Dhanlaxmi Bank Ltd Directors Report

Dear Shareholders,

The Board of Directors takes great pleasure to present the 99^th Annual Report on the business and operations of Dhanlaxmi Bank Limited (“the Bank”), together with the audited accounts for the financial year ended March 31, 2026. The Report highlights the performance and achievements of the Bank during the year along with the new initiatives undertaken by the Bank.

Performance Highlights

The Banks performance Highlights for the financial year ended March 31,2026 are as follows:

in Crore

	March 31,2026	March 31,2025
Total Business	33771.57	28219.11
Deposits	18642.88	16013.45
Advance (Gross)	15128.69	12205.66
Total Income	1793.87	1489.08
Total Expenditure	1577.59	1393.98
Net Interest Income	622.33	483.29
Operating Profit	216.28	95.10
Net Profit	102.75	66.64
Gross NPA %	1.89	2.98
Net NPA%	0.51	0.99
Provision Coverage Ratio% (incl. Technical write off)	92.46	88.84
Provision Coverage Ratio% (Excl. Technical Write off)	73.67	67.61
CRAR%	18.92	16.12
Return on Assets%	0.53	0.40
Return on Equity%	6.97	4.78
Earnings Per Share (in )	2.60	2.37

Bank’s Geographical Spread & Expansion Programme

> The Bank has 264 branches as on 31^st March, 2026 spread across 1 4 States and 2 Union Territories. During the financial year, Bank opened branches in Sulthan Bathery in Wayanad District, Kerala and Dindigul and Thiruporur in Tamil Nadu.

> Out of 264 branches, 20 branches are in rural category, 114 in Semi Urban, 72 in Urban and 58 in Metropolitan Category

> The Bank had 285 ATMs/CRMs as on March 31,2026

> The Reserve Bank of India, vide Letter No. CO.DOR.RAUG. No. S6450/22-03-049/2025-2026 Dated November 19, 2025, approved the Banks request for reinstatement of general permission for opening, shifting, merger, conversion, and closure of banking outlets.

Total Business

Total business of the Bank improved by 19.67% to reach Rs.33771.57 Crore as on 31.03.2026, from Rs.28219.11 Crore as on 31.03.2025.

Deposits

Deposits recorded a growth of 16.42%, reaching Rs.18,642.88 Crore as of March 31, 2026, compared to Rs.16,013.45 Crore as of March 31,2025. Current Account and Savings Account (CASA) deposits recorded a growth of 15.78%, reaching Rs.5,380 Crore as of March 31, 2026, compared to Rs.4,647 Crore as of March 31, 2025. The CASA-to-total deposits ratio stood at 28.86% as of March 31,2026

Gross advances stood at Rs.15128.69 Crore as of March 31,2026, compared to Rs.12205.66 Crore as of March 31,2025, registering a growth of 23.95%.

The CD ratio as of March 31,2026, was 81.15%

Profitability

The total income (Interest Income + Non-Interest Income) as of March 31 , 2026 was Rs.1 793.87 Crore, compared to Rs.1489.08 Crore as of March 31,2025, registering a growth of 20.47%. Interest income increased by 21.34% year-on-year, reaching Rs.1601.48 Crore as of March 31, 2026, compared to Rs.1319.88 Crore as of March 31, 2025. Similarly, non-interest income increased by 13.71% year-on-year, reaching Rs.192.39 Crore as of March 31, 2026, compared to Rs.169.20 Crore as of March 31,2025.

Changes in interest rates have impacted the Net Interest Income (NII) of the Bank, which has increased by 28.77% on a year-overyear (YoY) basis. Interest expenses have increased by 17.04% YoY to Rs.979.15 Crore as of March 31,2026, from Rs.836.59 Crore as of March 31, 2025. Operating expenses also increased by Rs.41.05 Crore, to Rs.598.44 Crore as on March 31,2026 from Rs.557.39 Crore as on March 31,2025.

Cost to Income Ratio as on March 31,2026 was 73.45% against 85.42% as on March 31,2025.

Operating profit during the year was Rs.216.28 Crore as against Rs.95.10 Crore during the previous year. The Bank declared a net Profit of Rs.102.75 Crore during the year under report and for the previous year, the Bank had declared a net profit of Rs.66.64 Crore.

Capital and Reserves

Banks Paid-up capital and reserves was Rs.1473.92 Crore as on

31.03.2026. The capital adequacy ratio as per Basel III was 18.92% with Core CRAR of 16.11%.

Capital Market Activities During FY 2025-26

Pursuant to the approval accorded by the shareholders of the Bank at the Extraordinary General Meeting (EGM) held on March 18, 2025, the Bank successfully issued and allotted 150 redeemable, non-convertible unsecured debentures (Basel III compliant Tier II Bonds) (ISIN: INE680A08099) aggregating to Rs.150 Crore on private placement basis during April 2025. The proceeds of the issue are being utilized to augment the Banks Tier II Capital, strengthen overall capital adequacy, and enhance long-term resources to support business growth.

The Board places on record its sincere appreciation to the shareholders and stakeholders for their continued trust in the Bank and participation in this capital-raising exercise. The Board also extends its gratitude to the Merchant Bankers, Legal Counsels, Trustees to the Bond Issue, Registrar and Transfer Agents, Bankers to the Issue, and the Banks Central Statutory Auditors for their valuable support in the successful completion of the issue. The Bank acknowledges with thanks the guidance and cooperation extended by the Regulators and the Stock Exchanges. The details of the issue of bonds are included in the Report on Corporate Governance forming part of the Directors Report.

Dividend

The Board of Directors of the Bank has not recommended any dividend for the financial year 2025 - 2026.

Non - Performing Assets

Gross NPA and Net NPA percentage stood at 1.89% and 0.51% respectively as on 31.03.2026 against 2.98% and 0.99% as on 31.03.2025.

The provision coverage ratio (PCR) as on 31.03.2026 was 92.46% which was 88.84% in the previous year.

Vision & Mission

Our Vision: “Banking on Relationships forever”.

Our Mission: To Become a Strong and Innovative Bank with Integrity and Social Responsibility to Maximize Customer Satisfaction as well as that of the Employees, Shareholders and the Society,

Customer Service

The Bank accords high importance to the quality of customer service rendered across its branches / offices. The Bank initiated a series of measures during the year through deployment of technology and significantly enhancing service quality, A well-defined and full-fledged Customer Grievance Redressal Mechanism has been put in place in the Bank.

The Customer Service Committees comprising of Bank personnel as well as our constituents monitor the implementation of customer service measures periodically. Customer Service Committee of the Board has been formed at the apex level and committees at branches for monitoring service quality and bringing about improvements in this area on an ongoing basis. The Bank has a dedicated Customer grievance redressal division at corporate office Thrissur and customer service 24 x 7 Phone Banking Call Centre at Chennai to cater to customer needs across the country. In the financial year 2025-26, the Bank registered 12483 complaints, as against 13538 complaints in 2024-25.

Compliance with Rights of Persons with Disabilities Act, 2016

The Bank is committed to providing accessible and inclusive banking services to Persons with Disabilities (PwDs), in accordance with the Rights of Persons with Disabilities Act, 2016 and guidelines issued by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).

Key initiatives undertaken include:

• Provision of ramps and other accessibility features at branches for easy access

• Designated service counters and priority assistance for PwDs

• Staff assistance for availing banking services and conducting transactions

• Implementation of website accessibility features in line with WCAG 2.1 Level AA standards

• Availability of accessibility tools on the Banks corporate website to enable customized browsing

The Bank periodically reviews its facilities and services to ensure equitable, dignified, and convenient access to banking for all stakeholders.

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

1. Introduced new deposit products, ”FCNR(B) Premium Deposit”

2. Implemented TAB based application to facilitate Account Opening, Re-KYC and customer service requests

3. Integrated UPI with the GSTN (PAYTAX) application to enhance customer convenience

4. Automation of the Retail Loan processing through implementation of Loan Origination System

5. Automated PMJJBY and PMSBY renewals to ensure seamless policy continuity, enhance operational efficiency and improve customer experience

6. Migrated the public domain to dhan.bank.in in line with the regulatory requirement to adopt a secure and compliant .bank.in domain for enhanced trust, authentication, and protection against phishing and other cyber threats

7. Enabled ECS-based collection of Recurring Deposits to ensure automated payments and improve customer convenience

8. Introduced SMS-based blocking of Retail Internet Banking and Mobile Banking services to enhance customer security and enable swift response to potential fraud

9. Upgraded all branches to B category in Core System to enable pan-branch forex transactions and enhance customer access to forex services

10. Real-time fraud monitoring of digital channels strengthened to enhance customer security

1 1 . Enabled end-to-end online Re-KYC through Retail Internet Banking to enhance customer convenience

12. Enabled UPI onboarding and transactions for customers with international mobile numbers, enhancing global accessibility and digital payment adoption

13. Enabled Digital KYC for differently abled persons promoting inclusive banking and enhancing customer onboarding experience

14. Digitized ATM withdrawal dispute handling via Mobile Banking, reducing manual intervention and enabling faster resolution and tracking

15. Enabled UPI services for Dhanam Genius and Dhanam Yuvak customers upon attaining 18 years, ensuring seamless transition to full digital banking capabilities

16. Launched ASHRAYA application to streamline and digitize death claim settlement processes

17. Enabled online modification of communication address via Retail Internet Banking and Mobile Banking, empowering customers with secure and convenient self-service option

18. Digitized the credit card closure process in RIB & MB, minimizing manual intervention and improving turnaround time

19. Enabled delegated payment functionality (UPI Circle) in UPI

20. Strengthened the UPI ecosystem by introducing exclusive UPI IDs with the ‘@validdlb handle for SEBI-registered intermediaries to collect funds from the investors through UPI

21. Enabled net banking registration using credit card details- simplifying the onboarding process and improving customer convenience

22. Strengthened dispute handling of digital transactions through UDIR in Retail Internet Banking and Mobile Banking, minimizing manual intervention and enhancing resolution efficiency

23. The Bank has partnered with Arppan Online, a leading service provider for temple solutions for bill generation and collections and is integrated with different mode of payments like Cards, UPI and Cash

24. The Bank has entered into a tie-up with M/s. Atyati Technologies as a Corporate Business Correspondent under the Financial Inclusion initiative

Listing on Stock Exchanges

The Equity shares of the Bank are listed on BSE Ltd. and the National

Stock Exchange of India Ltd. The Bank confirms that it has paid the

listing fees to the Stock Exchanges for the financial year 2026-27.

Green Initiatives in Corporate Governance

The Bank supports and pursues the Green Initiative of the Ministry of Corporate Affairs. All the documents including the notice and explanatory statement of Annual General Meeting, Audited Financial Statements, Directors Report and Auditors Report are being sent electronically to all shareholders who have registered their e-mail addresses with their Depository Participants or with the Bank / Registrar & Transfer Agents. Shareholders holding shares in electronic form are requested to update their e mail addresses in their respective DP accounts. Shareholders holding shares in physical form are requested to update their e mail addresses with Banks Registrar and Transfer Agents by a written request for enabling the Bank to ensure electronic dispatch of the aforesaid documents. A letter providing the web-link, including the exact path, where the complete details of the Annual Report are available is also being sent to those shareholder(s) who have not so registered their e-mail addresses.

Directors

The composition of the Board of Directors of the Bank is in accordance with the provisions of the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Banking Regulation Act, 1 949, guidelines issued by the Reserve Bank of India (“RBI”) and the best practices of Corporate Governance. As on March 31 , 2026, the Board of Directors of the Bank had 1 0 Directors comprising of the Chairman, Managing Director & CEO, Executive Director, 4 non-executive Independent Directors, one non-executive non independent Director and 2 Additional Directors appointed by the Reserve Bank of India under Section 36AB of the Banking Regulation Act, 1949. Our Chairman is also an Independent Non-Executive Director.

All the Directors have rich experience and specialized knowledge in various sectors like banking, risk management, agriculture & rural economy, small scale industry, information technology, economics, accountancy, etc. The remuneration / sitting fees paid to the Directors during the year are disclosed in the Report on Corporate Governance.

There were 5 independent Directors on the Board of the Bank as on March 31 , 2026. Declarations have been taken from all the Independent Directors as required under the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and the guidelines issued by RBI.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the Management.

There are no changes in any of the above information from March

31,2026 to the date of this Report, except for the following:

1. In the Meeting of the Board of Directors of the Bank held on

29.07.2026, Sri Rajan T.K was appointed as Additional Director (Non-Executive Independent) of the Bank w.e.f. July 29, 2026. His term of appointment as Non-Executive Independent Director will be for five years w.e.f. July 29, 2026, subject to the approval of the Shareholders of the Bank in the Annual General Meeting to be held on Wednesday, September 23, 2026. Sri Rajan T.K will be representing “Information Technology” as required under Section 10(2)(a) of the Banking Regulation Act, 1949.

2. In the Meeting of the Board of Directors of the Bank held on

07.08.2026, Sri T.V Rao was appointed as Additional Director (Non-Executive Independent) of the Bank w.e.f. September 01, 2026. His term of appointment as Non-Executive Independent Director will be for three years w.e.f. September 01, 2026, subject to the approval of the Shareholders of the Bank in the Annual General Meeting to be held on Wednesday, September 23, 2026. Sri T.V Rao will be representing “Payment& Settlement Systems” as required under Section 10(2)(a) of the Banking Regulation Act, 1949.

Detailed profiles of all the Board Members are available on the

Banks website at https://www.dhan.bank.in/board-of-directors/.

Changes in the Board during the year 2025-2026

1. Sri Ashutosh Khajuria was appointed as Director (Non-Executive Independent) on the Board of the Bank w.e.f March 22, 2025 and his appointment as Independent Director for a period of 5 years w.e.f March 22, 2025 was approved by the Shareholders of the Bank vide postal ballot on June 16, 2025.

2. Dr. Jineesh Nath C.K was re-appointed as Non-Independent Non-Executive Director, liable to retire by rotation, at the Annual General Meeting of the Bank held on September 29,2025.

3. Sri C. Nageswara Rao, General Manager, Reserve Bank of India was appointed by Reserve Bank of India as Additional Director on the Board of the Bank in accordance with the provisions of Section 36AB (1) of the Banking Regulation Act, 1949 from November 18, 2023 to November 17, 2025. RBI has further extended the term of office of Sri C. Nageswara Rao for a further period of two years from November 1 8, 2025 to November 17, 2027 or till further orders, whichever is earlier.

4. Reserve Bank of India has appointed Ms. Sujatha J, General Manager, Reserve Bank of India as Additional Director on the Board of the Bank in accordance with the provisions of Section 36AB (1) of the Banking Regulation Act, 1949, in place of Sri D K Kashyap, for a period of two years from November 19, 2025 to November 18, 2027 or till further orders, whichever is earlier.

Changes in Directors during the year 2026-27 till the date of the report

1. In the Meeting of the Board of Directors of the Bank held on

29.07.2026, Sri Rajan T.K was appointed as Additional Director (Non-Executive Independent) of the Bank w.e.f. July 29, 2026. His term of appointment as Non-Executive Independent Director will be for five years w.e.f. July 29, 2026, subject to the approval of the Shareholders of the Bank in the Annual General Meeting to be held on Wednesday, September 23, 2026.

2. In the Meeting of the Board of Directors of the Bank held on

07.08.2026, Sri T.V Rao was appointed as Additional Director (Non-Executive Independent) of the Bank w.e.f. September 01, 2026. His term of appointment as Non-Executive Independent Director will be for three years w.e.f. September 01, 2026, subject to the approval of the Shareholders of the Bank in the Annual General Meeting to be held on Wednesday, September 23, 2026.

Composition of Audit Committee

As on March 31 , 2026, the Bank had a 5-member Audit Committee of the Board (including 2 RBI Additional Directors). All the five members of the Committee were non-executive Directors. Ms. Vardhini Kalyanaraman is the Chairperson of the Committee. The other Members of the Committee are Sri G. Rajagopalan Nair, Dr. Jineesh Nath C.K, Sri C. Nageswara Rao and Ms. Sujatha J. The composition as well as the terms of reference of the Committee are in accordance with the provisions of the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Banking Regulation Act, 1949 and the guidelines issued by Reserve Bank of India.

Declaration By Independent Directors

The Bank has duly obtained necessary declarations from each independent Director under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 1 6 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Bank has also obtained the Fit & Proper declarations from all Directors as prescribed under the guidelines issued by Reserve Bank of India. Pursuant to the notification of the Ministry of Corporate Affairs dated October 22, 2019, an online data bank for the independent directors (“Data Bank”) has been rolled out by the Indian Institute of Corporate Affairs. All the Independent Directors of the Bank have registered themselves in the Data Bank.

Policy on appointment and remuneration of Directors

The Nomination & Remuneration Committee of the Board recommends the appointment / reappointment / continuation of the Directors to the Board after conducting due diligence of

the Directors on the basis of the “fit& proper” criteria prescribed under the guidelines issued by Reserve Bank of India along with the provisions of the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Nomination Policy approved by the Board. The Board will take the appropriate action based on the recommendations of the Committee.

The criteria for determining qualifications, positive attributes and independence of Directors to be appointed / re-appointed or for continuation of Directors include, inter-alia, the following:

• Ensuring that the appointment / re-appointment / continuation is in conformity with the provisions of the Banking Regulation Act, 1949, RBI guidelines, Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

• Ensuring that the criteria for independence of Directors as stated in the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is complied with, in case of independent Directors

• Ensuring that the person does not attract any disqualification as per the provisions of the Banking Regulation Act, 1949, RBI guidelines, the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

• Special knowledge or practical experience in various fields as enumerated in Section 10A(2)(a) of the Banking Regulation Act, 1949 or any other field which may be useful to the Bank;

• Professional knowledge and experience;

• Experience in the field of banking / finance sectors;

• Interest in NBFCs and other entities;

• Relatives connected with the Bank;

• Fund and non-fund facilities availed from the Bank;

• Defaults, if any, by the Director or interested entities with respect to the credit facilities availed from any Bank;

• Professional achievements relevant to the office of Directorship;

• Prosecution, if any, pending or commenced or resulting in conviction in the past against the director and / or against any of the interested entities for violation of economic laws and regulations;

• Criminal prosecution, if any, pending or commenced or resulting in conviction in the past against the Director;

• Any other factors as the Nomination & Remuneration Committee may think fit for the purpose of considering the appointment / re-appointment / continuation as Director

The Bank has a Board approved Compensation Policy which deals with the compensation & benefits of the Employees of the Bank.

The objectives of the Compensation Policy of the Bank inter-alia includes, to provide a fair and persistent basis for motivating, inspiring and rewarding the employees appropriately, according

to their jobs/role size, performance, accomplishments, contribution, skill, aptitude and competence to implement standards on sound compensation practices and incentives and to provide effective governance of compensation payable to the employees, alignment of compensation with prudent risk taking and effective supervisory oversight. The disclosure requirement of the remuneration is separately provided in “Disclosure under Basel III norms.”

The Board considers the recommendations of the Nomination & Remuneration Committee and approves the remuneration, with or without modifications, subject to regulatory approvals. The remuneration payable to MD & CEO / Whole-time Directors is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration to MD & CEO / Whole-time Directors is payable only after receipt of the approval from RBI.

The non-executive Directors are paid sitting fees for attending each meeting of the Board of Directors or any Committee thereof as approved by the Board, within the permissible limits prescribed under the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other regulatory guidelines, as amended from time to time. The Board while recommending any change in the sitting fees considers various factors like size and complexity of organization, comparison with the peer banks and regulatory guidelines as applicable. Apart from sitting fees, the Bank does not pay any other remuneration to the non-executive Directors.

The total remuneration paid to MD & CEO, Executive Director and non-executive Directors for the financial year 2025-26 is included in the Report on Corporate Governance forming part of this Report.

The Remuneration Policy of the Bank is hosted on the website of the Bank https://www.dhan.bank.in/pdf/Nomination-and- Remuneration-Policy-8.0.pdf.

Board Level Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, the individual Directors and various Committees of the Board are undertaken annually. The evaluation of the individual Directors is being done in the absence of the Director being evaluated. A separate meeting of independent Directors, held once a year, evaluates the performance of non-independent Directors, Chairman and the Board as a whole. The criteria for performance evaluation of Directors, Board and its Committees include, inter-alia, the following:

• Attendance at Board and various Committee meetings;

• Participation and contribution in Board and Committee meetings;

• Composition of the Board and its diversity;

• Roles of various Committees of the Board;

• Compliance and understanding of regulatory requirements;

• Contribution to effective corporate governance and transparency in the Banks operations;

• Updation of Knowledge and familiarization programmes conducted for Directors;

• Appropriateness of decisions made by the Board and its Committees;

• Quality, quantity and timeliness of flow of information to the Board;

• Understanding by individual Directors for their roles and responsibilities as Director;

• Contributions towards the performance and strategies of the Bank;

• Conduct of Meetings;

• Professionalism in the Board and Committees

Number of Board Meetings

A total of 14 Board Meetings were held during the year. The Board meetings were held in accordance with the regulatory requirements. The details of the meetings held are provided in the Corporate Governance Report that forms part of this Report.

Changes in Key Managerial Personnel (KMP)

During the Financial Year 2025-26, there were no changes in the Key Managerial Personnel (KMP).

Subsequent to the close of the financial year, Mr. Krishnakumar K has taken charge as the Chief Financial Officer of the Bank from Ms. Kavitha T.A with effect from July 10, 2026.

Except for the above, there are no other changes in the Key Managerial Personnel (KMP).

Particulars of employees

The Bank continues to uphold its commitment to building a dynamic and diverse workforce. The total number of employees of the Bank as at the closure of the financial year ended March 31,2026 was 1856, of which:

• Number of male employees: 1076

• Number of female employees: 780

• Number of transgender employees: 0

The Bank has no employee whose particulars are required to be given in terms of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report.

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

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

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

The Bank declares that it has duly complied with the provisions of the Maternity Benefit Act, 1961. All eligible women employees have been extended the statutory benefits prescribed under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support as applicable. The Bank remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

Statutory Central Auditors and the Auditors Report

The shareholders had at the 98th Annual General Meeting of the Bank held on September 29, 2025, appointed M/s. Sagar & Associates, Chartered Accountants, Hyderabad (FRN-003510S) and M/s. Abraham & Jose, Chartered Accountants, Thrissur (FRN- 000010S) for the financial year 2025-26 for their third year and second year respectively to hold office as the Joint Statutory Central Auditors of the Bank from the period commencing from the conclusion of the 98th Annual General Meeting to the conclusion of the 99th Annual General Meeting of the Bank.

M/s Sagar & Associates, Chartered Accountants, Hyderabad, will be completing their third year of engagement by conclusion of the 99th Annual General Meeting scheduled to be held on Wednesday, September 23, 2026 and therefore, shall not continue as the Joint Statutory Central Auditors of the Bank in accordance with the guidelines issued by Reserve Bank of India. The Reserve Bank of India vide. Letter No CO. DOS.RPD. No. S3063/08.08.005/2026-27 dated July 23, 2026 has approved appointment of M/s. Abraham & Jose, Chartered Accountants (FRN 000010S) and M/s. G. Natesan & Co., Chartered Accountants (FRN 002424S), Chennai as the Joint Statutory Central Auditors of the Bank for the financial year 2026-27, for their third year and first year respectively. Accordingly, the Board of Directors of the Bank has placed the proposal for the appointment of M/s. Abraham & Jose, Chartered Accountants and M/s. G. Natesan & Co., Chartered Accountants, Chennai as the Joint Statutory Central Auditors of the Bank for the financial year 2026-27, for their third year and first year respectively, to the Shareholders for their approval at the 99th Annual General Meeting of the Bank scheduled to be held on Wednesday, September 23, 2026.

A total fee of Rs. 50 Lakhs (Rupees Fifty Lakh only) plus applicable taxes was paid to the Statutory Central Auditors M/s. Sagar & Associates and M/s. Abraham & Jose for Audit, Certification, Quarterly Review and Tax Audit for the FY 2025-26. The travelling

and out- of pocket expenses related to the audit/review were additionally reimbursed on actual basis.

There is no qualification or adverse remark in the Auditors Report for the financial year 2025-26.

Secretarial Auditors and Secretarial Audit Report

Subject to the approval of Shareholders, the Board of Directors of the Bank has appointed Sri M. Vasudevan as the Secretarial Auditor of the Bank for a term of 5 years i.e., from the financial year 202526 to the financial year 2029-30, based on the recommendation of the Audit Committee of the Board. The Bank has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The report of the Secretarial Auditor is annexed to this report. The Secretarial Audit Report for the financial year 2025-26 does not contain any qualification, reservation, adverse remark or disclaimer of opinion.

Annual Return

Pursuant to Section 92 (3) of the Companies Act, 2013 and Section 134 (3) (a), the Annual Return is hosted on the Banks website at https://www.dhan.bank.in/pdf/15-Annual%20Return.pdf

Related Party Transactions

The Bank has adopted the “Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions” in accordance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is hosted on the website of the Bank at https://www.dhan.bank.in/ pdf/Policy-Materiality-Related-Party-Transactions-Dealing-Related- Party-T ransactions-8.0.pdf.

During the financial year, the Bank did not enter into any related party transactions with its Directors or Key Managerial Personnel or their Relatives that would potentially conflict with and/ or adversely affect the interests of the Bank. In accordance with the circular issued by Reserve Bank of India on “Disclosure in Financial Statements - Notes to Accounts dated July1, 2015 - Para 4.5 Accounting Standard 18 - Related Party Disclosures”, the remuneration paid to Managing Director & CEO and the Executive Director alone qualifies for classification as Related Party Transaction, for which the Bank has taken due approvals of the Reserve Bank of India and the Shareholders of the Bank. However, in accordance with the provisions of Regulation 23 (9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the remuneration paid to Managing Director & CEO and the Executive Director does not fall within the purview of Related Party Transactions. Further, there was no related party transaction for which Form AOC-2 was applicable.

Risk Management Policy Framework

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement and

management of all material risks including but not limited to credit, market, operational, liquidity and other Pillar-II risks. The Bank has put in place integrated risk management policies which ensure independence of the risk governance structure. The required standard operating procedures also follows the Policies to ensure that all the parameters are well covered while implementing the approved policies. The details of risk management practices are provided in Management Discussion and Analysis Report annexed to the Directors Report.

Compliance With Capital Adequacy Framework

In compliance with regulatory guidelines on Pillar I of Basel III norms, the Bank has computed capital charge for credit risk as per the Standardized Approach, for market risk as per the Standardized Duration Method and for operational risk as per the Basic Indicator Approach. To address Pillar II risk, the Bank has implemented ICAAP (Internal Capital Adequacy Assessment Process), to integrate capital planning with budgetary planning and to capture residual risks which are not addressed in Pillar I, like credit concentration risk, interest rate risk in the banking book, liquidity risk, earnings risk, strategic risk, reputation risk, pension obligation risk etc. The Bank has adopted a common framework for additional disclosures under Pillar III for adhering to the market discipline norms of Basel III guidelines. This requires the Bank to disclose its risk exposures, risk assessment processes and its capital adequacy to the market in a consistent and comprehensive manner.

Adequacy of Internal Financial Controls related to Financial Statements

The Bank has laid down a system of internal financial controls with reference to its financial statements. The integrity and reliability of the internal control systems are achieved through clear policies and procedures, process automation, training and development of employees, and an organisation structure that segregates responsibilities. These controls are reviewed and tested by the internal audit team to ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements. The internal financial controls of the Bank with respect to the financial statements are adequate and are operating effectively.

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

To reduce its carbon footprint and enhance resource efficiency, the Bank has undertaken various energy conservation initiatives at its premises. The Banks Mattancherry Branch is currently operating on solar energy, The Bank is also in the process of installing solar power systems at Corporate Office and other Bank-owned premises. Further, energy-efficient equipment is being deployed across branches and administrative offices to optimize power consumption.

The Bank continues to leverage information technology extensively to deliver quality services to its customers. It remains committed to digital transformation, with ongoing investments in analytics and paperless technologies aimed at enhancing operational efficiency and improving both internal and customer-facing processes.

In addition, the Bank actively supports the countrys export efforts through its trade finance operations, thereby contributing to foreign exchange earnings.

Investor Education and Protection Fund

The Bank transferred the entire pending unclaimed dividend amount to the Investor Education and Protection Fund (IEPF) during the financial year 2018-19. There was no amount of dividend pending to be transferred to the fund in the financial year 2025-26.

In terms of Section 124 (6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, it may be noted that if the dividends have been unpaid or unclaimed for seven consecutive years or more the underlying shares shall be transferred to the IEPF Demat Account maintained with depositories. Upon transfer of such shares to IEPF account, all benefits (eg. bonus, split, etc.), if any, accruing on such shares shall also be credited to the IEPF Demat Account and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. The members/claimants whose shares, unclaimed dividend etc. have been transferred to IEPF may claim the shares or apply for refund by making an application to IEPF Authority as per the procedure prescribed in the IEPF Rules.

Maintenance of Cost Records

Being a Banking Company, the Bank is not required to maintain cost records as per sub-section (1) of Section 148 of the Companies Act, 2013.

Subsidiary Companies

The Bank does not have any subsidiary companies.

Compliance to Secretarial Standards

The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings and General Meetings have been complied with by the Bank.

Confirmation with respect to Insolvency and Bankruptcy Code, 2016

As per section 3(7) of The Insolvency and Bankruptcy Code, 2016, “Corporate person” does not include any financial service provider, but under section 3(17) of IBC,” Bank “is treated as “Financial Service Provider”. However as per the said section, normal creditors cannot directly trigger action against the Bank under IBC, but prior permission/consent and approval is required

from the Financial Regulator, RBI. There is no application or proceeding against the Bank under Insolvency and Bankruptcy Code, 2016 during the financial year under review, Bank also had not filed any IBC cases directly against any corporate defaulter or against the personal guarantor to the Corporate Debtor during the financial year 2025-26.

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

Being a Banking Company, the disclosures relating to deposits as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Act, are not applicable to the Bank.

Details in respect of frauds reported by auditors

The Statutory Auditors have not reported any fraud under Section 143(12) of the Companies Act, 2013 during the financial year.

Particulars of Loans, Guarantees or Investments

Pursuant to Section 186 (11) of the Companies Act, 2013, the provisions of section 186 of Companies Act, 2013, except subsection (1), do not apply to a loan made, guarantee given or security provided or investment made by a banking company in the ordinary course of business.

Strictures and Penalties

During the year, BSE imposed a fine of Rs.75,000 plus applicable GST and NSE imposed a fine of Rs.24,000 plus applicable GST for delay in filing the halfyearly disclosure respectively with respect to related party transactions and for delay in filing the statement indicating the utilization of proceeds of nonconvertible securities. Apart from the above, no other penalties or strictures were imposed on the Bank by the Stock Exchanges, SEBI, or any other statutory authorities on matters relating to the capital market. Further, there were no significant or material orders passed by regulators, courts, or tribunals impacting the going concern status of the Bank or its future operations.

Management Discussion and Analysis Report

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

Report on Corporate Governance

A separate report on Corporate Governance as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and certificate from Sri V, Suresh, Practicing Company Secretary certifying compliance with the conditions of Corporate Governance are annexed to this report.

Corporate Social Responsibility

In compliance with the provisions of Section 1 35 of the Companies Act, 2013, the Bank has constituted a Corporate Social Responsibility Committee of the Board and has formulated

a Corporate Social Responsibility Policy approved by the Board. Due to losses incurred by the Bank from FY 2013 to 2018, in compliance with the provision outlined in Section 198, these losses were offset against profits in subsequent years. Consequently, no profits were available under Section 1 98 of the Companies Act, 2013 for Corporate Social Responsibility purposes. Therefore, the Bank did not undertake any projects under Corporate Social Responsibility for the financial year 2025-26.

Business Responsibility and Sustainability Report

The regulatory provisions relating to the Business Responsibility and Sustainability Reporting are not applicable to the Bank for the financial year ended March 31,2026.

Material Changes and Commitments affecting Financial Position of the Bank

There are no material changes and commitments affecting the financial position of the Bank which has occurred between the end of the financial year, i.e, March 31, 2026 and the date of Directors Report, i.e, August 19, 2026.

Directors Responsibility Statement

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013 with respect to the Directors Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2025-26 and of the profit and loss of the Bank for that period.;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts for the financial year ended March 31, 2026 on a going concern basis;

(v) the Directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Board of Directors places on record its gratitude to the Government of India, the governments of various States, the Reserve Bank of India, the Securities and Exchange Board of India, the Registrar of Companies, other regulatory bodies and the Stock Exchanges, where the Banks shares are listed, for their support and guidance. The Board also places on record its gratitude to the Banks customers, shareholders, other stakeholders and well- wishers for their valued patronage. The Board further places on record its appreciation for the valuable services rendered by the Joint Statutory Central Auditors and the Secretarial Auditor of the Bank. The Board expresses its sincere appreciation for the dedicated services rendered by officers and employees of the Bank at all levels.

	By Order of the Board
	Sd/-
Place : Thrissur	K.N Madhusoodanan
Date : August 19, 2026	Chairman