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.

Performance Highlights

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

Bank's Geographical Spread & Expansion Programme

> 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

Total business of the Bank improved by 14.31% to reach

'28219.11 Crore as on 31.03.2025, from '24687.21 Crore as

on 31.03.2024.

Deposits

Deposits recorded a growth of 12.06%, reaching '16,013.45

Crore as of March 31, 2025, compared to '14290.31 Crore as

of March 31,2024. The CASA to total deposits ratio as of March

31.2025, was 29.02%.

Gross Advances

Gross advances stood at '12,205.66 Crore as of March 31,
2025, compared to '10396.90 Crore as of March 31, 2024,
registering a growth of 17.40%. The CD ratio as of March 31,
2025, was 76.22%.

Profitability

The total income (Interest Income Non-Interest Income) as of
March 31 , 2025, was '1 489.09 Crore, compared to '1359.55
Crore as of March 31,2024, registering a growth of 9.53%. Interest
income increased by 9.35% year-on-year, reaching '1319.88
Crore as of March 31, 2025, compared to '1206.99 Crore as
of March 31, 2024. Similarly, non-interest income increased by
10.91% year-on-year, reaching '169.20 Crore as of March 31,
2025, compared to '152.56 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 '836.59 Crore as of March 31,2025, from '748.54 Crore
as of March 31, 2024. Operating expenses also increased by
'15.64 Crore, to '557.39 Crore as on March 31, 2025 from
'541.75 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 '95.10 Crore as against
'69.26 Crore during the previous year. The Bank declared a
net Profit of '66.64 Crore during the year under report and for
the previous year, the Bank had declared a net profit of '57.82
Crore.

Capital and Reserves

Bank's Paid-up capital and reserves was '1395.29 Crore as on

31.03.2025. The capital adequacy ratio as per Basel III was
16.12% with Core CRAR of 15.24%.

Capital Market Activities During FY 2024-25

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
'297,54 Crore through the allotment of 14,16,86,767 equity
shares. Offered at '21 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 '487,96 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 '150,00 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 '300 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 '1 50 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,

Dividend

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

Non-Performing Assets

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,

Vision & Mission

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,

Customer Service

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,

The following important products and services / initiatives were
introduced during the year for the benefit of the customers:

• 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.

Listing on Stock Exchanges

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.

Green Initiatives in Corporate Governance

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.

Directors

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 1 0 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.

Change in the Board during the year 2024-2025

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.

Composition of Audit Committee

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.

Declaration by Independent Directors

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 1 6 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.

Policy on appointment and remuneration of Directors

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, 1 949, 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.

Board Level Performance Evaluation

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.

Number of Board Meetings

A total of 1 7 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.

Changes in Key Managerial Personnel (KMP)

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).

Particulars of employees

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.

Number of cases filed, if any, and their disposal under
Section 22 of the Sexual Harassment of Women at workplace
(Prevention, Prohibition and Redressal) Act, 2013

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

Maternity Benefit provided by the Bank under Maternity
Benefit Act, 1961

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.

Statutory Central Auditors and the Auditors' Report

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-00001 0S) 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 ?50,00,000 (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.

Secretarial Auditors and Secretarial Audit Report

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.

Annual Return

Pursuant to Section 92 (3) of the Companies Act, 2013 and
Section 1 34 (3) (a), the Annual Return is hosted on the Bank's
website at https://www.dhanbank.com/pdf/33-Annual%20

Return.pdf.

Related Party Transactions

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.

Risk Management Policy Framework

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.

Compliance With Capital Adequacy Framework

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.

Adequacy of Internal Financial Controls related to Financial
Statements

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.

Particulars Regarding Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo (as
required under Section 134 (3)(m) of the Companies Act, 2013
Read with Rule (8)(3) of The Companies (Accounts) Rules, 2014)

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.

Investor Education and Protection Fund

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.

Maintenance of Cost Records

Being a Banking Company, the Bank is not required to maintain
cost records as per sub-section (1 ) of Section 1 48 of the
Companies Act, 2013.

Subsidiary Companies

The Bank does not have any subsidiary companies.
Compliance to Secretarial Standards

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.

Confirmation with respect to Insolvency and Bankruptcy
Code, 2016

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.

Disclosures relating to deposits as required under the
provisions of the Companies Act, 2013 & the Rules thereunder

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.

Details in respect of frauds reported by auditors

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.

Particulars of Loans, Guarantees or Investments

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.

Strictures and Penalties

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.

Management Discussion and Analysis Report

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

Report on Corporate Governance

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.

Corporate Social Responsibility

In compliance with the provisions of Section 1 35 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
1 98 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.

Business Responsibility and Sustainability Report

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.

Material Changes and Commitments affecting Financial
Position of the Bank

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.

Directors' Responsibility Statement

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) i n 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) t he Directors had prepared the annual accounts for the
financial year ended March 31,2025 on a going concern
basis;

(v) t he 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,

Acknowledgements

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.

By Order of the Board
Sd/-

Place : Thrissur K.N. Madhusoodanan

Date : August 26, 2025 Chairman