అకౌంట్స్ గమనికలుTamilnad Mercantile Bank Ltd.

Mar 31, 2026

• The Financial Statements have been prepared in conformity with Forms A & B of the Schedule III to the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 to the extent applicable and practices generally prevalent in the banking industry in India. During the year, all the 622 branches have been subjected to statutory audit.

• Reconciliation of inter branch / office adjustment accounts has been completed up to 31.03.2026.

b) Draw down from Reserve: During the year there has been no draw down from the reserves to the Profit & Loss account.

c) Basel III disclosures

In accordance with RBI Guidelines banks are required to make Pillar 3 disclosures under Basel III capital regulations. Accordingly, necessary disclosures have been made available on the Bank''s website https://www.tmb.bank.in/pages/basel-disclosures .These disclosures have not been subjected to audit by the Statutory Central Auditors.

b) Liquidity coverage ratio (LCR):

Quantitative information on Liquidity Coverage Ratio (LCR) for the year ended March 31, 2026 is given below:

The Liquidity Coverage Ratio (LCR) is one of the key reforms of Basel Committee to develop a more resilient banking sector. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately into cash to meet their liquidity needs for a 30 calendar days liquidity stress scenario. The LCR is expected to improve the banking sector''s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy. The LCR is calculated by dividing the bank''s stock of HQLA by its total net cash outflows over a 30-days stress period. HQLA of the bank is in the form of Government Securities and highly marketable and liquid securities / bonds. The Bank has been maintaining HQLA mainly in the form of SLR investments over and above the mandatory requirements.

The guidelines for LCR were effective January 1, 2015, with the minimum requirement at 60%, which would rise in equal annual steps to reach 100% on January 1, 2019. In order to accommodate the burden on banks cash flows on account of the Covid19 pandemic, RBI had permitted the banks to maintain LCR as under: vide their circular Ref DOR.BP.BC.No.65/21.04.098/2019-20 dated 17.04.2020.

iii) Qualitative disclosure about LCR:

The main drivers of LCR: The bank is having adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately into cash to meet liquidity needs for a 30 calendar days under liquidity stress scenario.

The net cash outflows for the next 30 days has been calculated after deducting the cash inflows from the outflows for the period. The inflows and outflows have been calculated based on RBI prescribed haircuts and run-off factors.

The Bank''s LCR is more than the minimum regulatory requirement for all the dates from April''25 to March''26. LCR of the bank for the Financial Year 2025-26 stood at 153.33%.

Composition of HQLA

The Level 1 Assets of our bank comprises of Cash in hand & Cash at ATM, Excess CRR and SLR, MSF & FALLCR are as per permitted extent. Level 1 asset is the main driver of HQLA of the Bank.

Level 2A and Level 2B assets are well within the regulatory cap of 40% and 15% of the stock of HQLA respectively after the required haircut.

Corporate Bonds not issued by a Bank/Financial/NBFC which have been rated AA- or above by an Eligible Credit Rating Agency have been classified under Level 2A assets. Similarly Bonds not issued by a Bank/Fl/NBFC which have been rated not lower than BBB- have been classified under level 2B Assets.

Outflows & Inflows:

Deposits are the main source of funds for the Bank.

Currency mismatch in LCR:

LCR is expected to be met and reported in a single currency. The bank is not having significant liabilities and HQLAs in any foreign currency.

Description of the degree of centralization of liquidity management and interaction between the group''s units: The Bank does not belong to any group and does not have any associate, subsidiaries, joint venture, etc. c) Net Stable Funding Ratio

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR. The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.

Net Stable Funding is a liquidity measure which is the indication of the long term liquidity health of the Bank is measured as under.

NSFR= (Available Stable Funding (ASF)) / (Required Stable Funding (RSF)) >=100%

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding sources, including contractual maturity of its liabilities and the differences in the tendency of different types of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity characteristics and residual maturities of the various assets held by the bank including Off-Balance Sheet (OBS) exposures. The result should minimum of 100% to ensure liquidity comfort.

The table given below sets out the un-weighted and weighted value of the NSFR components as on 31st March 2026 based on audited financials.

At a consolidated level, the NSFR of the bank is at 156.63% as on 31st March 2026 against the requirement of 100% as per RBI guidelines.

iv) Details of single borrower limit (SBL)/group borrower limit (GBL) exceeded by the Bank.

Single Borrower limit / Group Borrower limit has not been exceeded during the financial year (not exceeded the same for previous year) .

(e) Divergence in Asset Classification and provisioning:

Divergence in Asset classification and Provisioning for NPAs. The divergence observed by RBI for the financial year 2024-25 in respect of the Bank''s asset classification and provisioning under the extant prudential norms on income recognition, asset classification and provisioning is within the prescribed limit for disclosure.

(f) Disclosure of transfer of Loan exposures:

i) There were no loans that are not in default or stressed, transferred and acquired to or from other entities - NIL (For Previous FY 2024-25 - NIL). Bank has received Rs.1000 crore under Inter Bank Participation Certificate (IBPC).

ii) Particulars of stressed loans transferred acquired - NIL (For Previous FY 2024-25 - NIL)

*As defined in Section 3(7) of the Insolvency and Bankruptcy Code, 2016. “corporate person” means a company as defined in clause (20) of section 2 of the Companies Act,2013, a limited liability partnership, as defined in clause (n) of sub-section (l) of section 2 of the Limited Liability Partnership Act, 2008, or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider

Personal Loan ''Personal loans'', for the purpose of this circular shall have the same meaning as defined in the Circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 4, 2018 on “XBRL Returns - Harmonization of Banking Statistics”.

e) Factoring exposures - Nil (For Previous FY 2024-25 - NIL)

f) Intra-group exposures as on 31.03.2026

i) Total amount of intra-group exposures - NIL (For Previous FY 2024-25 - NIL)

ii) Total amount of top 20 intra-group exposures - NIL (For Previous FY 2024-25 - NIL)

iii) Percentage of intra-group exposures to total exposure of the bank on borrowers/customers - NIL (For Previous FY 2024-25 - NIL)

iv) Details of breach of limits on intra-group exposures and regulatory action thereon, if any - NIL (For Previous FY 2024-25 - NIL)

g) Unhedged foreign currency exposure (UFCE)

Bank has a laid down policy for hedging Foreign Currency Exposure, Bank shall insist on hedging the unhedged foreign currency risk of our Borrowers. In case of extreme resistance to hedge the Foreign Currency Exposure or bear the additional Interest Rate the Bank may stipulate, the Bank may on case to case merit, insist on the customer to place suitable term deposits with the bank under lien to the unhedged exposure to take care of the likely losses arising out of adverse currency movements.

UFCE shall exclude items which are effective hedge of each other natural hedges and financial hedges already made shall be excluded for arriving at the UFCE.

Bank shall make incremental provisioning and capital provisioning as under, as prescribed by RBI, and shall adopt the provisioning and capital provisioning requirements of RBI in respect of those entities on which total exposure of the Banking system is above g50 crore. Bank shall follow the RBI guidelines in respect of smaller entities (i.e. total exposure of the Banking system is at g50 crore or less) and shall make an incremental provisioning of 10 bps over and above the extant standard asset provisioning for the unhedged exposure.

The provisioning required for currency induced Credit Risk for the bank on account of the unhedged Foreign Currency Exposure of the borrowers was estimated at g1.60 Crore (Previous Year - g 2.06 Crore). Bank holds required provision towards the same. Bank holds additional capital of g NIL (previous year g16.54 Crore) towards the unhedged foreign currency exposure as per extant guidelines.

h) Disclosure on amortisation of expenditure on account of enhancement in family pension of employees of banks - Not Applicable. (Applicable for banks covered under the 11th Bipartite Settlement and Joint Note dated November 11, 2020)

i) Disclosure of Letters of Comfort (LoCs) issued by bank:-

The Bank has not issued any Letters of Comfort during the financial year 2025-2026.

j) Portfolio-level information on the use of funds raised from green deposits: -

The Bank has not raised any green deposit in the Financial year 2025-2026.

k) Pending Litigations with Directorate of Enforcement under FEMA on Transfer of certain shares and issue of Bonus shares thereon:-

The Bank had received a show-cause notice dated 17.12.2014 from the office of the Special Director, Directorate of Enforcement, Chennai, which was simultaneously issued to 26 persons/entities, including Standard Chartered Bank (scb) and SCB''s Head of operations, in connection with the alleged violation in transfer of shares on 13.05.2007, 26.12.2011 and 11.06.2012.

Subsequently, after considering all our submissions / written replies / responses / personal hearing, the Directorate of Enforcement had levied a penalty of Rs.16.99 Crores on our bank, vide its order dated 14.08.2020.

In the meantime, on 27.01.2021, the Deputy legal advisor of the Directorate of Enforcement has filed an appeal before the appellate tribunal for foreign exchange, New Delhi with a prayer for confiscation of shares/de-nova proceedings. We understand from the other noticee (previous Directors/officials) that they have also gone for appeal against the order of DoE. Considering the situation, Bank has also filed an appeal before the Appellate Tribunal, New Delhi on 04.11.2022.

On 05.12.2022, the Appellate Tribunal was not inclined to hear the main issue in the absence of pre-deposit of the penalty amount before the Tribunal, as required under law. We have therefore agreed to deposit the amount of penalty and the penalty was deposited on 16.12.2022 and the bank is having necessary provision.

Pending disposal of the appeal before the Appellate Tribunal, the Bank has fully provided and pre-deposited the penalty of 51699 Lakhs on December 16, 2022, relating to alleged irregularity under FEMA in respect of transfer of

shares, during the years 2007, 2011 & 2012 levied by Directorate of Enforcement. The Bank has also fully provided the penalty of g 225 Lakhs levied by Directorate of Enforcement for alleged FEMA Violation against 11 persons who were Directors / Company Secretary of the Bank at the time of transfer of above shares and pre-deposited 20% thereof amounting to g45 Lakhs. Further, the bank has also provided a sum of g2 Lakhs on the basis of legal opinion towards leviable penalty in respect of show-cause notice from Directorate of Enforcement, for the issue of Bonus Shares to the above-said transferees.

.l) Transfer of Dividend and shares to IEPF:

Unclaimed Dividend and shares pertaining to the Financial Years 2015-16 (2nd Interim), 2016-17 (1st Interim), 2016-17 (2nd Interim), 2017-18 (1st Interim & 2nd Interim) have been transferred to IEPF during the FY 2025-26.

15) Disclosure Requirements as per Accounting Standards where RBI has issued guidelines in respect of disclosure items for Notes to Accounts:

15.1 Changes in Accounting Policies (AS-5):

There were no material pertaining to prior period Income /Expenditure requiring disclosure as per AS5.

The bank has applied its significant accounting policies in the preparation of these financial statements, consistent with those followed in the previous financial years except in relation to performance based incentive

15.2Revenue Recognition (AS-9):

The heads of income recognized on cash basis are neither material enough nor do they require disclosure under AS 9 on Revenue Recognition.

Performance Based Incentive:

The Board has formulated a policy for variable pay based on the performance linked scorecard methodology for achievement of targets of the employees and the same is provided on accrual basis as against the past practice of accounting the incentive in the year of payment. As a result of the above change profit for the current financial year is lower by Rs.49.80cr with corresponding increase in other liabilities.

ESOP:

In line with the policy of the Bank, duly approved by the shareholders, the Bank during the year granted 7879 equity shares under the scheme Tamilnad Mercantile Bank Ltd Employee Stock Option Plan, 2024 (TMB ESOP Plan 2024) which shall vest over the next three years. The ESOP expenses of Rs.8.67 Lakhs has been recognized in the Statement of Profit and Loss for the year based on fair value option estimated using Black-Scholes Merton formula.

Impact of the New Labour Code:

The management has taken into consideration the New Labour Codes notified by Government of India on November 21, 2025. Based on the assessment, the Bank is of the opinion that the incremental impact is not material for the year ended March 31,2026 and accordingly no provision is considered for the year. The Bank will continue to monitor the finalization of Central and State Rules and clarifications issued by the Government on the New Labour Codes and would provide for appropriate accounting effects on the basis of such developments, as needed.

1. Assets and Liabilities wherever directly related to segments have been accordingly allocated to segments and wherever not directly related have been allocated on the basis of segment revenue.

2. The Bank operates only in Domestic Segment.

3. Segment information is prepared on the basis of management estimates/ assumptions and is based on internal reporting systems. Methodology adopted in compiling the above information has been relied upon by the auditors

PART A: Operational Segments:

For the purpose of segment reporting, the reportable segments are identified into Treasury, Corporate/

Wholesale banking, Retail banking and other banking operations, in compliance with RBI guidelines. Brief

description of activities of each segment and revenue attributable thereto is as under:

1) Treasury portfolio comprises of investments in Central and State Government securities, debt instruments of Banks, FIs, Insurance companies, PSUs and corporates, certificate of deposits, equity shares, mutual funds etc. as well as forward contracts, derivatives and foreign exchange operations on proprietary account and for customers, including trading in these instruments as well as borrowing and lending operations. Treasury income is primarily earned through interest on investments, forex income as well as income from securities trading; expenditure includes interest on funds borrowed and other allocated overheads.

2) Corporate/ Wholesale banking includes all advances to trusts, partnership firms, companies, and statutory bodies, which are not included under Retail Banking. Revenue comprises of interest and fees / charges earned from such clients and expenses are those incurred on interest towards funds utilized and other allocated overheads.

3) Retail banking comprises of lending of funds and other banking services to any legal person including small business customers, on the basis of the borrower, nature of the product, granularity of the exposure and quantum thereof. Revenue comprises of interest and fees / charges earned from such clients and expenses are those incurred on interest towards funds utilized and other allocated overheads.

15.15. Issue of fresh shares:NIL

15.16. Dividend:

Final Dividend (paid during the year 2025-26)

The Board, in its meeting held on 23.04.2025, had approved/declared final dividend for the financial year 202425, at the rate of S11 /- (Rupees Eleven only) per share, i.e.110% on the fully paid up equity shares of S10/- each. The same was approved by shareholders in the Annual General Meeting held on August 08, 2025. The record date for the same was fixed as Friday, August 01, 2025. The payout (15,83,51,454 shares * S11 = ^174,18,65,994/-) process was completed by 20.08.2025.

Proposed dividend recommendation if any:

A final dividend for the financial year 2025-26, has been proposed at the rate of S12.50/- per share, i.e 125% on the fully paid up equity shares of S10/- each subject to the approval of the shareholders in the upcoming Annual General Meeting.

15.17. Corporate Social Responsibility:

The bank was required to spend Rs. 29.07 crore (Previous year Rs. 26.08 crore) during the financial year 2025-26 towards Corporate Social Responsibility (CSR) in accordance with companies Act, 2013. The bank has spent an amount of Rs. 29.07 crore (Previous year Rs. 26.08 crore) in respect of CSR activities across the country. None of the CSR expenditure incurred by the Bank is to entities controlled by related parties identified by the bank as per Accounting Standard 18, Related Party Disclosures. The amount spent as above is for the purpose other than for construction/acquisition of any asset in 2025-26/2024-2025.

16 Fixed assets (Land and Building) include property held in Chennai, land (UDS 753.117 sqft Rs.10.76 lakh) and building (Rs.11.10 lakh) purchased during January 1993. While the UDS of land was registered in Bank''s name, the building was to be handed over to the Bank after construction, by the corporate debtor, who are in corporate insolvency resolution process, which they failed to do so and the bank had preferred a suit in Madras High Court against them for specific performance and damages which is pending due to moratorium imposed by NCLT. Further, the Bank has already filed necessary claims with the resolution professional/liquidator appointed by NCLT under IBC, 2016.

In addition to the above, our Bank has filed necessary petitions before NCLT, Chennai(lA.No.871/2025) seeking the following reliefs;

1) To direct the liquidator to hand over the possession of the property to our Bank.

2) To treat all the rents collected over the premises during the CIRP Period from the date of commencement to upto the date and treat the same as Interim Finance from our Bank and hold the same shall have priority as per Section 53 of the IBC, 2016

3) To direct the liquidator to amend the Asset Memorandum by excluding our Property and the same being not part of the Liquidation estate as per Section 36(4) of IBC.

At present the case before NCLT is posted to 04.06.2026 for hearing.

17 Pursuant to the statutory regulations outlined under the Reserve Bank of India guidelines on Compensation of Whole Time Directors/ Chief Executive Officers/ Material Risk Takers and Control Function staff (RBI/2019-20/89 DOR.Appt.BC.No.23/29.67.001/2019-20 dated November 4, 2019), the Bank has implemented ESOP Scheme known as Tamilnad Mercantile Bank Limited (TMB) Employee Stock Option Plan, 2024 (''TMB ESOP 2024''). The ESOP plan was approved by the Board in their meeting dated January 17, 2025 and subsequently it was approved by the Shareholders on March 12,2025.

18 In respect of certain branches/offices where additional information was required, the data available at Controlling/Head office was considered.

19 Previous year''s figures have been regrouped wherever necessary to conform to this year''s classification.

20 Figures have been rounded off to the nearest thousand rupees in the Financial Statements.

---

Mar 31, 2025

19. ACCOUNTING FOR PROVISIONS, CONTINGENT

LIABILITIES AND CONTINGENT ASSETS

a) As per the Accounting Standard 29, the bank recognizes
provisions only when it has a present obligation as a
result of past event, it is probable that an outflow of
resources is required to settle the obligation and when
a reliable estimate of the amount can be made. The
required disclosure for contingent liability is made on
possible obligation that arises from past events, the
existence of which depends on occurrence or non¬
occurrence of future event not under control.

b) Contingent assets are not recognized in the financial
statement since this may result in the recognition of
income that may never be realized.

SCHEDULE - 18: Disclosure in Financial Statements - ''Notes to Accounts''

• The Financial Statements have been prepared in conformity with Forms A & B of the Schedule III to the Banking
Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read together with paragraph 7 of the
Companies (Accounts) Rules 2014 to the extent applicable and practices generally prevalent in the banking
industry in India. During the year, all the 578 branches have been subjected to statutory audit.

• Reconciliation of inter branch / office adjustment accounts has been completed up to 31.03.2025.

b) Draw down from Reserve: During the year there has been no draw down from the reserves to the Profit
& Loss account.

c) Basel III disclosures

In accordance with RBI Guidelines banks are required to make Pillar 3 disclosures under Basel III capital regulations.
Accordingly, necessary disclosures have been made available on the Bank''s website https://www.tmb.in/pages/
basel-disclosures.These disclosures have not been subjected to audit by the Statutory Central Auditors.

b) Liquidity coverage ratio (LCR):

Quantitative information on Liquidity Coverage Ratio (LCR) for the year ended March 31, 2025 is given below:

The Liquidity Coverage Ratio (LCR) is one of the key reforms of Basel Committee to develop a more resilient
banking sector. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks
by ensuring that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be
converted easily and immediately into cash to meet their liquidity needs for a 30 calendar days liquidity stress
scenario. The LCR is expected to improve the banking sector''s ability to absorb shocks arising from financial
and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real
economy. The LCR is calculated by dividing the bank''s stock of HQLA by its total net cash outflows over a 30-
days stress period. HQLA of the bank is in the form of Government Securities and highly marketable and liquid
securities / bonds. The Bank has been maintaining HQLA mainly in the form of SLR investments over and above
the mandatory requirements.

The guidelines for LCR were effective January 1, 2015, with the minimum requirement at 60%, which would rise in
equal annual steps to reach 100% on January 1, 2019. In order to accommodate the burden on banks cash flows
on account of the Covid19 pandemic, RBI had permitted the banks to maintain LCR as under: vide their circular Ref
DOR.BP.BC.No.65/21.04.098/2019-20 dated 17.04.2020.

iii) Qualitative disclosure about LCR:

The main drivers of LCR: The bank is having adequate stock of unencumbered high-quality liquid assets (HQLA)
that can be converted easily and immediately into cash to meet liquidity needs for a 30 calendar days under
liquidity stress scenario.

The net cash outflows for the next 30 days has been calculated after deducting the cash inflows from the outflows
for the period. The inflows and outflows have been calculated based on RBI prescribed haircuts and run-off factors.

The Bank''s LCR is more than the minimum regulatory requirement for all the dates from April''24 to March''25. LCR
of the bank for the Annual Financial Year 2024-25 stood at 163.29%.

Composition of HQLA

The Level 1 Assets of our bank comprises of Cash in hand & Cash at ATM, Excess CRR and SLR, MSF & FALLCR are as
per permitted extent. Level 1 asset is the main driver of HQLA of the Bank.

Level 2A and Level 2B assets are well within the regulatory cap of 40% and 15% of the stock of HQLA respectively
after the required haircut.

Corporate Bonds not issued by a Bank/Financial/NBFC which have been rated AA- or above by an Eligible Credit
Rating Agency have been classified under Level 2A assets. Similarly Bonds not issued by a Bank/FI/NBFC which
have been rated not lower than BBB- have been classified under level 2B Assets.

Outflows & Inflows:

Deposits are the main source of funds for the Bank.

Currency mismatch in LCR:

LCR is expected to be met and reported in a single currency. The bank is not having significant liabilities and
HQLAs in any foreign currency.

Description of the degree of centralization of liquidity management and interaction between the group''s units:

The Bank does not belong to any group and does not have any associate, subsidiaries, joint venture, etc.

C) Net Stable Funding Ratio

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level
with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR.
The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.

Net Stable Funding is a liquidity measure which is the indication of the long term liquidity health of the Bank and
is measured as under.

NSFR= (Available Stable Funding (ASF)) / (Required Stable Funding (RSF)) >=100%

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding
sources, including contractual maturity of its liabilities and the differences in the tendency of different types
of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity
characteristics and residual maturities of the various assets held by the bank including Off-Balance Sheet (OBS)
exposures. The result should be minimum of 100% to ensure liquidity comfort.

The table given below sets out the un-weighted and weighted value of the NSFR components as on 31st March
2025 based on audited financials.

At a consolidated level, the NSFR of the bank is at 163.90% as on 31st March 2025 (174.15% as on 31st March 2024)
against the requirement of 100% as per RBI guideline

iii) Details of single borrower limit (SBL)/group borrower limit (GBL) exceeded by the Bank.

Single Borrower limit / Group Borrower limit has not been exceeded during the financial year (not exceeded
the same for previous year) .

e) Divergence in Asset Classification and provisioning:

Divergence in Asset classification and Provisioning for NPAs. The divergence observed by RBI for the financial
year 2023-24 in respect of the Bank''s asset classification and provisioning under the extant prudential norms on
income recognition, asset classification and provisioning is within the prescribed limit for disclosure.

f) Disclosure of transfer of Loan exposures:

i) Loans that are not in default or stressed, transferred and acquired to or from other entities - NIL (For Previous
FY 2023-24 - NIL)

ii) Particulars of stressed loans transferred acquired - NIL (For Previous FY 2023-24 - NIL)

e) Factoring exposures - Nil (For Previous FY 2023-24 - NIL)

f) Intra-group exposures as on 31.03.2025

i) Total amount of intra-group exposures - NIL (For Previous FY 2023-24 - NIL)

ii) Total amount of top 20 intra-group exposures - NIL (For Previous FY 2023-24 - NIL)

iii) Percentage of intra-group exposures to total exposure of the bank on borrowers/customers - NIL (For
Previous FY 2023-24 - NIL)

iv) Details of breach of limits on intra-group exposures and regulatory action thereon, if any - NIL (For Previous
FY 2023-24 - NIL)

g) Unhedged foreign currency exposure (UFCE)

Bank has a laid down policy for hedging Foreign Currency Exposure, Bank insists on hedging the unhedged
foreign currency risk of our Borrowers. In case of extreme resistance to hedge the Foreign Currency Exposure or
bear the additional Interest Rate the Bank insists on case to case basis on the customer to place suitable term
deposits with the bank under lien to the unhedged exposure to take care of the likely losses arising out of adverse
currency movements.

Items which are effective hedge of each other, natural hedges and financial hedges already made are excluded
for arriving at the UFCE.

Bank makes incremental provisioning and capital provisioning as prescribed by RBI, and adopts the provisioning
and capital provisioning requirements of RBI in respect of those entities on which total exposure of the Banking
system is above H50 crore. Bank follows the RBI guidelines in respect of smaller entities (i.e. total exposure of the
Banking system is at H50 crore or less) and make an incremental provisioning of 10 bps over and above the extant
standard asset provisioning for the unhedged exposure.

The provisioning required for currency induced Credit Risk for the bank on account of the unhedged Foreign
Currency Exposure of the borrowers was estimated at H2.06 Crore (Previous Year - H 1.90 Crore). Bank holds
required provision towards the same. Bank holds additional capital of H 16.54 Crore (Previous Year - H3.19 Crore)
towards the unhedged foreign currency exposure as per extant guidelines.

j) Pending Litigations with Directorate of Enforcement under FEMA on Transfer of certain shares and issue
of Bonus shares thereon:-

The Bank had received a show-cause notice dated 17.12.2014 from the office of the Special Director, Directorate
of Enforcement, Chennai, which was simultaneously issued to 26 persons/entities, including Standard Chartered
Bank (SCB) and SCB''s Head of operations, in connection with the alleged violation in transfer of shares on
13.05.2007, 26.12.2011 and 11.06.2012.

Subsequently, after considering all our submissions / written replies / responses / personal hearing, the Directorate
of Enforcement had levied a penalty of Rs.16.99 Crores on our bank, vide its order dated 14.08.2020.

In the meantime, on 27.01.2021, the Deputy legal advisor of the Directorate of Enforcement has filed an appeal
before the appellate tribunal for foreign exchange, New Delhi with a prayer for confiscation of shares/de-nova
proceedings. We understand from the other noticee (previous Directors/officials) that they have also gone for
appeal against the order of DoE. Considering the situation, Bank has also filed an appeal before the Appellate
Tribunal, New Delhi on 04.11.2022.

On 05.12.2022, the Appellate Tribunal was not inclined to hear the main issue in the absence of pre-deposit of the
penalty amount before the Tribunal, as required under law. We have therefore agreed to deposit the amount of
penalty and the penalty was deposited on 16.12.2022 and the bank is having necessary provision.

The Bank has also pre-deposited amount of Rs.45 Lakhs, on May 25, 2024, being 20% of Rs. 225 Lakhs, levied by
Directorate of Enforcement for alleged FEMA violation against 11 persons who were Directors / Company Secretary
of the Bank at the time of transfer of above shares and is shown as Contingent Liabilities. Further, the bank has
also provided a sum of Rs. 2 Lakhs on the basis of legal opinion towards leviable penalty in respect of show-cause
notice from Directorate of Enforcement, for the issue of Bonus Shares to the above-said transferees.

k) Transfer of Dividend and shares to IEPF:

Unclaimed Dividend and shares pertaining to the Financial Years 2009-13, 2015-16 (1st Interim) have been
transferred to IEPF during the FY 2024-25 and we are in the process of transferring the Unclaimed Dividend and
shares pertaining to the Financial Years 2015-16 (2nd Interim), 2016-17 (1st Interim), 2016-17 (2nd Interim) which will
be completed during the FY 2025-26.

15) Disclosure Requirements as per Accounting Standards where RBI has issued guidelines in
respect of disclosure items for Notes to Accounts:

15.1 Changes in Accounting Policies (AS-5):

There were no material Income/Expenditure pertaining to prior period requiring disclosure as per AS5.

The Bank has applied its significant accounting policies in the preparation of these financial statements, consistent
with those followed in the annual financial statements for the year ended 31 March 2024 except for classification,
measurement and valuation of the Bank''s investments which are carried out in accordance with the RBI Master
Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023
dated September 12, 2023 (the RBI Investment Master Direction) effective April 01, 2024.

Transitional adjustment on account of Available For Sale (AFS) portfolio and other securities has been credited to
opening "General Reserve" to the extent H5695 Lakhs (net of taxes) (Which includes reversal of provision for depreciation
of H 3067 Lakhs and transfer of investment reserve of H 2534 Lakhs).

Subsequently, the valuation gains or loss for the year ended march 31, 2025 of performing investments under available
for sale (AFS) and Fair Value through Profit and Loss (''FVTPL'') (Including Held for Trading (HFT)) categories have been
recognised through AFS reserve and profit and loss account respectively. Accordingly, the amounts for periods prior to
April 1, 2024 are not comparable.

15.2 Revenue Recognition (AS-9):

The heads of income recognized on cash basis are neither material enough nor do they require disclosure under AS 9
on Revenue Recognition.

2) Corporate/ Wholesale banking includes all advances to trusts, partnership firms, companies, and statutory bodies,
which are not included under Retail Banking. Revenue comprises of interest and fees / charges earned from such
clients and expenses are those incurred on interest towards funds utilized and other allocated overheads.

3) Retail banking comprises of lending of funds and other banking services to any legal person including small
business customers, on the basis of the borrower, nature of the product, granularity of the exposure and quantum
thereof. Revenue comprises of interest and fees / charges earned from such clients and expenses are those
incurred on interest towards funds utilized and other allocated overheads.

4) Other banking operations includes items not included above i.e. para-banking activities like bancassurance, third
party product distribution, demat services and other banking transactions and includes items like deposits in
RIDF, MSME Funds etc. Income earned from such services and costs related thereto are reported thereunder.

15.9. Accounting for Investment in associates in CFS (AS-23)

The Bank has no associates. Hence reporting under AS 23 is not applicable.

15.10. Discontinuing Operation (AS-24):

The bank has not discontinued any operations. Hence reporting under AS 24 is not applicable.

15.11. Intangible assets (AS-26)

Depreciation on software is calculated on straight line method at 33.33%.

15.12. Impairment of Assets (AS-28)

In the opinion of the management, there is no impairment to the assets to which AS 28 "Impairment of Assets" applies.

15.13. Contingent Liabilities and Provisions (AS-29)

The details of provisions and contingencies, contingent liabilities, the movement of provisions on NPA''s and
depreciation on investment which are considered material are disclosed elsewhere under the appropriate headings
as per RBI guidelines.

15.15. Issue of fresh shares:NIL

15.16. Dividend:

Final Dividend (paid during the year 2024-25)

The Board, in its meeting held on 22.04.2024, had approved/declared Final dividend for the financial year 2023-24,
at the rate of Rs. 10 /- (Rupees Ten only) per share, i.e.100% on the fully paid up equity shares of Rs.10/- each. The
same was approved by shareholders in the Annual General Meeting held on 27.09.2024. The record date for the same
was fixed as Tuesday, September 20, 2024. The payout (Rs. 1,58,35,14,540/- Rs.10/- x 15,83,51,454 shares) process was
completed by 08.10.2024.

Proposed dividend recommendation if any:

A final dividend for the financial year 2024-25, has been proposed at the rate of H11/- (Rupees Eleven per share), i.e 110%
on the fully paid up equity shares of H10/- each subject to the approval of the shareholders in the upcoming Annual
General Meeting.

15.17. Corporate Social Responsibility:

The bank was required to spend Rs.26.08 crore (Previous year Rs. 22.10 crore) during the financial year 2024-25
towards Corporate Social Responsibility (CSR) in accordance with companies Act, 2013. The bank has spent an
amount of Rs.26.08 crore (Previous year Rs. 22.10 crore) in respect of CSR activities across the country. None of the CSR
expenditure incurred by the Bank is to entities controlled by related parties identified by the bank as per Accounting
Standard 18, Related Party Disclosures. The amount spent as above is for the purpose other than for construction/
acquisition of any asset in 2024-25/2023-24.

16 Fixed assets (Land and Building) include property held in Chennai, land (UDS 753.117 sqft Rs.10.76 lakh) and building
(Rs.11.10 lakh) purchased during January 1993. While the UDS of land was registered in Bank''s name, the building
was to be handed over to the Bank after construction, by the corporate debtor, who are in corporate insolvency
resolution process, which they failed to do so and the bank had preferred a suit in Madras High Court against
them for specific performance and damages which is pending.

17 TMB Employee stock option plan 2024 (TMB ESOP Plan 2024), as approved by the shareholders in March 2025, is
yet to be implemented.

18 In respect of certain branches/offices where additional information was required, the data available at Controlling/
Head office was considered.

19 Previous year''s figures have been regrouped wherever necessary to conform to this year''s classification.

20 Figures have been rounded off to the nearest thousand rupees in the Financial Statements.

Sd/-

Salee S Nair

Managing Director & CEO
DIN: 09231101

Sd/- Sd/- Sd/- Sd/-

M.D.Vincent A.Niranjan Sankar S.R.Ashok D.N.Nirranjan Kani

Executive Director Director Director Director

DIN: 09850306 DIN: 00084014 DIN: 07933713 DIN: 00455352

Sd/- Sd/- Sd/- Sd/-

K.V.Rama Moorthy B.Prabaharan C.Chiranjeeviraj S.Sridharan

Director Director Director Director

DIN: 07034994 DIN: 00209875 DIN: 08730382 DIN: 07205781

Sd/- Sd/- Sd/- Sd/-

R.Deepak Shankar R.Kanagavalli A.Shidambaranathan C.S.Ram Kumar

Director Director Director Director

DIN: 05223027 DIN: 00883998 DIN: 02904738 DIN: 09777115

Sd/- Sd/- Sd/- Sd/-

Thomas Mathew D.Ramesh V.Jayaraman R.Ananda Ganesan

Director Executive Vice President Executive Vice President Executive Vice President

DIN: 10642487

Sd/- Sd/- Sd/-

Sd/- K.Vijayan P.R.Ashok Kumar S. IIangovan

J. Sundaresh Kumar Chief Quality Control Officer Country Head Branch Banking Head of Internal Audit

Chief Compliance Officer

Sd/- Sd/- Sd/-

Sd/- Laxman Karkala Kudva Sanjoy Kumar Goel Swapnil Yelgaonkar

K. Arvind Chief Risk Officer Chief Financial Officer Company Secretary

Head of Integrated Treasury

^{Vide our report of even date attached} vide our report of even date attached

^{For Sundaram} & ^Srinivasan For Chandran & Raman

^{Chartered Accountants} Chartered Accountants

^{FRN No. 004207S} _{FRN No. 000571S}

^Sd/- Sd/-

^Thoothukudi S Ramkumar S G Kalyanaraman

23.04.2025 Partner (M.No.238820) Partner (M.No.010652)

---

Mar 31, 2024

19. ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

a) As per the Accounting Standard 29, the bank recognizes provisions only when it has a present obligation as a result of past event, it is probable that an outflow of resources is required to settle the obligation and when a reliable estimate of the amount can be made. The required disclosure for contingent liability is made on possible obligation that arises from past events, the existence of which depends on occurrence or nonoccurrence of future event not under control.

b) Contingent assets are not recognized in the financial statement since this may result in the recognition of income that may never be realized.

Sd/

S.Krishnan

Managing Director & CEO

DIN: 07261965

Sd / Sd / Sd / Sd/ Sd/

A.Niranjan Sankar D.N.Nirranjan Kani S.R.Ashok B.Prabaharan C.Chiranjeeviraj

Director Director Director Director Director

DIN: 00084014 DIN: 00455352 DIN: 07933713 DIN: 00209875 DIN: 08730382

Sd/ Sd/ Sd/ Sd/ Sd/ Sd/

S.Ezhil Jothi S.Sridharan C.S.Ram Kumar Thomas Mathew V.Jayaraman D. Inbamani

Director Director Director Director General G_enerai

IN: 07772888 DIN: 07205781 DIN: 09777115 DIN: 10642487 ^{Manager Manager}

Sd/ Sd/ Sd/ Sd/ Sd/ Sd/

P.Suriaraj D.Ramesh J.Sundaresh Kumar K.Vijayan P.R.Ashok Kumar S.Narayanan

General General General General General General

Manager Manager Manager Manager Manager Manager

b) draw down from reserve: During the year there has been no draw down from the reserves to the Profit & Loss account. C) BASEL III DISCLOSURES

In accordance with RBI circular DOR.CAP.REC.3/21.06.201/2022-23 dated 01st April 2022, read together with RBI circular DBR. No.BP. BC.1/21.06.201/2015-16 dated 1st July 2015, Banks are required to make Pillar 3 disclosures under Basel III capital regulations. Accordingly, necessary disclosures have been made available on the Bank''s website https://www.tmb.in/pages/basel-disclosures.These disclosures have not been subjected to audit by the Statutory Central Auditors.

b) LIQUIDITY COVERAGE RATIO (LCR)

Quantitative information on Liquidity Coverage Ratio (LCR) for the year ended March 31, 2024 is given below

The Liquidity Coverage Ratio (LCR) is one of the key reforms of Basel Committee to develop a more resilient banking sector. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately into cash to meet their liquidity needs for a 30 calendar days liquidity stress scenario. The LCR is expected to improve the banking sector''s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy. The LCR is calculated by dividing the bank''s stock of HQLA by its total net cash outflows over a 30-days stress period. HQLA of the bank is in the form of Government Securities and highly marketable and liquid securities/ bonds. The Bank has been maintaining HQLA mainly in the form of SLR investments over and above the mandatory requirements.

The guidelines for LCR were effective January 1, 2015, with the minimum requirement at 60%, which would rise in equal annual

THE MAIN DRIVERS OF LCR RESULTS

The bank is having an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately in markets into cash to meet liquidity needs for a 30 calendar days under liquidity stress scenario.

The net cash outflows for the next 30 days has been calculated after deducting the cash inflows from the outflows for the period. The inflows and outflows have been calculated based on RBI prescribed haircuts and run-off factors.

The Bank''s LCR is more than the minimum regulatory requirement for all the dates from April''23 to March''24. LCR of the bank for the Annual Financial Year 2023-24 stood a 199.58%

COMPOSITION OF HQLA

The Level 1 Assets of our bank comprises of Cash in hand & Cash at ATM, Excess CRR and SLR, MSF & FALLCR are as per permitted extent. Level 1 asset is the main driver of HQLA of the Bank.

Level 2A and Level 2B assets are well within the regulatory cap of 40% and 15% of the stock of HQLA respectively after the required haircut.

Corporate Bonds not issued by a Bank/Financial/NBFC which have been rated AA- or above by an Eligible Credit Rating Agency have been classified under Level 2A assets. Similarly Bonds not issued by a Bank/FI/NBFC which have been rated not lower than BBB- have been classified under level 2B Assets.

OUTFLOWS & INFLOWS

Deposits are the main source of funds for the Bank.

CURRENCY MISMATCH IN LCR

LCR is expected to be met and reported in a single currency. The bank is not having significant liabilities and HQLAs in any foreign currency.

DESCRIPTION OF THE DEGREE OF CENTRALIZATION OF LIQUIDITY MANAGEMENT AND INTERACTION BETWEEN THE GROUP''S UNITS

The Bank does not belong to any group and does not have any associate, subsidiaries, joint venture, etc.

NET STABLE FUNDING RATIO

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR. The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.

Net Stable Funding is a liquidity measure which is the indication of the long term liquidity health of the Bank is measured as under.

NSFR= (AVAILABLE STABLE FUNDING (ASF)/ (REQUIRED STABLE FUNDING (RSF)) >=100%

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding sources, including contractual maturity of its liabilities and the differences in the tendency of different types of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity characteristics and residual maturities of the various assets held by the bank including Off-Balance Sheet (OBS) exposures. The result should minimum of 100% to ensure liquidity comfort.

The table given below sets out the un-weighted and weighted value of the NSFR components as on 31st March 2024 based on audited financials.

At a consolidated level, the NSFR of the bank comes out to 174.15% as on 31st March 2024 against the requirement of 100% as per RBI guidelines.

BANK INVESTMENT IN LAKSHMI VILAS BANK LIMITED (LVB)

The Bank had invested in the Tier II bonds of LVB to the tune of ¥5 Crore. As per RBI''s scheme of Amalgamation with DBS Bank India with effect from 27 Nov 2020, LVB ceased to exist and the entire amount of the share Capital & Reserves and Tier II bonds were written off. The said amalgamation scheme has been challenged at various High Courts by some of the investors in the above said Tier II Bonds and as per orders of Hon''ble Supreme Court of India the said writ petitions were now transferred to the Hon''ble High Court of Madras. Considering the same, The Bank had treated the investment as NPI and holding 100 % provision.

Instructions : For the purpose of disclosure in the above format, the following instructions are required to be followed

₁ Advances restructured under CDR mechanism, SME Debt restructuring mechanism and other categories of restructuring should be shown separately

Under each of the above categories, restructured advances under their present asset classification i.e, standard, sub standard, doubtful and loss '' should be shown separately.

Under the standard restructured account; accounts, which have objective evidence of no longer having inherent credit weakness, need not be disclosed. For this purpose, an objective criteria for accounts not having inherent credit weakness is discussed below

• As regards restructured accounts classified as standard advances, in view of the inherent credit weakness in such accounts, banks are required to make a general provision higher than what is required for otherwise standard accounts in the first two years from the date of restructuring. In case of moratorium on payment of interest/ principal after restructuring, such advances attract the higher general provision for the period covering moratorium and two years thereafter.

• Further, restructured standard unrated corporate exposures and housing loans are also subjected to an additional risk weight of 25 percentage point with a view to reflect the higher element of inherent risk which may be latent in such entities.

• The aforementioned [ (a) and (b) additional / higher provision and risk weight cease to be applicable after the prescribed period if the performance is as per the rescheduled programme. However, the diminution in the fair value will have to be assessed on each balance sheet date and provision should be made as required.

• Restructured accounts classified as sub standard and doubtful advances, when upgraded to standard category also attract a general provision higher than what is required for otherwise standard accounts for the first year from the date of up gradation, in terms of extant guidelines on provisioning requirement of restructured accounts. This higher provision ceases to be applicable after one year from the date of upgradation if the performance of the account is as per the rescheduled programme. However , the diminution in the fair value will have to be assessed on each balance sheet date and provision made as required.

• Once the higher provisions and/or risk weights ( if applicable and as prescribed from time to time by RBI ) on restructured standard advances revert to the normal level on account of satisfactory performance during the prescribed periods as indicated above, such advances, henceforth,

: would no longer be required to be disclosed by banks as restructured standard accounts in the " Notes on Accounts " in their Annual Balance Sheets.

j However , banks should keep an internal record of such restructured accounts till the provisions for diminution in fair value of such accounts are

> maintained.

s

DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING

Divergence in Asset classification and Provisioning for NPAs. The divergence observed by RBI for the financial years 2022-23 in respect of the Bank''s asset classification and provisioning under the extant prudential norms on income recognition, asset classification and provisioning is below the regulatory requirement for disclosure and hence the disclosure as required under RBI Master Direction on ''Financial Statements-Presentation and Disclosures'' on ''Divergence in the asset classification and provisioning is not required to be made

DISCLOSURE OF TRANSFER OF LOAN EXPOSURES: NIL

• There were no loans that are not in default or stressed, transferred and acquired to or from other entities

COVID -19

COVID-19 pandemic has and had an extraordinary impact on macroeconomic conditions in India and around the world during the past two years. The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and Individual activities, had led to volatility in global and Indian financial markets and a decrease in global and local economic activities. The revival of economic activity has since improved supported by relaxation of restrictions due to administration of the COVID vaccines to a large population in the country. The extent to which any new wave of COVID-19 pandemic will impact the Bank results will depend on ongoing as well as future developments, including, among other things, any new information concerning the severity of the COVID-19 pandemic, and any action to contain its spread or mitigate its impact whether government-mandated or elected by us. On a prudent basis, the Bank holds a provision of ?250 crores as at 31st March, 2024 against the potential impact of COVID-19 & other uncertainties (previous year 31.3.2023: Rs.300 crores).

---

Mar 31, 2023

> The Financial Statements have been prepared in conformity with Forms A & B of the Schedule III to the Banking Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 to the extent applicable and practices generally prevalent in the banking industry in India. During the year, all the 530 branches have been subjected to statutory audit.

> Reconciliation of inter branch / office adjustment accounts has been completed up to 31.03.2023.

b) Liquidity coverage ratio (LCR):

Quantitative information on Liquidity Coverage Ratio (LCR) for the year ended March 31, 2023 is given below:

The Liquidity Coverage Ratio (LCR) is one of the Basel Committee''s key reforms to develop a more resilient banking sector. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately into cash to meet their liquidity needs for a 30 calendar days liquidity stress scenario. The LCR is expected to improve the banking sector''s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy. The LCR is calculated by dividing a bank''s stock of HQLA by its total net cash outflows over a 30-days stress period. HQLA of bank is in the form of Government Securities and highly marketable and liquid securities / bonds.

The Bank has been maintaining HQLA mainly in the form of SLR investments over and above the mandatory requirements.The guidelines for LCR were effective January 1, 2015, with the minimum requirement at 60%, which would rise in equal annual steps to reach 100% on January 1, 2019. In order to accommodate the burden on banks cash flows on account of the Covid19 pandemic, RBI had permitted the banks to maintain LCR as under: vide their circular Ref DOR.BP.BC.No.65/21.04.098/2019-20 dated 17.04.2020.

DATE	LCR TO BE MAINTAINED
17.04.2020 to 30.09.2020	80%
01.10.2020 to 31.03.2021	90%
01.04.2021 onwards	100%

III) QUALITATIVE DISCLOSURE ABOUT LCR:

The main drivers of LCR Results:

The bank is having an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted easily and immediately in markets into cash to meet liquidity needs for a 30 calendar days under liquidity stress scenario.

The net cash outflows for the next 30 days has been calculated after deducting the cash inflows from the outflows for the period. The inflows and outflows have been calculated based on RBI prescribed haircuts and run-off factors.

The Bank''s LCR has been more than the minimum regulatory requirement for all the dates from April''22 to March''23. LCR of the bank for the Annual Financial Year 2022-23 stood at 211.65%.

Composition of HQLA:

The Level 1 Assets of our bank comprises of Cash in hand & Cash at ATM, Excess CRR and SLR, MSF & FALLCR are as per permitted extent. Level 1 asset is the main driver of HQLA, contributing around 98.02% in the total HQLA of the Bank.

Level 2A and Level 2B assets are well within the regulatory cap of 40% and 15% of the stock of HQLA respectively after the required haircut.

Corporate Bonds not issued by a Bank/Financial/NBFC which have been rated AA- or above by an Eligible Credit Rating Agency have been classified under Level 2A assets. Similarly Bonds not issued by a Bank/FI/NBFC which have been rated not lower than BBB- have been classified under level 2B Assets.

Outflows & Inflows:

Deposits are the main source of funds for the Bank.

Currency mismatch in LCR:

LCR is expected to be met and reported in a single currency. The bank is not having significant liabilities and HQLAs in any foreign currency.

Description of the degree of centralization of liquidity management and interaction between the group''s units:

The Bank does not belong to any group and does not have any associate, subsidiaries, joint venture, etc.

C) Net Stable Funding Ratio (NSFR):

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR. The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.Net Stable Funding is a liquidity measure which is the indication of the long term liquidity health of the Bank is measured as under.

NSFR= (Available Stable Funding (ASF)) / (Required Stable Funding (RSF)) >=100%

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding sources, including contractual maturity of its liabilities and the differences in the tendency of different types of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity characteristics and residual maturities of the various

assets held by the bank including Off-Balance Sheet (OBS) exposures. The result should minimum of 100% to ensure liquidity comfort.

The table given below sets out the un-weighted and weighted value of the NSFR components as on 31st March 2023 based on audited financials. At a consolidated level, the NSFR of the bank comes out to 168.87% as on 31st March 2023 against the requirement of 100% as per RBI guidelines.

i) COVID -19

COVID-19 pandemic has and had an extraordinary impact on macroeconomic conditions in India and around the world during the past two years. The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and Individual activities, had led to volatility in global and Indian financial markets and a decrease in global and local economic activities. The revival of economic activity has since improved supported by relaxation of restrictions due to administration of the COVID vaccines to a large population in the country. The extent to which any new wave of COVID-19 pandemic will impact the Bank results will depend on ongoing as well as future developments, including, among other things, any new information concerning the severity of the COVID-19 pandemic, and any action to contain its spread or mitigate its impact whether government-mandated or elected by us. On a prudent basis, the Bank holds a provision of ?300 crores as at 31st March, 2023 against the potential impact of COVID-19 & other uncertainties (previous year 31.3.2022: Rs.250 crores).

e) Factoring exposures - Nil

f) Intra-group exposures as on 31.03.2023

i) Total amount of intra-group exposures - NIL

ii) Total amount of top 20 intra-group exposures - NIL

iii) Percentage of intra-group exposures to total exposure of the bank on borrowers/ customers - NIL

iv) Details of breach of limits on intra-group exposures and regulatory action thereon, if any - NIL

g) Unhedged foreign currency exposure

The provisioning required for currency induced Credit Risk for the bank on account of the unhedged Foreign Currency Exposure of the borrowers was estimated at ?1.87 Crore (Previous Year - ?1.16 Crore). Bank holds required provision towards the same. Bank holds ?3.19 Crore as capital towards the unhedged foreign currency exposure.

c) Disclosures on risk exposure in derivatives

i) Qualitative disclosures

Banks shall disclose their risk management policies pertaining to derivatives with particular reference to the extent to which derivatives are used, the associated risks and business purposes served. The disclosure shall also include:

i. the structure and organization for management of risk in derivatives trading,

ii. the scope and nature of risk measurement, risk reporting and risk monitoring systems,

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

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.

f) Implementation of IFRS converged Indian Accounting Standards (Ind AS)

The Proforma Financial Statement (PFS) are being submitted to RBI on a periodical basis. Bank is in the process of development of software for IFRS converged India Accounting Standard (IndAS). However bank is awaiting for the final guidance from RBI in order to make suitable system related changes.

h) Disclosure on amortisation of expenditure on account of enhancement in family pension of employees of banks:

The Bank has incurred an additional liability of Rs.26.84 Crore on account of revision in family pension consequent to the 11th Bipartite settlement and it has been fully charged to the Profit & Loss Account during the financial year 2021-22 itself and there is no amortization expense for 2022-23.

i) Penalty levied by Directorate of Enforcement

The Bank had received a show-cause notice dated 17.12.2014 from the office of the Special Director, Directorate of Enforcement, Chennai, which was simultaneously issued to 26 persons/ entities, including Standard Chartered Bank (SCB) and SCB''s Head of operations, in connection with the alleged violation in transfer of shares on 13.05.2007, 26.12.2011 and 11.06.2012.

Subsequently, after considering all our submissions/written replies/responses/personal hearing, the Directorate of Enforcement had levied a penalty of ?16.99 Crores on our bank, vide its order dated 14.08.2020.

In the meantime, on 27.01.2021, the Deputy legal advisor of the Directorate of Enforcement has filed an appeal before the appellate tribunal for foreign exchange, New Delhi with a prayer for confiscation of shares/de-nova proceedings. We understand from the other notice (previous Director) that they have also gone for appeal against the order of DoE. Considering the situation, our Bank has also filed an appeal before the Appellate Tribunal, New Delhi on 04.11.2022.

On 05.12.2022, the Appellate Tribunal was not inclined to hear the main issue in the absence of pre-deposit of the penalty amount before the Tribunal, as required under law. We have therefore agreed to deposit the amount of penalty and the penalty was deposited on 16.12.2022.

The Bank has paid the above penalty amount on 16.12.2022 and the bank is having necessary provision.

j) Transfer of Dividend and shares to IEPF:

Unclaimed Dividend pertaining to the Financial Year 2014-15 (Interim Dividend 1 & 2) and related shares have been transferred to IEPF with little delay beyond the due date.

15.9. ACCOUNTING FOR INVESTMENT IN ASSOCIATES IN CFS (AS-23)

The Bank has no associates. Hence reporting under AS 23 is not applicable.

15.10. DISCONTINUING OPERATION (AS-24):

The bank has not discontinued any operations. Hence reporting under AS 24 is not applicable.

15.11. INTANGIBLE ASSETS (AS-26)

Depreciation on software is calculated on straight line method at 33.33% in compliance with RBI guidelines.

15.12. IMPAIRMENT OF ASSETS (AS-28)

In the opinion of the management, there is no impairment to the assets to which AS 28 "Impairment of Assets" applies.

15.13. CONTINGENT LIABILITIES AND PROVISIONS (AS-29)

The details of provisions and contingencies, contingent liabilities, the movement of provisions on NPA''s and depreciation on investment which are considered material are disclosed elsewhere under the appropriate headings as per RBI guidelines.

a) Provisions: (Amount in ? crore)
PARTICULARS	PROVISIONS AS AT THE BEGINNING OF THE YEAR	ADDITIONS DURING THE YEAR	AMOUNT USED DURING THE YEAR	UNUSED AMOUNTS REVERSED DURING THE YEAR	PROVISIONS AS AT THE CLOSE OF THE YEAR
A. Provision for Interest sacrifice on restructured accounts(DFV)	2.85	0.41	0	0	3.26
B.Provision for Contingencies	27.5	0.42	0.05	0	27.87
b) Contingent Liabilities: (Amount in ? crore)
PARTICULARS				AS ON 31.03.2023	AS ON 31.03.2022
1. Claims not acknowledged as debt a) Counter suits filed by the borrowers against the Bank has initiated legal action. b) Cases filed in Consumer/Civil Courts for deficiency in services c) Any other claims against the bank not Acknowledged as debts*				8.47 1.71 278.55	Nil 1.75 133.57
2. Forward exchange contracts				4535.33	6643.36
3. Guarantees issued on behalf of constituents				1070.93	1139.23
4. Acceptance, endorsements & other obligations				623.78	768.69
5. Other items for which the Bank is contingently liable				120.29	111.1
TOTAL				6639.06	8797.7

15.15. ISSUE OF FRESH SHARES:

The Bank has raised Equity Share Capital of Rs.80784 Lakhs through Initial Public Offer (IPO) on 12th September 2022. The Bank has issued and allotted 158.4 Lakhs equity shares of Rs.10 each at a premium of Rs.500 per share. The share premium net of issue expenses, tax impact amounting to Rs.76922 Lakhs has been credited to Share Premium Account. The banks shares are listed in NSE and BSE stock exchanges.

15.16. DIVIDEND:

Final Dividend (for the year 2021-22 paid during 2022-23)

The Final dividend at the rate of Rs.10.00 per equity share (Rs.6 for regular dividend Rs.4 for centenary commemoration) i.e, 100% for the year ended 2021-22 was recommended by the Board in its Meeting held on 29.04.2022, to the members for approval. The same was approved by the members in the 100th AGM held on 09.06.2022. The payout process was completed by 08.07.2022.

Interim Dividend (paid during the year 2022-23)

The Board, in its meeting held on 14.02.2023, had approved/declared Interim dividend for the financial year 2022-23, at the rate of Rs.5/- (Rupees five only) per share, i.e. 50% on the fully paid up equity shares of Rs.10/- each. The record date for the same was fixed as Friday, February 24, 2023. The payout process was completed by 06.03.2023.

Proposed dividend recommendation if any

A final dividend for the financial year 2022-23, has been proposed at the rate of Rs.5/- (Rupees five only) per share, i.e, 50% on the fully paid up equity shares of Rs.10/- each subject to the approval of the shareholders in the upcoming Annual General Meeting.

15.17. CORPORATE SOCIAL RESPONSIBILITY:

The bank was required to spend Rs.16.72 crore (Previous year Rs.11.86 crore) during the financial year 2022-23 towards Corporate Social Responsibility (CSR) in accordance with companies Act, 2013. The bank has spent an amount of Rs.16.82 crore (Previous year Rs.11.88 crore) in respect of CSR activities across the country. None of the CSR expenditure incurred by the Bank is to entities controlled by related parties identified by the bank as per Accounting Standard 18, Related Party Disclosures. The amount spent as above is for the purpose other than for construction/ acquisition of any asset in 2022-23/2021-22.

16. Fixed assets (Land and Building) include property held in Chennai, land (UDS 753.117 sqft Rs.10.76 lakh) and building (Rs.11.10 lakh) purchased during January 1993. While the UDS of land was registered in Bank''s name, the building was to be handed over to the Bank after construction, by the corporate debtor, who are in corporate insolvency resolution process, which they failed to do so and the bank had preferred a suit in Madras High Court against them for specific performance and damages which is pending.

17. In respect of certain branches/offices where additional information was required, the data available at Controlling/Head office was considered.

18.2022-2023''s figures have been regrouped wherever necessary to conform to this year''s classification.

19. Figures have been rounded off to the nearest thousand rupees in the Financial Statements.

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Mar 31, 2007

1. The Balance Sheet and Profit & Loss Account have been prepared in conformity with Forms A & B of the Schedule III to the Banking Regulation Act, 1949 read with Section 211 of the Companies Act, 1956.

2. During the year, out of 183 branches, 178 branches have been subjected to statutory audit other than the 5 branches opened during the month of March 2007.

3. Reconciliation of inter branch adjustment accounts has been completed up to 31.3.2007.

4. (i) In accordance with RBI guidelines, the investments portfolio of the Bank has been classified into 3 categories as given below:

*The excess over statutory limit of 25% consists of SLR securities. The total SLR securities under "Held to Maturity" category accounted for 20.75% of Banks Demand and Time Liabilities as on 16.03.2007.

(ii) During the year, the excess of acquisition cost over face value of securities kept under "Held to Maturity" category is amortized upto the date of maturity and the amount amortized for the year is Rs.9.89 crore (previous year Rs. 4.60 crore). In terms of the instructions of RBI the amount has been shown as a deduction under the head "Profit on Revaluation of Investments" in the Profit and Loss Account.

(iii) A sum of Rs.26.16 crore has been provided as depreciation while shifting securities from "Available for Sale" to "Held to Maturity" category and Rs.0.36 crore in shifting from "Held for Trading" to "Available for Sale" category.

(iv) Profit on sale of securities held under "Held to Maturity" category amounting to Rs. 0.61 crore has been taken to profit and loss account and thereafter appropriated to Capital Reserve Account.