & CEO / Whole-time Directors is payable only after receipt of the approval from RBI.

The non-executive Directors are paid sitting fees for attending each meeting of the Board of Directors or any Committee thereof as approved by the Board, within the permissible limit prescribed under the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other regulatory guidelines, as amended from time to time. The Board while recommending any change in the sitting fees considers various factors like size and complexity of organization, comparison with the peer banks and regulatory guidelines as applicable. Apart from sitting fees, the Bank does not pay any other remuneration to the non-executive Directors.

The total remuneration paid to MD & CEO and non-executive Directors for the financial year 2024-25 is included in the Report on Corporate Governance forming part of this Report.

The Remuneration Policy of the Bank is hosted on the website of the Bank https://www.dhanbank.com/pdf/Nomination-and-Remuneration-Policy-8.0.pdf.

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, the individual Directors and various Committees of the Board are undertaken annually. The evaluation of the individual Directors is being done in the absence of the Director being evaluated. A separate meeting of independent Directors evaluates the performance of non-independent Directors, Chairman and the Board as a whole. The separate meeting of independent Directors is held once in a year. The criteria for performance evaluation of Directors, Board and its Committees include, inter-alia, the following:

• Attendance at Board and various Committee meetings;

• Participation and contribution in Board and Committee meetings;

• Composition of the Board and its diversity;

• Roles of various Committees of the Board;

• Compliance and understanding of regulatory requirements;

• Contribution to effective corporate governance and transparency in the Bank's operations;

• Updation of Knowledge and familiarization programmes conducted for Directors;

• Appropriateness of decisions made by the Board and its Committees;

• Quality, quantity and timeliness of flow of information to the Board;

• Understanding by individual Directors for their roles and responsibilities as Director;

• Contributions towards the performance and strategies of the Bank;

• Conduct of Meetings;

• Professionalism in the Board and Committees.

A total of 17 Board Meetings were held during the year. The Board meetings were held in accordance with the regulatory requirements. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Annual Report.

During the financial year 2024-25, Sri Ajith Kumar K.K. took charge as Managing Director & CEO of the Bank for a period of three years w.e.f. June 20, 2024, in place of Sri Shivan J.K. Further, Sri P. Suriaraj took charge as the Executive Director (Whole-time Director other than MD & CEO) of the Bank w.e.f. January 20, 2025. Except the above, there are no other changes in the Key Managerial Personnel (KMP).

The Bank continues to uphold its commitment to building a dynamic and diverse workforce. The total number of employees of the Bank as at the closure of the financial year ended March 31, 2025 was 1756, of which:

• Number of male employees was 1042

• Number of female employees was 714

• Number of transgender employees was Nil

The Bank has no employee whose particulars are required to be given in terms of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The ratio of the remuneration of each Director to the median employees' remuneration and other details 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 are annexed to this report.

The relevant information is included in the Report on Corporate Governance forming part of the Directors' Report.

The Bank declares that it has duly complied with the provisions of the Maternity Benefit Act, 1961. All eligible women employees have been extended the statutory benefits prescribed under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support as applicable. The Bank remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

The shareholders had at the 97th Annual General Meeting of the Bank held on September 30, 2024, appointed M/s. Sagar & Associates, Chartered Accountants, Hyderabad (FRN-003510S) and M/s. Abraham & Jose, Chartered Accountants, Thrissur (FRN-000010S) for the financial year 2024-25 for their second year and first year respectively to hold office as the Joint Statutory Central Auditors of the Bank from the period commencing from the conclusion of the 97th Annual General Meeting to the conclusion of the 98th Annual General Meeting of the Bank. The Board of Directors of the Bank have placed the proposal for the appointment of M/s. Sagar & Associates and M/s. Abraham

& Jose for the financial year 2025-26 for their third year and second year respectively to the Shareholders for their approval at the 98th Annual General Meeting of the Bank scheduled to be held on Monday, September 29, 2025.

A total fee of Rs50,00,000 (Rupees Fifty Lakh only) plus applicable taxes was paid to the present Statutory Central Auditors M/s. Sagar & Associates and M/s. Abraham & Jose for Audit, Certification, Quarterly Review and Tax Audit for the FY 2024-25. The travelling and out- of pocket expenses related to the audit/ review were additionally reimbursed on actual basis.

There is no qualification or adverse remark in the Auditors' Report for the financial year 2024-25.

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors of the Bank appointed Mr. M. Vasudevan, Practicing Company Secretary, Thrissur as the Secretarial Auditor to conduct the Secretarial Audit of the Bank for the financial year

2024-25. The Bank has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The report of the Secretarial Auditor is annexed to this report. The Secretarial Audit Report for the financial year 2024-25 does not contain any qualification, reservation, adverse remark or disclaimer of opinion.

Pursuant to Section 92 (3) of the Companies Act, 2013 and Section 134 (3) (a), the Annual Return is hosted on the Bank's website at https://www.dhanbank.com/pdf/33-Annual%20 Return.pdf.

The Bank has adopted the “Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions” in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is hosted on the website of the Bank at https://www.dhanbank. com/pdf/Policy-Materiality-Related-Party-Transactions-Dealing-Related-Party-Transactions-8.0.pdf. During the financial year, the Bank did not enter into any related party transactions with its Directors or Key Managerial Personnel or their Relatives that would potentially conflict with and/ or adversely affect the interests of the Bank. In accordance with the circular issued by Reserve Bank of India on “Disclosure in Financial Statements · ‘Notes to Accounts' dated July 1, 2015 · Para 4.5 Accounting Standard 18 · Related Party Disclosures”, the remuneration paid to Managing Director & CEO and the Executive Director alone qualifies for classification as Related Party Transaction, for which the Bank has taken due approvals of the Reserve Bank of India and the Shareholders of the Bank. Further, there was no related party transaction for which Form AOC-2 was applicable.

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement and management of all material risks including but not limited to credit, market, operational, liquidity and other Pillar-II risks. The Bank has put in place integrated risk management policies which ensure independence of the risk governance structure. The required standard operating procedures also follows the Policies to ensure that all the parameters are well covered while implementing the approved policies. The details of risk management practices are provided in Management Discussion and Analysis Report annexed to the Director's Report.

In compliance with regulatory guidelines on Pillar I of Basel III norms, the Bank has computed capital charge for credit risk as per the Standardized Approach, for market risk as per the

Standardized Duration Method and for operational risk as per the Basic Indicator Approach. To address Pillar II risk, the Bank has implemented ICAAP (Internal Capital Adequacy Assessment Process), to integrate capital planning with budgetary planning and to capture residual risks which are not addressed in Pillar I, like credit concentration risk, interest rate risk in the banking book, liquidity risk, earnings risk, strategic risk, reputation risk, pension obligation risk etc. The Bank has adopted a common framework for additional disclosures under Pillar III for adhering to the market discipline norms of Basel III guidelines. This requires the Bank to disclose its risk exposures, risk assessment processes and its capital adequacy to the market in a consistent and comprehensive manner.

The Bank has laid down a system of internal financial controls with reference to its financial statements. The integrity and reliability of the internal control systems are achieved through clear policies and procedures, process automation, training and development of employees, and an organisation structure that segregates responsibilities. These controls are reviewed and tested by the internal audit team to ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements. The internal financial controls of the Bank with respect to the financial statements are adequate and are operating effectively.

To reduce its carbon footprint and enhance resource efficiency, the Bank has undertaken various energy conservation initiatives at its premises. The Bank's Mattancherry Branch is currently operating on solar energy. The Bank is also exploring the feasibility of installing solar power systems at other Bank-owned premises. Further, energy-efficient equipment is being deployed across branches and administrative offices to optimize power consumption. The Bank continues to leverage information technology extensively to deliver quality services to its customers. It remains committed to digital transformation, with ongoing investments in analytics and paperless technologies aimed at enhancing operational efficiency and improving both internal and customer-facing processes.

In addition, the Bank actively supports the country's export efforts through its trade finance operations, thereby contributing to foreign exchange earnings.

The Bank transferred the entire pending unclaimed dividend amount to the Investor Education and Protection Fund (IEPF) during the financial year 2018-19. There was no amount of dividend pending to be transferred to the fund in the financial year 2024-25.

In terms of Section 124 (6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, it may be noted that if the dividends have been unpaid or unclaimed for seven consecutive years or more the underlying shares shall be transferred to the IEPF Demat Account maintained with depositories. Upon transfer of such shares to IEPF account, all benefits (eg. bonus, spilt, etc.), if any, accruing on such shares shall also be credited to the IEPF Demat Account and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. The members/claimants whose shares, unclaimed dividend etc. have been transferred to IEPF may claim the shares or apply for refund by making an application to IEPF Authority as per the procedure prescribed in the IEPF Rules.

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

The Bank does not have any subsidiary companies.

The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings and General Meeting have been complied with by the Bank.

As per section 3(7) of The Insolvency and Bankruptcy Code, 2016, Corporate person does not include any financial service provider, thereby the Bank is excluded from the purview of the Code. There is no application or proceeding against the Bank under Insolvency and Bankruptcy Code, 2016 during the financial year under review. However, Bank has been filing cases in NCLT under IBC, 2016 as a financial creditor as a part of its recovery mechanism and as at the end of the financial year 2024-25, there were 2 cases against corporate debtors.

Being a Banking Company, the disclosures relating to deposits as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Act, are not applicable to the Bank.

There is no fraud reported by auditors under subsection (12) of Section 143 of the Companies Act, 2013 other than those which are reportable to the Central Government.

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of section 186 of Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided or investment made by a banking company in the ordinary course of business.

During the last three years, there were no penalties or strictures imposed on the Bank by the Stock exchanges(s) and/or SEBI and/ or any other statutory authorities on matters relating to capital market. There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Bank or the future operations of the Bank.

This has been dealt with in a separate section in the Annual Report.

A separate report on Corporate Governance as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and certificate from Sri V. Suresh, Practicing Company Secretary certifying compliance with the conditions of Corporate Governance are annexed to this report.

In compliance with the provisions of Section 135 of the Companies Act, 2013, the Bank has constituted a Corporate Social Responsibility Committee of the Board and has formulated a Corporate Social Responsibility Policy approved by the Board. Due to losses incurred by the Bank from FY 2013 to 2018, in compliance with the provision outlined in Section 198, these losses were offset against profits in subsequent years. Consequently, no profits were available under Section 198 of the Companies Act, for Corporate Social Responsibility purposes. Therefore, the Bank did not undertake any projects under Corporate Social Responsibility for the financial year 2024-25.

The regulatory provisions relating to the Business Responsibility and Sustainability Reporting are not applicable to the Bank for the financial year ended March 31, 2025.

There are no material changes and commitments affecting the financial position of the Bank which has occurred between the end of the financial year, i.e., March 31, 2025 and the date of Directors' Report, i.e., August 26, 2025.

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the annual accounts for the financial year ended March 31, 2025, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2024-25 and of the profit and loss of the Bank for that period; (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; (iv) the Directors had prepared the annual accounts for the financial year ended March 31, 2025 on a going concern basis; (v) the Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Board of Directors places on record its gratitude to the Government of India, the governments of various States, the Reserve Bank of India, the Securities and Exchange Board of India, the Registrar of Companies, other regulatory bodies and the Stock Exchanges, where the Bank's shares are listed, for their support and guidance. The Board also places on record its gratitude to the Bank's customers, shareholders, other stakeholders and well-wishers for their valued patronage. The Board further places on record its appreciation for the valuable services rendered by M/s. Sagar & Associates, and M/s. Abraham & Jose who were the Joint Statutory Central Auditors of the Bank, and Mr. M. Vasudevan, the Secretarial Auditors of the Bank. The Board expresses its sincere appreciation for the dedicated services rendered by officers and employees of the Bank at all levels.