4.12 Provisions and Contingent Assets/Liabilities

A Contingent Liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the
control of the Bank or a present obligation that is not
recognised because it is not probable that outflow of
resources will be required to settle the obligation. A
Contingent Liability also arises in extremely rare cases
where there is a liability that cannot be recognised
because it cannot be measured reliably. The Bank
does not recognise a Contingent Liability but discloses
its existence in the financial statements.

The Bank creates a provision when there is a present
obligation as a result of a past event that probably
requires outflow of resources, and a reliable estimate
can be made of the amount of the obligation.
Provisions are reviewed at each Balance Sheet date
and adjusted to reflect the current best estimate.
Provisions are not discounted to their present value
and are determined based on the best estimate
required to settle the obligation as at the reporting
date if it is no longer probable that an outflow of
resources would be required to settle the obligation,
the provision is reversed.

Contingent Assets are neither recognised nor
disclosed in the financial statements.

4.13 Leases

Leases where the lessor effectively retains substantially
all the risks and benefits of ownership of the leased
item are classified as operating leases. Operating
lease payments are recognised as an expense in the
Profit and Loss Account on a straight-line basis over
the lease term in accordance with AS 19 - Leases.

4.14 Transaction Involving Foreign Exchange

All transactions in foreign currency are recognised
at the exchange rate prevailing on the date of the
transfer.

Foreign currency monetary items are reported using
the exchange rate prevailing at the Balance Sheet
date.

Non-monetary items which are measured in terms
of historical cost denominated in foreign currency
are reported using the exchange rate at the date of
transaction. Non-monetary items which are measured
at fair value or other similar value denominated in a
foreign currency are translated using the exchange
rate at the date when such value is determined.
Exchange differences arising on settlement of
monetary items or on reporting of such monetary
items at rates different from those at which they
were initially recorded during the year, or reported
in previous financial statements, are recognised as
income or expense in the year in which they arise.
Outstanding forward (other than deposit and
placement swaps) and spot foreign exchange
contracts outstanding at the Balance Sheet date
are revalued at rates notified by FEDAI for specified
maturities and at the interpolated rates of interim
maturities. In case of forward contracts of greater
maturities where exchange rates are not notified by
FEDAI, are revalued at the forward exchange rates
implied by the swap curves in respective currencies.
The forward profit or loss on the forward contracts
are discounted using discount rate and the resulting
profits or losses are recognised in the Profit and Loss
Account as per the regulations stipulated by the RBI.
Foreign exchange swaps "linked" to foreign currency
deposits and placements are translated at the
prevailing spot rate at the time of swap. The premium
or discount on the swap arising out of the difference in
the exchange rate of the swap date and the maturity
date of the underlying forward contract is amortised
over the period of the swap and the same is recognised
in the Profit and Loss Account. Contingent liabilities
on account of letters of credit, bank guarantees and
acceptances and endorsements outstanding as at the
Balance Sheet date denominated in foreign currencies
and other foreign exchange contracts are translated
at period end rates notified by FEDAI.

4.15 Derivative Transactions
Notionalamounts of derivative transactions
comprising swaps, futures and options are disclosed
as off Balance Sheet exposures. The Bank recognises
all derivative contracts (other than those designated
as hedges) at fair value, on the date on which the

derivative contracts are entered into and are re¬
measured at fair value as at the Balance Sheet or
reporting date. Derivatives are classified as assets
when the fair value is positive (positive marked to
market) or as liabilities when the fair value is negative
(negative marked to market). Changes in the fair value
of derivatives other than those designated as hedges
are recognised in the Profit and Loss Account.
Outstanding derivative transactions designated as
'hedges' are accounted in accordance with hedging
instrument on an accrual basis over the life of the
underlying instrument. Option premium paid or
received is recognised in the Profit and Loss Account
on expiry of the option. Option contracts are marked
to market on every reporting date.

4.16 Employee Share-Based Payments

The Employee Stock Option Schemes (ESOSs) of the
Bank are in accordance with Securities and Exchange
Board of India (Share Based Employee Benefits)
Regulations, 2014. The Schemes provide for grant of
options on equity shares to employees of the Bank to
acquire the equity shares of the Bank that vest in a
cliff vesting or in a graded manner and that are to be
exercised within a specified period.

In accordance with the Securities and Exchange Board
of India (Share Based Employee Benefits) Regulations,
2014 and the Guidance Note on Accounting for
Employee Share-based Payments, issued by The
Institute of Chartered Accountants of India, the cost
of equity-settled transactions is measured using the
intrinsic value method. The intrinsic value being the
excess, if any, of the fair market price of the share
under ESOSs over the exercise price of the option
is recognised as deferred employee compensation
with a credit to Employee's Stock Option (Grant)
Outstanding account. The deferred employee
compensation cost is amortised on a straight-line basis
over the vesting period of the option. The cumulative
expense recognised for equity-settled transactions at
each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the
number of equity instruments that are outstanding.
Fair market value of an equity share, as determined
by a Category I Merchant Banker registered with SEBI,
based on the Board-approved financial statements
within one year prior to the date of Grant.

The options that do not vest because of failure to
satisfy vesting condition are reversed by a credit
to employee compensation expense, equal to the
amortised portion of value of lapsed portion. In
respect of the options which expire unexercised the
balance standing to the credit of Employee's Stock
Option (Grant) Outstanding accounts is transferred to
Profit & Loss Account.

The Reserve Bank of India has prescribed monitoring of sufficiency of the Bank's liquid assets using Basel III - Liquidity
Coverage Ratio (LCR). The LCR is aimed at measuring and promoting short-term resilience of banks to potential liquidity
disruptions by ensuring maintenance of sufficient High Quality Liquid Assets (HQLAs) to survive an acute stress scenario
lasting for 30 days.

The LCR requirement has been introduced in a phased manner and the Bank is required to maintain minimum ratio of
100% from April 01,2021.

The ratio comprises High Quality Liquid Assets (HQLAs) as numerator and net cash outflows in 30 days as denominator.
HQLA has been divided into two parts i.e. Level 1 HQLA which comprises of primarily cash, excess CRR, SLR securities in
excess of minimum SLR requirement and a portion of mandatory SLR as permitted by RBI (under MSF) and Level 2 HQLA
which comprises of investments in highly rated non-financial corporate bonds and listed equity investments considered at
prescribed haircuts. Cash outflows are calculated by multiplying the outstanding balances of various categories or types
of liabilities by the outflow run-off rates and cash inflows are calculated by multiplying the outstanding balances of various
categories of contractual receivables by the rates at which they are expected to flow in.

The Bank monitors the LCR periodically and has maintained LCR well above the regulatory threshold. Average LCR for
Quarter ended March 31,2025 is 140.02% (Previous Year: 139.12%).

Asset Liability Committee (ALCO) of the Bank is the primary governing body for Liquidity Risk Management. Treasury is the
central repository of funds within the Bank and is vested with the responsibility of managing liquidity risk within the risk
appetite of the Bank. The Bank has incorporated Basel Liquidity Standards - LCR for liquidity risk. In computing the above
information, certain estimates and assumptions have been made by the Bank's management which have been relied upon
by auditors.

As per the RBI guideline on Net Stable Funding Ratio (NSFR) dated May 17, 2018, the Bank is required to maintain
the NSFR on an ongoing basis. The minimum NSFR requirement set out in the RBI guideline effective Oct 1,
2021 is 100%. The BaselCommittee on Banking Supervision (BCBS) had introduced the Net Stable Funding
Ratio (NSFR) to ensure resilience over a longer time horizon by requiring banks to fund their activities with more
stable sources of funding. NSFR is defined as the amount of Available Stable Funding relative to the amount
of Required Stable Funding. "Available Stable Funding" (ASF) is defined as the portion of capital and liabilities
expected to be reliable over the time horizon considered by NSFR, which extends to one year. The amount of
Required Stable Funding" (RSF) of a specific institution is a function of the liquidity characteristics and residual
maturities of the various assets held by the institution as well as those of its Off-Balance Sheet (OBS) exposures.
In computing the above information, certain estimates and assumptions have been made by the Bank's management
which have been relied upon by the auditors.

As per the RBI guideline on Net Stable Funding Ratio (NSFR) dated May 17, 2018, the Bank is required to maintain
the NSFR on an ongoing basis. The minimum NSFR requirement set out in the RBI guideline effective Oct 01,
2021 is 100%. The BaselCommittee on Banking Supervision (BCBS) had introduced the Net Stable Funding
Ratio (NSFR) to ensure resilience over a longer time horizon by requiring banks to fund their activities with more
stable sources of funding. NSFR is defined as the amount of Available Stable Funding relative to the amount
of Required Stable Funding. "Available Stable Funding" (ASF) is defined as the portion of capital and liabilities
expected to be reliable over the time horizon considered by NSFR, which extends to one year. The amount of
"Required Stable Funding" (RSF) of a specific institution is a function of the liquidity characteristics and residual
maturities of the various assets held by the institution as well as those of its Off-Balance Sheet (OBS) exposures.
In computing the above information, certain estimates and assumptions have been made by the Bank's management
which have been relied upon by the auditors.

3.3. Sale/ Transfer of Securities to/from HTM Category

During the years ended March 31, 2025 and March 31, 2024, there was no sale/transfer of securities to/from HTM
category in excess of 5% of book value of investments held in HTM category at the beginning of the year.

In accordance with the RBI guidelines, sales from, and transfers to / from, HTM category exclude the following from the
5% cap:

a) one-time transfer of securities permitted to be undertaken by banks at the beginning of the accounting year with
approval of the Board of Directors;

b) sales to the RBI under pre-announced open market operation auctions and the Government securities acquisition
programmes;

4.3. Overseas Assets, NPAs and Revenue:

The Bank does not have any branches outside India. Hence disclosure relating to overseas assets, NPAs and Revenue
are not applicable to the Bank during the years ended March 31, 2025 and March 31, 2024.

4.4 Resolution of Stressed Assets- Revised Framework

The Bank is having Nil loan account for resolution of stressed asset (revised framework) as on March 31,2025 (Previous
year : Nil) as per the RBI Circular DBR.No. BP.BC.45/21.04.048/ 2018-19 dated June 07, 2019, as amended.

4.5. Divergence in Asset Classification and Provisioning

RBI vide circular no. DOR.ACC.REC.No.74/21.04.018/2022-23 dated October 11, 2022, has directed that banks shall
make suitable disclosures, wherever (a) the additional provisioning requirement assessed by RBI exceeds 5 % of the
reported profit before provisions and contingencies for the reference period, or (b) the additional Gross NPA identified
by RBI exceeds 5 % of the published incremental Gross NPA for the reference period, or both. There are no reportable
matters to the Bank for the years ended March 31,2025 and March 31, 2024.

4.6. Disclosure of Transfer of Loan Exposures

(i) During the year ended March 31,2025, the Bank has not acquired / transferred any ""loans not in default"" through
assignment of loans.

(ii) During the year ended March 31,2025, the Bank has not acquired/ transferred any stressed loans (Non-Performing
Asset and Special Mention Account).

iii) Details of ratings of SRs outstanding as on March 31, 2025 are given below:

5.4. Unsecured Advances

During the years ended March 31, 2025 and March 31, 2024, the Bank has not extended any advances where the
collateral is an intangible asset such as a charge over rights, licenses, authorisations, etc. Hence the disclosure is not
applicable.

5.5. Details of Factoring Exposure:

The factoring exposure of the Bank as at March 31,2025 is Nil (Previous Year: Nil).

5.6. Intra Group Exposures

The Bank does not have any intra group exposures for the year ended March 31,2025 and March 31, 2024. Exposure
is computed as per RBI Master Circular on Exposure Norms DBOD. No. Dir.BC.12/13.03.00/ 2015-16 dated July 01,
2015.

5.7. Unhedged Foreign Currency Exposure

The Bank held '0.20 crore towards unhedged foreign currency exposure as on March 31, 2025 (Previous Year: '0.20
crore ). The Bank held no incremental capital on advances to borrowers with unhedged foreign currency as on March
31,2025 (Previous Year: Nil).

7. Derivatives

7.1 Forward Rate Agreement/ Interest Rate Swap

The Bank has not entered into any Forward Rate Agreement/ Interest Rate Swap contracts during Financial Years 2024¬
25 and 2023-24. Hence this disclosure is not applicable to the Bank.

7.2 Exchange Traded Interest Rate Derivatives

The Bank has not entered into any exchange traded interest rate derivatives contracts during Financial Years 2024-25
and 2023-24. Hence this disclosure is not applicable to the Bank.

7.3 Disclosures on Risk Exposure in Derivatives

A. Qualitative Disclosures

i. Structure and organisation for management of risk in derivatives trading:

The Board of Directors, Risk Management Committee of Board (RMCB), Asset Liability Management Committee
(ALCO) and Risk Management department are entrusted with management of risk in derivative transactions
for trading and hedging. The Bank's exposure to derivatives is limited to foreign exchange swaps done for
hedging its FCNR portfolio. Policy for hedging is included in Foreign Exchange policy of the Bank.

Bank has operations and Risk management functions independent of dealing function. The Market Risk
division of Risk Management department is responsible for assessment, monitoring, measurement and
reporting of market risk and counterparty risk in foreign exchange swaps entered into for trading and
hedging.

ii. Scope and nature of risk measurement, risk reporting and risk monitoring systems:

Market Risk division of Risk Management department monitors the Bank's exposures in FX spot and forwards
on daily basis via computing VaR, AGL etc. and reports to the Chief Risk Officer.

A report is submitted to Risk Management Committee of Board (RMCB) on periodic intervals.

iii. Policies for hedging and / or mitigating risk and strategies and processes for monitoring the continuing
effectiveness of hedges / mitigants:

Policy for hedging is included in Foreign Exchange policy of the Bank.

iv. Accounting policy for recording hedge and non-hedge transactions; recognition of income, premiums and
discounts; valuation of outstanding contracts; provisioning, collateral and credit risk mitigation:

Notional amounts of derivative transactions comprising of swaps, futures and options are disclosed as
Off-Balance Sheet exposures. The Bank recognises all derivative contracts (other than those designated as

hedges) at fair value, on the date on which the derivative contracts are entered into and are re-measured at
fair value as at the Balance Sheet or reporting date. Derivatives are classified as assets when the fair value
is positive (positive marked to market) or as liabilities when the fair value is negative (negative marked to 5
market). Changes in the fair value of derivatives other than those designated as hedges are recognised in the
Profit and Loss Account.

Outstanding derivative transactions designated as "Hedges" are accounted in accordance with hedging
instrument on an accrual basis over the life of the underlying instrument. Option premium paid or received
is recognised in the Profit and Loss Account on expiry of the option. Option contracts are marked to market
on every reporting date.

B. Quantitative Disclosures

The Bank does not have any curreny derivatives and interest rate derivatives. Hence disclosure is not
applicable for Financial Years 2024-25 and 2023-24.

8. Disclosures Relating to Securitisation

The Bank has not undertaken any Securitised transaction during the years ended March 31, 2025 and March 31,2024
and no outstanding as on March 31,2025. Hence the disclosure is not applicable to the Bank.

9. Off-Balance Sheet SPVs Sponsored

There are no Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms)
during the years ended March 31, 2025, and March 31,2024.

10. Transfer to Depositor Education and Awareness Fund (DEAF)

During the years ended 31st March 2025 and 31st March 2024, the Bank was not required to transfer any amount to
Depositor Education and Awareness Fund.

12. Disclosure of Penalties Imposed by RBI

During the year ended March 31,2025, the Reserve Bank of India had imposed a penalty under Banking Regulation Act,
1949 for failure to adhere to

i) RBI Directions on "Customer Services in Bank" ' Nil (Previous Year: '0.30 crore).

ii) RBI Circular DCM (RMMT) No.S153/11.01.01/2021-22 dated August 10, 2021 and addendum dated January 03,
2022 on cash out at ATM of more than ten hours in a month by the Bank of Rs 0.003 crore (Previous Year: '0.006
crore).

13. Disclosure of Remuneration
A. Qualitative Disclosures:

a) Information relating to the composition and mandate of the Remuneration Committee:

The Nomination, Remuneration and Compensation committee ("NRC") comprises of 4 Independent Directors
of the Bank. Key mandate of the NRC is to oversee the implementation of the compensation policy of the
Bank. The scope and function of the NRC are in accordance with Section 178 of the Companies Act 2013,
Securites & Exchange Board of India Regulation 2015 and the guidelines issued by Reserve Bank of India
from time to time.

b) Information relating to the design and structure of remuneration processes and the key features
and objectives of remuneration policy:

Objective of the Banks' Compensation Policy is:

- to provide a fair and transparent structure that is designed to retain and attract the talent pool.

- the compensation shall be adjusted for all types of risk and the outcomes shall be symmetric with risk
outcomes.

- to ensure that a sustained and rigorous compensation practice is followed.

- to ensure that a comprehensive and timely disclosure of information is made available to all stakeholders
to facilitate constructive engagement.

c) Description of the ways in which current and future risks are taken into account in the remuneration
processes. It should include the nature and type of the key measures used to take account of
these risks:

In order to manage current and future risk and allow a fair amount of time to measure and review both
quality and quantity of the delivered outcomes, the Bank has a policy to set apart a portion of the total
compensation of senior and middle management as variable.

In the event of negative contributions of the Bank and/or in the relevant line of business, disciplinary
proceedings initiated if any, in a year the deferred compensation will be subjected to 'malus' and 'clawback'
arrangements.

d) Description of the ways in which the Bank seeks to link performance during a performance
measurement period with levels of remuneration:

Variable pay for Whole-Time Directors/Managing Director/ Material Risk Takers will have minimum pay out of
50% of the fixed pay and maximum pay out of 300% of the fixed pay, which will be determined based on the
level of responsibility. However, any bonus at the time of joining/ sign on bonus will be limited only to the first
year and would be in the form of Employee Stock Options.

e) A discussion of the Banks' policy on deferral and vesting of variable remuneration and a discussion
of the Bank's policy and criteria for adjusting deferred remuneration before vesting and after
vesting:

For MD & CEO, WTDs, and other employees who are MRTs, deferral arrangements exist for the variable pay,
regardless of the quantum of pay. For such executives of the Bank, a minimum of 60% of the Total Variable
Pay is invariably under deferral arrangements. Further, if cash component is part of variable pay, at least 50%

of the cash bonus will be deferred. However, in cases where the cash component of variable pay is under
'25 lakh, deferral requirements is not necessary.

The deferral period is a minimum of three years and would be applicable to both the cash and non-cash
components of the variable pay.

The deferral of the variable pay will be spread out over the course of the deferral period.

f) Description of the different forms of variable remuneration (i.e. cash, shares, ESOPs and other
forms) that the Bank utilises and the rationale for using these different forms:

Variable remuneration in the form of Cash or in the form ESOP is paid periodically.

The form of variable remuneration depends on the job level of individual, risk involved, the time horizon for
review of quality and longevity of the assignments performed.

14.8. Unamortised Pension and Gratuity Liabilities

There are no unamortised pension and gratuity liabilities as at March 31,2025 and March 31, 2024.

14.9 Letter of Comforts

The Bank has not issued any Letter of Comforts during years ended March 31, 2025 and March 31, 2024. Hence
corresponding disclosures are not made.

14.10 Green Deposits

The Bank has not raised any green deposits during years ended March 31, 2025 and March 31, 2024. Hence
corresponding disclosures are not made.

15. Details of Single Borrower Limit (SBL) / Group Borrower Limit (GBL) exceeded by the Bank

During the years ended March 31,2025 and March 31,2024, the Bank's credit exposure to single borrower and group
borrowers was within the prudential exposure limits prescribed by the RBI.

16. The Bank was carrying an additional contingency provision on standard assets of ' 35.82 crore as on March 31,2024
and further made a provision of ' 8.85 crore during the year ended and consequently the contingency provision on
standard assets as at March 31, 2025 stands at ' 44.67 crore.

8. Employee Stock Option Scheme ("ESOS")

i) ESAF Small Finance Bank Employee Stock Option Plan 2019

The Bank, pursuant to the resolutions passed by the Board on December 23, 2019 and Shareholders on January
03, 2020, adopted the ESAF ESOP Plan 2019. The ESAF ESOP Plan 2019 has been framed in compliance with
the SEBI Regulations. The ESOP grant is of two types (i) loyalty grant and (ii) performance grant. As on March 31,
2024 no options under performance grant have been granted by the Bank under the ESAF ESOP Plan 2019. The
Nomination and Remuneration Committee of the Bank on June 28, 2021 and May 06, 2024 granted loyalty grant
to its eligible employees. The details of the options granted under the ESAF ESOP Plan 2019 as loyalty grant are as
follows:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.

iii. Leave Encashment

The employees of the Bank are entitled to compensated absence. The employees can carry forward a portion of
the unutilised accrued compensated absence and utilise it in future periods or receive cash compensation during
service, retirement or termination of employment for the unutilised accrued compensated absence for a maximum
of 90 days. The Bank records an obligation for compensated absences in the period in which the employee renders
the services that increase this entitlement. The Bank measures the expected cost of compensated absence as the
additional amount that the Bank expects to pay as a result of the unused entitlement that has accumulated at the
balance sheet date based on actuarial valuations.

The Actuarial Liability of compensated absences of accumulated privilege leaves of the employees of the Bank is
given below:

Pursuant to Section 135 (5) & 135 (6) of Companies Act, 2013 read with Companies (Corporate Social Responsibility
Policy) Rules, 2014 (Amended), the Bank has transferred '7.39 crore (Previous Year : ' 5.13 crore) to the "Unspent
CSR Account" as on March 31, 2025 towards the ongoing projects approved by the CSR Committee to be spent over
the next 3 years. The advance with the Implementing Agencies is ' 2.38 crore as at March 2025 (March 2024 : ' 1.81
crore)

Nature of CSR Activities:

Children's education, sustainable village development, waste management, liveable city projects, community school
infrastucture, Krushakmitra for farmer and farmer collectives, Garshom projects for migrant labourers, skills training for
rural artisans and rural youth, flood rehabilitation, Covid 19 response programme, sustainable development initiatives,
Arogyamitra- health enterprenuership development.

Refer Note B.7 of Schedule 18 for the related parties involved in activities relating to Corporate Social Responsibility.

11. Subordinated Debt and Perpetual Debt

a The Bank has an outstanding subordinated debt of ' 340 crore (As at March 31, 2024 : '425 crore). This has
been considered as part of Tier 2 Capital for capital adequacy computation after subjecting to discounting in
accordance with the RBI guidelines.

During the year ended March 31, 2025, the Bank raised a Subordinated Debt of ' Nil crore by way of private
placement (Previous Year: ' 280 crore).

The Bank has an outstanding Perpetual Debt Instrument of ' 48 crore ( As at March 31,2024: ' 48 crore).
b. Interest Expended- Others includes interest of ' 44.59 crore (Previous year : ' 22.83 crore) on Subordinated Debt
and includes interest of ' 6.24 crore (Previous Year: ' 6.26 crore) on Perpetual Debt Instrument.

13. Description of Contingent Liabilities:

The Bank has Contingent Liability of ' 0.46 crore (Previous Year : ' 0.11 crore) for claims against customer disputes
and tax disputes, ' 0.66 crore (Previous year ' 0.56 crore) for properietory transactions and other court matters
' 195.76 crore (previous Year: ' Nil ) againt outstanding forward exchange contracts and ' 1.72 crore (Previous Year:
1.51 crore) towards guarantees given on behalf of constituents in India.

14. The Bank has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. As
on March 31, 2025 and March 31,2024, the Bank has reviewed and recorded adequate provision as required under
any law /accounting standards for material foreseeable losses on such long-term contracts in the books of account and
disclosed the same under the relevant notes in the financial statements.

15. The Bank has received few intimations from "suppliers" regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006. Based on the information received and available with the Bank, there are no
reported cases of delays in payments to micro and small enterprises or of interest payments due to delays in such
payments during the years ended March 31, 2025 and March 31,2024. The above is based on information available
with the Bank and relied upon by the auditors.

16. As a part of the normal banking business, the Bank grants loans and advances to its borrowers with permission to lend/
invest or provide guarantees/ securities in other entities identified by such borrowers or on the basis of the security/

guarantee provided by the co-borrower. Similarly, the Bank may accept funds from its customers who may instruct the
Bank to lend/ invest/ provide guarantee or security or the like against such deposits in other entities identified by such
customers. These transactions are part of the Bank's normal banking business, which is conducted after exercising
proper due diligence including adherence to "Know Your Customers" guidelines.

Other than the nature of the transactions described above:

- No funds have been advanced or loaned or invested by the Bank to or in any other person(s) or entity(ies)
("intermediaries") with the understanding that the intermediary shall lend or invest in party identified by or on
behalf of the Bank (ultimate beneficiary).

- The Bank has not received any funds from any party(s) (funding party) with the understanding that the Bank shall,
whether, directly or indirectly, lend or invest in other persons or entities by or on behalf of the Bank ("ultimate
beneficiaries") or provide any guarantee or security or the like on behalf of the ultimate beneficiary.

17. Dividend

Board of Directors has not proposed any dividend for 2024-25.

The Board of Directors at its meeting held on May 08, 2024 , had proposed a dividend of ' 0.70 per share for the year
ended March 31, 2024 which was approved by the shareholders at the Annual General Meeting held on August 14,
2024.

18. IPO Expenses

During the previous year ended March 31, 2024, the Bank had incurred expenses towards the Initial Public Offer
amounting to ' 39.28 crore which had been charged-off to securities premium account in accordance with Section 52
of the Companies Act, 2013.

19. The Board of Directors at their meeting held on June 14, 2024, had taken a strategic decision to reduce
concentration risk associated with dependence on Business Correspondents and had decided to modify the
existing arrangement with M/s. ESAF Swasraya Multi State Agro Co-operative Society Limited ("ESMACO"),
the largest Business Correspondent and one of the promoter group entities of the Bank from July 01, 2024.
In terms of the modified arrangement, the Bank had absorbed 5,109 trained employees of ESMACO and had agreed to
compensate ESMACO ' 58.00 crore (inclusive of GST) being the value addition for sourcing and training the staff which
otherwise the Bank would have had to incur based on an independent external valuation. These employees would be
eligible to all the benefits similar to the Bank staff from July 01, 2024.

20. Previous Year's Figures

Previous year figures have been regrouped/reclassified wherever necessary to correspond with the current year's
classification/disclosure.

For and on Behalf of Board of Directors

Ravimohan Periyakavil Ramakrishnan Dr. Kadambelil Paul Thomas

Chairman Managing Director & CEO

DIN:08534931 DIN: 00199925

Thomas Jacob Kalappila George K. John

Director Executive Director

DIN: 00812892 DIN:00694646

Gireesh C. P. Ranjith Raj P.

Chief Financial Officer Company Secretary

Place: Mannuthy
Date: May 16, 2025