Equitas Small Finance Bank Ltd

To

The Members

Equitas Small Finance Bank limited

Your Directors have pleasure in presenting the Eighth Annual Report on the business and operations of the Bank, together with the audited accounts of the Bank for the financial year ended March 31, 2024 (FY 2023-24).

1. SUMMARY OF FINANCIAL PERFORMANCE

(Rs. in lakhs)

2. DIVIDEND

The Board of Directors at their meeting held on April 24, 2024 has recommended a dividend of Rs. 1/- per equity share (i.e., 10%) of face value Rs. 10/- each for the financial year ended March 31, 2024, subject to the approval of the Members at the ensuing Eighth Annual General Meeting (AGM). The Dividend, if approved by the Members would be paid to those Members whose name appears in the Register of Members as on the Record Date mentioned in the Notice convening the Eighth AGM.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the RBI guidelines, the Bank has formulated and adopted a Dividend

Distribution Policy and the same is available on the website of the Bank Click here. The dividend declared during the year is in accordance with the Dividend Distribution Policy of the Bank.

3. TRANSFER TO RESERVES

As per the requirement of RBI Regulations, the Bank has transferred the following amounts to various reserves during the year ended March 31, 2024.

4. DEPOSITS

Being a Bank, the disclosures relating to deposits as required under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013 ("the Act") are not applicable. The Bank receives and accepts deposits, the details of which are enumerated in the financial statements for FY 2023-24.

5. CAPITAL ADEQUACY RATIO

The Capital Adequacy Ratio stood at 21.70% as on March 31, 2024 as against the minimum requirement of 15% stipulated by the Reserve Bank of India (RBI). The Net Worth of the Bank as on the said date was Rs. 5,96,870.18 lakhs.

6. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE BANK AFTER THE BALANCE SHEET DATE AS AT MARCH 31, 2024

There were no material changes and commitments between the end of Financial Year 2023-24 and the date of this report, affecting the financial position of the Bank.

7. I NFORMATION ABOUT FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Bank does not have any Subsidiaries, Associates and Joint Venture Companies.

8. OPERATIONAL HIGHLIGHTS AND STATE OF THE BANK'S AFFAIRS

The details of operations and state of affairs are given in the Management Discussion and Analysis [MD&A] Report.

9. MANAGEMENT DISCUSSION AND ANALYSIS, REPORT ON CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Management Discussion and Analysis Report as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, Report on Corporate Governance for FY 2023-24 along with the General Shareholder Information and the Business Responsibility and Sustainability Report under Regulation 34(2)(f) of the SEBI Listing Regulations forms part of this annual report.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Bank has laid down a Corporate Social Responsibility (CSR) Policy, which is available on our website click here. The CSR policy of the Bank establishes the framework, enabling Bank to carry out CSR activities for improving the quality of life of the underprivileged sections of the society through multi-faceted interventions in education, healthcare, skill development and dignified living conditions. The policy was amended by the Board of Directors on May 04, 2023 to give effect to the changes as mandated under the applicable laws.

The Bank contributes 5% of its previous year's net profits or 2% of average net profits made during the preceding three financial years, whichever is higher to Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF), registered Public Charitable Trusts for carrying out CSR activities on its behalf. A report in this regard is enclosed as Annexure A.

The Bank has constituted a CSR Committee, which:

a) Recommends to the Board an annual activity plan in line with the CSR policy and CSR contribution of the Bank for the year.

b) Monitors the implementation of the plan as approved.

c) Reviews and recommends changes to the policy from time to time.

11. SHARE CAPITAL

During the year, there has been no change in the Authorised share capital of the Bank. The Bank has allotted in aggregate 2,43,29,125 equity shares to the eligible employees of the Bank under the ESFB Employees Stock Option Scheme, 2019. The paid-up share capital of the Bank as on March 31, 2024 is Rs. 1,134,88,72,790/- comprising of 113,48,87,279 equity shares of Rs. 10/- each.

12. MEETINGS OF THE BOARD

During the FY 2023-24, our Board had met thirteen (13) times. The details of Meetings are given in the report on Corporate Governance. The maximum interval between any two Meetings did not exceed 120 days, as prescribed in the Act & the relevant Rules made thereunder and the applicable provisions of the SEBI Listing Regulations.

Board Committees

The details pertaining to the Audit Committee and other Committees of the Board are provided in the Corporate Governance section forming part of this report. All the recommendations made by the Audit Committee during the year were accepted and implemented by the Board. The changes in the composition of the Committees of the Board during the reporting period are disclosed in the Corporate Governance Report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on the date of this Report, the Bank has fourteen (14) Directors, out of which, there are thirteen (13) Independent Directors including a Woman Independent Director.

Change in Directors & KMPs Re-appointment of Managing Director & CEO

During the year, RBI vide its letter dated June 15, 2023 had accorded its approval for the re-appointment of Mr. Vasudevan P N (DIN: 01550885) as the Managing Director & CEO of the Bank for a period of three (3) years with effect from July 23, 2023 to July 22, 2026. The aforesaid re-appointment was approved by the Members of the Bank at the Seventh Annual General Meeting held on August 29, 2023.

Appointment of Independent Directors and Parttime Chairman

Further, the appointment of Dr. Gulshan Rai (DIN: 01594321) as an Additional Director (Independent) of the Bank with effect from March 28, 2024 until April 08, 2028, not liable to retire by rotation was approved by the Board of Directors of the Bank at its meeting held on March 28, 2024 subject to the approval of the Members of the Bank.

RBI vide its letter dated April 04, 2024 had accorded its approval for the appointment of Mr. Anil Kumar Sharma (DIN: 08537123) as the Part-time Chairman of the Bank (Non-Executive) for a period of three (3) years, effective from April 25, 2024 until April 24, 2027. The Board of Directors of the Bank at its meeting held on April 24, 2024 had approved the appointment of Mr. Anil Kumar Sharma (DIN: 08537123) as an Additional Director (Independent) of the Bank for a period of five (5) years with effect from April 25, 2024 until April 24, 2029 (both days inclusive), not liable to retire by rotation and also as the Part-time Chairman of the Bank (Non-Executive) for a period of three (3) years, effective from April 25, 2024 until April 24, 2027 subject to the approval of the Members of the Bank.

The approval for the appointment of Dr. Gulshan Rai (DIN: 01594321) as an Independent Director of the Bank and Mr. Anil Kumar Sharma (DIN: 08537123) as an Independent Director and Part-time Chairman of the Bank was sought from the Members of the Bank through Postal Ballot by way of electronic voting (e-voting). The resolutions pertaining to the aforesaid appointments were approved with requisite majority by the Members of the Bank through Postal Ballot by way of e-voting which concluded on June 06, 2024.

Further, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on July 15, 2024 had approved the appointment of Mr. Narayanan Rajagopalan Nadadur (DIN: 07877022), Mr. Keezhayur Sowrirajan Sampath (DIN: 07924755) and Mr. Ramkumar Krishnaswamy (DIN: 00244711) as Additional Directors (Independent) of the Bank for a term of three years with effect from July 16, 2024 until July 15, 2027, not liable to retire by rotation, subject to the approval of the Members of the Bank. The aforesaid appointments has been placed for approval of the Members at the ensuing Annual General Meeting.

In the opinion of the Board, the Independent Directors appointed as mentioned above possess requisite integrity, qualification, experience, proficiency and fulfill the criteria of independence and expertise, as stipulated by the applicable Rules and Regulations, which would immensely benefit the Bank.

Retirement

Mr. Arun Ramanathan (DIN: 00308848) ceased to be the Part-time Chairman and Independent Director of the Bank from the close of business hours on April 24, 2024 consequent to the completion of his tenure. The Board places on record its sincere appreciation for the remarkable leadership and contribution by Mr. Arun Ramanathan during his association with the Bank.

Directors liable to retire by rotation

Section 152 of the Act, provides that two-thirds of the total number of Directors are liable to retire by rotation out of which one-third shall retire from office at every AGM. In terms of Section 149(13) of the Act, the provisions of retirement of Directors by rotation shall not be applicable to the Independent Directors and an Independent Director shall not be included in the total number of Directors liable to retire by rotation.

The Bank has only one Director viz., Mr. Vasudevan P N, MD & CEO liable to retire by rotation. Mr. Vasudevan P N will retire at the ensuing AGM of the Bank and being eligible, offers himself for re-appointment. The Board of Directors recommend his re-appointment and the same has been placed for approval of the Members at the ensuing Annual General Meeting.

Re-appointment of Independent Director

Mr. Navin Puri (DIN: 08493643) was appointed as an Independent Director of the Bank for a period of five years with effect from August 01, 2019 until July 31, 2024. As per the provisions of Section 149 of the Act, and other applicable provisions, if any, an Independent Director shall hold office for a term of five consecutive years on the Board of the Bank and is eligible for re-appointment on passing of special resolution.

In accordance with Section 10A (2A) of the Banking Regulation Act, 1949, no Director of a Banking company, other than its Chairman or Whole-time Director, by whatever name called, shall hold office continuously for a period exceeding eight years. Mr. Navin Puri would complete five years as an Independent Director of the Bank on July 31, 2024.

The Board based on the performance evaluation and recommendation of Nomination & Remuneration Committee considers that given his background, experience and contribution, the continued association of Mr. Navin Puri as an Independent Director would be of immense benefit to the Bank. The Bank has received a declaration from Mr. Navin Puri to the effect that he continues to meet the criteria of independence as provided in Section 149(6) of the Act, Rules framed thereunder and Regulation 16(1 )(b) of the SEBI Listing Regulations and he has given his consent for re-appointment. In the opinion of the Board, Mr. Navin Puri satisfies all the criteria applicable for re-appointment including fit and proper criteria as prescribed in the Bank's Policy for Selection and Appointment of Directors.

The Board proposes the re-appointment of Mr. Navin Puri as an Independent Director for a second consecutive term of three years effective from August 01,2024 until July 31, 2027 for approval of the Members by way of Special Resolution.

Familiarisation Programme

The Bank has familiarised the Independent Directors of the Bank of their roles and responsibilities in the Bank, nature of industry in which the Bank operates, business model of the Bank, etc., The details of the familiarisation programme imparted to the Independent Directors are available in the website of the Bank click here.

Key Managerial Personnel (KMP)

In terms of Section 203(1) read with Section 2(51) of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had the following KMPs as on March 31, 2024:

During the financial year, there were no changes to the Key Managerial Personnel of the Bank.

14. DECLARATION FROM INDEPENDENT DIRECTORS

The Board has received the declaration from the Independent Directors as required under Section 149(7) of the Act and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations, 2015. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Act.

Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Board has assessed the confirmations submitted by the Independent Directors and had taken the same on record. In the opinion of the Board, all the Independent Directors are independent of the Management.

15. EVALUATION OF PERFORMANCE OF THE BOARD AND ITS COMMITTEES

The performance of the Board, Committees of the Board, Chairman and individual Directors were evaluated on the basis of criteria as approved by the Board. The manner of performance evaluation included the process of obtaining feedback by way of a structured questionnaire, covering aspects pertaining to the roles and functions, as applicable. The Directors actively participated in the evaluation process and provided their feedback. The consolidated feedback were shared with the respective Directors and feedback relating to the Committees and the Board were discussed in meetings of the respective Committees & Board.

16. POLICY ON DIRECTORS' APPOINTMENT, REMUNERATION AND OTHER DETAILS

Pursuant to the provisions of Section 178 of the Act, the Bank has formulated and adopted the Policy for Selection and Appointment of Directors & ESFB Remuneration & Benefits Policy, which are available on the website of the Bank at click here and here. The said policies provide a framework for the appointment and remuneration of Directors (including Independent Directors) as per the criteria formulated by the Nomination and Remuneration Committee of the Board in compliance with the requirement of the Act, read with the relevant Rules made thereunder and the SEBI Listing Regulations. The policies were amended by the Board of Directors on March 28, 2024 to make it more robust and effective complying with regulatory / statutory requirements.

17. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors of the Bank, to the best of their knowledge and belief confirm that:

i) In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures,

ii) such accounting policies as specified in Schedule 17 to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at March 31, 2024 and of the profit of the Bank for the year ended on that date,

iii) proper and sufficient care has been taken for 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 frauds and other irregularities,

iv) annual accounts have been prepared on a going concern basis,

v) internal financial controls to be followed by the Bank were laid down and that the same were adequate and were operating effectively and

vi) proper systems to ensure compliance with the provisions of all applicable laws was in place and the same were adequate and operating effectively.

18. OVERALL REMUNERATION

Details of all elements of remuneration of Directors are given in the Corporate Governance Report. The Independent Directors of the Bank are not entitled to Stock options. Details of remuneration as required under Section 197 (12) of the Act, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

In accordance with Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the statement prescribed under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The aforesaid information is available for inspection at the Registered office of the Bank during the business hours on working days of the Bank. If any Member is interested in obtaining a copy, such Member may write to the Company Secretary in this regard at cs@equitasbank.com

19. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Bank has adopted a Whistle Blower Policy and Vigil Mechanism in compliance with the relevant provisions of the Act and Rules thereunder and SEBI Listing Regulations. This Policy provides an opportunity to address concerns of the employees & the Directors in relation to any fraud, malpractice or any other activity or event which is against the interest of the Bank or society as a whole. The Policy is available in the Bank's website, click here.

During the year under review, the Bank had received 'Nine(9)' complaints under the Whistle Blower Policy of the Bank. The functioning of the mechanism is reviewed by the Audit Committee from time to time. No personnel of the Bank has been denied access to the Audit Committee.

20. CREDIT RATINGS

The details of the credit ratings are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

21. AUDITORS & THEIR REPORT

Reserve Bank of India ("RBI") has on April 27, 2021 issued the Guidelines for Appointment of Statutory Central Auditors / Statutory Auditors of Commercial banks which are applicable from the FY 2021-22 ("RBI Guidelines"). The RBI Guidelines has capped the term of Statutory Auditors at three years, replacing the earlier cap of four years.

The Board of Directors of the Bank in their Meeting held on June 01,2021 had appointed M/s. Varma and Varma, Chartered Accountants, (Firm Registration No. 004532S) as one of the Joint Statutory Auditors of the Bank for the period from FY 2021-22 to FY 2023-24. The said appointment was approved by the Members at the Fifth AGM held on August 12, 2021. The appointment was approved by RBI for FY 2021-22, 2022-23, 2023-24 vide its letters dated July 13, 2021, May 31,2022 and July 07, 2023 respectively. The tenure of M/s. Varma and Varma, Chartered Accountants (Firm Registration No. 004532S) shall end at the conclusion of the ensuing Eighth AGM of the Bank.

Further, the Board of Directors of the Bank in its meeting held on June 14, 2023 had appointed M/s. A S A & Associates LLP, Chartered Accountants (Firm Registration No: 009571N/ N500006) as one of the Joint Statutory Auditors for the period from FY 2023-24 to FY 2025-26 which was approved by the Members at the Seventh AGM held on August 29, 2023. The appointment was approved by RBI for FY 2023-24 vide its letter dated July 07, 2023. As per the RBI guidelines, the appointment of Joint Statutory Auditors shall be subject to annual approval from Reserve Bank of India. The Audit Committee of the Board had reviewed the performance of M/s. AS A & Associates LLP, Chartered Accountants during the financial year 2023-24 and their independence by taking note of the eligibility letters received from the Auditors stating that they continue to satisfy the criteria provided in Section 141 of the Act and RBI Regulations and their continuance, if approved, will be in accordance with the conditions prescribed under the Act and Rules thereunder as well as the applicable RBI Regulations and had accordingly recommended their continuance to the Board. The Board of Directors of the Bank in its Meeting held on April 24, 2024 considered the recommendation of Audit Committee and approved the re-appointment of M/s. A S A & Associates LLP, Chartered Accountants as one of the Joint Statutory Auditors for the FY 2024-25 as they continue to satisfy the eligibility norms as per the RBI guidelines. The appointment was approved by RBI for the FY 2024-25 vide its letter dated May 22, 2024.

Further, consequent to the completion of term of M/s. Varma and Varma, Chartered Accountants at the ensuing eighth AGM of the Bank, the Board of Directors at its meeting held on April 24, 2024, on the recommendation of the Audit Committee, considered and approved the appointment of M/s. Suri & Co, Chartered Accountants (Firm Registration No: 004283S) as one of the Joint Statutory Auditors for the period from FY 2024-25 to FY 2026-27 subject to the approval of the Members at the ensuing Annual General Meeting. RBI has approved the aforesaid appointment vide its letter dated May 22, 2024.

Auditors' Report

There are no qualifications, reservations or adverse remarks made by the Joint Statutory Auditors of the Bank, M/s. Varma & Varma, Chartered Accountants and M/s. AS A & Associates LLP, Chartered Accountants in their report on the financial statements for the FY 2023-24. Further, the Joint Statutory Auditors of the Bank have not reported any instances of frauds committed in the Bank by its officers or employees during the period, pursuant to Section 143(12) of the Act.

22. DETAILS OF EMPLOYEE STOCK OPTIONS SCHEME (ESOS)

The Bank, pursuant to the resolutions passed by the Board and the Members of the Bank on January 31, 2019, adopted the ESFB Employee Stock Option Scheme (ESOS), 2019 ("ESFB ESOP 2019"). The Bank had amended the ESFB ESOP 2019 pursuant to the resolutions of the Board and Members of the Bank dated November 07, 2019 & November 22, 2019 respectively.

Post listing of Equity shares of the Bank, the ESFB ESOP 2019 was ratified by the Members by way of special resolution dated February 08, 2021 as required by Regulation 12 of erstwhile SEBI (Share Based Employee Benefits) Regulations, 2014. Further, as recommended by the Nomination and Remuneration Committee of the Board, the Board of Directors at its Meeting held on January 28, 2022 had approved modifications to the ESFB ESOP 2019 aligning the scheme as per the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

As per the scheme approved, the Bank is entitled to grant an aggregate number of up to 11,00,00,000 Options under ESFB ESOP 2019. The objective is to enable the Bank to attract and retain the best available talent to contribute and share in the growth of the Bank.

The Scheme is administered by the Nomination and Remuneration Committee constituted by the Board of Directors of the Bank. There were no material changes in the Employee Stock Option Scheme and the Scheme is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. A certificate from

CS Dr. B Ravi, Managing Partner, M/s B Ravi & Associates, Practicing Company Secretaries, the Secretarial Auditor of the Bank, that the Employee Stock Option Scheme has been implemented in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and is in accordance with the resolutions passed by the Members of the Bank is enclosed as Annexure B.

The disclosures as mandated under the provisions of Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is available on the website of the bank click here.

Information as required under Section 62 of the Companies Act, 2013 and Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 is as below:

a) Key Managerial Personnel

b) any other employee who receives a grant of Options in any one year, of options amounting to 5% or more of options granted during that year - click here

c) identified employees who were granted Option, during any one year, equal to or exceeding 1%of the issued capital (excluding outstanding warrants and Conversions) of the Bank at the time of grant. - NIL

23. SECRETARIAL AUDITOR

The Secretarial Audit Report issued by CS Dr. B Ravi, Managing Partner, M/s. B Ravi & Associates (C.P No. 3318) is enclosed as Annexure C. The Bank has complied with the applicable Secretarial Standards relating to 'Meetings of the Board of Directors' and 'General Meetings' during the year. There are no qualifications or adverse remarks made by the Secretarial Auditor.

Based on the recommendation of the Audit Committee, the Board of Directors at its meeting held on July 15, 2024 had approved the appointment of M/s. SR Srinivasan & Co. LLP, Practising Company Secretaries, Chennai as the Secretarial Auditor of the Bank for the Financial Year 2024-25.

24. FURTHER INFORMATION AS PER SECTION 134 (3) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014

- During FY 2023-24, the Bank had no activity relating to conservation of energy or technology absorption.

- During FY 2023-24, the total foreign exchange earned by the Bank was Nil and the total foreign exchange outgo of the Bank during the year was Rs. 461.44 lakhs.

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Bank with the related parties during the financial year 2023-24 were in its ordinary course of business and on an arm's length basis. During the year, the Bank had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Bank on materiality of related party transactions or which is required to be reported as per Section 188 and other applicable provisions, if any, of the Act read with the Rules made thereunder.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act (Form AOC-2) is not applicable to the Bank for the reporting period and hence does not form part of this report. The Policy on Related Party Transactions is available in the website of the Bank click here.

26. RISK MANAGEMENT

The Bank has formulated and adopted a robust Risk Management framework. The Bank has also constituted Risk Management Committee of the Board, which periodically reviews the risks faced by the Bank and the practices/ processes followed to manage them. Details of the same are covered in the MD&A report.

27. INTERNAL FINANCIAL CONTROLS

The Bank has clear delegation of authority and standard operating procedures, which are in accordance with the approved policies of the Bank. These measures help in ensuring adequacy of internal financial controls commensurate with the nature and size of operations of the Bank. The Board also reviews the adequacy and effectiveness of the Bank's internal financial controls with reference to the financial statements. The procedures and internal controls provide reasonable assurance on the preparation of financial statements and the reliability of financial reporting. The Bank also ensures that the internal controls are operating effectively.

28. IND-AS IMPLEMENTATION

In January 2016, the Ministry of Corporate Affairs issued the roadmap for implementation of new Indian Accounting Standards (Ind AS), converged with International Financial Reporting Standards (IFRS) for scheduled commercial banks, insurance companies and Non-Banking Financial Companies (NBFCs). However, currently the implementation of Ind AS for banks has been deferred by RBI till further notice pending consideration of some recommended legislative amendments by the Government of India. The Bank is in an advanced stage of preparedness for implementation of Ind AS, as and when these are made applicable to the banks.

As required by the RBI guidelines, the accounts of the Bank are converted into Ind AS format and submitted to the RBI at periodic intervals. The Bank has put in place a Board approved Policy on Expected Credit Loss (ECL) as per Indian Accounting Standards. The Bank carries out the Expected loss provisioning using Probability of Default (PD) and Loss Given Default (LGD) framework by considering historical data. The Bank has identified an IT solution for Ind AS reporting and is currently in the process of implementing the solution.

29. LOANS / GUARANTEES / INVESTMENTS

Pursuant to Section 186 (11) of the Act, the provisions of Section 186 of Act, except sub-section (1) do not apply to a loan made, guarantee given or security provided by a Banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in Schedule 8 of the Financial Statements as per the applicable provisions of Banking Regulation Act, 1949.

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Bank has in place, a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The particulars of complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the FY 2023-24 are as follows:

a. Number of complaints filed during the financial year: 21

b. Number of complaints disposed of during the financial year: 19

c. Number of complaints pending as on the end of the financial year: 2*

*Pending complaints as on March 31, 2024 have since been closed.

The Bank has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

31. DEPOSITORY SYSTEM

As the Members are aware, the Bank's Equity Shares are tradable in electronic form. As on March 31,2024, out of the Bank's total equity paid up share capital comprising of 1,13,48,87,279 Equity Shares, only 115 equity shares were in physical form and the remaining shares were in electronic form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail the facility of dematerialisation.

32. GENERAL DISCLOSURE

The Annual Return under MGT-7 as required under the Act is available on the website of the Bank click here.

There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the future operations of the Bank.

There are no agreements entered into as per clause 5A to para A of part A of schedule III of the SEBI Listing Regulations.

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:

• Issue of equity shares with differential rights as to Dividend, voting or otherwise

• The Bank has not issued any warrants, debentures, bonds or any non-convertible securities

• The Bank has not bought back its shares, pursuant to the provisions of Section 68 of Act and the Rules made thereunder.

• The financial statements of the Bank were not revised.

• The Bank has not failed to implement any corporate action.

• There was no application made / proceeding pending under the Insolvency and Bankruptcy Code, 2016.

• Managing Director or the Whole-time Directors of your Bank received any remuneration or commission during the year, from any of its subsidiaries - Not Applicable as the Bank does not have any subsidiaries.

• The Bank has not issued Sweat equity shares to the employees of the Bank under any scheme.

• The details regarding the difference in valuation between a one-time settlement and valuation for obtaining loans from banks or financial institutions, along with reasons, are not applicable.

• Being a banking company, provisions of section 148(1) of the Act, relating to maintenance of cost records is not applicable.

Acknowledgement

The Board of Directors are grateful to RBI, other Government and Regulatory Authorities, other Banks and Financial Institutions for their support and guidance. The Directors place on record their sincere thanks to the valued constituents of the Bank for their support and patronage and their deep sense of appreciation to all the employees of the Bank for their unstinted commitment to the growth of the Bank.