CSB Bank Ltd

Dear Shareholders,

Your Board of Directors (the "Board") have pleasure in presenting you the 104th Annual Report of CSB Bank Limited ("CSB Bank/ the Bank") together with the Audited Financial Statements, Independent Auditors' Report and the Report on the business and operations of the Bank for the financial year ended March 31, 2025.

FINANCIAL PERFORMANCE AND STATE OF THE BANK'S AFFAIRS

The financial highlights of the Bank for the financial year under review, are presented below:

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BUSINESS STRATEGY OVERVIEW

Your Bank is primarily driven by the Sustain Build Scale (SBS) 2030 strategy, which was rolled out in FY 2022, with a clearly defined implementation horizon of eight years. SBS 2030 encompasses your Bank's long-term vision to become a midsized new age bank by FY 2030, with an ambitious objective of eventually positioning itself as the "Bank of the Future (BoTF)". The vision is being rolled out in 3 phases.

The five key pillars on which the above vision is built around are governance, human capital, technology, customer service and compliance. The initial Sustain phase is aimed at sustaining our core strengths and the rich legacy that we have painstakingly built over a period of 100 plus years. Build phase which extends till FY 26, targets to put in place all the required platforms, which would help the bank to scale at a level required for becoming the mid-sized bank and finally the ‘BoTF'.

Under build phase, the key milestones that are being pursued are - Pan India network expansion, creating enhanced product suite, building a strong liability franchise, continuing with the gold loan focus, process re-engineering and strengthened risk management/ compliance/governance standards. All this is targeted to be achieved alongside the overall tech revamp including the Core migration to Flex Cube (FC). We are at the advanced stage of the build phase with the successful CBS migration, implementation of various surround systems, OGL, OFSAA etc. Your bank has achieved all the key milestones set under the build phase, the most critical one being the readiness for revamping the entire tech stack. Growth oriented policies have been put in place. Apart from tech infra, the bank continued its investments in distribution and has a network of 829 branches and 791 ATMs as on March 31, 2025. Once the system stabilises, the retail journey will pick up. From FY 27, the scale phase will start in true perspective, which will ultimately help your bank to achieve the long-term goal of transforming into a new age private sector bank by creating value by means of customer centricity, meaningful collaboration, connecting ecosystems, innovation etc

PERFORMANCE OVERVIEW

During the period under review, your Bank continued to deliver on stakeholder expectations by demonstrating good performance across most of the key parameters,despite facing a challenging and adverse environment. Bank's growth trajectory remained steady and clearly discernible over the years and the performance during the financial year under review was no exception with many key business parameters/metrics surpassing industry growth rate/benchmarks, despite a few areas of relative underperformance. Bank successfully achieved topline targets, the bottom-line performance was marginally below expectations, and this shortfall was primarily attributed to prevailing liquidity constraints in the ecosystem, systemic stress and slippages.

In the Financial year 2024-25, the total income grew by ' 1,057.37 crore to ' 4,569.20 crore from ' 3,511.83 crore in the corresponding previous financial year. During the same period, Interest Income increased by ' 669.60 crore to ' 3,597.14 crore from ' 2,927.54 crore and Non-Treasury Other Income increased by ' 337.46 crore to ' 874.10 crore from ' 536.64 crore in the corresponding previous financial year. During the same period, Net Treasury Income increased by ' 50.30 crore to ' 97.95 crore from ' 47.65 crore in the corresponding previous financial year.

During FY 2024-25, the total Operating Profit of the Bank increased by ' 130.32 crore to ' 910.24 crore from ' 779.92 crore and Net Profit increased by ' 26.98 crore to ' 593.80 crore from ' 566.82 crore in the corresponding previous financial year. The profit came in the backdrop of a strong Non-interest income, backed by processing fee, commissions on selling third party products, charges collected from deposit accounts, treasury profit and Income received from sale of PSLC. However, the Net Interest Income registered a slight decline in the same period compared to the previous financial year, primarily due to tight liquidity conditions lead to elevated deposit rates, increased hedging costs, and shifts in the business mix.

In the same period, the Bank's gross advances grew by ' 7,270.23 crore to ' 31,841.98 crore led by 35% growth in gold loans to ' 14,094 crore from ' 10,407 crore, 33% growth in SME/MSME to ' 4,241 crore from ' 3,200 crore, 24% growth in retail loan to ' 6,233 crore from ' 5,009 crore and 22% growth in corporate loan to ' 7,274 crore from ' 5,956 crore.

In the same period, the Deposits grew by ' 7,142.68 crore to ' 36,861.49 crore from ' 29,718.80 crore in the corresponding previous financial year.

Gross non-performing assets (GNPAs) increased by ' 13739 crore to ' 498.46 crore as on March 31, 2025 from ' 361.07 crore as on March 31, 2024. Net non-performing assets (Net NPAs) increased by ' 38.63 crore to ' 163.53 crore as on March 31, 2025 from ' 124.90 crore as on March 31, 2024. The gross NPA as percentage of advances increased by 10 basis points to 1.57% as on March 31, 2025 as against 1.47% as on March 31, 2024. Net NPAs increased by 1 basis points to 0.52% as of March 31, 2025 from 0.51% as on March 31, 2024. Provision Coverage Ratio (including write off) stood at 83.71% at the end of the financial year as against 86.44% in the corresponding previous financial year. Total Assets have increased by ' 11,780.28 crore and stood at ' 47,836.27 crore as on March 31, 2025 as against ' 36,055.99 crore as on March 31, 2024. Net Advances have increased by ' 7,171.47 crore and stood at ' 31,507.05 crore as on March 31, 2025 as against ' 24,335.58 crore as on March 31, 2024.

FINANCIAL PERFORMANCE

Net Interest Income (NII) stood at ' 1,476.18 crore in FY 2024-25 as against ' 1476.41 crore in FY 2023-24. Non-Treasury Other Income increased by ' 337.46 crore to ' 874.10 crore in FY 2024-25 from ' 536.64 crore in FY 2023-24. Net Treasury Income also increased by ' 50.30 crore to ' 97.95 crore in FY 2024-25 from ' 47.65 crore in FY 2023-24.

Provisions other than taxes increased by ' 92.23 crore from ' 18.48 crore to ' 110.71 crore. The Operating Profit for the financial year 2024-25 was ' 910.24 crore before taxes and provisions as against ' 779.92 crore in the financial year 2023-24 mainly on account of increased other income including treasury profits.

The Net Profit for the financial year 2024-25 was ' 593.80 crore as compared to a Net Profit of ' 566.82 crore in the financial year 2023-24.

DIVIDEND

The Bank has formulated the Dividend Distribution Policy as per the requirements of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("SEBI Listing Regulations") and guidelines issued by Reserve Bank of India (the "RBI").

The objective of the Policy is to lay down the criteria to be considered by the Board, before recommending dividend to its shareholders, whether it be Interim/Special Dividend or Final Dividend. The Bank believes in optimizing the shareholder's wealth by offering them various corporate benefits from time to time after considering the Capital to Risk (Weighted) Assets Ratio (CRAR) and reserve requirements subject to regulatory stipulations.

The directors, with the object of conserving the profits to strengthen its balance sheet further, do not propose to recommend any dividend for the financial year ended March 31, 2025, despite the Bank posted a commendable net profit in the same period.

The Dividend Distribution Policy is available on the Bank's website at https://www.csb.co.in/pdf/CSB_Dividend_Policy. pdf.

CHANGE IN THE NATURE OF BUSINESS

During the financial year under review, there has been no change in the nature of business of the Bank.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE 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 of the Bank i.e., March 31, 2025 and the date of the Board's Report.

CAPITAL STRUCTURE

The Authorised share capital of the Bank stood at ' 220.00 crore divided into 22 crore equity shares with a face value of ' 10/- each as on March 31, 2025. During the financial year under review, there has been no change in the Authorised share capital of the Bank.

The Paid-up Equity Capital of the Bank stood at ' 173.49 crore comprising 17,34,85,827 fully paid-up Equity Shares of ' 10/- each as on March 31, 2025. The Bank has not allotted any shares during the financial year 2024-25, and as a result, the paid-up capital of the Bank remains unchanged, i.e., ' 173.49 crore, in the said period.

NET OWNED FUNDS

The Bank's Net owned funds grew to ' 4,256.63 crore from ' 3,563.64 crore as of the previous financial year, and market capitalisation stood at ' 5,243.61 crore as on March 31, 2025 as against ' 7,000.15 crore as on March 31, 2024.

CAPITAL ADEQUACY RATIO

The Bank's overall Capital Adequacy Ratio (CRAR) under Basel III stood at 22.46% at the end of fiscal 2025, well above the benchmark requirement of 11.50% stipulated by Reserve Bank of India. Of this, the Common Equity Tier I (CET I) CRAR was 20.59% (against minimum regulatory requirement of 8.00%) and Tier I CRAR was 20.59% (against minimum regulatory requirement of 7.00%). As on March 31, 2025, the Bank's Tier II CRAR under Basel III stood at 1.87% as against 1.37 % as on March 31, 2024.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that;

a. In the preparation of the annual accounts for the financial year ended March 31, 2025, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. The directors have 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 2024-25 and of the profit and loss of the Bank for that period.

c. The directors had taken proper and sufficient care for the 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 fraud and other irregularities.

d. The directors had prepared the annual accounts for the financial year ended on March 31, 2025, on a going concern basis.

e. 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.

f. 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.

PROMOTER HOLDING - FIH MAURITIUS INVESTMENTS LTD

FIH Mauritius Investments Ltd (FIHM), the promoter of the Bank holds 40.00% of the paid-up capital of the Bank in line with Reserve Bank of India Master Direction, viz., (Acquisition and Holding of Shares or Voting Rights in Banking Companies) Directions, 2023 ("Master Direction") read with Reserve Bank of India Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies ("Guidelines"), dated January 16, 2023. FIHM holding in the Bank is subject to the dilution schedule as mandated by Reserve Bank of India and the relevant RBI guidelines as applicable, from time to time.

FIHM, on June 27, 2024, as part of the dilution schedule, sold 16,868,645 shares, which constitute 9.72% of the paid-up capital of the Bank, and accordingly, their holdings were brought down to the current level of 40.00% of the paid-up capital of the Bank from 49.72% at the beginning of the financial year.

Pursuant to Section 12(2) of Banking Regulation Act, 1949 and RBI Gazette Notification no. DBR.PSBD. No. 1084/16.13.100/2016-17 dated July 21, 2016, read with Guidelines dated January 16, 2023, voting rights of FIHM is currently capped at 26% of the total voting rights of the Bank.

DISCLOSURE OF CERTAIN TYPE OF AGREEMENTS BINDING THE BANK

The Bank has entered into an Investment Agreement ("Agreement") dated February 20, 2018, with FIH Mauritius Investments Ltd (FIHM), the promoter of the Bank, which was superseded and replaced by Amended and Restated Investment Agreement dated October 15, 2018, read with Addendum No. 1 dated October 19, 2020 ("Addendum") to the Amended and Restated Investment Agreement dated October 15, 2018. The salient features of the agreement in terms of Regulation 30A of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 read with clause 5A of paragraph A of Part A of Schedule III of the SEBI Listing Regulations was disclosed in the Annual Report of the Bank for the financial year 2023-24. The shareholders may refer page no. 93 of the said Annual Report for further information.

Except as stated above there are no other agreements which mandates a disclosure under of Regulation 30A of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 read with clause 5A of paragraph A of Part A of Schedule III of the SEBI Listing Regulations.

QUALITY INITIATIVES

CSB Institute of Learning & Development (CSBILD) has emerged as a pillar of capacity building, enhancement and professional development within the Bank. Through a suite of structured programme and forward-thinking learning initiatives, CSBILD consistently equips employees with the critical knowledge and skills needed to excel in a rapidly evolving banking landscape. By aligning its efforts with the Bank's strategic vision, CSBILD plays a vital role in driving long-term organisational success and fostering a culture of continuous growth.

CSBILD achieved a significant achievement in FY 2024-25 by ensuring 100% employee participation across a diverse array of learning platforms, including online, campus-based, and external programme. During the year, total training hours reached 2,15,567 hours, resulting in a per employee learning average of 30 hours. This commitment to continuous development was reflected across the workforce, with male employees averaging 29.29 hours and female employees averaging 31.14 hours, underscoring CSBILD's dedication to inclusive and impactful learning.

During FY 2024-25, two key learning initiatives were rolled to enhance employee development. The first, DORM (Demonstrate, Observe, Release & Monitor), is a structured four-step, on-the-job training framework conducted by supervisors over a 90-day period, aimed at accelerating the onboarding and performance of new team members. The second initiative, DISHA, features concise learning modules delivered under a unified brand identity. These sessions are conducted simultaneously across all branches on the first and third Saturdays of each month, fostering a culture of continuous learning. Covering a wide array of topics-from products and processes to essential skills— these modules are facilitated by branch heads to promote active engagement and participation.

Building on its momentum in the current financial year, CSBILD has continued its structured five-day onboarding programme, ‘Neev', aimed at equipping new hires for success. In addition, a self-paced online progamme titled ‘Neev NXT - BM', specifically designed for newly appointed Branch Managers was conducted. This five-day programme is tailored for newly appointed Branch Managers, helping them adapt to their roles with greater productivity.

CSBILD has also retained its ISO 9001:2015 certification, originally obtained in the previous financial year, underscoring its commitment to maintaining high standards in learning and development.

DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAS

In terms of Reserve Bank of India (the "RBI") guidelines, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts to the financial statements. The disclosure is required if either or both of the following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 5% of the reported profit before provisions and contingencies for the reference period; and (b) the additional gross NPAs identified by RBI exceed 5% of the published incremental gross NPAs for the reference period.

Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's annual supervisory process for fiscal 2024

HUMAN RESOURCES

For a detailed update on Human resources activities, please refer to the report on Human Resources / Industrial Relations in the Management Discussion & Analysis section for detailed analysis.

CREDIT RATINGS OF DEBT INSTRUMENTS

CRISIL, vide letter dated May 20, 2025, reaffirmed the rating ‘CRISIL A1+' to the ' 2,500 crore Certificate of Deposits Programme and ' 2,000 crore Short Term Fixed Deposits Programme of the Bank.

CRISIL, vide letter dated May 20, 2025, reaffirmed ‘CRISIL A /Stable' rating to the proposed ' 500 crore Tier II, Basel III compliant bonds issue Programme of the Bank. India

Ratings and Research, vide letter dated August 16, 2024, reaffirmed its rating of ‘IND A' with Outlook Stable, to the proposed ' 500 crore Tier II, Basel III compliant bonds issue Programme of the Bank. The Bank has not yet issued any bonds as part of the programme.

The further details of all credit ratings obtained by the Bank along with revisions thereto, if any, during fiscal 2025, for all the debt instruments outstanding as on March 31, 2025, are provided in the Report on Corporate Governance, forming part of this annual report.

DEPOSITS ISSUANCE PROGRAMME

During the period under review, your Bank raised ' 3,675 crore under the Certificate of Deposits (CD) programme, sourced from various mutual funds and banks. As of March 31, 2025, the outstanding amount under this programme stood at ' 1,750 crore compared to ' 1,030 crore as on March 31, 2024. The Bank has not raised deposits under the Short-Term Fixed Deposits Programme during the period under review.

ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS

As on the date of this Report, the Bank has not issued any equity shares with differential voting rights.

ISSUE OF SWEAT EQUITY SHARES

As on the date of this Report, the Bank has not issued any sweat equity shares.

EMPLOYEES STOCK OPTION SCHEME

CSB Employees Stock Option Scheme 2019

The Bank, on receipt of approval of the shareholders by postal ballot on May 4, 2019, formulated and adopted a stock option scheme called "CSB Employees Stock Option Scheme 2019" ("ESOS 2019" or "Scheme"). The Scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 which was subsequently repealed and replaced with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Scheme is intended to enable the employees, present and future, to get a share in the value that they help to create for the organisation over a period of time, aligning the objectives of an individual with those of the Bank as well as to attract and retain critical senior talents with Employee Stock Options as a compensation tool.

The Scheme shall be administered through an employee stock option trust ("ESOS Trust") in the nature of an irrevocable employee welfare trust in due compliance with the applicable laws.

Under the Scheme, 10,51,818 stock options were granted in the financial year 2024-25. All the options were granted at market price, to be vested subject to the vesting conditions/ malus and claw back arrangements and be exercised within the period as per the terms of the grant and the Scheme. As on March 31, 2025, 13,86,788 options were vested in line with the vesting schedule, of which 8,32,067 options were exercised by the grantees and 1,11,919 vested options were lapsed due to resignation/ non-exercise within the prescribed timeline. In FY 2024-25, 1,40,855 options were lapsed prior to its vesting schedule due to the resignation/ separation of employment by the grantees. As on March 31, 2025, the number of options are in force is 29,46,792 of which 4,42,802 are vested options.

Pursuant to the approval received from Reserve Bank of India on October 22, 2024, the Nomination & Remuneration Committee of the Board on October 24, 2024, granted 1,43,435 stock options to Mr. Pralay Mondal, Managing Director & CEO, at an exercise price of ' 303.15 per option for the performance period from April 01, 2023 to March 31, 2024.

Amendment proposed in the CSB Employees Stock Option Scheme 2019

No amendment is proposed to the CSB Employees Stock Option Scheme 2019 in the ensuing Annual General Meeting of the Bank.

CSB Employees Stock Option Scheme - Statutory Compliance

A Certificate of Secretarial Auditors of the Bank pursuant to Regulation 13 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, that the CSB Employees Stock Option Scheme 2019 has been implemented in the Bank in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, and the resolution passed by the Shareholders for the Scheme, will be placed to the Annual General Meeting for the scrutiny of Shareholders.

The statutory disclosures as required as per rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are given on the website of the Bank at www.csb.co.in which forms part of this report as Annexure-I.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

CSB Bank's legacy, spanning over a century, is deeply rooted in trust, ethics, and transparency. Throughout its history, the Bank has dedicated itself to serving the needs-based sections of society by providing banking services with responsibility and transparency. This steadfast commitment has profoundly impacted the communities it serves. While focusing on its core business, CSB Bank consistently prioritises environmental, social, and governance (ESG) concerns, which are reflected in its practices and initiatives. By adhering to exemplary corporate governance standards, the Bank ensures that transparency and disclosure remain at the forefront of its principles.

The Bank in compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024, presents the Business Responsibility and Sustainability Report (BRSR) of the Bank for the FY 202425, being the fourth report of its kind, in the format as specified by SEBI, describing the initiatives taken by the Bank from an environmental, social and governance perspective, forms part of this Report as Annexure-II.

The Report indicates the Bank's performance against the nine principles of the ‘National Guidelines on Responsible Business Conduct'. Reporting under each principle is divided into essential and leadership indicators. The report has also been hosted on the website of the Bank and can be accessed at https://www.csb.co.in/general- meetings>Annual General Meeting - 2025.

BUY-BACK OF SHARES OR PROVISION OF FINANCIAL ASSISTANCE FOR PURCHASE OF THE BANK'S SHARES

The Bank has not effected any buy-back of its shares or provided any financial assistance for purchase of its shares, to any persons including directors and employees of the Bank in terms of Section 67 of the Companies Act, 2013.

DISCLOSURE RELATED TO DETAILS OF DEPOSITS ACCEPTED

Being a banking company, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Companies Act, 2013 are not applicable to the Bank.

SUBSIDIARIES AND ASSOCIATES

The Bank does not have any subsidiaries, joint ventures or associate companies.

There are no companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year under review.

The Bank has formulated a Policy for determining material subsidiaries pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is displayed on the website of the Bank at: https://www.csb.co.in/pdf/2Policy-for- Determining- Material-Subsidiary.pdf

RISK MANAGEMENT POLICY

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement, monitoring & control and mitigation of all material risks including but not limited to credit, market, operational, liquidity and other Pillar- II risks. The Bank has put in place an integrated risk management policy which ensures independence of the risk governance structure. IRMD Charter is included in the Integrated Risk Management policy. The risk management policy details the principles, rules and guidelines to be adopted by the Bank for managing and controlling various kinds of risks through various subpolicies. The policies are implemented in an uninterrupted, reliable and comprehensive manner across the Bank. The details of risk management practices are provided in the Management Discussion and Analysis Report annexed to the Director's Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

A set of policies, that include Whistle Blower Policy, AntiBribery & Anti-Corruption Policy and Policy to deal with Employee frauds are devised and formulated by the Vigilance Department as part of its ongoing preventive vigilance. These are scrupulously followed, for surveillance and control to prevent frauds and thereby manage the risk of eventual financial loss or Bank's reputation. These policies are aligned with the directions of RBI, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Companies Act, 2013 and SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended.

One such policy, the Whistle Blower policy is an effective tool to report concerns regarding unethical behaviour, violation of systems & procedures, questions of law, wrong business practices or grave misconduct by the employees. As per this Policy, all stake holders viz Directors and employees of the Bank, customers, vendors, NonGovernmental Organisations (NGO) or any other person others can lodge complaints. Link for the same is published on the Bank's Website. The Audit Committee of the Board (ACB) oversees the vigil mechanism through its committee processes. The Chairman of ACB directly hear grievances reported in the whistle blower complaints. Policy provides reassurance/protection to the whistle blower from victimisation, discrimination or reprisals for having blown the whistle, in good faith and in the interest of the Bank, identity of the whistle blower kept secret. The investigation under this policy shall be completed within 60 days from the date of receipt of the complaint and the report thereof should be placed before the ACB.

As part of the awareness programme, the said policies as well as the Ethics & Code of conduct for staff are included in sessions of the training programme conducted at the Bank's Human resource team, for enhancing awareness of fraud risk and for promoting a culture of compliance amongst the employees.

Bank is taking stringent action against those employees, vendors who fail to comply with the Bank's policy. Deficiencies/irregularities/Lacunae in the system and procedures, if any, observed during the investigation are plugged and wherever necessary systemic corrections are suggested and placed before the ACB for necessary directions. Further, with regard to the irregularities committed, the concerned officials, vendors are suitably cautioned so that incidents do not recur. Vigilance Department issues Caution Note on a regular basis that create awareness regarding the different modus operandi adopted by the fraudsters. This enables the Branches / Offices to prevent similar kind of fraudulent attempts in future. This policy is reviewed every year by the Board and suitably amended, as required. A reference to the Whistle Blower Policy/Vigil Mechanism is also made in every caution note issued by the Vigilance Department.

Further the Anti-Bribery and Anti-Corruption Policy ensures that the stakeholders including employees (whether full-time or contractual, including trainees and interns), Directors, Agents, Associates, Vendors, Consultants, Advisors, Representatives, or Intermediaries do not indulge in any act of ‘Bribery' or ‘Corruption' while discharging their official duties, either in their own name or in the name of the Bank.

As part of the preventive mechanism, the department also undertakes Preventive Vigilance Audits, to ensure that all the checks and balances are in place. This promotes a culture of compliance amongst its employees. Moreover, the Bank is making all out efforts to prevent frauds by strengthening the existing control measures and by reiterating the systems and procedures, to update and alert its employees.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to the provisions of Regulation 34(2)(e) of the SEBI Listing Regulations, the Management Discussion and Analysis Report for the year under review is provided in a separate section forming part of this Report as Annexure - III.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Bank has laid down 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 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.

The Bank is operating in a fully computerised environment with Core Banking System supported by diverse application platforms for handling special business such as treasury, trade finance, retail loans, etc. The process of recording transactions i n each application platform is subject to various forms of control such as in-built system checks, maker - checker authorisations and independent post transaction reviews. The financial statements are prepared based on computer system outputs. Responsibility of preparations of financial statements is entrusted to a dedicated unit which is independent of business.

For mitigating risks and for KYC norms compliance, the Bank has put in place centralised processing for opening of CASA accounts and modifications in customer information. For login to CBS, in addition to login passwords, finger-scan- authentication is implemented and as control measure, dual custody for cash and gold are in place in all branches. The Bank has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Bank's operation. During the year under review, there are no material or serious observations of inefficiency or inadequacy of such controls observed/reported.

CORPORATE GOVERNANCE

The Bank continues its endeavour to adopt the best prevalent corporate governance practices. A separate section/Report on corporate governance standards followed by your Bank and the relevant disclosures as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 and the rules made thereunder are incorporated in the Corporate Governance Report that forms part of this Report as Annexure - IV.

A certificate from Bhandari & Associates, Company Secretaries, Mumbai, confirming compliance to the conditions of Corporate Governance as stipulated under SEBI Listing Regulations is annexed to this report.

UPDATE ON IND AS IMPLEMENTATION

Reserve Bank of India (RBI) vide press release RBI/2018- 2019/146 DBR.BP.BC.No.29/ 21.07.001/2018-19, dated March 22, 2019, advised all scheduled commercial Banks about deferment of implementation of Ind AS till further notice in the context of legislative amendments recommended by RBI on implementation of Ind AS were under consideration of the Government of India.

The implementation of Ind AS is expected to result in significant changes to the way the Bank prepares and presents its financial statements. The key impact areas during the implementation of Ind AS for the Bank include impairment requirements of Financial Instruments based on Expected Credit Loss, interest recognition using effective interest method and Fair valuation of financial assets.

As directed by the RBI, the Bank is submitting half yearly Proforma Ind AS financial statements within the stipulated timeline.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE BANK

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 or any investment made by a banking company in the ordinary course of business, hence being excepted from disclosure requirements under Section 134(3)(g) of the said Act.

The particulars of investments made by the Bank are disclosed in Schedule 8 of the financial statements as per the applicable provisions of the Banking Regulation Act, 1949.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Bank has obtained prior approvals of the Audit Committee, the Board, and the members of the Bank at the annual general meeting for all related party transactions/ material related party transactions. Your Bank has obtained the omnibus approval of the Audit Committee for those transactions with related parties that are repetitive in nature. Further, the Audit Committee of the Board has reviewed all the transactions with the related parties on a quarterly basis.

No transactions were entered into with related parties, which were not in the ordinary course of the business of the Bank or which were not on an arm's length basis.

During the financial year 2025, the Bank has not entered into any materially significant transactions with its related parties, which could lead to potential conflict of interest between the Bank and these parties, other than transactions entered into with them in the ordinary course of its business.

The particulars of contracts or arrangements with related parties entered into during the period under review in terms of Section 188(1) of the Companies Act, 2013 are provided in Form AOC-2 as Annexure -V in terms of 134(3)(h) of the Companies Act, 2013.

The ‘Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions' has been reviewed by the ACB and the Board and the same is available on the website of the Bank at https://www.csb.co.in/pdf/ PolicyondealingwithRelatedPartyTransactionnew.pdf in terms of the SEBI Listing Regulations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Bank recognise society as a primary stakeholder and consistently prioritise Corporate Social Responsibility (CSR) activities, embedding CSR into its core business strategies to address societal needs, foster a culture of responsibility and ethical conduct, and ensure sustainable development through well-structured and impactful initiatives. The Bank's CSR policy is meticulously designed with the primary objective of integrating CSR as a crucial business process for the sustainable development of society. This policy functions as a guiding document, assisting in the identification, execution, and monitoring of CSR projects, ensuring they align with the spirit of statutory requirements. The policy outlines clear objectives and methodologies for CSR initiatives, ensuring that each project is effectively managed and delivers tangible benefits to the community. Through this comprehensive approach, the Bank demonstrates its unwavering commitment to making a positive impact on society while maintaining transparency and accountability in all its endeavours. In the financial year 2024-25, the Bank budgeted a total of ' 13.90 crores for CSR activities, a significant increase from ' 3.08 crore in the previous financial year 2023-24. Of this budget, ' 6.11 crore was expended on various CSR initiatives. The remaining ' 7.79 crores has been earmarked for Project Dialysis, a venture undertaken by the Fairfax India Charitable Foundation. This project is set to be an ongoing commitment of the Bank.

The Project Dialysis conducted by Fairfax India Charitable Foundation aims in providing affordable, quality dialysis services to patients in various parts of India where the services are limited/non-existent for dialysis infrastructure. The project was initially approved by the Board as a onetime arrangement with a contribution of ' 6.00 crore, however,

there was a delay in execution of the project due to delays in the readiness of dialysis centres that resulted in centres not being ready for installations of dialysis machines and these resulted in impeding the progress of the completion of the project as committed by the foundation at the time of sanctioning the fund. The Bank, hence, on request of the foundation, decided to classify the entire project as an ongoing project with an additional contribution of ' 1.79 crores, which is expected to be completed on or before March 31, 2026.

The unspent amount of ' 7.79 crores pertaining to the said ongoing projects were transferred to Unspent CSR account on April 17, 2025 which will be released in a phased manner up on receipt of request from the foundation or based on the progress of the project on or before March 31, 2026. The projects identified by the Bank spread across areas such as healthcare, sanitation, education, housing, gender equality etc., as per the annual action plan approved by the Corporate Social Responsibility Committee and the Board of the Bank. As a responsible citizen, the Bank will persist in implementing a slew of measures to honour its commitment to society at large.

The Annual Report on Corporate Social Responsibility Activities of the Bank for the financial year 2024-25, has been provided in Annexure - VI to this report.

The Corporate Social Responsibility Policy as recommended by the CSR Committee and as approved by the Board is available on the website of the Bank and can be accessed at https://www.csb.co.in/pdf/CSR%20 Policy_ Final_-30032022.pdf.

AUDITORS

(a) Statutory Auditors

The members of the Bank in the 103^rd Annual General Meeting of the Bank held on August 23, 2024, approved the appointment of M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as one of the Joint Statutory Auditors of the Bank, to hold office from the conclusion of 103^rd Annual General Meeting till the conclusion of the 106^th Annual General Meeting of the Bank. Walker Chandiok & Co LLP, Chartered Accountants, Mumbai was the other Joint Statutory Auditors of the Bank to audit the accounts for the financial year ended March 31, 2025 and the Bank obtained approval of the shareholders for their appointment in the 102nd Annual General Meeting held on August 08, 2023, to hold office from the conclusion of 102^nd Annual General Meeting till the conclusion of the 105^th Annual General Meetings of the Bank.

Bank in terms of Section 30(1A) of the Banking Regulation Act, 1949, obtained approval of Reserve Bank of India on May 27, 2025, for the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, Mumbai together with M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as the Joint Statutory Auditors of the Bank for the FY 2025-26 for their 3^rd year and 2^nd year in the office, respectively.

Pursuant to the amendment made to Rule 3 of the Companies (Audit and Auditors) Rules, 2014 via the Companies (Audit and Auditors) Amendment Rules, 2018, effective from May 07, 2018, the requirement of seeking ratification of the members for the reappointment of the Statutory Auditors has been withdrawn from the Statute. Hence, ratification of the members for re-appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, Mumbai together with M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as the Joint Statutory Auditors of the Bank at the ensuing AGM is not being sought for. However, the Bank will continue to seek approval of the shareholders for payment of fees/ remuneration to the Auditors on a yearly basis though approval of the shareholders be sought for their appointment for a period of three years together, in line with the extant guidelines.

Pursuant to the Regulation 33(1) (d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Joint Statutory Auditors have confirmed that they are subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI.

(b) Independent Auditors' Report

The Joint Statutory Auditors of the Bank viz., M/s. Walker Chandiok & Co LLP, Chartered Accountants, Mumbai together with M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, have audited the accounts of the Bank for the FY 2024-25 and their Report is annexed. Pursuant to Section 143(3)(i) of the Companies Act, 2013, the Statutory Auditors have also reported on the adequacy and operating effectiveness of the internal financial controls system over financial reporting, which has been enclosed as "Annexure A" to the Independent Auditor's Report.

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for FY 2024-25.

(c) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amended Regulation 24A of the SEBI Listing Regulations, the Board has based on the recommendation of the Audit Committee, approved the appointment of M/s. BNP & Associates, Company Secretaries, Mumbai, (Firm Registration No. P2014MH03740 0), a peer reviewed firm of Company Secretaries in Practice as Secretarial Auditors of the Company for a period of five years, i.e., from April 01, 2025 to March 31, 2030, subject to the approval of the Shareholders of the Bank at the ensuing AGM.

M/s. Bhandari & Associates, Company Secretaries, Mumbai, (Firm Registration No. P1981MH043700), was the Secretarial Auditors of the Bank for the period from FY 2022-23 to FY 2024-25, and the decision to appoint a new auditor was in the context of the amendment in Regulation 24A of the SEBI Listing Regulations.

(d) Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Bank appointed M/s. Bhandari & Associates, Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Bank for the FY 2024-25. The Bank produced all necessary records to the Secretarial Auditors for the smooth conduct of the Audit.

The Report of Secretarial Auditors for the said period is enclosed with this report as Annexure -VII. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their report for the FY 2024-25.

(e) Secretarial Compliance Report

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with circular No. CIR/CFD/ CMD1/27/2019 dated February 08, 2019, issued by SEBI, the Bank has obtained Secretarial Compliance Report for the financial year ended March 31, 2025, from M/s. Bhandari & Associates, Company Secretaries, Mumbai, the Secretarial Auditors of the Bank on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and the copy of the same was submitted with the Stock Exchanges within the prescribed timelines.

(f) Certificate in terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations

In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, the Bank has obtained a Certificate from Bhandari & Associates, Company Secretaries, Mumbai, confirming that none of the Directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as Directors of the companies either by the Securities and Exchange Board of India or the Ministry of Corporate Affairs or any other Statutory / Regulatory Authorities. The said certificate is Annexed to this Report.

(g) Reporting of frauds by Auditors

During financial year ended March 31, 2025, pursuant to Section 143(12) of the Companies Act, 2013, except as detailed below, neither the Statutory Auditors nor the Secretarial Auditor of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.

M/s. Walker Chandiok & Co LLP and M/s. Sundaram & Srinivasan, Chartered Accountants, Joint statutory auditors of the Bank, had reported to the Audit Committee two frauds, involving an amount of ' 125.80 lakh and ' 258.82 lakh, committed by employees of the Bank at Pallavaram branch and 5 branches at Tirupur (Tiruppur main, P N Road Tiruppur, Kangeyam, Kangeyam Road and Mangalam Road), respectively. The disclosures as required under Section 143(12) of the Companies Act, 2013 read with Rule 13 of The Companies (Audit and Auditors) Rules, 2014 are given below:

1. Pallavaram Branch.

2. Tiruppur branches (Tiruppur Main, P N Road Tiruppur, Kangeyam, Kangeyam Road and Mangalam Road)

COMPLIANCE TO SECRETARIAL STANDARDS

The Bank is in compliance with the relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings (SS-1) and the General Meeting (SS-2) during the FY 2024-25. Further, the Bank has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

TRANSFER OF UN-CLAIMED/UN-PAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Dividend transferred to Unpaid Dividend account and remaining unpaid or unclaimed for a period of seven years from the date of such transfer, has to be transferred to Investor Education and Protection Fund as per Section 124 (5) of the Companies Act, 2013.

Since the Bank had not declared any dividends since the FY 2014-15, no amount was required to be transferred to the Investor Education and Protection Fund (the "Fund") by the Bank for the financial year ended March 31, 2025.

All the unclaimed dividends pertaining to the prior period/ financial years were transferred to the Fund in the corresponding previous financial years within the stipulated time and in the manner as prescribed in Section 124(6) of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time.

TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY

In terms of the provisions of Section 124(6) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (as amended) and other applicable rules, notifications and circulars, if any, every company is required to transfer the shares, in respect of which dividend remains unpaid / unclaimed for a period of seven (7) consecutive years, to the Investor Education Protection Fund (IEPF) Authority.

Since the Bank had not declared any dividends since the FY 2014-15, no shares were required to be transferred to the Investor Education and Protection Fund Authority by the Bank for the financial year ended March 31, 2025.

UNCLAIMED SHARE APPLICATION MONEY

There is no unclaimed Share application money pending with the Bank or to be transferred to Investor Education and Protection Fund.

COMPENSATION/ REMUNERATION POLICY

The Bank has formulated and adopted a Compensation Policy in terms of Reserve Bank of India circular no. DOR. Appt. BC. No.23/29.67.001/2019 -20 dated November 04, 2019, the relevant provisions of Section 178 of the Companies Act,2013, the relevant Rules made thereunder and the SEBI Listing Regulations.

The Policy formulates the criteria for determining the remuneration and further deals with the compensation and benefits of Non-Executive Chairman, Non-Executive Directors, Managing Director & CEO, Whole-Time Directors, Material Risk Takers, Control Function Staff and all other officials and employees of the Bank.

The details of the Policy have been included in the Report on Corporate Governance, which forms part of this Report. The Policy was last reviewed by the Nomination and Remuneration committee and the Board in their respective meetings held on October 24, 2024.

The excerpts from the Compensation Policy are available on the website of the Bank.

NOMINATION POLICY

The Bank has formulated and adopted Nomination policy for appointment and orderly succession of appointment of Part-time Chairman, Managing Director & CEO, Whole time Directors, Directors, Key Managerial Personnel and Senior Management team in the Bank. The Policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of directors. The details of the same have been included in the Report on Corporate Governance, which forms part of this Report.

The Nomination Policy was last reviewed by the Nomination and Remuneration Committee and the Board in their respective meetings held on December 13, 2024 and the same is displayed on the website of the Bank at: https://www.csb.co.in/sites/default/files/annexure-VI_9_ nomination_policy.pdf .

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of Directors / Employees of the Bank, is attached as Annexure - VIII to this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in an Annexure and forms part of this report.

In terms of Section 136(1) of the Companies Act, 2013, the annual report and the financial statements are being sent to the members, excluding the aforesaid Annexure. The said Annexure is available for inspection at the registered office of the Bank, and any member interested in obtaining a copy of the Annexure may write to the Company Secretary of the Bank at secretarial@csb.co.in.

BOARD OF DIRECTORS

CSB Bank has a broad-based Board of Directors, constituted in compliance with the Banking Regulation Act, 1949, Circulars and Guidelines issued by the Reserve Bank of India, from time to time, the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with the best practices/principles in corporate governance adopted by the Bank.

As on the date of this report, the Board comprises of eleven (11) Directors, out of which Seven (7) are Independent Directors, two (2) are Non-executive, Non-Independent Directors and Two (2) are Executive Directors. The Directors possess rich experience and specialised knowledge in various areas of relevance to the Bank viz. like Agriculture, Rural Economy, Banking, Accountancy, Co-operation, Economics, Finance, MSME, Information Technology, Payment & Settlement Systems, Human Resources, Risk Management and Business Management, Law, SSI, etc.

The Board functions as the governing body and also through various Committees constituted to oversee specific areas. Policy formulation, setting up of goals, evaluation of performance and control functions vest with the Board. The Committees have oversight of operational and supervisory issues assigned to them by the Board, from time to time.

Appointment/changes in the Board Directors of the Bank since the last Board's Report dated June 24, 2024 and up to the date of the Report is as given under:

RE-APPOINTMENT OF NON-EXECUTIVE DIRECTORS

Director, Mr. Sumit Maheshwari (DIN: 06920646), liable to retire by rotation, was re-appointed at the Annual General Meeting held on August 23, 2024.

PART-TIME CHAIRPERSON

The term of appointment of Ms. Bhama Krishnamurthy as the Part-Time Chairperson of the Bank ended on September 28, 2024, which is coterminous with her second term of appointment as Independent Director of the Bank.

The Board places on record its appreciation of the valuable contributions and advises rendered by Ms. Bhama Krishnamurthy during her tenure as an Independent Director and the Part-time Chairperson of the Bank. The Board also took note of the sheer professionalism displayed by Ms. Bhama Krishnamurthy during her tenure by sharing unbiased, decisive and professional opinions, keeping in view of all the stakeholders' interest at hand.

Mr. Biswamohan Mahapatra (DIN: 06990345) was appointed as the Part-time Chairperson of the Bank in place of Ms. Bhama Krishnamurthy for a period of three years, starting from May 09, 2025 and up to May 08, 2028.

RE-APPOINTMENT OF MANAGING DIRECTOR & CEO

Pursuant to the receipt of approval from Reserve Bank of India, vide letter no. DoR.GOV.No.2031/08.36.001/2025- 26 dated June 12, 2025, the Board re-appointed Mr. Pralay Mondal as Managing Director & CEO of the Bank for a period of three years with effect from September 15, 2025 and upto September 14, 2028.

The present term of appointment of Mr. Pralay Mondal as Managing Director & CEO is upto September 14, 2025.

APPOINTMENT OF INDEPENDENT DIRECTORS

1. Appointment of Mr. Narasimha Raju Narasappa Doddahosahalli, (DIN: 01070476) as an Independent Director

Pursuant to the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Bank in their meeting held on December 13, 2024, appointed Mr. Narasimha Raju Narasappa Doddahosahalli, (DIN: 01070476) as an Additional Director (Non-Executive Independent category) of the Bank w.e.f. December 13, 2024 for a period of three (3) years pursuant to the provisions of Section 149,161(1) of the Companies Act, 2013 and Rules made thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Article 133 of the Articles of Association of the Bank. The appointment is subject to the approval of the Shareholders of the Bank and the approval of the shareholders was obtained for the appointment of Mr. Narasimha Raju Narasappa Doddahosahalli as an Independent Director with effect from December 13, 2024, by postal ballot resolution dated February 06, 2025.

Mr. Narasimha Raju Narasappa Doddahosahalli is representing ‘Majority Sector - Agriculture & Rural economy, Co-operation, Law, SSI, Economics, Finance & Human Resources' on the Board of the Bank.

Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year:

The Board appointed Mr. Narasimha Raju Narasappa Doddahosahalli, as an Additional Director of the Bank under "Non-Executive Independent" category based on the extensive due diligence carried out by the Nomination& Remuneration Committee on the declarations submitted by him in terms of fit & proper criteria and other applicable statutory guidelines issued by Reserve Bank of India from time to time.

The Board noted that Mr. Narasimha Raju Narasappa Doddahosahalli is a Karnataka cadre IAS officer of 1984 batch with over three decades of diverse and rich experience in various fields. He has held various significant positions in both Government of India and Government of Karnataka.

Adverting to the above, in the opinion of the Board, the said Independent Director appointed on December 13, 2024, possesses the requisite qualifications, proficiency, expertise, track record, integrity, independence, and has the necessary knowledge for being appointed as an Independent Director of the Bank.

2. Appointment of Mr. Biswamohan Mahapatra, (DIN: 06990345) as an Independent Director

Pursuant to receipt of approval of the members through resolution passed by means of Postal Ballot dated April 10, 2025 and pursuant to the recommendation made by the Nomination & Remuneration Committee, the Board of Directors in their meeting held on April 16, 2025, appointed Mr. Biswamohan Mahapatra (DIN: 06990345) as an Independent Director of the Bank, with effect from April 16, 2025 up to August 02, 2029 (both dates inclusive), not liable to retire by rotation. Mr. Biswamohan Mahapatra is representing the ‘Majority Sector - Banking, Finance, Risk Management, Law and Payment Systems' on the Board of the Bank.

Opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year:

The Board appointed Mr. Biswamohan Mahapatra, (DIN: 06990345) as an Independent Director of the Bank under "Non-Executive Independent" category based on the extensive due diligence carried out by the NRC on the declarations submitted by him in terms of fit & proper criteria and other applicable statutory guidelines issued by Reserve Bank of India from time to time.

The Board noted that Mr. Biswamohan Mahapatra is a career central banker with over 33 years of intense experience in various departments of Reserve Bank of India and retired as Executive Director in RBI in 2014. Adverting to the above, in the opinion of the Board, the said Independent Director appointed on April 16, 2025, possesses the requisite qualifications, proficiency, expertise, track record, integrity, independence, as well as vast and rich experience in the field of Banking.

RE-APPOINTMENT OF INDEPENDENT DIRECTORS

Mr. Sharad Kumar Saxena (DIN: 08238872) was reappointed for a second term as Non-Executive Independent Director of the Bank, by postal ballot resolution dated February 06, 2025, for a period of 5 (five) years commencing from February 19, 2025 up to February 18, 2030 (both dates inclusive), not liable to retire by rotation.

Mr. Sharad Kumar Saxena is representing ‘Majority Sector - Banking, Information Technology and Payment & Settlement System' on the Board of the Bank.

WOMAN DIRECTOR

In terms of the provisions of Section 149(1) of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, the Bank is required to have at least one independent woman director on the Board. Currently, there are two independent women directors on the Board of the Bank. Ms. Sharmila Abhay Karve (DIN: 05018751) since July 20, 2020 and Ms. Renu Kohli (DIN: 07981627) since December 14, 2023.

DIRECTORS RETIRING BY ROTATION

In terms of Section 152 of the Companies Act, 2013, NonExecutive Director, Mr. Madhavan Menon (DIN: 00008542) shall retire by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM).

Mr. Madhavan Menon was at first appointed as an Additional Director of the Bank with effect from September 03, 2018 under Section 161(1) of the Companies Act, 2013 and his appointment was regularised at the 97^th AGM held on September 29, 2018 and he was liable to retire by rotation. Mr. Madhavan Menon was last reappointed as a director to retire by rotation at the 102^nd Annual General Meeting held on August 08, 2023 in terms of Section 152 of the Companies Act, 2013.

Approval of the members of the Bank is being requested for re-appointment of Mr. Madhavan Menon as Non- Executive, Non-Independent Director of the Bank.

The detailed profile of Mr. Madhavan Menon (DIN: 00008542) recommended for reappointment in the ensuing Annual General Meeting will be provided in the Notice of the Annual General Meeting for the benefit of shareholders as per the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standard on General Meetings (SS-2).

INDEPENDENT DIRECTORS - COMPLIANCE STATUS

The Bank fully satisfies the requirements of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations in connection with the appointment/ re-appointment of Independent Directors and the following are the Independent Directors of the Bank as on the date of this report.

The performance of the Independent Directors is subject to evaluation as per Section 149(8) of the Companies Act, 2013 and read with Schedule IV to the said Act.

The Board is confident about their integrity, expertise and experience in the relevant functional areas.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have confirmed of having complied with the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with 25(8) of the Regulations that they meet the criteria of independence laid down thereunder. Further, they have also complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and the Code of Conduct and Ethics for Board of Directors and Senior Management Personnel of the Bank. Based on the declarations submitted by the Independent Directors, Board is of the opinion that they fulfil the conditions specified in the Act and SEBI LODR and are independent of the Management. There has been no change in the circumstances affecting their status as independent directors of the Bank.

Further, pursuant to regulation 5 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Independent Directors have confirmed that while dealing with the Bank, they shall comply with responsibilities or obligations, if any, assigned to them under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, the Independent Directors of the Bank have affirmed that, they had registered as an Independent Director in the Independent Directors Data Bank as required under rule 6(1) and 6(2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and had also complied with the requirements of passing the online proficiency self- assessment test/ exempted from online proficiency self- assessment test in terms of Rule 6(4) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended.

The Board is of the opinion that Independent Directors appointed since the date of last report and up to the date of this report are persons of integrity and has the necessary knowledge, experience and expertise and further, the Board has ensured that the independent directors have also complied with the requirements of passing the online proficiency self-assessment test/exempted from online proficiency self-assessment test in terms of Rule 6(4) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended for being appointed/continue to be appointed as an Independent Director of the Bank.

FAMILIARISATION PROGRAMMES OF INDEPENDENT DIRECTORS

All directors, including Independent Directors are familiar with their roles, rights and responsibilities in the Bank at the time of appointment and also on a recurring basis. The Bank facilitates familiarisation programme and other programmes including Certification programme in IT and Cyber Security for its directors.

The details of various programmes undertaken/arranged for familiarizing the Independent Directors and other programmes arranged for the directors are disclosed in the Report on Corporate Governance, which forms part of this Report.

Details of familiarisation programmes attended by all Directors including Independent Directors are provided at https://www.csb.co.in/pdf/Disclosure_on_ Familiarisation_ Programmes_for_ Board_of_Directors_22032024.pdf, pursuant to regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

APPOINTMENT/ CHANGES IN KEY MANAGERIAL PERSONNEL

Mr. Pralay Mondal, Managing Director & CEO, Mr. B. K. Divakara, Executive Director, Mr. Satish Gundewar, Chief Financial Officer and Mr. Sijo Varghese, Company Secretary, continue to be the Key Managerial Personnel of the Bank as per the provisions of the Companies Act, 2013.

BOARD AND ITS COMMITTEES Board and Number of Meetings

Regular meetings of the Board are held to discuss and decide on various business policies, strategies and other businesses. Due to business exigencies, certain decisions are taken by the Board through resolution passed by circulation from time to time.

The Board met ten (10) times during the FY 2024- 25 and the gap between the said meetings did not exceed the limit of 120 days, as prescribed under the relevant provisions of the Act, the relevant Rules made thereunder and the applicable SEBI Listing Regulations.

The schedule of the meetings of the Board is fixed on a yearly basis and circulated in advance to the members of the Board for their consideration and approval.

Detailed information on the meetings of the Board is included in the report on Corporate Governance, which forms part of this Report.

Committees of the Board

The Bank has eleven sub-committees of the Board and the same have been formed as part of the best corporate governance practices and/or in compliance with the requirements of the relevant provisions of applicable laws and regulatory prescriptions.

The details with respect to the compositions, powers, roles, terms of reference, etc., of the above Committees are given in detail in the ‘Report on Corporate Governance' which forms part of this Report.

AUDIT COMMITTEE

The Bank has constituted the Audit Committee of the Board in terms of the extant guidelines of Reserve Bank of India (RBI), provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Committee discharges the functions laid down in the Companies Act, 2013 and those prescribed by the Reserve Bank of India and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It also discharges the functions delegated by the Board of Directors from time to time. The ACB acts as an effective tier to the Board in the matters of inspection, audit and internal control system. The Board has accepted all the recommendations of the Audit Committee. The composition, role and functions of Committee, are provided in the Report on Corporate Governance, which forms part of this annual report.

ANNUAL EVALUATION OF PERFORMANCE

Pursuant to the provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also in line with Board Evaluation Policy, the Bank has put in place criteria for annual evaluation of performance of Chairperson, Managing Director & CEO, Executive Directors, Non-executive Directors, Independent Directors, Board Level Committees and the Board as a whole. The performance of the members of the Board other than independent Directors and the Board as a whole has been evaluated separately at the meeting of the Independent Directors.

The performance of the independent Directors has been reviewed by the Board as provided for under Section 149(8) read with Schedule IV of the Companies Act, 2013.

The Statement indicating the manner in which formal annual evaluation of the Directors, Committees of the Board and the Board are given in detail in the report on Corporate Governance, which forms part of the Annual Report.

The Nomination & Remuneration Committee of the Board annually reviews and approves the criteria and the mechanism for carrying out the said exercise effectively. The Board Evaluation Policy is displayed on the website of the Bank at: https://www.csb.co.in/pdf/ PolicyonEvaluationoftheBoard.pdf

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Considering the nature of activities of the Bank, with respect to the provisions of Section 134(3)(m) of the Companies Act, 2013 relating to conservation of energy and technology adoption, the Bank is constantly pursuing and making all-out efforts to achieve the desired goals as contained in the Act.

Ensuring compliance with the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014, the relevant disclosures to be made are as under:

a) Conservation of Energy

All attempts are being made to reduce energy consumption to the maximum extent possible. As part of these measures, the Bank is installing LED lights and other energy saving equipments in a phased manner across.

b) Technology Absorption

The required technology absorption is being made considering the nature of activities undertaken by the Bank.

c) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo are part of the normal banking business of the Bank. Being an Authorised Dealer in Foreign Exchange, the Bank has been taking all possible steps to augment export credit.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the FY 2024-25, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Bank's operations in future.

MAINTENANCE OF COST RECORDS

Being a banking company, the Bank is not required to make and maintain such accounts and cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014.

CEO & CFO CERTIFICATION

Pursuant to Regulation 17(8) of the SEBI Listing Regulations, the Certificate issued by Mr. Pralay Mondal, Managing Director & CEO and Mr. Satish Gundewar, Chief Financial Officer of the Bank, for the financial year ended March 31, 2025, was placed before the Board at its meeting held on April 28, 2025.

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

The Bank has formulated and adopted a Policy on Prevention of Sexual Harassment of Women at workplace.

The Bank has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information relating to complaints received and redressed during the FY 2024-25 is disclosed in the Report on Corporate Governance, which forms part of the Annual report.

STRICTURES AND PENALTIES

There are no instances of non-compliance by the Bank and no penalties or strictures have been imposed on the Bank by the Stock Exchange(s) and/or SEBI and/or any other statutory authorities on matters relating to capital market activities, during the last three years.

DISCLOSURE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Being a banking company, the disclosures required as per Rule 8(5)(xi)&(xii) of the Companies (Accounts) Rules, 2014, on the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year and the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, are not applicable to the Bank.

However, being a banking company, during the period under review, the Bank was part of the Corporate Insolvency Resolution Process (CIRP) initiated against two corporate debtors before NCLT for a total book value of ' 73.99 crore. Out of two corporate debtors, against one having a book value of ' 3.88 crore, resolution plan was successfully implemented.

ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of the Companies Act, 2013, read with Rule 11 of the Companies (Management and Administration) Rules, 2014, as amended, the Annual Return (MGT-7) as on March 31, 2025, will be displayed on the website of the Bank at: https://www.csb.co.in/general- meetings > Annual General Meeting - 2025.

ANNEXURES FORMING A PART OF THIS REPORT

The following Annexures as referred to in this Report form part of the Board's Report:

ACKNOWLEDGEMENTS AND APPRECIATIONS

The Board of Directors is grateful to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Ministry of Corporate Affairs, Stock Exchanges, Insurance Regulatory and Development Authority of India, the domestic banking community, Depositories and Rating agencies for their continued support and guidance. The Board of Directors would like to take this opportunity to express sincere thanks to its valued customers for their continued patronage.

The Board extends its profound appreciation and heartfelt thanks to every member of the CSB family for their continued commitment, ethics, outstanding performance, professionalism, teamwork and initiatives. These qualities have significantly contributed to reinforcing the Bank's customer-centric image and achieving commendable progress in today's challenging and competitive environment. The Board looks forward to their continued dedication, sincere and committed passion to work to propel the Bank to new heights, especially the Bank is progressing towards its vision to become a mid-sized bank by 2030' through the strategy ‘SBS 2030'-'Sustain, Build, Scale', a comprehensive roadmap that manifests the Bank's commitment to excellence and growth.

Finally, the Board of Directors wishes to express their profound gratitude to all shareholders, well-wishers, and other stakeholders for their unwavering support and patronage. The Board looks forward to continuing this mutually supportive and beneficial relationship in future as well to achieve the strategy.