The Board of Directors of your Bank is immensely pleased to
present the 106^th Annual Report on the business and operations
of the Bank together with the audited accounts for the financial
year ended March 31, 2025.

KEY PERFORMANCE INDICATORS

Your Bank has been able to achieve significant growth in all
areas of operation and delivered a striking performance during
the financial year 2024-25, which depict the aptness of the
strategies implemented during the last few years. The essence
of the performance for the financial year 2024-25 is as below:

Interest Income registering a growth of 17.84%.

Net Interest Income increased by 11.56%.

Non-Interest Income increased by 10.92%.

DEPOSITS

The Gross Deposits grew by '12,965.27 Crore and reached
'1,02,077.99 Crore as on March 31, 2025 from '89,112.72
Crore as on March 31, 2024, recording a growth of 14.55%.

The Term Deposits grew by '12,218.55 Crore and reached
'74,246.22 Crore as on March 31, 2025, from '62,027.67 Crore
as on March 31, 2024, registering a growth of 19.70%.

Your Bank's CASA balances grew by '746.71 Crore and reached
'27,831.77 Crore as on March 31, 2025 from '27,085.06 Crore
as on March 31, 2024, recording a growth of 2.76%. The CASA
balance as on March 31, 2025 is constituted by Savings Bank
deposits of '19,478.84 Crore and Other Demand Deposits of
'8,352.93 Crore. The CASA ratio of the Bank as on March 31,
2025, stood at 27.27%.

ADVANCES

During the year, your Bank's credit portfolio grew by '10,068
Crore and reached '84,491 Crore as on March 31, 2025,
from '74,423.22 Crore as on March 31, 2024, registering a
growth of 13.52%. Growth in advances is majorly contributed
by Commercial, Retail and Agriculture. Commercial loan book
increased its share to 36% of the total loan portfolio followed
by Retail as well as Agriculture at 25% each and Corporate Loan
Book reduced to 14% indicating our continued shift towards
granular portfolio. The degrowth in Corporate and Institutional

loan books resonates with our preference over margins than
topline growth. The details of the advances portfolio for the
financial year 2024-25 and financial year 2023-24 along with
their comparative growth are given in the table below.

CLASSIFICATION OF ADVANCES PORTFOLIO

As on March 31, 2025, the Priority Sector Lending of your
Bank reached '35,476.26 Crore and constituted 47.09% of
its Adjusted Net Bank Credit (ANBC) as against the statutory
requirement of 40%.

AGRICULTURE ADVANCES

Your Bank's Agriculture Advances reached '20,818.50 Crore as
on March 31, 2025. Also, the bank's Priority Sector - Agriculture
advances in terms of RBI guidelines stood at '15,266.15 Crore
which constitutes 20.26% of ANBC as against the regulatory
stipulation of 18%. Advances to Micro Enterprises and
Weaker Sections Credit stood at 7.95% and 12.47% of ANBC
respectively. Your Bank has continuously achieved and surpassed
all the targets and sub-targets under the Priority sector for all
the quarters of the year through a focused lending strategies.

ASSET QUALITY

Your Bank has a dedicated vertical (Credit Monitoring and
Recovery Department) that takes care of recovery. It plays a
pivotal role in ensuring the health and stability of our bank's
loan portfolio. In the face of economic fluctuations and market
challenges, your Bank diligently manages Non-Performing Assets
(NPAs) to minimise risks and optimise recovery strategies. High
value NPA accounts are taken care by eight Asset Recovery
Branches spread across India for effective recovery. Your bank
has also engaged recovery agencies to assist the Asset recovery
Branches to reach the end customers for continuous follow-up.

The Gross NPAs of your Bank curtailed by '399.84 Crore and
contained to '641.80 Crore as on March 31, 2025, from the
level of '1,041.64 Crore as on March 31, 2024. Correspondingly,
Net NPA of your Bank curtailed by '131.76 Crore and contained
to '166.21 Crore as on March 31, 2025 from the level of
'297.97 Crore as on March 31, 2024. In terms of percentage,
your Bank's Gross Non-Performing Assets (Gross NPA) and
Net Non- Performing Assets (Net NPA) were well contained
at 0.76% and 0.20% as against 1.40% and 0.40% of the
previous year respectively. Further, your Bank's SMA30 levels
has been managed well and confined to 0.30% as against
0.38% of previous year. Your Bank has carried out focused
recovery drive on a continuous basis which resulted in improved
recovery performance during the past three years. The Provision
Coverage Ratio stood at 96.81% and your Bank is continuously
strengthening the ratio for the past five years. Your Bank will
take all possible steps to curtail slippages and expedite recovery
in existing SMA / NPAs.

Your bank has implemented several measures to minimise
slippages and enhance recovery, including strengthening
credit risk assessment processes, implementing proactive
monitoring systems, offering timely restructuring options for
stressed borrowers, collaborating with specialised recovery
agencies, leveraging data analytics for early warning signals,
and streamlining legal and recovery frameworks. These steps
ensure proactive identification of potential defaults, prompt
action for resolution, and efficient recovery processes, ultimately
contributing to the reduction of slippages and improved
recovery rates.

Analytics Department has devised a separate EWS Tool, which
generates Early Warning Signals for helping Bank to monitor
Portfolio regularly.

INVESTMENTS

Your Bank's investment portfolio grew by '1,365.69 Crore
and reached '24,206.14 Crore as on March 31, 2025, from
'22,840.44 Crore as on March 31, 2024, registering a growth of
5.98%. The average investment for the financial year 2024-25
stood at '24,563.83 Crore. The investment portfolio's
composition is consistent with the Investment Policy of the Bank
and lays stress on liquidity and regulatory management besides
providing gains.

Interest income earned on investments during the financial year
2024-25 was '1,622.47 Crore as against '1,331.01 Crore in
financial year 2023-24. Profit made on sale of investments was
at '68.36 Crore for the FY 2024-25. With a view to prevent
large volatility, Modified Duration of overall portfolio including
Held To Maturity (HTM) was maintained at a lower level of 3.43
years. Liquidity position was maintained at comfortable levels
throughout the financial year 2024-25.

FOREIGN EXCHANGE TRANSACTIONS

Your Bank's merchant turnover reached '25,136 Crore during the
financial year 2024-25 as against previous year's achievement of
'24,559 Crore. Bank's Export credit de-grown to '1467 Crore
during the financial year 2024-25 as against previous year's
position of '1,554 Crore. Total Income earned through foreign
exchange transactions was '58.83 Crore for the financial year
2024-25 as against '57.85 Crore for the previous financial year
2023-24. Exchange Profit of ' 31.56 Crore and Commission
& others of '27.27 Crore forms part of total Income earned
through foreign exchange transactions.

EXPENDITURE

Your Bank's Interest expenditure increased by '1,023.38 Crore
and reached '5,418.12 Crore for the financial year 2024-25 as
against '4,394.74 Crore for the financial year 2023-24. The
Operating expenses also increased to '2,877.14 Crore during
the financial year 2024-25 from '2,638.75 Crore of the previous
financial year in line with the business growth and various new
initiatives taken by the Bank. Your Bank regularly monitored both
its operating and establishment expenses during the year and
tight controls were exercised on the expenditures.

Your Bank's Cost of deposits for the year increased by 42 bps to
5.61% during the financial year 2024-25, and in tune with the
same, yield on advances also improved by 20 bps from 9.95%
to 10.15%. Further, yield on investments improved by 38 bps to
6.61%. Hence, spread between yield on funds (8.93%) and cost
of funds (5.61%) works out to 3.32%, as against 3.45% a year
ago. Accordingly, Net Interest Margin (NIM) of your Bank reduced
by 11 bps to 4.09% over the previous year position of 4.20%.

APPROPRIATIONS

The Net Profit of '1,941.64 Crore along with '10.21 Crore
brought forward from the previous financial year, aggregating
to '1,951.85 Crore, was appropriated as follows

DIVIDEND

Your Bank has formulated the Dividend Distribution Policy as per
the requirements of Regulation 43A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, (“SEBI LODR")
and guidelines issued by Reserve Bank India. The objective of
the Policy is to ensure an equitable balance between rewarding
the shareholders through dividend and retaining sufficient funds
for future growth of the Bank subject to compliance with the
dividend pay-out ratio matrix prescribed as per extant guidelines
issued by Reserve Bank of India. The Dividend Distribution Policy
is available on the Bank's website at https://www.kvb.co.in/docs/
dividend-distribution-policy.pdf

Accordingly, considering the capital position of the Bank and the
quantum of dividend pay-out permitted, Board of Directors of the
Bank is pleased to recommend a Dividend of '2.60/- per equity
share of face value of ' 2/- each i.e., 130%, for the financial year
2024-25. Your Bank has notified August 07, 2025 as record date
for determining the names of members eligible for dividend on
Equity shares. The Dividend pay-out is in accordance with Bank's
Dividend Distribution Policy and is subject to the approval of the
shareholders at the ensuing 106^th Annual General Meeting and
also any regulatory/statutory authorities, if required.

In accordance with Accounting Standards 4 - Contingencies and
Events occurring after the Balance Sheet date - notified by the
MCA on March 30, 2016, the proposed dividend amounting to
'209.33 Crore has not been shown as an appropriation from the
Profit and Loss account as of March 31, 2025 and correspondingly
not reported under Other Liabilities and Provisions as at March
31, 2025 (is reported under balance of profit).

SHARE CAPITAL

The Authorised share capital of the Bank stood at '200 Crore
divided into '100 Crore equity shares with a face value of '2/-

each as on March 31, 2025. During the financial year under
review, there has been no change in the Authorised share capital
of the Bank.

During the financial year under review, Bank has allotted 6,80,540
Equity Shares of face value '2/- each to the employees who
exercised their options under KVB ESOS 2011 Scheme and KVB
ESOS 2018 Scheme. Further Bank has alloted 67,121 shares
which were kept under abeyance category to the claimants. Post
allotment of the aforesaid equity shares, the Issued Share Capital
increased from '1,61,00,85,864 to '1,61,14,46,944 comprising
of 80,57,23,472 equity shares with a face value '2/- each and
the Paid-up Share Capital increased from '160,87,53,996 to
'1,61,02,49,318 comprising of 80,51,24,659 equity shares with
a face value '2/- each. Other than the aforementioned, there
is no change in capital structure of the Bank during the year
under review.

The Board of Directors in their meeting held on July 24, 2025 has
approved alteration of Authorised Share Capital from '200 Crore
divided into 100 Crore equity shares of '2/- each to '250 Crore
divided into 125 Crore equity shares of '2/- each and issue of
Bonus shares subject to the approval of members of the Bank in
the 106^th AGM of the Bank.

The Bank's Net owned funds grew to '11,929.54 Crore as
on March 31, 2025, from '10,040.07 Crore of the previous
financial year.

EARNINGS PER SHARE/BOOK VALUE

Bank's Earnings Per Share (Basic) stood at '24.13 for the
financial year 2024-25 as against '19.99 for the financial year
2023-24. The Book Value of shares was '145.57 per equity
share of face value '2/- each (fully paid up) as on March 31,
2025, as against previous year position of '122.42.

As per ICRA ratings schedule:-

ICRA A1 : Instruments with this rating are considered to have
very strong degree of safety regarding timely payment of financial
obligations. Such instruments carry lowest credit risk.

ICRA AA (Stable): Instruments with this rating are considered to
have high degree of safety regarding timely servicing of financial
obligations. Such instruments carry low credit risk.

As per CRISIL ratings schedule:-

CRISIL A1 : Instruments with this rating are considered to
have very strong degree of safety regarding timely payment of
financial obligations. Such instruments carry lowest credit risk.

As per CARE ratings schedule:-

CARE A1 : Securities with this rating are considered to have very
strong degree of safety regarding timely payment of financial
obligations. Such securities carry lowest credit risk.

Further, during the financial year 2024-25 for the Bank's Basel III
Tier II Bonds, India Ratings and Research vide its communication
dated 07.05.2024 has withdrawn its Credit Rating “IND A /
Stable,” and ICRA vide its communication dated 12.07.2024 has
withdrawn its Credit Rating “ICRA AA- (Stable), consequent to
repayment of principal on 12.03.2024.

CAPITAL ADEQUACY

The Bank's Capital Adequacy Ratio stood at 18.17% as on March
31, 2025, as per BASEL III norms. This is well above the statutory
limit of 11.50% (9% plus Capital Conservation Buffer of 2.50%
is required to be maintained as of March 31, 2025) as prescribed
by the Reserve Bank of India Guidelines.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Your Bank does not have any Subsidiaries or Associates/JVs to
report during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to provisions of the Regulation 34(2)(e) of SEBI LODR,
the Management Discussion and Analysis Report for the year
forms part of this Annual Report.

NETWORK OF BRANCHES

The selection of new branch and office locations follows a
strategic approach focused on identifying high-potential areas.
To assess the viability of potential centres, your Bank conducts
a detailed analysis on leveraging data from various forums and
sites. Additionally, we rely on location-based surveys received from
respective Divisional Offices, which provide valuable insights. By
combining these sources of information, we carefully shortlist the
locations for opening new branches or offices, ensuring that our
expansion efforts align with the growth prospects of each centre.
Your Bank has added Fifty (50) Branches (Regular Branches -
12, LITE-38) and Two (2) Offices viz. Corporate Communication
and Social Responsibility Cell and Corporate Institutional Group
at Chennai during the financial year 2024-25. Your Bank has
888 Branches as on March 31, 2025. The branch network
including Corporate Business Units, Business Banking Units,
Asset Recovery Branches, OMC, SMART, Digital Banking Units
and Precious Metal Division totals to 888 as on March 31, 2025,
excluding three Extension Counters and four Satellite Offices.
During the year under review, your Bank has installed 88 new
Automated Teller Machines (ATM), 100 Bunch Note Recycler
Machines (BNRM) and 77 Self Service Passbook Kiosks. As of
March 31, 2025, 1,586 Automated Teller Machines (ATM), 666
Bunch Note Recycler Machines (BNRM) and 294 Self-Service
Passbook Kiosks are providing uninterrupted Banking services
to customers.

CURRENCY CHEST

As on March 31, 2025, your Bank has eight Currency Chests
across different locations in Tamil Nadu, Andhra Pradesh,
Telangana and Karnataka to supply adequate cash to Branches
& ATMs in its respective areas and the Clean Note Policy of RBI
is being adhered to. Currency Chests also support the branches
to maintain cash within the retention limit for smooth operations.
Bank also conducted soiled note exchange melas and distribution
of coins through Currency Chest linked branches.

FINANCIAL INCLUSION

Financial Inclusion ensures availability of basic banking services
and products to all, thereby reaching the unreached, un-banked
and under-banked areas. Bank has been actively pursuing the
agenda of Financial Inclusion with key interventions in offering

appropriate financial products, using technology and financial
literacy. Bank is providing various Business Correspondents (BCs)
services & implementing comprehensive Financial Inclusion
programme through effective utilisation of BCs in Sub Service
Area (SSA). SSA is a cluster of few villages and is linked to one
base branch of the Bank.

Your Bank has reached the underprivileged segment of the
society and extended its focused financial services through 156
Bank Mitras in rural villages, 3 Bank Mitras in urban locations
including 39 Ultra Small Branches. The Bank Mitra use Micro
ATM for providing the banking services to the customers.

Your Bank continues to provide basic financial products including
Basic Savings Bank Deposit Account (BSBDA), Social security
schemes of Insurances like., Pradhan Mantri Jeevan Jyoti Bima

Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY)
and Pension product like., Atal Pension Yojana (APY) and thereby
support the Government in implementation of various social
welfare schemes. Your bank has made 39,590 fresh enrollments
under PMJJBY, 1,90,839 fresh enrollments under PMSBY and
5,403 enrollments under APY during the year.

Pradhan Mantri Jan Dhan Yojana (PMJDY):

Your Bank has enrolled 26,117 PMJDY accounts during the year.
The Balance outstanding in the PMJDY accounts as on March 31,
2025, was '12.12 Crore. The Bank has issued 26,117 Rupay
Debit Cards under PMJDY accounts during the year. Micro ATM
devices are provided to Bank Mitras for facilitating payments,
which are enabled for accepting Rupay Card transactions/
Aadhaar enabled Payment system (AePs)/Third Party deposit,
Balance enquiry, Mini statement. Bank Mitras have done 3.57
Lakh transactions, amounting to '44.98 Crore during the
year under report which includes of DBT/Old Age Pension/
MGNREGS transactions.

Micro credit (SHGS Bank linkage):

Your Bank is providing credit facilities to Self-Help Groups (SHG)
/ Joint Liability Groups (JLG) to meet the credit needs of the poor.
As on March 31, 2025, the Bank has 98,970 JLG loans with
outstanding of '331.84 Crore.

Financial literacy:

Financial Literacy campaigns are intended to provide basic banking
knowledge to people across various corners of the Society. Your
Bank has been in the forefront in creating awareness to the
rural mass on the financial services and products through the
Financial Literacy Campaigns. During the FY 2024-25, your
Bank has conducted 302 financial literacy campaigns in Rural,
Semi Urban/Urban areas, including RBI Financial Literacy week
campaign 2025.

TECHNOLOGY INITIATIVES

Your Bank is always inclined to plan and implement the latest
trends, technological advancements, and innovations. Such long¬
term projects are initially taken up as study projects. Based on
their technical feasibility, these study projects are converted into
regular action plan projects to benefit our customers. The bank
has been integrating AI and ML into its operations to improve
decision-making processes, risk assessment, and customer
service. These technologies help in providing personalised
banking experiences and optimising operational workflows.

Your Bank has implemented the following customer centric
projects during the financial year 2024-25:

• Completion of Middleware Version migration:

As part of the ongoing technology enhancement initiative
for FY 2024-25, the middleware version has been migrated
to the latest version. This migration was undertaken to
enhance technology performance and ensure better
support for the bank's application.

• GST UPI Payment facility:

GSTN has enabled tax collection via the UPI payment mode,
in addition to the existing Over the Counter and Internet
Banking payment options.

This feature will be useful for customers to conveniently pay
their GST payments using any mobile UPI application.

Our bank has implemented this GST UPI Payments facility,
allowing any customer to pay GST taxes seamlessly through
any UPI-enabled mobile App.

• Implemented CPPC pension module under Government
Business process for central government like defence,
Telecom, Postal and Railways:

The Pension Module Application automates and streamlines
the pension disbursement process for civil pensioners,
including those from Central Government ministries,
union territories, retired judges, former Members of
the Parliament, All India Service pensioners, and family
pensioners. By eliminating manual calculations and reducing
dependency on manpower, the application ensures faster,
accurate, and reliable pension payments.

The application integrates with the Central Pension
Processing Centers (CPPCs) to manage the entire pension
payment process, from capturing Pension Payment Order
(PPOs) to crediting payments. It also generates necessary
reports and scrolls/e-scrolls for reimbursement, extending
its functionality to Central and State Government treasuries
for consistent and efficient pension management.

• Dlite: Launched updated version of DLite App with
enhanced customer experience, pay to contacts, statements
download, Loan certificate, Social Security Schemes,
Email ID verification, Tutorial videos for Mobile banking in
corporate website.

• Implemented UPI Pay to Contact in mobile Banking:

The UPI Numerical Mapper (Pay to Contacts) allows us to
make payments using just a mobile number instead of a full
UPI ID / IFSC, Account number / MMID. It is a customer-
friendly way to simplify digital payments using familiar
contact details.

• Enhanced Security Features: Application Security,
Tampered app detection, app blacklisting, runtime integrity
checks, and detection of side-loaded apps.

• Anti-Malware Capabilities: Protection against app
spoofing, unsecured keyboard usage, spyware, adware, and
riskware, as well as key-logger prevention and detection of
hooking frameworks.

• Fraud Prevention Controls: Alerts for social engineering,
voice call interception, SMS forwarding, OTP sharing,
remote access via screen-sharing apps, and protection
against “juice jacking" (data theft via charging cables).

• Internet Banking: Unified Dashboard, Simplified Fund
Transfer, Quick Pay, Quick Response Search, Password
Protected E-Receipts for Transactions, Accessibility over
Mobile, Multi-Lingual Support and Feedback Capture
& Management.

• Credit Card Inbound Customer Support: With effect
from December 13, 2024, exclusive Credit Card customer
support was setup at our existing call center and the
customers queries / request / complaints are handled by
the customer support executives.

• E-mail & SMS triggers for the National Cybercrime
Reporting Portal (NCRP): Non-Connect Customers /
Customers directly report the fraudulent transactions
at NCRP, the data is shared by COC to call center and
outcalls are initiated to customers to ascertain the modus
operandi. If the customers are non-contactable, after the
stipulated attempts, SMS and E-mail are triggered to the
non-connected customers, to reach us back or the Branch
for providing the details. Such non-connects are entered in
the payment fraud data entry screen.

Response which requires Root Cause Analysis (RCA) for each
incident and implementation of corrective actions to plug the
gaps, if any. Your Bank has also established best practices of
Baselines for the IT systems.

Your Bank's ISMS reinforces not only the Confidentiality, Integrity
and Availability of information but also other security principles
such as Authenticity, Non-Repudiation and Accountability. Thus,
your Bank's ISMS ensures the following objectives:

> Safety and privacy of sensitive customer and
Bank's information.

> Prevent IT Assets and Information System from
Unauthorised Access.

> Protect the Data / IT Systems from threats such as Phishing,
Ransomware and other malware, malicious actors targeting
cloud services and integrated systems in multiple locations
over the Internet and zero-day attacks.

> Timely availability of Data / IT Systems to the
authorised users.

The bank has implemented several controls to prevent or detect
data breaches, including:

> Perimeter security controls such as network firewalls, web
application firewalls, network intrusion prevention, network
segregation, and network behaviour analysis and anomaly
detection systems.

> Privileged access management control.

> Host-based intrusion prevention systems to automatically
detect and prevent known vulnerabilities.

> 24x7 security monitoring to identify unusual security
events in the bank's IT environment and timely incident
response actions.

> Periodic management and Board oversight to review control
effectiveness and strengthen controls.

To provide awareness on recent trends in Information security
and understanding on the crucial role in safeguarding the data,
Bank has been arranging Virtual trainings, Cyber awareness
workshops, Phishing campaigns, awareness Email and SMS, etc.,
to its employees and also circulating the awareness Email and
SMS to its customers.

Highlights

1. ISO 27001:2022 Certification: The Bank is now certified
with a recent version of ISMS - ISO 27001:2022. Successful
transition from ISO 27001:2013 to recent 27001:2022
version depicts the commitment in aligning with the globally
recognised best practices in information security there by
ensuring that controls implemented in our environment are
capable to handle the evolving threat landscape and meets
regulatory expectations.

2. Version Enhancements of Security Solutions : All critical
infosec tools have migrated to the recent version to equip
the bank to handle the emerging threat landscape.

3. Training Programs : Various internal and external training
sessions to enhance the skill set of internal teams.

4. Implementation of new Security solutions: New security
tools were procured for equipping the organisation to
protect against emerging threat landscapes.

CHANGE IN NATURE OF BUSINESS

There was no change in the nature of business of the Bank during
the financial year under review.

SYSTEM FOR INTERNAL FINANCIAL CONTROL AND ITS
ADEQUACY

The Bank has on par computerised solutions similar to New-
Gen Private Sector Banks to serve its customers in respect of
all banking requirements. Adequate infrastructure has been
established in processing the day-to-day transactions. “Flexcube"
is the CBS platform used in the Bank which is commonly used
in several well-known banks in the Country. The CBS platform
has well defined set-up to ensure internal financial controls
viz maker-checker requirements with adequate credentials.
Automation of interest & charges application and accounting
transactions ensures necessary internal financial control. IT audit
in respect of CBS is also being conducted as per the stipulated
periodicity which ensures adherence to the regulatory and
mandatory guidelines. Exclusive unswerving reporting software
is used by Bank with appropriate systems and protocols which
have periodical review. The same ensures reporting of Bank's
business without any ambiguity. The Bank has standardised
operating procedures in monitoring the account operations to

have effective internal controls. Separate monitoring team has
been identified to prevent and detect frauds and errors in the
Bank. Compliance of regulatory/mandatory requirements are
being taken care by an individual team which has its exclusive
procedure in adhering to regulated and framed policies besides
reporting of financial information in a disciplined manner. These
systems enable the Bank to have established internal control over
financial information reporting.

The Bank has Board approved policies in respect of various
banking activities like lending, investment, borrowing etc. with
well-defined hierarchy of officials vested with sanctioning powers.
Inspection Department and Risk Management Department review
various aspects of internal control, adherence to procedure and
review credit assessment protocols periodically.

Internal Financial controls of the branches are verified by the
statutory branch auditors during their branch audit and covered
in the report. Statutory Central Auditors of the Bank audit
the internal controls over financial reporting of the Bank and
submit a separate report containing the salient features of their
observations to the Board of directors.

RISK MANAGEMENT

Risks are inherent in any business and banking is not an exception
to this. Your Bank has adopted a multi-layered risk management
process to identify, assess, monitor and manage risks through the
effective use of processes and information technology.

Objective of risk management of the Bank is to balance the
trade-off between risk and return and ensure that the Bank
operates within the Board approved risk appetite statement. An
independent risk management function ensures that the risk
is managed through policies and processes approved by the
Board of Directors encompassing independent identification,
measurement, and management of risks across the various
businesses of the Bank. The risk management function in
the Bank strives to proactively anticipate vulnerabilities at the
transaction as well as at the portfolio level, through quantitative
or qualitative examination of the risks. The Bank continues to
focus on refining and improving its risk measurement systems
including automation of processes, not only to ensure compliance
with regulatory requirements, but also to ensure optimal capital
utilisation with a better risk-adjusted return. The Board reviews
the risk profile of the Bank at periodic intervals and ensures that
risk levels are within the defined risk appetite.

The Board is responsible for overseeing the overall risk
management framework by approving various policies relating to
the Risk functions and has delegated powers to Board Level Risk
Management and Asset Liability Management Committee (RM
& ALM) for monitoring the implementation of Risk Governance
Framework, compliance to various policies & processes. The
RM & ALM Committee ensures the same by closely monitoring
& guiding the functions through Executive Level Credit Risk
Management Committee, Market Risk Management Committee,
Operational Risk Management Committee and Asset Liability
Management Committee, which regularly assess the functional
efficiency of the Bank's risk management processes. Minutes
of these Committee meetings are placed to the RM & ALM
Committee of the Board for its perusal and further guidance.
The Board is reviewing the performance of these executive level
committees on half yearly basis.

Risk Management department examines various policies of the
Bank to ensure risk management aspects are addressed in those
policies. Risk Management Department also maintains various risk
management policies viz., Credit risk rating, Market risk, Liquidity
risk, Operational risk, Risk culture, Strategic risk management,
Reputational risk, Integrated risk management, Stress testing
and ICAAP.

Bank's risk management objectives broadly cover proper
identification, assessment, measurement, monitoring, controlling,
mitigation and reporting of the risks across various business
segments of the Bank. The risk management strategy adopted
by the Bank is based on a clear understanding of the risks and
level of risk appetite, which is dependent on the willingness
of the Bank to take risks in the normal and stressed course of
business operations.

All material risks of the Bank emerging during its business are
identified, assessed, monitored, managed, and mitigated with the
effective control measures in place.

Bank is well capitalised; CRAR stands at 18.17% as on March
31, 2025. Capital provides the required buffer to manage and
meet any unexpected risks / losses that materialise despite
prudent and timely risk management actions. In view of the
foregoing, apparently there are no material risks which threaten
the existence of the Bank.

VIGIL MECHANISM/WHISTLE-BLOWER POLICY

The Bank has put in place a ‘Whistle Blower Policy' in compliance
to the provisions of Regulation 4(2)(d)(iv) of the Listing

Regulations, the Companies Act, 2013 and SEBI (Prohibition of
Insider Trading) Regulations, 2015 as amended. This policy also
incorporates suggestions of the Protected Disclosure Scheme
for Private Sector Banks instituted by the Reserve Bank of India.
The Bank's Whistle Blower Policy is in synchronisation with all
statutory and regulatory guidelines on Vigil mechanism.

Through the Whistle Blower Policy / Vigil Mechanism, the
Bank encourages an open and transparent system of working
and dealing amongst its stakeholders to make or report any
disclosures under this Policy, without any fear of reprisal,
retaliation, discrimination or harassment of any kind.

Under the Whistle Blower Policy, the employees are free to
report violations of applicable laws and regulations and the
Code of Conduct. The objective of the policy is to pre-emptively
identify any untoward events with the help of the employees
and to take timely corrective measures before they become
incidents. This mechanism also provides adequate safeguards
against victimisation of employees who avail this mechanism
and provides for direct access to the Chairman of the Audit
Committee of the Board, in exceptional cases when the Whistle
Blower is not satisfied with the resolution of the complaint.
During the FY 2024-25, 5 complaints were received under this
mechanism and there were no instances of escalations made to
the ACB Chairman. The Audit Committee of the Board reviews
the complaints received through the Whistle Blower Mechanism
on a quarterly basis.

The Bank is encouraging all its stakeholders to share the details
of any kind of unlawful/unethical instances/practices noticed on
the part of any employee, in order to take appropriate action upon
review. Further, the Bank is ensuring that the details shared under
this mechanism are kept confidential and protection is available
to the Whistle Blower. Periodical training and awareness sessions
are being conducted for the employees on the importance of
Whistle Blower mechanism.

The details of the Whistle Blower Policy is made available on the
website of the Bank https://www.kvb.co.in/docs/whistle-blower-
policy.pdf

Vigil at KVB

The stakeholders are encouraged to voice their concerns by way
of Whistle Blowing.

May raise their concerns at pds@kvbmail.com

DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF
WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013

The details related to Internal Complaints Committee under
the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 are furnished in the Corporate
Governance Report that forms part of this Annual Report.

RELATED PARTY TRANSACTIONS

All transactions entered by your Bank with related parties are not
material and repetitive in nature in ordinary course of business
and on an arm's length basis. Omnibus approval is obtained
from the Audit Committee for transactions which are repetitive
in nature and the same are reviewed on periodic basis. The
Bank's policy on Related Party Transactions can be viewed at:
https:// www.kvb.co.in/docs/related-party-transactions-policy.pdf.

During the year, your Bank has not entered into any materially
significant transactions with the related parties, which could
lead to potential conflict of interest. Therefore, pursuant to
Section 134(3)(h) of the Companies Act, 2013 read with Rule
8(2) of the Companies (Accounts) Rules, 2014, there are no
related party transactions to be reported under Section 188(1)
of the Companies Act, 2013 and Form AOC-2 is not applicable
to the Bank.

AUDIT COMMITTEE RELATED DISCLOSURE UNDER SUB¬
SECTION 8 OF SECTION 177 OF THE COMPANIES ACT, 2013

The Bank has constituted a Board level Audit Committee in line
with the requirements of the Companies Act, 2013, SEBI LODR
and Reserve Bank of India guidelines, as amended from time
to time. Board has accepted all the recommendations of the
Audit Committee. The details of the composition of the Audit
Committee are disclosed in the Corporate Governance Report
that forms part of this Annual Report.

DISCLOSURE RELATED TO DETAILS OF DEPOSITS ACCEPTED
UNDER RULE 8(5)(V) OF COMPANIES (ACCOUNTS) RULES,
2014

Being a Banking company, the disclosures required as per Rule
8(5)(V) of Companies (Accounts) Rules, 2014, read with Section
73 and 74 of the Companies Act, 2013 are not applicable.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to Section 186 (11) of the Companies Act, 2013, the
provisions of Section 186 of the Companies Act, 2013, except
sub-section (1), do not apply to a loan made, guarantee given or
security provided, or any investment made by a banking company
in the ordinary course of business. Hence, the particulars of
loan and guarantees as required under Section 134(3)(g) of
the Companies Act, 2013 are not required to be disclosed. The
particulars of investments made by the Bank are disclosed in
the Financial Statements as per the applicable provisions of the
Banking Regulation Act, 1949.

AUDITORS

Joint Statutory Central Auditors

In terms of Section 139 of the Companies Act, 2013 read
with Section 30(1A) of the Banking Regulation Act, 1949, it is
proposed to re-appoint, M/s. Kalyaniwalla & Mistry LLP, Chartered
Accountants (Firm Registration No. 104607W/ W100166) and
M/s. Varma & Varma, Chartered Accountants (Firm Registration
No. 004532S) as Joint Statutory Central Auditors of the Bank,
who are retiring at the conclusion of the ensuing 106^th Annual
General Meeting (AGM), subject to the approval of Reserve
Bank of India and shareholders of the Bank. The Bank has
received consent from the Auditors on their reappointment and
confirmation to the effect that they are not disqualified to be
reappointed as the Auditors of the Bank in terms of the provisions
of the Companies Act, 2013 and the rules made thereunder.

Accordingly, the Board of Directors have recommended to the
shareholders, the reappointment of M/s. Kalyaniwalla & Mistry
LLP, Chartered Accountants (Firm Registration No. 104607W/
W100166) and M/s. Varma & Varma, Chartered Accountants
(Firm Registration No. 004532S) as Joint Statutory Central
Auditors of the Bank, to hold office from the conclusion of the
ensuing 106^th AGM till the conclusion of the next AGM. Fee
payable to Statutory Auditors is proposed at '1,30,00,000
(Rupees One Crore and Thirty Lakh only) plus applicable taxes
and out of pocket expenses with a cap of 10% of fees for the
financial year 2025-26, subject to the approval of Reserve Bank
of India and Shareholders of the Bank.

Members are requested to consider the re-appointment of
M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm
Registration No. 104607W/ W100166) and M/s. Varma &
Varma, Chartered Accountants (Firm Registration No. 004532S)
as Joint Statutory Central Auditors of the Bank.

& Associates LLP, Company Secretaries, (Firm Registration No.
L2018TN004700) to undertake the Secretarial Audit of the
Bank for the financial year 2024-25. The Bank produced all
necessary records to the Secretarial Auditors for smooth conduct
of their Audit. The Secretarial Audit Report for the financial year
2024-25 is annexed to this report as Annexure - I.

There are no qualifications, reservations or adverse remarks
made by the Secretarial Auditors in their report for the financial
year 2024-25

Pursuant to regulation 24A (2) of the SEBI LODR and SEBI Master
Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November
11, 2024, the Bank has obtained Secretarial Compliance Report,
from the Secretarial Auditors of the Bank on compliance of all
applicable SEBI Regulations and circulars/guidelines issued
thereunder and the copy of the same was submitted to Stock
Exchange within Sixty days from the end of the Financial Year.

Implementation of Indian Accounting Standards (Ind AS)

As per RBI guidelines, Proforma IndAS statements have to be
submitted on half-yearly basis and accordingly submitted to RBI.
RBI has issued discussion paper on introduction of Expected
Credit Loss Framework for provisioning by banks during FY 2022¬
23. Final guidelines are awaited. Further details are given in
Schedule 18 - Notes to Account of the Balance Sheet.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the financial year 2024-25, your Bank is in compliance
with the applicable Secretarial Standards issued by The Institute
of Company Secretaries of India.

STATUTORY DISCLOSURES

Disclosures relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, pursuant
to Section 134(3)(m) of the Companies Act, 2013 read with
Rule (8)(3) of the Companies (Accounts) Rules, 2014 are
detailed as under:

Conservation of Energy

Your Bank has undertaken various energy efficiency improvement
initiatives for energy conservation at its branches / offices by
installing LED lights in a phased manner. VRF (Variant Refrigerant
Flow) AC units have been installed in back offices across various
cities to save electricity by energy conservation technology.

Your Bank owns a 850 kW Wind Turbine Generator in
Govindanagaram, Theni District, Tamilnadu and the said wind mill
has generated 11,18,616 units during the year under review.
Bank is utilising the power generated by Wind Turbine for its
Central office at Karur and Divisional Office at Chennai. Roof top
solar power plant (38 kW) has been installed at our Bank's own
building at Hyderabad Divisional Office for utilisation of renewable
energy and the said plant has generated 46,650 units.

Your Bank has made a capital investment of '45,55,426/- on
LED Lights during the financial year 2024-25.

Technology Absorption

Your Bank has always used information technology extensively
to deliver quality service to its customer, for more details please
refer the section on Technology Initiatives of Directors Report
forming part of the Annual Report.

Foreign Exchange Earnings and Outgo

Your Bank continuously supports and encourages the country's
export efforts through its export financing operations. The
details on foreign exchange earnings and outgo are furnished
in the Foreign Exchange Transactions section that forms part
of this report.

MATERIAL EVENTS THAT HAVE OCCURRED AFTER THE
BALANCE SHEET DATE

There are no material events/changes and commitments, which
affect the financial position of the Bank between the end of the
financial year of the Bank and the date of the Directors' Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY
REGULATORS

During the financial year 2024-25, no significant and material
orders were passed by the Regulators or Courts or Tribunals
against the Bank which impacts its going concern status and
Bank's operations in future.

MAINTENANCE OF COST RECORDS

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

ANNUAL RETURN

The Annual Return for the financial year ended March 31, 2025,
as required under Section 92 (3) and Section 134(3)(a) of
the Companies Act, 2013 is available on the Bank's website at
https://www.kvb.co.in/investor-corner/annual-general-meeting/
annual-return/

DETAILS OF APPLICATION MADE OR ANY PROCEEDING
PENDING UNDER THE INSOLVENCY AND BANKRUPTCY
CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH
THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

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 part of its recovery mechanism and the status of the cases as
at the end of the financial year 2024-25 is furnished as below:

^A In addition to the two claims, there are 50 other claims filed
with NCLT under IBC by other Lenders/ Operational Creditors,
involving ' 1,165.66 Crore, in which our Bank has submitted
claims as one of the creditors.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE
VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT
AND THE VALUATION DONE WHILE TAKING LOAN FROM
THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH
THE REASONS THEREOF

Being Banking Company, the aforesaid provision is not applicable
to your Bank.

PARTICULARS OF EMPLOYEES

The information as required under Section 197(12) of the
Companies Act, 2013 read with Rule 5 of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules,
2014 are annexed to this report as Annexure - II.

EMPLOYEE STOCK OPTION SCHEME

Your Bank has formulated and adopted Employee Stock Option
Schemes to provide a platform to employees for participating in
the ownership of the Bank and in its long-term growth. Bank uses
stock options as a compensation tool to attract and retain critical

talent and encourage employees to align individual performances
with that of Bank's objectives. Currently, the Bank has the
following Schemes in compliance with the provisions of SEBI
(Share Based Employee Benefits and Sweat Equity) Regulations,
2021 (“SEBI SBEB & SE Regulations”) erstwhile SEBI (Share
Based Employee Benefits) Regulations, 2014.

• Karur Vysya Bank Employees Stock Option Scheme 2011
(“KVB-ESOS-2011”)

• Karur Vysya Bank Employees Stock Option Scheme 2018
(“KVB-ESOS-2018”)

During the period under review, your Bank has granted
2,48,568 options under KVB-ESOS-2018 to Shri B Ramesh
Babu, MD & CEO, Shri J Natarajan, Former Executive Director
(while holding the position as President & COO) and Senior
Management towards their variable pay as a part of non-cash
component. The said variable pay is in accordance with Bank's
Compensation policy read with Reserve Bank of India circular
DOR.Appt.BC.No.23/29.67.001/2019-20 dated November 04,
2019. Further, your Bank has allotted 58,216 Equity Shares to
Shri B Ramesh Babu, MD & CEO under KVB ESOS 2018 during
the year under review as a part of his non-cash component of
variable pay for the financial year 2021-22 and 2022-23 and
58,055 Equity Shares to Shri J Natarajan, Former Executive
Director (while holding the position as President & COO), under
KVB ESOS 2018 during the year under review as a part of his
non-cash component of variable pay for the financial year 2021-22
in terms of compensation structure. Furthermore, your Bank has
allotted 1,32,297 shares to Senior Management towards their
variable pay as a part of non-cash component and 3,64,851
Equity Shares of face value ' 2 each to the employees who have
exercised their options under KVB ESOS 2011 Scheme and KVB
ESOS 2018 Scheme during the year under review.

Pursuant to Regulation 13 of SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021, (“SEBI SBEB
& SE”) Bank's Secretarial Auditors, M/s S.A.E. & Associates
LLP, Company Secretaries, has certified that the Bank's above
mentioned Schemes have been implemented in accordance
with the Resolutions passed by Shareholders for 2011 &
2018 Schemes and SEBI SBEB & SE. Disclosures as required
under the said regulation are available on Bank's website at
https://www.kvb.co.in/investor-corner/other-disclosures/esos-
disclosures/

The Board of Directors in their meeting held on July 24, 2025,
have approved the Karur Vysya Bank Employee Stock Option
Scheme - 2025 (“KVB-ESOS-2025"), Subject to approval of
shareholders of the Bank in the ensuing Annual General Meeting.
The details of the scheme is furnished in the AGM Notice.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION
FUND

Pursuant to Sections 124 and 125 of the Companies Act, 2013
read with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF
Rules'), the dividends remaining unclaimed for period of 7 years
and all shares in respect of which dividend are not claimed
for the last 7 consecutive years are liable to be transferred to
the Investor Education and Protection Fund (‘IEPF'). The said
requirement does not apply to shares in respect of which there
is a specific Order of Court, Tribunal or Statutory Authority,
restraining transfer of the shares. Further details are provided
in the Corporate Governance Report that forms part of this
Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Articles of Association of the Bank drafted in 1916, provided
for setting aside of one percent of the annual profits to a “Charity
Account", which would be used to support the needy for their
health and education requirements. The Bank continues with that
tradition even today after 109 years in the modern avatar of
Corporate Social Responsibility. Karur Vysya Bank views Corporate
Social Responsibility (CSR) not merely as a regulatory obligation,
but as a strategic commitment to creating long-term value for
the planet, people, and purpose. Anchored in its CSR Policy and
in alignment with Section 135 of the Companies Act, 2013, the
Bank remains focused on inclusive and sustainable development.
A Corporate Social Responsibility (CSR) Committee has been
constituted in accordance with the provisions of Section 135 of
the Companies Act, 2013, read with the amended Companies
(Corporate Social Responsibility Policy) Rules, 2014.

During the year under review, Bank has spent ' 29.58 Crore
towards CSR initiatives, directing these funds to key priority
areas as outlined under Schedule VII of the Act. These included
Healthcare & Sanitation, Education & Skill Development,
Environmental Sustainability, Rural Development, Livelihood
Enhancement, and the Promotion of Art & Culture. All initiatives
were carefully monitored and executed under the guidance of
a dedicated CSR Committee, ensuring strategic alignment,
transparency, and measurable outcomes.

Through these efforts, the Bank aims to foster meaningful
change at the grassroots level while aligning its business values
with broader societal needs. The brief outline of the CSR policy
of the Bank, CSR spends, and other mandatory disclosures are
enclosed to this Report as Annexure - III.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG)

Your bank recognises that Environmental, Social, and Governance
(ESG) principles are fundamental to sustainable growth
and responsible banking. Our commitment extends beyond
compliance, focusing on real-world impact through ethical
governance, environmental stewardship, and social responsibility.
By integrating ESG into our core business strategy, we aim to
enhance financial resilience while contributing to a sustainable
future. Bank has voluntarily adopted integrated annual report
framework and published its maiden Sustainability Report
FY 2023-24 with reference to Global Reporting Initiative (GRI).

To accelerate these efforts, we have established a dedicated ESG
team that facilitate compliance with sustainability standards and
drives policy alignment. This structured approach ensures that
ESG is embedded across all levels of our operations.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTING
(BRSR)

In terms of Regulation 34(2)(f) of the SEBI LODR read with
SEBI circular SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated
May 10, 2021, the filing of BRSR shall be mandatory for the
top 1000 listed companies (by market capitalisation) from
the FY 2022-23. Your Bank on voluntary basis to keep up the
good governance practices and ensure transparency among our
stakeholders have published the Business Responsibility and
Sustainability Report since Financial Year 2021-22.

The Business Responsibility & Sustainability Reporting (BRSR)
of the Bank for the financial year 2024-25 is annexed to this
Report as Annexure - IV.

BOARD MEETINGS

The composition of the Board of Directors is in compliance with all
the relevant applicable statutory regulations. The Board meets at
regular intervals to discuss and decide on Bank's business policy
and strategy, apart from other items of business. During the year
under review, Thirteen Board Meetings were conducted and the
relevant periodicity for holding the meetings was complied. The
schedule of the meetings of the Board is circulated in advance
to the Members of the Board, for their consideration and

approval. Details of the composition of Board, Meetings held and
Attendance of the Directors at such Meetings are provided in the
Corporate Governance Report which forms part of Annual Report.

BOARD EVALUATION

Pursuant to Section 134(3) (p) of the Companies Act, 2013,
Regulation 17(10) of SEBI LODR and other applicable regulations,
Board has carried out annual evaluation of its own performance
(Board as a whole), Committees of the Board, Non-Executive
Independent Directors including Chairperson and MD & CEO.
Further Independent Directors in their Separate Meeting have
carried out evaluation of Board as a whole and Non-Executive
Non-Independent Director. The manner of evaluation conducted
during the financial year 2024-25 is furnished in the Corporate
Governance Report that forms part of this Annual Report.

CHANGES IN BOARD OF DIRECTORS OF THE BANK

Changes in Board of Directors of the Bank during the review
period and till the date of this report are presented below;

Appointment

Shri R Vidhya Shankar (DIN: 00002498)

Shri R Vidhya Shankar was co-opted as an Additional Director of
the Bank under “Non-Executive Independent Director" category
for a period of three (3) years with effect from April 22, 2024 to
April 21, 2027, by the Board in its meeting held on April 22, 2024
and the shareholders approval was sought through Postal Ballot
having remote e-voting process and the same was approved by
shareholders of the Bank on July 16, 2024, In terms of Regulation
17 (1C) of SEBI LODR.

Shri R Vidhya Shankar holds a Bachelor of Commerce and
Bachelor of Law degree from Bharathiyar University, Coimbatore.
He is a Gold Medalist and holds the record for a very rare first
class in Law at Bharathiyar University. He is the senior partner of
M/s Ramani & Shankar, one of the oldest Law Firms in Western
Tamil Nadu and much sought after lawyer in western Tamil Nadu
for corporate litigations, transactions and opinions.

He specialises in Corporate Law, including in corporate
transactions, corporate restructuring, schemes and
arrangements, corporate litigations, domestic and international
arbitrations, capital market, FEMA compliances, cross-border
transactions and general corporate advisory services.

He has more than 100 reported decisions in the field of corporate
law to his credit and he is regular speaker at the seminars and
workshops of Bar Association, Chambers of Commerce and
professional Institutes.

Shri J Natarajan (DIN: 02710776)

In the context of growing complexities of the banking sector and
to establish an effective senior management complementing
Managing Director and CEO's position, Reserve Bank of
India vide its circular RBI/2023-24/70 DOR.HGG. GOV.
REC.46/29.67.001/2023-24 Appointment of Whole-Time
Director(s) dated October 25, 2023, has advised to ensure the
presence of at least two Whole Time Directors (WTDs), including
the Managing Director and CEO, on the Bank's Board.

Accordingly, based on the recommendation of Nomination and
Remuneration Committee and Board of Directors of the Bank,
The Reserve Bank of India vide its letter No. DoR.GOV. No. S1076
/08.41.001 /2024-25 dated May 16, 2024, had accorded
its approval for the appointment of Shri J Natarajan (DIN:
02710776) as Whole-time Director (Executive Director) of the
Bank, for a period of One (1) year with effect from the date of his
taking charge, along with the terms and conditions. Subsequently
Shri J Natarajan was taken charge on May 22, 2024, as Whole
Time Director and designated as Executive Director of the Bank,
not liable to retire by rotation.

The shareholder's approval was obtained through Postal Ballot
on July 16, 2024, in compliance with the Regulation 17(1C) of
SEBI LODR.

Shri J Natarajan joined Karur Vysya Bank as a Trainee in the
year 1982 and moved up to different levels including General
Manager of the Bank in the year 2010, Chief General Manager
of the Bank in the year 2017 and President of the Bank in the
year 2019 reporting to MD&CEO of the Bank. He has extensive
work experience in Credit, Treasury, Finance, Human resources,
Information technology, Merchant Banking etc., He was
instrumental in Bank's digital lending journey and various other
key initiatives in the Bank.

Smt Srimathy Sridhar (DIN: 10627997)

Smt Srimathy Sridhar was co-opted as an Additional Director of
the Bank under “Non-Executive Independent Director" category
by the Board in its meeting held on September 26, 2024, subject
to the approval of the Shareholders of the Bank

In terms of Regulation 17(1C) of SEBI LODR, the listed entity
shall ensure that approval of Shareholders is obtained for
appointment of a person on the Board of Directors at the next
general meeting or within a period of three (3) months from the
date of appointment, whichever is earlier.

Accordingly, the appointment of Smt Srimathy Sridhar as Non¬
Executive Independent Director of the Bank, for a period of three
(3) years with effect from September 26, 2024 to September
25, 2027 not liable to retire by rotation, was placed before the
shareholders of the Bank for their approval through Postal Ballot
having remote e-voting process and the same was approved by
shareholders of the Bank on December 10, 2024.

Smt. Srimathy Sridhar started her career as a probationary
clerk at Andhra Bank in 1985 and moved to Canara Bank as
Probationary Officer in 1986. Over a period of 34 years in Canara
Bank, she rose to the level of Chief General Manager. She has
exposure to various verticals in the Bank Viz; Branch operations
across diverse locations from rural to metro, Retail & Corporate
credit, Mid & Large credits, Human Resources, Internal Control &
Compliance, Risk Management, Treasury, Administrative offices
etc. She has headed the Large Corporate Vertical at Head Office
of the bank and a large circle of Canara Bank at Chennai.

On a Deputational Assignment, she functioned as Chief Vigilance
Officer of NABARD. During this tenure, she also handled
additional assignments as Chief Vigilance Officer of New India
Assurance Company, State Bank of India and Bank of Baroda for
varying periods.

She moved up to the position of Executive Director at Indian
Overseas Bank in March 2021. She handled multiple critical
portfolios like Corporate Credit, Retail Lending, Agricultural
Credit and Financial Inclusion, including SLBC functions,
Treasury, Risk, Internal Control & Inspection, Digital Banking etc.
Upon completion of her tenure as Executive Director in IOB, she
demitted office in March 2024.

Shri B Sankar (DIN: 08846754)

In order to have effective senior management complementing
Managing Director and CEO's position, Reserve Bank of
India vide its circular RBI/2023-24/70/DOR.HGG.GOV.
REC.46/29.67.001/2023-24 Appointment of Whole-Time
Director(s) dated October 25, 2023, has advised to ensure the

presence of at least two Whole Time Directors (WTDs), including
the Managing Director and CEO, on the Bank's Board.

Accordingly, the Bank appointed Shri J Natarajan as Whole time
Director designated as Executive Director on May 22, 2024 for
a period of one year. Since the term of the said director would
be ended on May 21, 2025, as a part of succession planning,
based on the application made by the Bank, Reserve Bank of
India vide its letter DoR.GOV.No.7292/08.41.001/2024-25
dated February 11, 2025 has accorded its approval in terms
of Section 35B of the Banking Regulation Act, 1949, for the
appointment of Shri B Sankar, as Whole Time Director (Executive
Director) of the Bank for a period of three years from the date
of taking charge. Subsequently, Shri B Sankar, was co-opted as
an Additional Director of the Bank under “Whole Time Director"
category by the Board in its meeting held on February 20, 2025,
subject to the approval of the Shareholders of the Bank ensuring
adherence to the aforesaid RBI Circular. Further, He has taken
charge on March 12, 2025.

In terms of Regulation 17(1C) of SEBI LODR, the listed entity
shall ensure that approval of shareholders is obtained for
appointment of a person on the Board of Directors at the next
general meeting or within a period of three (3) months from the
date of appointment, whichever is earlier.

Accordingly, the appointment of Shri B Sankar as Whole Time
Director designated as Executive Director of the Bank, for
a period of three (3) years with effect from March 12, 2025
to March 11, 2028 not liable to retire by rotation, was placed
before the shareholders of the Bank for their approval through
Postal Ballot having remote e-voting process and the same was
approved by shareholders of the Bank on May 17, 2025.

Shri B Sankar was former Deputy Managing Director -
Stressed Assets, managing NPA worth 82k Crore in SBI.
He was CGM of SME - Corporate Centre SBI and tasked with
reactivating the SBI's SME business. Further, he served as the
Chief Operating Officer and managed operations for all 23,000
branches including customer service, ATMs (~65,200), and
branch re-design, CRM, etc. Exposure to Risk Management,
Internal Audits, Board Experience, enhancing efficiency and
operations by leveraging technology. In 2019, he served as
Chief General Manager (CGM) of Chennai, overseeing the entire
Tamil Nadu and Pondicherry regions with 1,391 branches.
Managing deposits of over ' 1,80,000 Crore and advances of
' 1,22,000 Crore.

Re-Appointment

Dr Meena Hemchandra (DIN: 05337181) was re-appointed as
Non-Executive Independent Director of the Bank for the second
term of five years (5) with effect from May 26, 2025, not liable
to retire by rotation. The said re-appointment was approved by
the shareholders of the Bank vide resolution dated May 17, 2025
through postal ballot. Further Reserve Bank of India accorded
its approval for the re-appointment of Dr Meena Hemchandra
as Part-Time Chairperson of the Bank vide letter dated May 09,
2025 for a second term of three years effect from July 25, 2025.

Shri Murali Ramaswami (DIN: 08659944) was re-appointed
as Non- Executive Independent director of the Bank for second
term of five years (5) effective from June 14, 2025, pursuant to
the approval of shareholders through postal ballot having remote
e-voting process on May 17, 2025, not liable to retire by rotation.

Opinion of the Board regarding integrity, expertise and
experience (including the proficiency) of the Independent
Director appointed during the year:

In the opinion of the Board, the Independent Directors appointed
during the year possess requisite qualifications, proficiency,
expertise, track record, integrity, independence, vast and rich
experience in their respective domains. Independent Directors
appointed during the year have qualified the online proficiency
self-assessment test for Independent Director's Databank/availed
exemption, within the timelines prescribed.

Retirement by rotation

Shri R Ramkumar (DIN: 00275622), Non-Executive Non
Independent Director, retires by rotation at the ensuing
106^th Annual General Meeting (AGM) and being eligible, offers
himself for re-appointment in terms of Section 152 of the
Companies Act, 2013. He hails from the promoter's family and
was on the Board since June 25, 2018 and would be representing
“Minority Sector" under sectoral representation on the Board such
as Business Management, Finance, Human Resources. Approval
of the shareholders is being requested for reappointment of
Shri R Ramkumar as Non-Executive Non-Independent Director of
the Bank, liable to retire by rotation.

The brief profile and details in terms of Regulation 36 (3) of
SEBI LODR and the Secretarial Standard on General Meetings,

in respect of the Director seeking appointment/re-appointment
has been annexed to the Notice of the ensuing AGM and in
the Corporate Governance Report that forms part of this
Annual Report.

Retirement on completion of tenure

Dr K S Ravichandran (DIN: 00002713), Non-Executive
Independent Director of the Bank demitted office at the close
of office hours on May 25, 2024, consequent to completion of
his eight (8) years tenure in terms of Section 10A(2A)(i) of the
Banking Regulation Act, 1949.

Shri J Natarajan (DIN: 02710776), Executive Director of the
Bank demitted office at the close of office hours on May 21,
2025, consequent to completion of his one (1) year tenure in
terms of Section 10A(2A)(i) of the Banking Regulation Act, 1949.

KEY MANAGERIAL PERSONNEL

The changes in Key Managerial Personnel of the Bank during the
review period and till the date of this report are briefed below;

Appointment

Shri J Natarajan (former President and Key Managerial Personnel
of the Bank) was appointed as an Executive Director of the Bank
on May 22, 2024 and he continues as Key Managerial Personnel
of the Bank.

Shri B Sankar was appointed as an Executive Director on
March 12, 2025 and Key Managerial Personnel of the Bank.

Cessation

Shri J Natarajan (DIN: 02710776), Executive Director
of the Bank demitted office at the close of office hours on
May 21, 2025, consequent to completion of his one (1)
year tenure in terms of Section 10A(2A)(i) of the Banking
Regulation Act, 1949.

Shri Sudhakar K V S M, Chief Compliance Officer forming part
of Senior Management Personnel of the Bank had relieved from
the office on April 30, 2025, consequent to his resignation.

Apart from the above, there were no changes in the Key
Managerial Personnels as on the date of this report.

CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE
ATTRIBUTES FOR APPOINTMENT/ REAPPOINTMENT OF
DIRECTORS

Pursuant to provisions of Section 178(3) of the Companies
Act, 2013 and relevant guidelines of RBI, the Nomination and
Remuneration Committee (NRC) formulated the criteria for
determining qualifications, positive attributes and independence
of a Director to adhere the various provisions and guidelines as
detailed below:

• ‘Fit and Proper' criteria as per Dr. Ganguly Committee
Norms which stipulates age, qualification, experience, track
record, integrity, etc., and various circular instructions and
guidelines issued by Reserve Bank of India from time to time.

• Norms laid down by the Banking Regulation Act, 1949 as
amended from time to time which stipulates substantial
interest, sectorial representation as per Section 10A(2)
(a), restrictions as per Section 16 and 20 of the Banking
Regulation Act, 1949, etc

• Disqualification/Conflict of Interest of Directors, and other
norms as per the provisions of the Companies Act, 2013
and rules made thereunder from time to time.

• Criteria of Independence of a Director as per the provisions
of the Companies Act, 2013 and rules made thereunder and
other applicable provisions as amended from time to time.

• Applicable listing regulations as amended from time to time.

• Articles of Association of the Bank.

• Any other factors as the NRC may deem fit and in the best
interest of the Bank and its stakeholders

The terms and conditions of appointment of Independent Director
are available on the website of the Bank at https://www.kvb.co.in/
docs/terms-and-conditions-of-appointment-of-independent-
directors.pdf. Your Bank's Nomination and Remuneration
Committee (NRC) oversees matters of succession planning of its
Directors, Senior Management and also Key Managerial Personnel
& the Board of the Bank and ensures that proper plans are put in
place for orderly succession of appointment to the Board and to
Senior Management of the Bank including KMPs.

Policy on remuneration of directors

The remuneration of Directors is governed by the
Compensation Policy of the Bank in terms of RBI circular
no. DOR.Appt. BC.No.23/29.67.001/2019-20 dated November
04, 2019, which covers the aspects of remuneration payable

to Board of Directors, Whole Time Directors/ Chief Executive
Officers/ Material Risk Takers/ Key Managerial Personnels/ Control
Function Staff and all other employees. This Policy is in tune with
the guidelines issued by the Reserve Bank of India, provisions
of the Companies Act, 2013 and the SEBI LODR amended
from time to time. Your Bank has adopted a board approved
compensation policy on the basis of the aforesaid regulatory
guidelines and the Policy is available on the Bank's website at
https://www.kvb.co.in/docs/investor-compensation-policy.pdf

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to Section 149(7) read with 149(6) of the Companies
Act, 2013 and Regulation 25(8) read with Regulation 16(1)(b)
of the SEBI LODR, all the Independent Directors of the Bank
has provided the necessary declarations that they have met the
criteria of independence laid down thereunder. As required under
Schedule IV of the Companies Act, 2013, Board has reviewed
the declarations submitted by the Independent Directors and
opined that, they have fulfilled all the conditions specified in the
Companies Act, 2013 and SEBI LODR, and are independent of
the management.

FAMILIARISATION PROGRAMMES OF INDEPENDENT
DIRECTORS

The Independent Directors along with all other Directors are
made familiar with their rights, roles and responsibilities in the
Bank at the time of appointment and on a recurrent basis.

Details of familiarisation programmes attended by all Directors
including Independent Directors are provided at https://www.kvb.
co.in/docs/disclosure-on-familiarisation-programmes-for-board-
of-directors.pdf, pursuant to regulation 46 of SEBI LODR. Other
details on the same are also covered in Corporate Governance
Report forming part of Annual Report.

CORPORATE GOVERNANCE

The details on Corporate Governance standards followed by your
Bank and the relevant disclosures as stipulated under SEBI LODR
and the Companies Act, 2013 and the rules made thereunder
are deliberated in Corporate Governance Report that forms
part of this Annual Report. A certificate from M/s S.A.E. &
Associates LLP, Company Secretaries, confirming compliance to
the conditions of Corporate Governance as stipulated under SEBI
LODR is annexed to Corporate Governance Report which forms
part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(C) of the Companies Act, 2013 with
respect to the Directors' Responsibility Statement, it is hereby
confirmed that:

a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper
explanation relating to material departures;

b) The Directors had selected such accounting policies and
applied them consistently and made judgements 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 and of the profit and loss of the
Bank for that period;

c) The Directors had taken proper and sufficient care 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 fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going
concern basis;

e) 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; and

f) 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.

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to express their
gratitude to the Government of India, Reserve Bank of India,
Securities Exchange Board of India (SEBI), Ministry of Corporate
Affairs (MCA), National Stock Exchange of India Limited, BSE
Limited, Rating Agencies, Joint Statutory Central Auditors,
Secretarial Auditors, various State Governments & Union
Territories and other regulatory authorities in India, for their
valuable guidance and consistent support.

The Board also expresses its sincere thanks to the Bank's
valued shareholders, debenture holders, esteemed customers,

all other stakeholders and well-wishers for their continued faith,
confidence, and patronage on us and look forward for their
continuous support.

Your Board also extends its profound gratitude to the Auditors,
Lawyers, and other financial institutions for their support
and acknowledge the dedicated efforts of the Bank's staff in
contributing to its overall performance of the Bank during the
year. The Board looks forward to their continued commitment in
achieving future goals.

For and on behalf of the Board of Directors

Dr Meena Hemchandra B Ramesh Babu

(DIN: 05337181) (DIN: 06900325)

Non-Executive Independent (Part-time) Chairperson Managing Director & CEO

Place: Karur
Date: July 24, 2025