Directors Report of Equitas Small Finance Bank Ltd.

Mar 31, 2025

Your Directors have pleasure in presenting the Ninth 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, 2025 (FY 2024-25).

1. Summary of Financial Performance

Particulars	For the Year ended March 31, 2025	For the Year ended March 31, 2024	Y-o-Y %
Deposits & Other Borrowings	45,24,371.09	37,91,673.22	19.32%
Advances	36,20,888.81	30,96,429.99	16.94%
Total Income	7,22,321.41	6,28,507.40	14.93%
Operating Profits (Profits before Provision, Depreciation and Taxation)	1,48,241.65	1,51,178.00	(1.94%)
Less: Depreciation	14,814.93	13,441.56	10.22%
Less: Provision and contingencies	1,13,541.81	31,423.97	261.32%
Less: Provision for Taxation	5,179.92	26,416.45	(80.39%)
Net Profit	14,704.99	79,896.02	(81.59%)
Add: Profit brought forward	93,682.19	59,863.87	56.49%
Add: Reversal of ESOP Cost on Lapse of options	357.58	48.31	640.18%
Total	1,08,744.76	1,39,808.20	(22.22%)
Appropriations
Transfer to Statutory Reserve	3,676.25	19,974.01	(81.59%)
Transfer to Special Reserve	723.85	1,946.48	(62.81%)
Transfer to Capital Reserve	1,231.13	114.75	972.88%
Transfer to Investment Reserve	-	177.94	(100.00%)
Transfer to Investment Fluctuation Reserve	2,000.00	12,750.00	(84.31%)
Dividend pertaining to previous year paid during the year	11,366.47	11,162.83	1.82%
Balance carried over to Balance Sheet	89,747.06	93,682.19	(4.20%)
Total	1,08,744.76	1,39,808.20	(22.22%)

2. Dividend

Considering the need to preserve capital to support growth and expansion, the Board of Directors did not recommend any
dividend for the financial year ended March 31, 2025.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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

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. ?0?5.

Amount transferred to	'' in Lakhs
Statutory Reserve	3,676.25
Special Reserve	723.85
Capital Reserve	1,231.13
Investment Fluctuation Reserve	2,000.00

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
2024-25.

5. Capital Adequacy

The Capital Adequacy Ratio stood at 20.60% as on
March 31, 2025 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
'' 6,07,252.03 Lakhs.

6. Material changes and commitments affecting the
Financial Position of the Bank after the Balance
Sheet date as on March 31, 2025

There were no material changes and commitments
between the end of Financial Year 2024-25 and the
date of this report, affecting the financial position of the
Bank.

7. Information 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
Obligations and Disclosure Requirements) Regulations,
2015, Report on Corporate Governance for the FY 2024Â¬
25 along with the General Shareholder Information and
the Business Responsibility and Sustainability Report
under Regulation 34(2)(f) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 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
June 27, 2025 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 (a) Share Capital

During the year, there has been no change in the
Authorized Share Capital of the Bank. The Bank
has allotted in aggregate 49,75,142 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, 2025 is '' 1,139,86,24,210/- comprising of
1,13,98,62,421 equity shares of Rs.10/- each.

11 (b) Issue of debentures / Non-Convertible securities

During the year, 50,000 Rated, Listed, Unsecured,
Subordinated, Redeemable, Non-Convertible
Debentures having a face value of '' 1,00,000/-
(Rupees One Lakh only) each, aggregating '' 500
crores ("NCDs") [which includes a green shoe
option of up to '' 250,00,00,000/- (Rupees Two

Hundred and Fifty Crores only)] were issued on Private Placement basis. The details pertaining to the aforesaid issuance
of securities are as follows:

Date of issue	Date of allotment	Coupon rate	Date of maturity	Brief details of the debt restructuring pursuant to which the securities are issued
November 08, 2024	December 05, 2024	9.6% (Nine Decimal Point Six Percent) Per Annum	December 05, 2030	Issuance of non-convertible debentures is for augmenting Tier-II capital and for general corporate purposes

12. Meetings of the Board

During the FY 2024-25, our Board had met Nine (9)
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 Companies Act, 2013 & the relevant
Rules made thereunder and the applicable provisions of
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

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 Eleven (11)
Directors, out of which, there are Nine (9) Independent
Directors including a Woman Independent Director and
Two (2) Whole Time Directors.

Change in Directors & KMPs

Following were the changes in composition of the Board
of Directors and Key Managerial Personnel:

Appointment of Part-time Chairman and Independent
Directors

- 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
and Independent Director 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, as approved by the RBI vide
its letter dated April 04, 2024 and the Members

through Postal Ballot by way of e-voting on June
06, 2024.

- Appointment of Dr. Gulshan Rai (DIN: 01594321)
as an Independent Director of the Bank with effect
from March 28, 2024 until April 08, 2028 (both
days inclusive) not liable to retire by rotation, as
approved by the Members through Postal Ballot by
way of e-voting on June 06, 2024.

- Appointment of Mr. Narayanan Rajagopalan Nadadur
(DIN: 07877022), Mr. Keezhayur Sowrirajan Sampath
(DIN: 07924755) and Mr. Ramkumar Krishnaswamy
(DIN: 00244711) as Independent Directors of the
Bank for a term of three years with effect from July
16, 2024 until July 15, 2027 (both days inclusive)
not liable to retire by rotation, as approved by the
Members of the Bank at the Eighth Annual General
Meeting held on September 10, 2024.

Re-appointment of Independent Director

- Re-appointment of Mr. Navin Puri (DIN: 08493643)
as an Independent Director of the Bank for a
second consecutive term of three years effective
from August 01, 2024 until July 31, 2027 (both
days inclusive), not liable to retire by rotation, as
approved by the Members of the Bank at the Eighth
Annual General Meeting held on September 10,
2024.

In the opinion of the Board, the Independent
Directors appointed / re-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.

- Mr. Ramesh Rangan was appointed as an
Independent Director of the Bank for a period of five
years effective from November 09, 2020. As per the
provisions of Section 149 of the Companies Act,
2013 ("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 for a second
consecutive term 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.
Ramesh Rangan would complete five years as an
Independent Director of the Bank on November 08,
2025.

Further, based on the recommendation of the
Nomination & Remuneration Committee, the Board
of Directors at its meeting held on June 27, 2025
had approved the re-appointment of Mr. Ramesh
Rangan as an Independent Director of the Bank for
a period of Three (3) years effective November 09,
2025 until November 08, 2028, not liable to retire
by rotation, subject to the approval of the Members
of the Bank. The aforesaid re-appointment has
been placed for approval of the Members at the
ensuing Annual General Meeting of the Bank.

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. Ramesh Rangan as an
Independent Director in the Board of the Bank and
as a member of various Committees of the Board
would be of immense benefit to the Bank.

Appointment of Executive Director (Whole-time
Director) & KMP

RBI vide its circular no. RBI/2023- 24/70 DOR.HGG.GOV.
REC.46 /29.67.001/2023- 24 dated October 25, 2023
had advised Commercial Banks to ensure the presence
of at least two Whole Time Directors (WTDs), including
the Managing Director & Chief Executive Officer, on
the Board of Banks. In adherence with the aforesaid
circular, the Nomination & Remuneration Committee
had assessed the candidature of Mr. Balaji Nuthalapadi
(DIN: 08198456) for the office of the Whole-time Director
of the Bank and having found him to be ''fit and
proper'' in terms of the extent RBI Circulars on ''fit and
proper'' criteria for directors of banks, recommended his
appointment to the Board.

Further, the Board of Directors of the Bank, at its meeting
held on July 15, 2024 had approved and recommended

the candidature of Mr. Balaji Nuthalapadi, for the
position of Whole-time Director (Executive Director) to
RBI for its approval.

RBI, vide its letter no. DoR.GOV.No.S5496/29.44.
002/2024-2025 dated December 11, 2024, had accorded
its approval for the appointment of Mr. Balaji Nuthalapadi
(DIN: 08198456) as Whole-time Director (Executive Director)
of the Bank for a period of three (3) years with effect
from the date of his taking charge, along with applicable
terms and conditions including compensation.

I n line with the approval granted by RBI and Regulation
17(1 C) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board at its
meeting held on March 28, 2025, co-opted Mr. Balaji
Nuthalapadi as an Additional Director in the category
of Whole-time Director, liable to retire by rotation
and designated him as Executive Director ("ED") and
classified him as one of the Key Managerial Personnel
of the Bank to hold office as such from the date of his
taking charge, i.e., March 29, 2025 till the approval of
Members within a period of three months from the date
of his appointment as an Additional Director.

The appointment of Mr. Balaji Nuthalapadi (DIN: 08198456)
as the Executive Director (Whole-time Director) was
approved by the Members through Postal Ballot by way
of e-voting on June 15, 2025.

Retirement & Resignation

- 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.

- Mr. Vinod Kumar Sharma (DIN: 02051084), Mr.
Arun Kumar Verma (DIN: 03220124), and Prof N
Balakrishnan (DIN: 00181842) ceased to be the
Independent Directors of the Bank from the close of
business hours on September 01,2024, September
04, 2024 and September 21, 2024, respectively
consequent to the completion of their tenure.

- Mr. N Srinivasan (DIN: 01501266) had tendered his
resignation as an Independent Director of the Bank
with effect from close of business hours on July 26,
2024 due to personal commitments.

The Board places on record its sincere appreciation for
the remarkable contributions made by the aforesaid
Independent Directors during their association with the
Bank.

Directors liable to retire by rotation

Section 152 of the Companies Act, 2013 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 Companies Act, 2013, the provisions of retirement
of Directors by rotation shall not be applicable to
Independent Directors and an Independent Director shall
not be included in the total number of Directors liable to
retire by rotation.

In compliance with the aforesaid section and the
Articles of Association of the Bank, Mr. Vasudevan P N,
MD & CEO will retire by rotation at the ensuing AGM
of the Bank and being eligible, offers himself for reÂ¬
appointment. The Board of Directors recommend his reÂ¬
appointment and the same has been placed for approval
of the Members at the ensuing Annual General Meeting.

The detailed profile of Mr. Vasudevan P N, MD & CEO
seeking re-appointment at the ensuing AGM as required
under Secretarial Standard 2 on General meetings and
Regulation 36 of the SEBI Listing Regulations is provided
as an Annexure to the notice of AGM.

Familiarisation Programme

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

Key Managerial Personnel (KMP)

I n 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, 2025:

S. No.	Name of the Key Managerial Personnel	Designation
1	Mr. Vasudevan P N	Managing Director & Chief Executive Officer (MD & CEO)
2	Mr. Balaji Nuthalapadi	Executive Director (Whole-time Director)
3	Mr. Sridharan N	Chief Financial Officer (CFO)
4	Mr. Ramanathan N	Company Secretary (CS)

Mr. Balaji Nuthalapadi was appointed as the Executive
Director (Whole-time Director) of the Bank and classified

as one of the Key Managerial Personnel of the Bank with
effect from March 29, 2025.

14. Declaration from Independent Directors

The Board has received 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 Obligations and Disclosure Requirements)
Regulations, 2015. The Independent Directors have
complied with the Code for Independent Directors
prescribed in Schedule IV of the Companies Act, 2013.

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 the respective Committees

16. Policy on Directors'' appointment, remuneration
and other details

Pursuant to the provisions of Section 178 of the
Companies Act, 2013, the Bank has formulated and
adopted the Policy for Selection and Appointment of
Directors Click here and Remuneration & Benefits Policy,
which are available on our website Click 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
& Remuneration Committee of the Board in compliance
with the requirement of the Act read with the relevant
rules made thereunder and the SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015. 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, 2025, 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 on March 31,2025 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 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 Companies Act, 2013 read with Rule 5 of
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

(i) Ratio of remuneration of each	The ratio of remuneration of each Director to median employee remuneration is as
Director with median employees remuneration.	below:
Director with median employees remuneration.	Name of the Director & Designation	Ratio
	Mr. Arun Ramanathan, Part time Chairman & Independent Director*	4.51:1
	Mr. Anil Kumar Sharma, Part time Chairman & Independent Director#	4.51:1
	Mr. Vinod Kumar Sharma, Independent Director*	2.82:1
	Mr. Arun Kumar Verma, Independent Director*	3.78:1
	Prof. Balakrishnan N, Independent Director*	2.82:1
	Mr. Srinivasan N, Independent Director*	2.82:1
	Mr. Navin Puri, Independent Director	2.82:1
	Mr. Ramesh Rangan, Independent Director	2.82:1
	Prof. Samir Kumar Barua, Independent Director	2.82:1
	Ms. Geeta Dutta Goel, Independent Director	2.82:1
	Dr. Gulshan Rai, Independent Director	2.82:1
	Mr. K S Sampath, Independent Director#	4.23:1
	Mr. Narayanan N R, Independent Director#	2.82:1
	Mr. Ramkumar Krishnaswamy, Independent Director#	2.82:1
	Mr. Vasudevan P N, MD & CEO	70.24:1
	Mr. Balaji Nuthalapadi, Executive Director#	67.7:1

	Notes: * 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. Mr. Vinod Kumar Sharma (DIN: 02051084), Mr. Arun Kumar Verma (DIN: 03220124), and Prof N Balakrishnan (DIN: 00181842) ceased to be the Independent Directors of the Bank from the close of business hours on September 01, 2024, September 04, 2024 and September 21, 2024, respectively consequent to the completion of their tenure. Mr. N Srinivasan (DIN: 01501266) had tendered his resignation as an Independent Director of the Bank with effect from close of business hours on July 26, 2024 due to personal commitments. #Mr. Anil Kumar Sharma (DIN: 08537123) was appointed 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 and Independent Director of the Bank for a period of five (5) years with effect from April 25, 2024 until April 24, 2029 (both days inclusive). Mr. Narayanan Rajagopalan Nadadur (DIN: 07877022), Mr. Keezhayur Sowrirajan Sampath (DIN: 07924755) and Mr. Ramkumar Krishnaswamy (DIN: 00244711) were appointed as the Independent Directors of the Bank for a term of three years with effect from July 16, 2024 until July 15, 2027 (both days inclusive). Mr. Balaji Nuthalapadi was appointed as the Executive Director (Whole-time Director) of the Bank and classified as one of the Key Managerial Personnel of the Bank with effect from March 29, 2025. The remuneration to the Independent Directors does not include the sitting fee. The Whole-time Directors of the Bank are not paid any sitting fee.
(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year	There was no increase in the remuneration paid to the Independent Directors during the financial year 2024-25. The increase in remuneration of Key Managerial Personnel is provided below: Chief Executive Officer - 8% Chief Financial Officer - 12% Company Secretary - 22% **Does not include perquisite value
(iii) the percentage increase in the median remuneration of employees in the financial year	8%
(iv) the number of permanent employees on the rolls of the Bank as on March 31, 2025	25,409

(v) Average percentage increase
already made in the salaries
of employees other than the
managerial personnel in the last
financial year and its comparison
with the percentile increase in the
managerial remuneration and
justification thereof and point
out if there are any exceptional
circumstances for increase in the
Managerial Remuneration

The average percentage increase in salaries of employees other than the managerial
personnel in the last financial year was 9% and for KMP the increase was in the
varying range of 8% to 22% for the financial year 2024-2025.

The increase during the year is based on remuneration policy of the Bank and reflects
the Bank''s reward philosophy as well as the results of the salary benchmarking exercise.

(vi) Affirmation that the
remuneration is as per the
remuneration policy of the Bank

The Management affirms that the remuneration is as per the remuneration policy of
the Bank.

In accordance with Section 136 of the Companies
Act, 2013, the report and accounts are being sent to
the Members and others entitled thereto, excluding
the statements 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
any working day of the Bank. If any Member is
interested in obtaining a copy, such Member may
write to the Company Secretary in this regard at
[email protected]

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 the Rules made thereunder and SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015. This Policy provides an opportunity to address the
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 on the Bank''s website
Click here

During the year under review, the Bank received ''Ten (10)''
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 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 at their meeting held
on June 14, 2023 on the recommendation of the Audit
Committee 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 2025-2026, which was
approved by the Members at the Seventh AGM held on
August 29, 2023. The appointment was approved by the
RBI for FY 2023-2024 vide its letter dated July 07, 2023.

Further, consequent to the completion of term of
M/s. Varma and Varma, Chartered Accountants at the
conclusion of the Eighth AGM of the Bank, the Board of
Directors at their 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 2024-2025 to FY 2026-2027 , which was approved
by the Members at the Eighth AGM held on September
10, 2024. RBI has accorded its approval for the aforesaid
appointment vide its letter dated May 22, 2024.

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. A S A & Associates LLP,

Chartered Accountants and M/s. Suri & Co, Chartered
Accountants during the financial year 2024-2025 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 Companies Act, 2013 and RBI Regulations and their
continuance, if approved, will be in accordance with the
conditions prescribed under the Companies Act, 2013
and Rules made thereunder as well as the applicable RBI
Regulations and had accordingly recommended their
continuance to the Board.

The Board of Directors of the Bank at its Meeting held
on May 30, 2025 considered the recommendation of
Audit Committee and approved the re-appointment of
M/s. A S A & Associates LLP, Chartered Accountants
and M/s. Suri & Co, Chartered Accountants, as the Joint
Statutory Auditors for the FY 2025-2026 as they continue
to satisfy the eligibility Norms as per the RBI guidelines,
subject to the approval of RBI. RBI has approved the
aforesaid appointment vide its letter dated July 11,2025.

Auditors'' Report:

There are no qualifications, reservations or adverse
remarks made by the Joint Statutory Auditors of the
Bank, M/s. A S A & Associates LLP, Chartered Accountants
and M/s. Suri & Co, Chartered Accountants in their
report on the financial statements for the FY 2024-2025.

Further, there any no instances of frauds committed
in the Bank by its officers or employees during the
period, under sub-section (12) of section 143 of the Act
other than those which are reportable to the Central
Government.

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 7, 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 & 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 &
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 S Rajendran, Managing Partner, M/s.
Shanmugam Rajendran & Associates LLP, Practicing
Company Secretaries and 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 our website Click here

I nformation 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:

Particulars	Total
Number of options granted during the year	97,29,111
Number of options forfeited / lapsed during the year	53,03,753
Number of options vested during the year	96,62,126
Number of options exercised during the year	49,75,142
Number of shares arising as a result of exercise of options	49,75,142
Money realized by exercise of options (INR), if scheme is implemented directly by the company	23,28,59,688
Loan repaid by the Trust during the year from exercise price received	NA

Particulars	Total
Option Granted but not vested	1,02,55,703
Options Vested but not exercised	1,75,34,698
Options Available for Grant	3,88,20,154

Employee wise details of the Options granted to

A) Key Managerial Personnel

S. No.	Name of the Employee	Designation	No. of options granted	Exercise price	% of Options granted
1	Mr. Vasudevan P N	MD & CEO	8,31,655	63.98	8.55%
2	Mr. Balaji Nuthalapadi	Executive Director	Nil	Nil	Nil
3	Mr. Sridharan N	CFO	1,44,360	98.19	1.48%
4	Mr. Ramanathan N	Company Secretary	34,420	98.19	0.35%

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:

No.

Name of Employee

Designation

No. of options
granted

Exercise Price

% of options
granted

Mr. Murali Vaidyanathan

Senior President &
Head Liabilities

5,04,312

98.19

5.18%

Mr. Rohit Gangadharrao
Phadke

Senior President

5,04,312

98.19

5.18%

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 Company at the time of
Grant. - NIL

23. Secretarial Auditor

The Secretarial Audit Report issued by CS S Rajendran,
Managing Partner, M/s. Shanmugam Rajendran
& Associates LLP, Practicing Company Secretaries
(C.P.NO.14055) 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.

The Securities and Exchange Board of India ("SEBI")
vide Notification No. SEBI/LAD-NRO/GN/2024/218 had
introduced ''Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements)
(Third Amendment) Regulations, 2024'' effective from
December 31, 2024. As per the aforesaid regulations,
a listed entity shall appoint or re-appoint an individual
as Secretarial Auditor for not more than one term of five
consecutive years or a Secretarial Audit firm as Secretarial

Auditor for not more than two terms of five consecutive
years, with the approval of its Shareholders in its Annual
General Meeting.

In adherence with the aforesaid regulations, the Board of
Directors of the Bank based on the recommendation of
the Audit Committee had approved the appointment of
M/s. Shanmugam Rajendran & Associates LLP, Practicing
Company Secretaries, Chennai as the Secretarial Auditor
of the Bank for a term of Five (5) consecutive years from
FY 2025- 2026 to FY 2029-2030 which is subject to the
approval of Members of the Bank at the ensuing Annual
General Meeting.

4 Further information as per Section 134(3) of the
Companies Act, 2013 read with Rule 8 of the
Companies (Accounts) Rules, 2014

- During the FY 2024-25, the Bank had no activity
relating to conservation of energy or technology
absorption.

- During the FY 2024-25, the total foreign exchange
earned by the Bank was Nil and the total foreign
exchange outgo of the Bank during the year was
'' 556.79 lakhs.

25. Particulars of contracts or arrangements with
related Parties

All contracts / arrangements / transactions entered by
the Bank during the Financial Year 2024-2025 with
related parties 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 that adequacy of internal financial controls
commensurates 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

the 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
Indian 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 carries out the
Expected Loss provisioning using Probability of Default
(PD) and Loss Given Default (LGD) by considering
historical data for the purpose of IND AS pro-forma
reporting and product pricing. The Bank has put in a
place a comprehensive Expected Credit Loss Framework.

29. Loans / Guarantees / Investments

Pursuant to Section 186 (11) of the Companies Act,
2013, the provisions of Section 186 of Companies
Act, 2013, except sub-section (1), do not apply to a
loan made, guarantee given or security provided 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
Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013. The particulars of
complaints under Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013 during the FY 2024-2025 are as follows:

a. Number of complaints filed during the financial
year: 18

b. Number of complaints disposed of during the
financial year: 15

c. Number of complaints pending as on end of the
financial year. : 3

d. Number of cases pending for more than ninety
days: 0

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. Compliance with the Maternity Benefit Act, 1961

The Bank has complied with the provisions relating to
the Maternity Benefit Act, 1961.

32. Depository System

As the Members are aware, the Bank''s Equity Shares are
tradable in electronic form. As on March 31,2025, out of
the Bank''s total equity paid up share capital comprising
of 1,13,98,62,421 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 Member(s) holding
shares in physical form are advised to avail the facility of
dematerialisation.

33. GENERAL DISCLOSURE

The Annual Return under MGT-7 as required under the
Companies Act, 2013 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
Obligations and Disclosure Requirements) Regulations,
2015.

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:

â¢ There has been no change in nature of business of
Bank

â¢ Issue of equity shares with differential rights as
to Dividend, voting or otherwise pursuant to the
provisions of Section 43 of the Act and Rules made
thereunder

â¢ The Bank has not issued any warrants

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

â¢ The financial statements of the Bank were not
revised

â¢ The Bank has not failed to implement any corporate
action

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

â¢ 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

â¢ The Bank has not issued Sweat Equity Shares to its
Directors or the employees of the Bank under any
scheme

â¢ 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

â¢ The Bank has not made any provisions of money or
has not provided any loan to the employees of the
Bank for purchase of shares of the Bank , pursuant
to the provisions of Section 67 of the Act and Rules
made thereunder

â¢ 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, SEBI, Stock
Exchanges, Depositories, 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.

For and on behalf of the Board of Directors

Vasudevan P N Anil Kumar Sharma

MD & CEO Part-time Chairman

DIN:01550885 DIN:08537123

Place : Chennai
Date : June 27, 2025

Mar 31, 2024

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

('' in lakhs)

Particulars	For the year ended March 31, 2024	For the year ended March 31, 2023	Y-o-Y %
Deposits & Other Borrowings	37,91,673.22	28,32,224.26	33.88%
Advances	30,96,429.99	25,79,855.66	20.02%
Total Income	6,28,507.40	4,83,146.38	30.09%
Operating Profits (Profits before Provision, Depreciation and Taxation)	1,51,178.00	1,26,054.53	19.93%
Less: Depreciation	13,441.56	8,453.78	59.00%
Less: Provision and contingencies	31,423.97	40,720.35	(22.83%)
Less: Provision for Taxation	26,416.45	19,521.35	35.32%
Net Profit	79,896.02	57,359.05	39.29%
Add: Profit brought forward	59,863.87	1,09,679.97	(45.42%)
Add: Reversal ESOP cost on Lapse of options	48.31	-	-
Profit and Loss Account balance adjustment on account of amalgamation	-	(87,825.49)	-
Total	1,39,808.20	79,213.53	76.50%
Appropriations
Transfer to Statutory Reserve	19,974.01	14,339.76	39.29%
Transfer to Special Reserve	1,946.48	1,202.11	61.92%
Transfer to Capital Reserve	114.75	-	-
Transfer to Investment Reserve	177.94	-	-
Transfer to Investment Fluctuation Reserve	12,750.00	3,807.79	234.84%
Dividend pertaining to previous year paid during the year	11,162.83	-	-
Balance carried over to Balance Sheet	93,682.19	59,863.87	56.49%
Total	1,39,808.20	79,213.53	76.50%

2. DIVIDEND

The Board of Directors at their meeting held on April 24, 2024 has recommended a dividend of '' 1/- per equity share (i.e., 10%) of face value '' 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.

Amount transferred to	'' in lakhs
Statutory Reserve	19,974.01
Special Reserve	1,946.48
Capital Reserve	114.75
Investment Reserve	177.94
Investment Fluctuation Reserve	12,750.00

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 '' 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 '' 1,134,88,72,790/-comprising of 113,48,87,279 equity shares of '' 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.

S.	Name of the	Designation
No.	Key Managerial Personnel
1	Mr. Vasudevan P N	Managing Director & Chief Executive Officer (MD & CEO)
2	Mr. Sridharan N	Chief Financial Officer (CFO)
3	Mr. Ramanathan N	Company Secretary (CS)

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,

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:

(i) Ratio of remuneration of each Director with	The ratio of remuneration of each Director to median employees
median employees remuneration	remuneration is as below:
	Mr. Arun Ramanathan, Part-time Chairman &	4.87:1
	Independent Director
	Mr. Arun Kumar Verma, Independent Director	4.56:1
	Mr. Vasudevan P N, MD & CEO	70.23:1
	Mr. Vinod Kumar Sharma, Independent Director	3.04:1
	Prof. Balakrishnan N, Independent Director	3.04:1
	Mr. N Srinivasan, Independent Director	3.04:1
	Mr. Navin Puri, Independent Director	3.04:1
	Mr. Ramesh Rangan, Independent Director	3.04:1
	Prof. Samir Kumar Barua, Independent Director	3.04:1
	Ms. Geeta Dutta Goel&, Independent Director	NA
	Dr. Gulshan Rai*, Independent Director	NA
	&Ms. Geeta Dutta Goel has waived her right to	receive the
	remuneration
	*Dr. Gulshan Rai was appointed as an Additional Director
	(Independent) by the Board with effect from March 28, 2024

(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year	There was no increase in the remuneration paid to the Independent Directors during the financial year. Ms. Geeta Dutta Goel has waived her right to receive the remuneration. The remuneration to Directors does not include sitting fees. The increase in remuneration of Key Managerial Personnel is provided below: Chief Executive Officer - 11 % Chief Financial Officer - 11% Company Secretary - 21% Does not include perquisite value
(iii) the percentage increase in the median remuneration of employees in the financial year	6%
(iv) the number of permanent employees on the rolls of the Bank as on March 31, 2024	22,854
(v) Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial Remuneration	The average percentage increase in the salaries of employees other than the managerial personnel in the last financial year was 6% and for KMP the increase was in the varying range of 11% to 21% for the financial year 2023-2024. The increase during the year is based on remuneration policy of the Bank and reflects the Bank''s reward philosophy as well as the results of the salary benchmarking exercise.
(vi) Affirmation that the remuneration is as per the remuneration policy of the Bank	The Management affirms that the remuneration is as per the remuneration policy of the Bank

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 [email protected]

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 CaDital and Debentures) Rules, 2014 is as below:

Particulars	Total
Number of options granted during the year	87,56,571
Number of options forfeited / lapsed during the year	47,02,007
Number of options vested during the year	1,40,38,787
Number of options exercised during the year	2,43,29,125
Number of shares arising as a result of exercise of options	2,43,29,125
Money realised by exercise of options (In ''), if scheme is implemented directly by the Company	87,64,20,145.20
Loan repaid by the Trust during the year from exercise price received	Not Applicable
Option Granted but not vested	1,23,23,320
Options Vested but not exercised	1,60,16,865
Options Available for Grant	4,32,45,512

Employee wise details of the Options granted to

a) Key Managerial Personnel

S. No.	Name of the Employee	Designation	No. of options granted	Exercise price (In '')	% of Options granted
1	Mr. Vasudevan P N	MD & CEO	8,24,968	75.15	9.42%
2	Mr. Sridharan N	CFO	97,660	75.15	1.12%
3	Mr. N Ramanathan	CS	35,140	75.15	0.40%

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 '' 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

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:

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

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

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

â¢ The financial statements of the Bank were not revised.

â¢ The Bank has not failed to implement any corporate action.

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

â¢ 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.

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

â¢ 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.

â¢ 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.

For and on behalf of the Board of Directors

Place : Chennai Vasudevan P N Anil Kumar Sharma

Date : July 26, 2024 MD & CEO Part-time Chairman

DIN: 01550885 DIN: 08537123

Mar 31, 2023

Your Directors have pleasure in presenting the Seventh 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, 2023 (FY 2022-23).

1. Summary of Financial Performance

The summary of Bank''s financial performance for the FY 2022-23 compared to the previous financial year 2021-22 is given below:

(? in lakhs)
Particulars	For the Year ended March 31, 2023	For the Year ended March 31, 2022	Y-o-Y %
Deposits & Other Borrowings	28,35,431.58	21,56,719.73	31.47%
Advances	25,79,855.66	19,37,420.60	33.16%
Total Income	4,83,146.38	3,99,722.58	20.87%
Operating Profits (Profits before Provision, Depreciation and Taxation)	1,26,054.53	94,723.00	33.08%
Less: Depreciation	8,453.78	7,528.31	12.29%
Less: Provision and contingencies	40,720.35	49,383.69	(17.54)%
Less: Provision for Taxation	19,521.35	9,737.82	100.47%
Net Profit	57,359.05	28,073.18	104.32%
Add: Profit brought forward from previous year	1,09,679.97	89,823.86	22.11%
Profit and Loss Account balance adjustment on account of amalgamation	(87,825.49)	-	-
Total Profit Available for Appropriation	79,213.53	1,17,897.04	(32.81)%
Appropriations
Transfer to Statutory Reserve	14,339.76	7,018.30	104.32%
Transfer to Special Reserve	1,202.11	968.43	24.13%
Transfer to Capital Reserve	-	105.63	(100.00)%
Transfer to Investment Fluctuation Reserve	3,807.79	124.71	2953.31%
Balance carried over to Balance Sheet	59,863.87	1,09,679.97	(45.42)%

2. Dividend

The Board of Directors at their meeting held on May 05, 2023, has recommended a dividend of Re.1/- per equity share (i.e., 10%) of face value ''10/-each, subject to the approval of the Members at the ensuing Seventh 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 Seventh AGM.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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

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, 2023.

Amount transferred to	H in lakh
Statutory Reserve	14,339.76
Special Reserve	1,202.11
Investment Fluctuation Reserve	3,807.79

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, are not applicable. The Bank receives and accepts deposits, the details of which are enumerated in the financial statements for FY 2022-23.

5. Capital Adequacy

The Capital Adequacy Ratio stood at 23.80% as on March 31, 2023 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 ''5,15,794.77 Lakhs.

6. Material changes and commitments affecting the Financial Position of the Bank after the Balance Sheet date as at March 31, 2023

There were no material changes and commitments between the end of Financial Year 2022-23 and the date of this report, affecting the financial position of the Bank.

7. Information 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.

10. 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 Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance for FY 2022-23 along with General Shareholder Information and the Business Responsibility and Sustainability Report forms part of this annual report.

11. Corporate Social Responsibility (CSR)

The Bank has laid down a Corporate Social Responsibility (CSR) Policy, which is available on our website. click here

The Bank contributes the higher of 5% of its previous year net profits or 2% of average net profits made during the preceding three financial years 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 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.

12. Scheme of Amalgamation between Equitas Holdings Limited and Equitas Small Finance Bank Limited

The Board of Directors of Equitas Small Finance Bank Limited (ESFBL) and Equitas Holdings Limited (EHL) at their respective Meetings held on July 26, 2021 approved a Scheme of Amalgamation between EHL, ESFBL and their respective Shareholders, contemplating amalgamation of EHL with ESFBL under applicable provisions of the Companies Act, 2013. The Scheme was designed to achieve the RBI licensing requirement of dilution of promoter shareholding in the Bank and Minimum Public Shareholding (MPS) requirements prescribed by SEBI Regulations, in a manner that is in the best interests

and without being prejudicial to EHL, ESFBL, their respective Shareholders or any other stakeholders.

Subsequently, ESFBL achieved the MPS through a Qualified Institutions Placement (QIP) of its shares, in February 2022, after obtaining the necessary approvals. QIP comprised issue of 10,26,31,087 equity shares of ''10/- each at premium of ''43.59 per share, aggregating to a fund raise of ''550 crores which was utilized 100% for augmenting the Tier 1 capital of the Bank during the year. As a result of this QIP, the public shareholding in the Bank increased from 18.70% to 25.37%, thereby complying with the Minimum Public Shareholding (MPS) requirements prescribed by SEBI Regulations.

Consequently, the aforesaid Scheme was revised to include the change in capital structure arising from QIP as well as the necessary change in objects of the Scheme. The Scheme, so revised was approved by the Boards of EHL and ESFBL in their respective Meetings held on March 21, 2022. The Scheme was filed with the Stock Exchanges and RBI for necessary approvals/ sanctions. The RBI vide its letter dated May 6, 2022 granted its conditional NOC to the Scheme and the No Observation letters towards the aforesaid scheme were received from the National Stock Exchange of India Limited (NSE Ltd) and BSE Limited on June 10, 2022.

Further, a joint application was filed by EHL and ESFBL with Hon''ble National Company Law Tribunal, Division Bench-II, (Chennai NCLT) on June 18, 2022 and the meetings of the equity shareholders and unsecured Creditors of EHL and the Bank and Depositors of the Bank holding deposits above '' 3 lakhs were convened on September 06, 2022 and September 07, 2022 respectively, in adherence with the Order passed by the Hon''ble National Company Law Tribunal on July 22, 2022.

Followed by the approval of the shareholders, creditors and depositors in the meetings as mentioned above, a joint petition was filed with the Chennai NCLT, wherein the NCLT had accorded its approval for the aforesaid Scheme vide its Order dated January 12, 2023. The Scheme became effective from February 02, 2023, upon filing the certified true copy of the NCLT order with Registrar of Companies, Chennai as ordered by NCLT.

Upon the effectiveness of the Scheme, EHL was dissolved without winding up and the Board of Directors of the Bank at its meeting held on February 08, 2023 approved the extinguishment of shares held by EHL and allotted equity shares to the EHL shareholders as on record date as consideration for

the transfer and vesting of undertaking in the Bank as per the terms of the Scheme.

The fractional entitlements arising out of the aforesaid allotment were dealt as per the terms of the scheme and the sale proceeds were distributed to the shareholders on March 21, 2023 and the report of Committee of Independent Directors and Audit Committee were filed with SEBI.

The aforesaid allotment in pursuance of the Scheme was made in demat form only, as per SEBI directives. The said allotment also comprised allotment of 2,99,336 fully paid-up equity shares of ESFBL to a suspense demat account, being held on behalf of the shareholders of EHL holding shares in physical form, as on the record date.

The Board of directors approved the balance sheet of the merged entity as on January 01^st, 2023 (Appointed date) on February 23, 2023.

Share Capital

During the year, there has been no change in the Authorized share capital of the Bank.

The Bank has allotted in aggregate 29,38,696 equity shares to employees of the Bank under the ESFB Employees Stock Option Scheme, 2019.

Extinguishment of Equity Shares held by Equitas Holdings Limited (EHL) in the Bank

Upon the effectiveness of the Scheme, EHL was dissolved without winding up and 93,39,43,363 (Ninety three Crores thirty nine lakhs forty three thousand three sixty three only) equity shares held by EHL in the Bank (erstwhile Promoter of the Bank) were cancelled and extinguished.

Allotment of Equity Shares to the eligible record date Shareholders of Equitas Holdings Limited

Pursuant to the effect of the scheme, 78,95,35,166 (Seventy eight crores ninety five lakhs thirty five thousand one hundred and sixty six only) fully paid equity shares of ''10/- each were allotted to the eligible Equity shareholders of EHL as on the Record date i.e., February 03,2023 as per the share exchange ratio envisaged in the approved scheme i.e.,231 equity shares of ''10 each of ESFBL in respect of every 100 equity shares of ''10 each fully paid up held by them in EHL as consideration for transfer and vesting of undertaking of EHL in ESFBL in terms of the Scheme.

Consequently, the total issued and paid-up share capital of the Bank decreased to ''1,110,55,81,540 (One thousand one hundred ten crores fifty five lakhs eighty one thousand five hundred and forty rupees only) comprising of 111,05,58,154 (One hundred and eleven crore five lakhs fifty eight thousand one

hundred and fifty four only) equity shares with face value of ''10 each.

Apart from the above, the Bank did not raise any additional equity share capital during the year.

13. Meetings of the Board

During the FY 2022-23, our Board 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 Companies Act 2013 & the relevant Rules made thereunder and the applicable SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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. During the year under review, there was no change in the composition of any of the committees.

14. Directors and Key Managerial Personnel (KMP)

As on the date of this Report, the Bank has ten Directors, out of which, there are nine Independent Directors including a Woman Independent Director.

Change in Directors & KMP

During the year, the appointment of Prof. Samir Kumar Barua (DIN: 00211077) and Ms. Geeta Dutta Goel (DIN: 02277155) as Independent Directors for a period of 5 years with effect from 27^th December, 2021 was approved by the Members at the Sixth Annual General Meeting held on 19^th July, 2022. Further, the re-appointment of Mr. Vasudevan P N (DIN: 01550885) as Managing Director & CEO for a period of 3 years with effect from 23^rd July, 2023 was approved at the Board meeting held on December 23, 2022, and approved by RBI vide its letter dated June 15, 2023, which is subject to the approval of Members.

The Members had approved the appointment of Mr. Murali Vaidyanathan (DIN: 09594986), Sr President & Country Head-Branch Banking-Liabilities and Mr. Rohit Gangadharrao Phadke (DIN: 07293524), Sr President-Retails Assets as Whole Time Directors of the Bank to be designated as Executive Directors to hold the office for a period of three years from date of approval from RBI or from such date and period as may be approved by RBI.

However, RBI vide its letter dated 11^th August, 2022 had agreed to the appointment of one Executive Director position although the Bank had requested

for appointment of two Executive Directors for which the Members of the Bank had also accorded their approval. Considering the RBI''s advice for one position, the Bank had decided to defer the matter for the present and consider the same at an appropriate time.

Directors liable to retire by rotation

Section 152 of the Companies Act, 2013 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 Companies Act, 2013, the provisions of retirement of Directors by rotation shall not be applicable to 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 Nomination and Remuneration Committee and 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.

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 Independent Directors are available on 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, 2023:

S. No.	Name of the Key Managerial Person	Designation
1	Mr Vasudevan P N	MD & CEO
2	Mr Sridharan N	Chief Financial Officer (CFO)
3	Mr Ramanathan N	Company Secretary (CS)

During the year, the Board at its meeting held on June 30, 2022, on the recommendation of the Nomination and Remuneration Committee had approved the appointment of Mr. Ramanathan N (Membership Number: A28366) as the Company Secretary and Compliance Officer of the Bank w.e.f July 1, 2022. Mr Sampathkumar KR, the erstwhile Company Secretary of the Bank had moved to another control function

within the Bank by way of job rotation with effect from July 01, 2022.

15. Declaration from Independent Directors

The Board has received declarations from the Independent Directors as required under Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013

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.

16. Evaluation of performance of the Board and its committees

The performance of the Board, Committees of the Board, Chairman, Individual Directors & Key Managerial Personnel were evaluated on the basis of criteria as approved by the Board. All the Directors were provided the criteria for evaluation and forms, which were duly filled. The feedback from the Directors was consolidated and those relating to the Directors were shared with the respective Directors and feedback relating to the Committees and the Board were discussed with the respective Committees & Board.

17. Policy on Directors'' appointment, remuneration and other details

Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Bank has formulated and adopted Policy on selection of Directors and remuneration Policy, which is available in our website at click here

18. Directors'' Responsibility Statement

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

i) I n the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along

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.

19. 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 Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

(i) Ratio of remuneration of each director with median employee remuneration.	The ratio of remuneration of each Director to median employee remuneration is as below:
	Mr. Arun Ramanathan, Chairman	6.47:1
	Mr. Arun Kumar Verma, Chairman, Audit Committee	4.85:1
	Mr. P N Vasudevan, MD & CEO	60.51:1
	Mr. Vinod Kumar Sharma, Independent Director	3.24:1
	Prof. Balakrishnan N, Independent Director	3.24:1
	Mr. Srinivasan N, Independent Director	3.24:1
	Mr. Navin Puri, Independent Director	3.24:1
	Mr. Ramesh Rangan, Independent Director	3.24:1
	Prof. Samir Kumar Barua, Independent Director	3.24:1
	Ms. Geeta Dutta Goel, Independent Director	NA

(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year	The percentage increase in the remuneration of all the Independent Directors except for Ms. Geeta Dutta Goel is 60%. Ms. Geeta Dutta Goel has waived her right to receive the remuneration. The remuneration to Directors does not include sitting fees. The increase in remuneration of Key Managerial Personnel is provided below: Chief Executive Officer - 6%
	Chief Financial Officer - 17%** Company Secretary - Mr. Sampath Kumar K R-27%$ Mr. Ramanathan N -NA
	$ Mr. Ramanathan N was appointed as the Company Secretary and Compliance Officer of the Bank w.e.f July 1, 2022 so % increase in remuneration is not applicable.
	**does not include perquisite value
(iii) the percentage increase in the median remuneration of employees in the financial year	6%
(iv) the number of permanent employees on the rolls of the Bank as on March 31, 2023	20,563

(v) Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial Remuneration.

The average percentage increase in salaries of employees other than the managerial personnel in the last financial year was 6% and for KMP the increase was in the varying range of 6% to 27% for the financial year 2022-2023.

The increase during the year is based on remuneration policy of the Bank and reflects the Bank''s reward philosophy as well as the results of the salary benchmarking exercise.

(vi) Affirmation that the remuneration is as per the remuneration policy of the Bank.

The Management affirms that the remuneration is as per the remuneration policy of the Bank

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, 2023 and of the profit of the Bank for the year ended on that date,

i ii) 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,

i n accordance with Section 136 of the Companies Act, 2013, 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.

21. Whistle Blower Policy/ Vigil Mechanism

The Bank has adopted a Whistle Blower Policy and Vigil Mechanism in compliance with the relevant provisions of Companies Act, 2013 and Rules thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Policy provides an opportunity to address concerns of employees & Directors relating to 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 received ''Five'' 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.

22. Ratings of Debt Instruments

The Bank had redeemed the debt instruments during the FY and the details of the same along with the ratings applicable for those debt instruments are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

23 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 Meetings held on April 29, 2021 and June 01, 2021 had appointed M/s T R Chadha & Co LLP (TRC), Chartered Accountants and M/s Varma and Varma, Chartered Accountants, respectively as the Joint Statutory Auditors of the Bank. The said appointments were approved by the Members at the Fifth AGM held on August 12, 2021. The appointment was approved by RBI for FY 2021-22 vide its letter dated July 13, 2021. The tenure of M/s T R Chadha & Co LLP (TRC), Chartered Accountants, (Firm Registration No: 006711N/N500028) shall end at the conclusion of the ensuing Seventh AGM of the Bank.

As per the RBI guidelines, the appointment of Joint Statutory Auditors should be subject to annual approval from Reserve Bank of India. The Audit Committee of the Board had reviewed the performance of the Auditors during the financial year 2022-23 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 Companies Act, 2013 and RBI Regulations and their continuance, if approved, will be in accordance with the conditions prescribed under the Companies Act, 2013 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 at its Meeting held on June 14, 2023 considered the recommendation of Audit Committee and approved the re-appointment of M/s Varma and Varma, Chartered Accountants, as one of the Joint Statutory Auditors for the FY 2023-24 as they continue to satisfy the eligibility Norms as per the RBI guidelines. Further, the Board of Directors at the aforesaid meeting, on the recommendation of the Audit Committee, considered and approved the appointment of M/s A S A & Associates LLP, Chartered Accountants, (Firm Registration No: 009571N/ N500006 as one of the Joint Statutory Auditor for the period from FY 2023-24 to FY 2025-2026 subject to approval of the Members at the ensuing Annual General Meeting. RBI has approved the aforesaid appointment vide letter dated July 07, 2023.

Auditors'' Report:

There are no qualifications, reservations or adverse remarks made by the Joint Statutory Auditors of the

Employee Wise details of the options granted to A) Key Managerial Personnel
S. No	Name of Employee	Designation	No of options granted	Exercise Price	% of options granted
1	Mr.Vasudevan P N	MD & CEO	10,78,431	57.20	5.28%
2	Mr. Sridharan N	CFO	63,140	43.60	0.31%
3	Mr.Ramanathan N	Company Secretary	Nil	NA	NA

Bank, M/s. Varma & Varma, Chartered Accountants and M/s. T R Chadha & Co LLP, Chartered Accountants in their report on the financial statements for the FY 2022-23. Further, pursuant to Section 143(12) of the Companies Act, 2013, the Joint Statutory Auditors of the Bank have not reported any instances of frauds committed in the Bank by its officers or employees.

24. Details of Employee Stock Options Scheme (ESOS)

The Bank, pursuant to the resolutions passed by the Board and the Shareholders of the Bank on January 31, 2019, adopted the ESFB Employee Stock Option Scheme (ESOS), 2019 ("ESFB ESOP 2019"). The Bank has amended the ESFB ESOP 2019 pursuant to the resolutions of the Board and Shareholders of the Bank dated November 7, 2019 & November 22, 2019 respectively.

Post listing of Equity shares of the Bank, the ESFB ESOP 2019 was ratified by the Shareholders 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.

Partner, M/s B Ravi & Associates, Practicing Company Secretaries and 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 in our website click here

The Scheme is administered by the Nomination and Remuneration Committee constituted by the Board of Directors of the Bank.

I nformation as required under Section 62 of the Companies Act, 2013 and Rule 12 of the Companies (Share Based Employee Benefits) and the (SEBI SBEB & SE) Regulations 2021:

Particulars	Total
Number of options granted during the year	2,04,10,628
Number of options forfeited / lapsed during the year	65,96,673
Number of options vested during the year	65,47,866
Number of options exercised during the year	29,38,696
Number of shares arising as a result of exercise of options	29,38,696
Money realized by exercise of options (INR), if scheme is implemented directly by the company	10,36,71,878.50
Loan repaid by the Trust during the year from exercise price received	Not applicable
Option Granted but not vested	1,99,62,337
Options Vested but not exercised	2,86,52,409
Options Available for Grant	4,73,00,076

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 - NIL

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 Company at the time of Grant. - NIL

25. Secretarial Auditors

The Secretarial Audit Report issued by CS Dr. B Ravi, Managing Partner, M/s B Ravi & Associates (C.P. 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, reservations, adverse remarks or disclaimers made by the Secretarial Auditors.

26. I nformation as per Section 134 (3) (q) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014

26.1 During FY 2022-23, the Bank had no activity relating to Conservation of energy or technology absorption.

26.2 During FY 2022-2023, the total foreign exchange earned by the Bank was Nil and the total foreign exchange outgo was ''375.32 lakhs.

27. Particulars of contracts or arrangements with Related Parties

All contracts / arrangements / transactions entered by the Bank during the Financial Year 2022-2023 with related parties 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. The Policy on Related Party Transactions is available on the website of the Bank at click here

28. 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.

29. Internal Financial Controls

The Bank has clear delegation of authority and standard operating procedures, which are 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.

30. IND AS Implementation

I n 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 the 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 Indian 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 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.

31. Loans / Guarantees / Investments

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of Section 186 of Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided 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.

32. 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. Internal Complaints Committee has been set up for redressal of complaints. The particulars of complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the FY 2022-23 are as follows:

a. Number of complaints filed during the financial year : 5

b. Number of complaints disposed of during the financial year : 5

c. Number of complaints pending as on end of the financial year. : 0

33. Depository System

As the Members are aware, the Bank''s Equity Shares are tradable in electronic form. As on March 31, 2023, out of the Bank''s total equity paid up share capital comprising of 1,11,05,58,154 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.

34. The Annual Return under MGT-7 as required under the Companies Act, 2013 is available at the website of the Bank at click here.

35. 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.

GENERAL DISCLOSURE

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:

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

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

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

â¢ The financial statements of the Bank were not revised.

â¢ The Bank has not failed to implement any corporate action

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

Acknowledgement

The Directors are grateful to RBI, other Government and Regulatory Authorities, other Banks and Financial Institutions for their support and guidance. The Directors gratefully acknowledge the guidance provided to the various activities of the Bank by the Board of the erstwhile Holding company. 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.

Mar 31, 2022

Your Directors have pleasure in presenting the Sixth Annual Report on the business and operation of the Bank, together with the audited Accounts of the Bank for the financial year ended March 31, 2022 (FY 2021-22).

1. Summary of Financial Performance

The summary of Bank''s financial performance for the FY 2021-22 compared to the previous year 2020-21 is given below:

(? in lakhs)
	For the	For the
Particulars	Year ended	Year ended	Y-o-Y %
	March 31, 2022	March 31, 2021
Deposits & Other Borrowings	21,56,719.73	20,55,729.17	4.92%
Advances	19,37,420.60	16,84,818.90	15.00%
Total Income	3,99,722.58	3,61,246.79	10.65%
Operating Profits (Profits before Provision, Depreciation and Taxation)	94,723.00	96,301.96	(1.64%)
Less: Depreciation	7,528.31	7,643.32	(1.51%)
Less: Provision and contingencies	49,383.69	37,531.96	31.58%
Less: Provision for Taxation	9,737.82	12,704.36	(23.35%)
Net Profit	28,073.18*	38,422.32	(26.94%)
Add: Profit brought forward from previous year	89,823.86	64,313.84	39.67%
Total Profit Available for Appropriation	1,17,897.04	1,02,736.16	14.76%
Appropriations
Transfer to Statutory Reserve	7,018.30	9,605.58	(26.94%)
Transfer to Special Reserve	968.43	742.44	30.44%
Transfer to Capital Reserve	105.63	2,366.08	(95.54%)
Transfer to/ (from) Investment Reserve	Nil	Nil	Nil
Transfer to/ (from) Investment Fluctuation Reserve	124.71	198.20	(37.08%)
Proposed Dividend	Nil	Nil	Nil
Tax including Surcharge and Education cess on Dividend	Nil	Nil	Nil
Balance carried over to Balance Sheet	1,09,679.97	89,823.86	22.11%

*The Net profit of the Bank for FY 21-22 was lower compared to previous FY 20-21 due to increase in credit cost resulting primarily from higher provisioning for restructured advances and increase in Gross NPA during the year.

2. Dividend

Considering the need to preserve capital to support growth and expansion, the Board of Directors did not recommend any dividend for the financial year ended March 31, 2022. The Dividend distribution policy of the Bank is available in our website click here

3. Transfer to Reserves

As per the requirement of RBI Regulations, the Bank has transferred the following amounts to various reserves during year ended March 31, 2022.

Amount transferred to	''in lakhs
Statutory Reserve	7,018.30
Special Reserve	968.43
Capital Reserve	105.63
Investment Fluctuation Reserve	124.71

4. Deposits

Being a Banking Company, the Bank receives and accepts deposits. The details of the deposits are enumerated in the financial statements for FY 2021-22.

5. Capital Adequacy

The Capital Adequacy ratio stood at 25.16% as on March 31, 2022 as against the minimum requirement of 15% stipulated by RBI. The Net Worth of the Bank as on the said date was ''4,24,616.86 lakhs.

6. Material changes after the Balance Sheet Date as at March 31, 2022

There have been no material changes and commitments between the end of FY 2021-22 and the date of this report, affecting the financial position of the Bank.

7. Share Capital

During the year, there has been no change in the Authorised share capital of the Bank.

The Bank has allotted in aggregate 1,01,18,318 Equity Shares to employees of the Bank under the ESFB Employees Stock Option Scheme, 2019.

Except for issue of 10,26,31,087 Equity shares through QIP as detailed under paragraph 12 below, there was no capital infusion during the year. Total paid up share capital of the Bank was increased by ''112,74,94,050 (One Hundred and Twelve crores seventy four lakhs ninety four thousand and fifty) and as on March 31, 2022 it stood at ''1252,02,76,550 (One thousand two Hundred and Fifty two crores two lakhs seventy six thousand five hundred and fifty) comprising of 125,20,27,655 equity shares with face value of ''10 each.

8. Information 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.

9. Operational highlights

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

10. Management Discussion and Analysis, Report on Corporate Governance and Business Responsibility Report

The enclosed MD&A Report, Report on Corporate Governance and Business Responsibility Report form part of this Report.

11. Corporate Social Responsibility (CSR)

The Bank has laid down a Corporate Social Responsibility (CSR) Policy, which is available on our website click here

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.

12. Scheme of amalgamation between Equitas Holdings Limited (EHL) and Equitas Small Finance Bank Limited (the Bank)

The Board of Directors of Equitas Small Finance Bank Limited (ESFBL) and Equitas Holdings Limited (EHL) at their respective Meetings held on July 26, 2021 approved a Scheme of Amalgamation between EHL, ESFBL and their respective shareholders, contemplating amalgamation of EHL with ESFBL under applicable provisions of the Companies Act 2013. The Scheme was designed to achieve the RBI licensing requirement of dilution of promoter shareholding in the Bank and minimum public shareholding (MPS) requirements prescribed by SEBI Regulations, in a manner that is in the best interests of and without being prejudicial to EHL, ESFBL, their respective shareholders or any other stakeholders.

Subsequently, ESFBL achieved the MPS through a Qualified Institutions Placement (QIP) of its shares, in February 2022, after obtaining the necessary approvals. QIP comprised issue of 10,26,31,087 equity shares of ''10/ each at premium of ''43.59 per share, aggregating to a fund raise of '' 550 crore utilised 100% for augmenting the Tier 1 capital of the Bank during the year. As a result of this QIP, the public shareholding in the Bank increased from 18.70% to 25.37%, thereby complying with the Minimum Public Shareholding (MPS) requirements prescribed by SEBI Regulations.

Consequently, the aforesaid Scheme was revised to include the change in capital structure arising from QIP as well as the necessary change in objects of the Scheme. The Scheme, so revised was approved by the Boards of EHL and ESFBL in their respective Meetings held on March 21, 2022. The Scheme has been filed with the Stock Exchanges and RBI for necessary approvals/ sanctions. The RBI vide its letter dated May 6, 2022 has granted its conditional NOC to the Scheme while other approvals are awaited.

Upon coming into effect of this Scheme and in consideration of the amalgamation of EHL with ESFBL, ESFBL, without any further application, act or deed,

shall issue and allot to each of the equity shareholders of EHL as on the Record Date defined in the Scheme, 231 equity Shares of '' 10/- each credited as fully paid up of ESFBL, in respect of every 100 Equity Shares of '' 10/- each fully paid up held by them in EHL.

13. Meetings of the Board

During FY 2021-22, our Board met Eighteen (18) 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 Companies Act 2013.

14. Directors and Key Managerial Personnel

As on the date of this Report, the Bank has Ten Directors out of which there are nine Independent Directors including a Woman Independent Director.

Change in Directors

14.1 Section 152 of the Companies Act 2013 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 Companies Act 2013, the provisions of retirement of Directors by rotation shall not be applicable to 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 in the ensuing AGM of the Bank and being eligible, offers himself for reappointment. The Directors recommend his re-appointment and the same is being placed for approval of the shareholders at the ensuing Annual General Meeting.

14.2 During the year, Mr Sridhar Ganesh and Ms Tabassum Inamdar, Independent Directors ceased to be Directors of the Bank upon expiry of their term w.e.f. September 04, 2021 and October 21, 2021 respectively.

The Board of Directors place on record its appreciation for the valuable services rendered by Mr Sridhar Ganesh and Ms Tabassum Inamdar during their tenure as Directors of the Bank.

Pursuant to recommendation of Nomination & Remuneration Committee (NRC), the Board of Directors of the Bank at its Meeting held on December 27, 2021, appointed Ms Geeta Dutta Goel and Prof Samir Kumar Barua as Additional Director (Independent) of the Bank w.e.f. close of business hours on December 27, 2021. NRC recommendation was made after evaluating various candidates as per the Criteria set out at its meeting held on December 23, 2021.

The terms and conditions of appointment of Independent Directors are also available on the website of the Bank, click here.

The appointment of Independent Director during the year was made with satisfaction of the Board after ascertaining the integrity, expertise, experience and proficiency of the Directors. Appropriate resolution recommending their appointment as Independent Director with effect from December 27, 2021 with brief profile and explanatory statement is placed for approval of shareholders at the ensuing Annual General Meeting.

14.3 Pursuant to recommendation of Nomination & Remuneration Committee and subject to approval of RBI and shareholders, the Board in its Meeting held on May 4, 2022 has approved the appointment of Mr Rohit Gangadharrao Phadke, Sr President- Retail Assets and Mr Murali Vaidyanathan, Sr President & Country Head- Branch Banking- Liabilities as Wholetime Directors of the Bank to be designated as Executive Directors, to take effect from the date of approval of proposal by RBI. The appointment shall be for a period of three years or for such other period as may be approved by RBI.

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 Independent Directors are available on the website of the Bank click here

Key Managerial Personnel (KMP)

There were no changes in KMPs during the Financial Year 2021-22. As at March 31, 2022, the Bank had the following KMPs:

S. No.	Name of the Key Managerial Person	Designation
1	Mr Vasudevan P N	MD & CEO
2	Mr Sridharan N	Chief Financial Officer (CFO)
3	Mr Sampathkumar K R	Company Secretary (CS)

There were no change in the Key Managerial Personnel during the year.

15. Declaration from Independent Directors

The Board has received declarations from the Independent Directors as required under Section 149(7) of the Companies Act 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act 2013.

16. Evaluation of Board Performance

The performance of the Board, Committees of the Board, Chairman, Individual Directors & the Key Managerial Personnel, were evaluated on the basis of criteria as approved by the Board for the FY 2021-22. All the Directors were provided the criteria for evaluation and forms, which were duly filled. The feedback from the Directors was collated. Feedback relating to the Directors were shared with the respective Directors and feedback relating to the Committees and the Board were discussed in the Board.

17. Policy on Directors'' appointment, remuneration and other details

Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Bank has formulated and adopted Policy on selection of Directors and Remuneration Policy, which are disclosed in our website, Click here and here.

18. Directors'' Responsibility Statement

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

i) i n the preparation of the annual accounts for

the year ended March 31, 2022, 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 judgements 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, 2022 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.

19. Overall Remuneration:

Details of all elements of remuneration of all the Directors are given in the Corporate Governance Report. The Non-Executive Directors of the Bank are not entitled to stock options.Details of remuneration as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

(i) Ratio of Remuneration of Each Director with Median Employees Remuneration.	The ratio of remuneration of each Director to median employee remuneration is as below:
	Chairman	4.12:1
	Chairman, Audit Committee	3.09:1
	MD & CEO	58.32:1
	Other Independent Directors except Prof Samir Kumar Barua and Ms Geeta Dutta Goel*	2.06:1
	Prof Samir Kumar Barua (who joined on December 27, 2021)	0.54:1
	*Ms Geeta Dutta Goel has waived her right to receive	remuneration for FY 2021-22

(ii) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;	There has been no increase in remuneration* of Independent Directors during FY 2021-22 as compared to FY 2020-21. The increase in remuneration of Key Managerial Personnel is provided below: Chief Executive Officer - 28%# Chief Financial Officer - 31%** Company Secretary - 25% does not include sitting fees #excluding the variable pay component as the separate application needs to be made to RBI every year seeking approval. During the year 2021-22, the Board approved an increase in remuneration of MD & CEO. The proposal is submitted to RBI and awaiting approval. *does not include perquisite value arising out of exercise of options by the employee
(iii) the percentage increase in the median remuneration of employees in the financial year;	15%
(iv) the number of permanent employees on the rolls of the Bank as on March 31, 2022	17,607
(v) Average percentage increase already	The average percentage increase in salaries of employees other than the
made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial Remuneration.	managerial personnel in the last financial year was 12%.
(vi) Affirmation that the remuneration is as per the remuneration policy of the Bank.	The remuneration is as per the Remuneration Policy of the Bank.

I n accordance with Section 136 of the Companies Act, 2013, the report and accounts is 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.

21. Whistle Blower Policy/ Vigil Mechanism

During the year under review, the Bank received six complaints under the Whistle Blower Policy of the Bank, all of which were redressed and reported to Audit Committee. The functioning of the Mechanism is reviewed by the Audit Committee from time to time. No employee of the Bank has been denied

access to the Audit Committee for raising a whistle blower complaint.

22. Ratings of Debt Instruments
Instrument	Nature	Rating	Rating Agency	Amount
NonConvertible Debentures / Subordinated Debt	Long Term	CRISIL A / Stable	CRISIL Ratings Ltd	'' 150 Crores
Certificate of Deposit	Short Term	CRISIL A1	CRISIL Ratings Ltd	'' 1,000 Crores
Issuer Rating	Short Term	Ind A1	India Ratings & Research P Ltd	NA

23. 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 for 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 Meetings held on April 29, 2021 and June 01, 2021 had appointed M/s T R Chadha & Co LLP (TRC), Chartered Accountants and M/s Varma and Varma, Chartered Accountants as Joint Statutory Auditors of the Bank till 2023-24 in accordance to the RBI guidelines. Subsequently, the said appointment was approved by the Shareholders at the Fifth AGM on August 12, 2021. The appointment was approved by RBI for FY 2021-22 vide letter dated June 13, 2022.

As per the RBI guidelines, the appointment of Joint statutory auditors should be subject to annual approval from Reserve Bank of India. The Audit Committee of the Board had reviewed the performance of the Auditors during the financial year 2021-22 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 Companies Act, 2013 and RBI Regulations, their continuance, if approved, will be in accordance with the conditions prescribed under the Companies Act, 2013 and Rules thereunder as well as the applicable RBI Regulations and recommended their continuance to the Board. Board of Directors at its Meeting on May 04, 2022 considered the recommendation and approved the continuance of the Joint Statutory Auditors for the FY 2022-23 as they satisfy with the eligibility Norms as per the RBI guidelines.

Auditor''s Report

There are no qualifications, reservations or adverse remarks made by the Joint Statutory Auditors of the Bank, M/s. Varma & Varma and T R Chadha & Co LLP, Chartered Accountants (ICAI Firm Registration No. 006711N/N500028,) in their report on the financial statements for the FY 2021-22. Further, pursuant

to Section 143(12) of the Companies Act, 2013, the Statutory Auditors of the Bank have not reported any instances of frauds committed in the Bank by its officers or employees.

24. Details of Employee Stock Options Scheme (ESOS)

The Bank, pursuant to the resolutions passed by the Board and the Shareholders of the Bank on January 31, 2019, adopted the ESFB Employee Stock Option Scheme (ESOS), 2019 ("ESFB ESOP 2019"). The Bank has amended the ESFB ESOP 2019 pursuant to the resolutions of the Board and Shareholders of our Bank dated November 7, 2019 & November 22, 2019 respectively.

Post listing of Equity shares of the Bank the ESFB ESOP 2019 was ratified by the Shareholders by way of a special resolution dated February 08, 2021 as required by Regulation 12 of erstwhile SEBI (Share Based Employee Benefits) Regulations 2014. Further, as recommended by NRC, the Board of Directors at its Meeting dated 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.

The Bank may grant an aggregate number of up to 11,00,00,000 employee stock 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

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Information as required under Section 62 of the Companies Act, 2013 and Rule 12 of the Companies (Share Based Employee Benefits) and the SEBI SBEB & SE Regulations 2021:

Particulars	Total
Number of options granted during the year	81,61,946
Number of options forfeited / lapsed during the year	41,22,261
Number of options vested during the year	1,00,92,124
Number of options exercised during the year	1,01,18,318
Number of shares arising as a result of exercise of options	1,01,18,318
Money realized by exercise of options (INR), if scheme is implemented directly by the Company	'' 28,96,93,068
Loan repaid by the Trust during the year from exercise price received	Not Applicable
Option Granted but not vested	1,02,19,214
Options Vested but not exercised	2,75,20,273
Options Available for Grant	6,11,14,031

Employee Wise details of the options granted to A) Key Managerial Personnel
	S. No Name of Employee	Designation	No of options granted	Exercise Price	% of options granted
	1 Sridharan N	CFO	72,680	64	0.89
	2 Sampathkumar KR	Company Secretary	9,280	64	0.11
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
	S. No Name of Employee	Designation	No of options granted	Exercise Price	% of options granted
	1 Vasudevan P N	Managing Director & CEO	16,85,489	57.85	20.65%
	2 Rohit Phadke	Senior President and Head Retail Assets	4,44,708	60.00	5.45%
C)	identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and Conversions) of the Company at the time of Grant. - Nil

25. Secretarial Auditors

The Secretarial Audit Report of M/s B Ravi & Associates, Practising Company Secretaries (C.P. 3318) is enclosed as Annexure - II. 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, reservations, adverse remarks or disclaimers made by the Secretarial Auditors.

26. I nformation as per Section 134 (3) (q) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014

26.1 During FY 2021-22, the Bank had no activity relating to conservation of energy or technology absorption.

26.2 During FY 2021-22, the Bank and incurred foreign currency expenditure of '' 45.19 lakhs.

27. Particulars of contracts or arrangements with Related Parties

During FY 2021-22, there were no transactions requiring reporting under Section 188(1) of the Companies Act, 2013 in Form AOC-2. The Policy on dealing with material Related party transactions is available at Click here

28. 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.

29. Internal Financial Controls

The Bank has clear delegation of authority and standard operating procedures, which are reviewed periodically by the Audit Committee. 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 relating to the latter 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.

30. IND AS Implementation

The Ministry of Corporate Affairs (MCA), Government of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015. Further, a Press Release was issued by MCA on January 18, 2016 outlining the roadmap for implementation of Indian Accounting Standards (IND AS) converged with International Financial Reporting Standards (IFRS) for banks. Banks in India were required to comply with the Indian Accounting Standards (IND AS) for financial

statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter.

On April 05, 2018, the RBI has announced deferment of implementation date by one year for scheduled commercial banks. Subsequently, on March 22, 2019, RBI has deferred implementation of Ind AS for banks until further notice, pending necessary legislative amendments to the Banking Regulation Act, 1949. The same is yet to be notified.

31. Loans / Guarantees / Investments

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of Section 186 of Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided 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.

32. 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. Internal Complaints Committee has been set up for redressal of complaints. During FY 2021-22, six complaints were received under the Policy which were dealt with as per the process laid down and disposed of.

33. Depository System

As the Members are aware, the Bank''s Equity Shares are tradable in electronic form. As on March 31, 2022, out of the Bank''s total equity paid up share capital comprising of 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 themselves of the facility of dematerialisation.

34. The Annual Return MGT-7 as required under the Companies Act, 2013 is available at the website of the Bank, click here.

35. 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.

Acknowledgement

The Directors are grateful to RBI, other Government and Regulatory Authorities, other Banks and Financial Institutions for their support and guidance. The Directors gratefully acknowledge the guidance provided to the various activities of the Bank by the Board of the Holding company. The Directors place on record their sincere thanks to the valued constituent 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.

For and on behalf of the Board of Directors

Place: Chennai Vasudevan P N Arun Ramanathan

Date: May 19, 2022 MD & CEO Chairman

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Directors Report of Equitas Small Finance Bank Ltd.

1. Summary of Financial Performance

2. Dividend

3. Transfer to Reserves

4. Deposits

5. Capital Adequacy

8. Operational highlights and state of the Bank''saffairs

10. Corporate Social Responsibility (CSR)

11 (a) Share Capital

11 (b) Issue of debentures / Non-Convertible securities

12. Meetings of the Board

Board Committees

13. Directors and Key Managerial Personnel (KMP)

Change in Directors & KMPs

Appointment of Part-time Chairman and IndependentDirectors

Appointment of Executive Director (Whole-timeDirector) & KMP

Retirement & Resignation

Directors liable to retire by rotation

Familiarisation Programme

Key Managerial Personnel (KMP)

14. Declaration from Independent Directors

15. Evaluation of performance of the Board and itsCommittees

16. Policy on Directors'' appointment, remunerationand other details

17. Directors'' Responsibility Statement

18. Overall remuneration

Details of remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

19. Whistle Blower Policy / Vigil Mechanism

20. Credit Ratings

21. Auditors & their Report

Auditors'' Report:

22. Details of Employee Stock Options Scheme (ESOS)

I nformation as required under Section 62 of the Companies Act, 2013 and Rule 12 of the Companies (ShareCapital and Debentures) Rules, 2014 is as below:

Employee wise details of the Options granted to

A) Key Managerial Personnel

23. Secretarial Auditor

25. Particulars of contracts or arrangements withrelated Parties

26. Risk Management

27. Internal Financial Controls

28. IND-AS Implementation

29. Loans / Guarantees / Investments

31. Compliance with the Maternity Benefit Act, 1961

32. Depository System

33. GENERAL DISCLOSURE

Acknowledgement

Vasudevan P N Anil Kumar Sharma

1. SUMMARY OF FINANCIAL PERFORMANCE

2. DIVIDEND

3. TRANSFER TO RESERVES

4. DEPOSITS

5. CAPITAL ADEQUACY RATIO

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

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

11. SHARE CAPITAL

12. MEETINGS OF THE BOARD

Board Committees

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

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

Appointment of Independent Directors and Parttime Chairman

Retirement

Directors liable to retire by rotation

Re-appointment of Independent Director

Familiarisation Programme

Key Managerial Personnel (KMP)

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

17. DIRECTORS'' RESPONSIBILITY STATEMENT

18. OVERALL REMUNERATION

19. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

20. CREDIT RATINGS

21. AUDITORS & THEIR REPORT

Auditors'' Report

22. DETAILS OF EMPLOYEE STOCK OPTIONS SCHEME (ESOS)

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

Employee wise details of the Options granted to

a) Key Managerial Personnel

23. SECRETARIAL AUDITOR

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

26. RISK MANAGEMENT

27. INTERNAL FINANCIAL CONTROLS

28. IND-AS IMPLEMENTATION

29. LOANS / GUARANTEES / INVESTMENTS

8. Operational highlights and state of the Bank''s
affairs

Appointment of Part-time Chairman and Independent
Directors

Appointment of Executive Director (Whole-time
Director) & KMP

15. Evaluation of performance of the Board and its
Committees

16. Policy on Directors'' appointment, remuneration
and other details

Details of remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

I nformation 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:

25. Particulars of contracts or arrangements with
related Parties