Jammu and Kashmir Bank Ltd

Your Board of Directors (the "Board") is pleased to present its 87^th Annual Report on the performance of the Bank, together with the audited Balance Sheet, Profit and Loss Account and the report on business and operations for the year ended 31^st March, 2025.

• The aggregate business of the Bank stood at Rs.252768.18 Crore at the end of the FY2024-25.

• The total deposits of the Bank grew by Rs.13793.14 Crore from Rs.134776.32 Crore as on 31^st March, 2024 to Rs.148569.46 Crore as on 31^st March, 2025, a growth of 10.23 percent.

• CASA deposits of the Bank at Rs.69843.42 Crore constituted 47.01 percent of total deposits of the Bank.

• Cost of deposits for current FY stood at 4.75 percent.

• Net advances of the Bank stood at 104198.72 Crore as on 31^st March, 2025.

• Yield on advances for the current FY stood at 9.56 percent.

• Average Priority Sector advances stood at Rs.46048.17 Crore as on 31^st March, 2025.

• The Bank effected cumulative cash recovery, up- gradation of NPAs and recoveries in technical write-off of Rs.1288.09 Crore during FY 2024-25.

• Investment portfolio of the Bank stood at Rs.41212.66 Crore as on 31^st March, 2025.

The Bank earned a commission income of Rs.106.09 Crore from insurance business by mobilizing a business of Rs.738.98 Crore in life insurance (including fresh retail life business of Rs.201.61 Crore, Credit life business of Rs.93.92 Crore and renewal business of Rs.443.45 Crore) and Rs.253.73 Crore (gross business) in non-life insurance during financial year 2024-25.

• The Interest income of the Bank stood at Rs.12535.86 Crore in the year 2024-25. Interest expenses stood at Rs.6742.04 Crore for FY 2024-25. The Net Interest Income stood at Rs.5793.82 Crore for FY 2024-25.

• The Net Income from operations [Interest Spread plus Non-interest Income] stood at Rs.6930.63 Crore in the FY 2024-25.

• The Operating Expenses registered an increase of Rs.248.55 Crore during the financial year 2024-25 and stood at Rs.4000.84 Crore as compared to Rs.3752.29 Crore in financial year 2023-24.

• The Cost to Income ratio (Operating Expenses to Net Operating Income) stood at 57.73 percent in the financial year 2024-25.

Operating Profit for the financial year 2024-25 stood at Rs.2929.79 Crore.

The Provision for Loan Losses, Standard Assets, Taxation and others aggregated to Rs.847.33 Crore in the financial year 2024-25.

The Bank registered a Net Profit of Rs.2082.46 Crore for the financial year 2024-25.

In view of the overall performance of the Bank and while retaining capital to support future growth, the Board at its meeting held on 5^th May, 2025, recommended dividend of 215 per cent for the financial year 2024-25 for approval of the Shareholders at the 87^th Annual General Meeting. If approved, the total outflow on account of dividend for the financial year 2024-25 will be Rs.236.75 Crores. The record date for payment of dividend is mentioned in the notice of the 87^th AGM of the Bank.

In terms of the Income Tax Act, 1961, the dividend income is taxable in the hands of the Members. Therefore, the dividend will be paid to the Members after deduction of applicable taxes, if any.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has formulated and adopted a Dividend Distribution Policy with the objective of appropriately rewarding Shareholders through dividends while retaining the capital required for meeting regulatory capital requirements, maintaining adequate buffers and supporting its future growth. The said Policy has been hosted on the website of the Bank at https://www.jkbank.com/investor /stockExchangeIntimation/ corporateGovernancepolicies.php.

During the financial year 2024-25, 15 new branches were established, thereby taking the number of branches to 1019 (including IARBs) as on 31.03.2025, spread over 18 states and 4 union territories. The area-wise breakup of the branch network (excluding extension counters/ mobile branches and service branches) on the basis of census 2011 as at the end of FY 2024-25 is as under:

During the financial year FY 2024-25, 3 Easy Banking Units ("EBUs'') were established taking the total number of EBUs to 97 and 14 ATMs were opened in FY 2024-25 taking the ATM network of the Bank to 1424 as on 31.03.2025. Besides 7 CRMs (Cash Recycler Machines) were opened in FY 2024-25 taking the total number of CRMs to 156 as on 31.03.2025.

The capital management framework of the Bank includes a comprehensive internal capital adequacy assessment process conducted periodically, which determines the adequate level of capitalization needed to meet the regulatory norms and current and future business needs.

The capital management framework of the Bank is complemented by the risk management framework, which covers the business and capital plans and stress testing results integrated with the internal capital adequacy assessment process while assessing its impact on the capital ratios and adequacy of capital buffers for current and future periods.

As at March 31, 2025, the Subscribed and Paid-up Capital of the Bank stood at Rs.110,11,82,463.00 comprising of 110,11,82,463 equity shares, which is same as at March 31, 2024.

• The Net Worth of the Bank stood at Rs.13013.26 Crore on 31^st March 2025.

• Adjusted Book Value per Share for the financial year 2024-25 stood at Rs.110.75.

• CRAR of the Bank stood at 16.29% as on 31.03.2025. Tier-I capital stood at 13.96%.

Your Bank has Twelve (12) Directors consisting of Managing Director & Chief Executive Officer, Executive Director and 10 Non-Executive Directors as on 31^st March, 2025.

Mr. Amitava Chatterjee (DIN: 07082989), Non

Independent Executive Director has been serving as the MD & CEO of the Bank since December 30, 2024, with the approval of the Reserve Bank of India (RBI). Mr. Sudhir Gupta (DIN: 09614492), Non Independent Executive Director has been serving as the Executive Director of the Bank since December 14, 2022 with the approval of the Reserve Bank of India (RBI).

Dr. Pawan Kotwal, IAS (DIN: 02455728), Mr. Santosh Dattatraya Vaidya, IAS (DIN: 05340193), Dr. Mandeep K Bhandari, IAS (DIN: 07310347), Mr. Sanjiv Dayal (DIN: 10926091), RBI appointed Additional Director and Mr. Rajesh Kumar Chhibber (DIN: 08190084) are the NonIndependent Non-Executive Directors of the Bank.

In terms of the definition of 'Independent Director' as prescribed under Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013 and based on the declarations/disclosures received from the Directors, the following Non-Executive Directors are Independent Directors:-

1. Mr. Umesh Chandra Pandey (DIN: 01185085)

2. Mr. Anil Kumar Goel (DIN: 00672755)

3. Mr. Anand Kumar (DIN: 03041018)

4. Ms. Shahla Ayoub (DIN: 09834993)

5. Mr. Sankarasubramanian Krishnan (DIN: 07261965)

All Independent Directors of the Bank have given their respective declarations stating that they meet the criteria of independence as laid down under the applicable laws and in the opinion of the Board, the Independent Directors meet the said criteria.

During the FY 2024-25, there were following changes in the composition of the Board:

• Mr. Amitava Chatterjee (DIN: 07082989) was appointed as a Managing Director & Chief Executive Officer of the Bank w.e.f. December 30, 2024 in place of Mr. Baldev Prakash (DIN: 09421701) who ceased to be the Managing Director & Chief Executive Officer of the Bank on December 29, 2024.

• Mr. Sanjiv Dayal (DIN: 10926091) was appointed as Additional Director by RBI on the Board of the Bank w.e.f. January 20, 2025.

• Dr. Rajeev Lochan Bishnoi (DIN: 00130335) ceased to be an Independent Director on the Board of the Bank on January 20, 2025 after completion of his second term.

• Mr. Naba Kishore Sahoo (DIN: 07654279) ceased to be an Independent Director on the Board of the Bank on February 28, 2025 after completion of his second term.

• Mr. Sankarasubramanian Krishnan (DIN: 07261965) was appointed as an Independent Director on the Board of the Bank w.e.f. March 27, 2025.

Board of Directors placed on record their deep appreciation for the valuable services rendered by the ex-directors during their tenure as Directors of the Bank.

There were no changes in the Board of Directors after the closure of Financial Year.

Dr. Pawan Kotwal, IAS (DIN: 02455728) and Dr. Mandeep K Bhandari, IAS (DIN: 07310347), who are retiring by rotation, have offered themselves for re-appointment. The profile and necessary details of the above mentioned Directors have been included in the Notice of AGM and Corporate Governance Report.

During the financial year 2024-25, Mr. Baldev Prakash, (DIN: 09421701) Managing Director & Chief Executive Officer (Up to December 29, 2024), Mr. Amitava Chatterjee, (DIN: 07082989) Managing Director & Chief Executive Officer (From December

30, 2024), Mr. Sudhir Gupta, (DIN: 09614492) Executive Director, Mr. Pratik D Punjabi, Chief Financial Officer (Up to April 05, 2024), Mr. Fayaz Ahmad Ganai, Chief Financial Officer (From April 16, 2024) and Mr. Mohammad Shafi Mir, Company Secretary were the Key Managerial Personnel of the Bank.

Mr. Amitava Chatterjee (DIN: 07082989) was appointed as M ana ging Director & Chief Execu tive Officer of th e Ba nk w.e.f. December 30, 2024 in place of Mr. Baldev Prakash (DIN: 09421701) who ceased to be the Managing Director & Chief Executive Officer of the Bank on December 29, 2024 after completion of his term.

Mr. Fayaz Ahmad Ganai was appointed as Chief Financial Officer of the Bank on April 16, 2024 in place of Mr. Pratik D Punjabi, who resigned from the services of the Bank w.e.f. April 05, 2024 in order to explore professional opportunities outside the Bank.

Mr. Ketan Kumar Joshi was appointed as Chief Financial Officer of the Bank with effect from July 17, 2025 in place of Mr. Fayaz Ahmad Ganai.

During the year under review, fifteen (15) Board Meetings were held in due compliance with statutory provisions, on the following dates:

16.04.2024, 04.05.2024, 12.06.2024, 09.07.2024, 27.07.2024, 13.09.2024, 25.10.2024, 19.11.2024, 07.12.2024, 13.12.2024, 25.12.2024, 18.01.2025, 20.01.2025, 25.02.2025, 26.03.2025.

The Bank has following Committees of the Board:

1) Management Committee

2) Audit Committee

3) Special Committee of the Board for Monitoring and Follow-up of Cases of Frauds

4) Stakeholders Relationship Committee

5) Information Technology Strategy Committee

6) Corporate Social Responsibility & Environmental, Social and Governance Committee

7) Integrated Risk Management Committee

8) Customer Service Committee

9) Nomination and Remuneration Committee

10) Legal and Impaired Assets Resolution Committee

The compositions, powers, roles, terms of reference, etc. of aforesaid Committees are given in detail in the statement on Corporate Governance annexed to this report.

The selection and appointment of Directors of the Bank is carried out in accordance with the applicable provisions of the Companies Act, 2013 and the rules made thereunder, the Banking Regulation Act, 1949, the guidelines issued by the Reserve Bank of India (RBI), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Articles of Association of the Bank.

In alignment with the above statutory and regulatory framework, the Bank has adopted a structured and comprehensive approach towards Board composition. The following policies and plans have been formulated to ensure an effective, diverse, and future-ready Board:

• Succession Plan for the Board of Directors

• Policy on Appointment of Directors

• Board Diversity Policy

• Policy for Training of Directors

These frameworks aim to ensure that the Board comprises individuals with appropriate balance of skills, experience, and diversity, and that there is a seamless transition and continuity in the leadership of the Board.

The Nomination and Remuneration Committee (NRC) has approved a framework / policy for evaluation of the Board, Committees of the Board and the individual Members of the Board (including the Chairperson). In conformity with the said policy requirements, following is the process of evaluation:

• The performance evaluation of all the Independent Directors is conducted by the entire Board excluding the Director being evaluated.

• Independent Directors evaluate the performance of Non Independent Directors, Chairperson of the Board, Whole Time Directors and Board as a whole and submit the report to the Board alongwith necessary comments and suggestive course of action arising out of the evaluation.

• The performance evaluation of the Committees of the Board is conducted by the entire Board.

A questionnaire for the evaluation of the Board, its Committees and the individual Members of the Board (including the Chairperson) designed in accordance with the said framework and covering various aspects of the performance relating to the following is forwarded to individual Directors:

The responses received to the questionnaires on evaluation of the Board, its Committees, individual Directors including Chairperson are consolidated and discussed by the Board.

Your Bank has in place a process, wherein, declarations are obtained from the Directors regarding fulfilment of the 'fit and proper' criteria in accordance with the RBI guidelines/

Companies Act, 2013. The declarations from the Directors other than Members of the NRC are placed before the NRC and the declarations of the Members of the NRC are placed before the Board. Assessment on whether the Directors fulfil the said criteria is made by the NRC / Board on an annual basis.

The Fiscal Year for the Bank is reckoned as starting from 01^st April to 31^st March every year.

J&K Bank is the only Private Sector Bank in the Country assigned with responsibility of convening State/ UT Level Bankers Committee-SLBC/ UTLBC meetings. Bank continues to satisfactorily discharge its Lead Bank Responsibility in 12 districts of UT of J&K, i.e. Srinagar, Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Poonch and Rajouri. Lead bank responsibility in other 8 districts of the UT, i.e. Jammu, Samba, Kathua, Udhampur, Reasi, Doda, Ramban and Kishtwar is assigned to State Bank of India.

The Annual Credit Plan 2024-25 for UT of J&K, which was launched on 1^st April, 2024, envisaged a total credit target of Rs.51,839.99 Crore for 16,66,432 beneficiaries. During the FY 2024-25, banks operating in UT of J&K have disbursed total credit of Rs.69,777.77 Crore in favour of 18,43,976 beneficiaries, registering an achievement of 135% in financial terms and 111% in physical terms. This includes disbursement of Rs.36,575.27 Crore in favour of 11,54,988 beneficiaries against the annual target of Rs.39,765.21 Crore for 13,28,858 beneficiaries under Priority Sector and Rs.33,202.50 Crore in favour of 6,88,988 beneficiaries against the annual target of Rs.12,074.77 Crore for 3,37,574 beneficiaries under Non- Priority Sector thereby registering achievement of 92% and 275% in financial terms respectively.

Bank was assigned annual target of Rs.23,748.13 Crore for 8,14,584 beneficiaries under Priority and Non-Priority Sectors of economy during FY 2024-25 against which Rs.43,320.46 Crore were disbursed in favour of 13,20,160 beneficiaries registering an achievement of 182% in financial terms and 162% in physical terms.

Three meetings of J&K UTLBC and six meetings of various Sub-Committees of J&K UTLBC were held during the financial year 2024-25 with special focus on implementation of following schemes/ programmes:

• Coverage of unbanked centres with banking Touch Points

• Prime Ministers Vishwakarma Scheme for socioeconomic development and betterment of artisans and craftsmen.

• SWAMITVA scheme to provide an integrated property validation solution for rural India.

• Pledge financing for agriculture commodities through electronic negotiable warehouse receipt (e-NWR) to help farmers to seek loans from banks against their NWR.

• Financing of Farmers Producer Organizations (FPO) by banks.

• Expanding and deepening of digital payment ecosystem for 100% digital onboarding of saving bank and business accounts.

Lead Bank ensured that District-level and block level meetings, such as DCC/ DLRC/ BLBC, and other related meetings under Lead Bank Scheme are held as per the schedule in all the 20 districts of UT of J&K during the FY 2024-25.

The Fora discussed and reviewed wide range of banking sector issues in blocks and districts including preparation of Annual District Credit Plans using bottom up approach and review progress thereof on regular intervals.

All the phases of Financial Inclusion Plan of GoI/ RBI have been successfully accomplished in Union Territory of J&K. The identified unbanked centers stand covered by providing banking service outlets in the form of Bank Branches/ Banking Correspondents or other Modes of coverage.

As part of strengthening banking presence across all the rural pockets of J&K, UTLBC J&K is making efforts to saturate all the Gram Panchayats (GPs) by onboarding Village Level Entrepreneurs (VLEs), Common Service Centers (CSCs) or Self-Help Group (SHG) members as Business Correspondents (BCs).

1,853 Gram Panchayats have been identified in J&K for providing banking services through Banking Correspondents of which 932 GPs have been allocated to J&K Bank alone. J&K Bank has saturated 751 GPs.

In terms of guidelines issued by Ministry of Rural Development, Government of India, setting up the Rural Self Employment Training Institutes (RSETIs) in all the districts of UT of J&K was assigned by J&K UTLBC to two banks, viz. J&K Bank and State Bank of India as per their Lead Bank responsibility. Accordingly, J&K Bank has set up 12 RSETIs in its allocated 12 lead districts (Anantnag, Bandipora, Baramulla, Budgam, Ganderbal, Kulgam, Kupwara, Poonch, Pulwama, Rajouri, Shopian and Srinagar). Performance of RSETIs in conducting training programmes and the number of candidates benefited through credit linkage is being reviewed in Quarterly UTLBC meetings.

In terms of RBI guidelines for setting up of Financial Literacy Centres (FLCs) in all the districts of UT of Jammu and Kashmir, J&K Bank has made 12 FLCs operational in its 12 allocated lead districts viz. Srinagar, Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Poonch and Rajouri and SBI having made 8 FLCs operational in its 8 allocated lead districts of UT of J&K, viz. Jammu, Samba, Kathua, Udhampur, Reasi, Doda, Ramban, Kishtwar. In addition, PNB, JKGB, EDB and J&K State Cooperative Bank have also established 6, 2, 2 & 1 FLCs respectively, in various districts of UT of J&K, which as on 31.03.2025 takes the total number of FLCs in UT of J&K to 31. The performance of FLCs in conducting the Financial Literacy Camps as per the guidelines from RBI is being reviewed at various forums including quarterly UTLBC meetings.

J&K Bank launched programmes like Kisan Ka Samman and Kisan Adhikar Abhiyan during FY 2024-25 for saturation of farmers under KCC Scheme. Banks have issued 1.34 Lac fresh KCCs (Crop and AH&F) during FY 2024-25 bringing the total number of KCCs to 11.34 Lac with credit sanction of 10,101 Crore.

The J&K Grameen Bank has come into existence on 30^th June 2009 with the issuance of statutory notification by Department of Financial Services, Ministry of Finance, Government of India with its Head Office at Jammu and has commenced its business with effect from 01.07.2009. With more than 70% of J&K's population living in rural areas, it presents a vast yet under-tapped opportunity for the banking sector in J&K. J&K Grameen Bank has a distinctive competitive advantage with its vast presence in rural areas. The bank is playing an important role in the economic prosperity of rural populace of J&K with its credit dispensation to small and marginal farmers, agricultural labourers, socio-economically weaker section of population for development of agriculture, trade, commerce, small scale industry and other productive activities in rural areas. The bank mobilizes resources and deploy the same locally, thus playing a significant role in developing agriculture and rural economy.

The issued and paid up capital of the J&K Grameen Bank as on 31^st March 2025 is Rs.589.44 Crores being fully subscribed by the Central Government, State/ UT Government and Sponsor Bank in the ratio of 50:15:35 respectively and is tabulated below:

Out of total cost outlay of Rs.23.34 Crores for implementation of 100% CBS by JKGB, 50% i.e. Rs.11.67 crore has been shared by J&K Bank (Sponsor Bank).

Date of issue: 04-12-2014

The area of operation of the J&K Grameen Bank comprises of 13 districts of the UT of J&K and UT of Ladakh viz. Baramulla, Bandipora, Kupwara, Ganderbal, Srinagar, Jammu, Kathua, Rajouri, Poonch, Samba, Kishtwar, Leh and Kargil.

The total business of the bank as on 31^st March 2025 stood at Rs.10450.25 Crores against Rs.9364.33 Crores as on 31^st March 2024, thereby registering a growth of 11.60% during the financial year 2024-25.

The deposits of the bank have increased from Rs.5710.15 Crores as on 31^st March 2024 to Rs.6299.36 Crores during the financial year 2024-25, thereby registering a growth rate of 10.32%.

The gross advances of the Bank as on 31^st March 2025 stood at Rs.4150.89 Crores as against Rs.3654.18 Crores as on the corresponding date of the previous year recording a growth of 13.59%.

The C.D. Ratio of the bank has increased from 63.99% as on 31^st March 2024 to 65.89% as on 31^st March, 2025.

The Priority Sector Advances outstanding as on 31^st March 2025 stood at Rs.3181.91 Crores against Rs.2845.64 Crores outstanding as on 31^st March 2024, registering a growth of 11.82 % on Y-o-Y basis. JKGB has Priority sector advances to total advances outstanding percentage at 76.66% as on 31^st March, 2025 which is well above the prescribed target of 75% for RRBs.

Gross NPAs of the Bank as on 31^st March, 2025 stood at 157.70 Crores (3.80%) against Rs.148.70 Crores (4.07%) as on 31^st March, 2024. Accordingly, Net NPAs as on 31^st March, 2025 stood at Rs.50.51 Crores (1.25%) against Rs.45.45 Crores (1.28%) as on 31^st March, 2024.

The business per employee as on 31^st March 2025 stood at Rs.8.68 Crores against Rs.7.64 Crores as on corresponding date of the previous year.

The business per branch as on 31^st March 2025 stood as Rs.48.38 Crores against Rs.43.35 Crores as on corresponding date of the previous year.

The bank has registered a net loss of Rs.12.75 Crores as on 31^st March, 2025 as against a net profit of Rs.3.76 Crores as on 31^st March, 2024.

Under Government's 'One State One RRB' policy regarding amalgamation of 26 Regional Rural Banks (RRBs), J&K Grameen Bank (JKGB) and Ellaquai Dehati Bank (EDB) have also been amalgamated into one Regional Rural Bank under the name "Jammu and Kashmir Grameen Bank" from May 1, 2025 under the sponsorship of J&K Bank, vide Gazette Notification No. CG-DL-E-07042025-262329 dated April 7, 2025, issued by the Department of Financial Services (DFS), Government of India.

As on March 31, 2025, the Bank has one unlisted wholly owned subsidiary namely, JKB Financial Services Limited (JKBFSL) which was incorporated on August 27, 2008. JKB Financial Services Limited was floated with the objective to primarily meet the para-banking requirements of J&K Bank customers in particular and other customers of the UT of J&K in general. JKBFSL is a member of the National Stock Exchange (NSE) & Bombay Stock Exchange (BSE). JKBFSL ensures the people of J&K in general and J&K Bank clientele in particular have easy access to financial services like depository, share trading and mutual fund investments through their reliable and trustworthy brand "The J&K Bank". The establishment of the subsidiary is part of our ongoing commitment and obligation towards our customers, being the dominant player in this geography and being the proud owner of the priceless emotional equity of the local populace. The Bank is committed for making available reliable and cost effective financial services to the people through its branch network especially in this geography through a Collaborative Business Model (CBM) with JKBFSL. The CBM is aimed at maximizing the business value and customer satisfaction.

As a leading broking entity in the Union Territory of J&K & Ladakh, JKBFSL at present provides a wide range of financial services to its clients which includes:

a) Equity Broking Services: JKBFSL provides broking services in equity (cash/delivery, intra-day, futures and option). It plans to include BSE FO (Sensex and Bankex contracts) Commodity Trading and Pro Trading along with debt products to its kitty. As a part of broking services offered by the company, it facilitates opening of Demat accounts for its clients. JKBFSL has taken the membership of NSE, BSE, NSDL and CDSL for providing broking and Demat services.

b) Margin Trading Facility: JKBFSL is providing margintrading facility to its clients for leveraging their eligible collaterals by funding their requirements on the cash- delivery segment of equities in NSE. The exposure is provided as per the norms set by SEBI and exchanges.

c) Gold ETF: JKBFSL is providing the facility to its customers for buying and selling Gold ETF. This product being an exchange-traded fund can be bought and sold only on stock exchanges, thus saving investors from the trouble of keeping physical gold. The transparency in pricing/purity is another advantage. Exchange Traded Funds are open-ended mutual fund schemes based on the ever-fluctuating cost of gold. Gold ETFs give investors exposure to the gold market, offering an excellent choice of investment.

d) Initial Public Offer: To complement its broking services, JKBFSL has been facilitating client participation in IPOs through the ASBA platform of J&K Bank in offline mode. However, with the rollout of its new and advanced trading application JKBmTRADE, the company now offers a seamless online IPO application facility. This new feature enables clients to apply for IPOs directly through the app, with real-time lien marking of funds, significantly enhancing the convenience and efficiency of the investment process.

e) Third Party Product Distribution: JKBFSL undertakes distribution of third party products like mutual funds and ETFs according to its client's requirements. The company provides such distribution through online channels as well as through the BSE Star Mutual Fund platform.

f) Launch of mobile application mTrade:

During the FY2024-25, JKBFSL launched a mobile app called JKB mTrade, which offers comprehensive features, an all-in-one digital platform designed to provide a seamless and advanced trading experience for both experienced and first-time investors.

• The company's total income exceeded 1900.00 lakhs during the financial year 2024-25, reflecting a growth of 27% from 1,514.56 lakhs as on 31^st March 2024 to Rs.1,918.38 lakhs as on 31^st March, 2025.

• Income from Margin Trade Funding (MTF) increased to Rs.487.65 lakhs in the financial year 2024-25, up from Rs.285.24 lakhs in FY 2023-24, registering a year-on-year (YoY) growth of 71%.

• The Company recorded an Assets under Management (AUM) growth of approximately 106% YoY, with mutual fund commissions increasing from Rs.97.72 lakhs in 202324 to Rs.201.14 lakhs in 2024-25, reflecting 106% YoY growth.

• Income from equity broking for the financial year 202425 stood Rs.878.94 lakhs, compared to Rs.770.37 lakhs in FY 2023-24, representing a YoY growth of 14%. The Company's total trading volumes increased to Rs.4424.61 Crores as on 31^st March, 2025 from Rs.3389.59 Crores as on 31^st March 2024, achieving a 31% growth.

• Depository income for the financial year 2024-25 recorded Rs.91.13 lakhs, as against Rs.172.88 lakhs in the previous financial year. The depository income during the financial year 2024-25 has witnessed a considerable decline of 47% compared to the previous financial year, primarily on account of regulatory changes introduced by the SEBI vide circular dated June 28, 2024, mandated the categorization of investors under Basic Service Demat Account (BSDA) Framework.

• The total expenses for the financial year 2024-25 amounted to Rs.1421.46 lakhs, compared to Rs.1163.51 lakhs in the previous financial year, representing a year-on- year (YoY) increase of 22%.

• The significant rise in total costs on a YoY basis is primarily attributable to increased employment costs due to the regularization of employee services and wages paid to outsourced staff.

• Most of the expenses under other administrative categories are variable and fluctuate in accordance with production levels and other developments.

• The company registered a profit before tax of Rs.496.88 lakhs during the given financial year and the net profit earned was Rs.378.65 lakhs during the same period.

During the FY 2024-25, we have further strengthened the bond of trust with all our stakeholders by leveraging all the means and channels available for uninterrupted and effective communication throughout the financial year. The Bank's products, services and facilities were successfully advertised and publicized through a series of multi-media mass campaigns across the operational geographies of the Bank. Also, the advertising campaigns initiated by the Bank to increase its overall business, while meeting the set targets, were duly publicized with proper follow-up communications.

Further, the functioning and accomplishments of the Bank were effectively communicated to relevant target audiences including major stake-holders, customers, shareowners and general public through customized and efficiently packaged messages/hand-outs using mass media within J&K and Ladakh, besides rest of the country to enhance our credibility and brand image.

Leveraging the power of internet in reaching out to a wider audience, we successfully increased our presence manifold in the social-media universe by strengthening and streamlining our online presence through highly popular mediums of social connectivity tools especially Facebook, Twitter, Instagram, YouTube and LinkedIn.

Brand perception forms the fulcrum of any communication plan, which is devised to complement the Bank's business strategy. Therefore, in line with the Bank's vision to scale up its business and expand presence in rest of the country while deepening its foot-prints in Jammu & Kashmir and Ladakh (JKL), we aligned the Brand Building campaigns accordingly to better leverage Bank's success in financial and institutional terms. With an established identity and image in the JKL market, our focus remained to enhance Bank's brand equity and boost its brand appeal in aesthetically vibrant terms to complement its financial standing. While as in rest of the country, we successfully increased our brand exposure activities during the FY 2024-25 both on and off-line thereby enhancing Bank's brand awareness, deepening its brand perception and increasing its brand value.

During the FY 2024-25, the Bank undertook various promotional activities to position its brand further favourably among the people, complementing ever-strengthening significance of our institution on financial landscape of JKL and beyond. While Brand J&K Bank continues to hold the sway among the people, Bank has ensured to put an effective and efficient communication strategy in place to reinforce the brand recall.

During the FY, the Bank successfully ran a highly charged brand-deepening series - 'Yadoon Ki Jama Poonji - A heartfelt journey through the memories as markers of our making." In this campaign, the Bank celebrated its 86-year legacy of love and unwavering bond with its valued customers and dedicated employees through an audio-visual tell-tale series on social media by presenting a treasure trove of memories as recounted by customers/employees highlighting the deep foundations of their trust and commitment with the Bank.

While the thrust for using digital channels to communicate to the people has been mandated in the face of ever changing technological landscape with Bank enhancing its digital footprints by leveraging its presence on social media platforms, it has increased usage of traditional advertisement genres like outdoor advertising (OOH) through hoardings, bus branding, airport trolley branding and barricades to garner better mileage in terms of brand visibility and reach. A well- drilled brand visibility enhancing activity was carried out by displaying Bank's products and schemes at ATMs/CRMs & Branches while making sure Glow Signboards-an important tool of brand identity-are properly maintained. Hoardings were placed in twin cities of Jammu and Srinagar, major railway stations, national highways and other key locations across all major towns and areas of JKL and rest of the country.

Moreover, people-centric, cyber security and environment- friendly initiatives during FY2024-25 were properly highlighted by using a blend of diverse media mix to enhance public awareness, strengthen the trust and bond between Bank and its stakeholders, thereby, enabling a continuity in the positive perception about the Bank.

While doing all this, the key components of brand identity like logo, its colors, font, and other aspects were properly utilized and placed to deepen the brand perception and loyalty among the stakeholders.

Throughout its illustrious history of more than eight and half decades, J&K Bank has been decorated with awards and accolades at prestigious platforms nationally as well as internationally. Over the years, the Bank has enriched its legacy by collecting numerous honours in various categories.

During the FY 2024-25, the Bank outperformed its competitors to win following major awards and grab the headlines in following categories:

1. Honoured with the 'Best Innovation in Digital Lending' award at the 1^st Indian PSU Achievers' Awards 2025.

2. Honoured by Union Minister of Defence, shri. Rajnath Singh for generous financial contribution under its Corporate Social Responsibility (CSR) towards the education of children of ex-servicemen and war widows.

3. Honoured as the winner in the category of Best Bank for Creating Awareness among MSMEs (Private Sector) awards at the MSME Banking Excellence Awards-2024.

Also secured the position of Runner-Up in Best MSME Bank (Private Sector).

4. Won the coveted 'Best Digital Sales, Payments and Engagements' award in the 'Medium Size Banks Category' at the 20^th IBA Annual Banking Technology Conference and Citations - 2024.

5. Bank's Football Club won the prestigious 18^th Christmas Gold Cup 2024-25.

6. Won the SKOCH Gold Award for 'Corporate Governance' at the summit themed 'New Dimensions of Inclusive Growth'.

7. Honoured with "Best Performance on Profitability" award in the category of Private Sector Bank (Mid-Size) at the 2^nd ICC Emerging Asia Banking Conclave & Awards 2024.

8. Received 'Outstanding Performance Award' for agriculture financing at the 15^th Agriculture Leadership Conclave and the 'Award of Excellence' for enrolling the maximum number of APY beneficiaries under the 'Mission Upgrade' campaign of the Pension Fund Regulatory & Development Authority (PFRDA) for the financial year 2024.

9. Won the prestigious Platinum Award at Infosys Finacle Innovation Awards - 2024 in the process innovation category for Bank's transformation in Business Correspondent (BC)/Khidmat Centre Channel.

As a responsible corporate entity, J&K Bank remains committed to aligning its strategic objectives with the broader needs of society, thereby fostering an inclusive, sustainable, and equitable environment. This commitment forms the cornerstone of the Bank's Corporate Social Responsibility (CSR) policy and is embedded in its core philosophy of contributing meaningfully to the communities it serves.

Guided by the founding principles of its CSR policy, the Bank consistently undertakes and promotes initiatives aimed at uplifting underprivileged and marginalized sections of society. These efforts also extend to supporting community- driven actions that contribute to a more compassionate, resilient, and sustainable world. In pursuit of this vision, the Bank continued its 'social investment' efforts during FY 202425 by implementing diverse CSR projects addressing social welfare, healthcare, education, livelihood enhancement, environmental sustainability, disaster relief etc. These initiatives have not only helped to mitigate the challenges faced by various communities but have also strengthened the Bank's emotional equity, brand affinity and public goodwill.

Throughout the financial year, the Bank remained steadfast in its mission of "Serving to Empower" by fostering value creation across the Union Territories of Jammu & Kashmir and Ladakh. While many of the CSR interventions directly impacted large segments of the population, several eco-centric projects have played a pivotal role in promoting renewable energy adoption and reducing the overall carbon footprint.

Statutory disclosures related to the activities of the CSR&ESG Committee of the Board, including a comprehensive report on CSR implementation are enclosed as part of this report as Annexure 1. The key areas of intervention and the activities undertaken under CSR by the Bank during the FY 2024-25 are detailed in Corporate Functions Report.

The Bank has established a tradition of exemplary practices in corporate governance. It encompasses not only regulatory and legal requirements, but also several voluntary practices, aimed at high level business ethics, effective supervision and enhancement of stakeholder volume. Several matters have been voluntarily included in the statement on corporate governance annexed to this report, besides certificate from the Secretarial Auditors regarding compliance of conditions of Corporate Governance as stipulated by the SEBI (Listing Obligations & Disclosure Requirement) Regulations, 2015.

The Management Discussion and Analysis Report for the year is presented in a separate section forming part of this report.

The Bank has a Whistle Blower mechanism in place which enhances transparency in the organization by encouraging the employees/ Directors/ other specified stakeholders to report any wrongdoing, which comes to their knowledge in the day-to-day performance of their duties or interaction with other fellow-colleagues/ Bank staff without fear of retaliation, victimization and unfair-treatment. The Bank has formulated the "Whistle Blower Policy" to guarantee them protection from any adverse departmental proceedings.

The Policy is compliant to regulatory requirements under Section 177 (9) of the Companies Act 2013, and SEBI Listing Regulations. The policy document is available on the Bank's official website under link: https://www.jkbank.com/investor/stockExchangeIntimation/ corporateGovernancepolicies.php

Further, the mechanism adopted by the Bank encourages the Whistle Blower to report genuine concerns or grievances and also provides for direct access to Chairman of the Audit Committee of the Board, in exceptional cases.

The grievance under Whistle Blower mechanism can be lodged on the Bank's official website under link: https://www. jkbank.com/others/common/wbGrievences.php

It is hereby affirmed that the Bank has not denied any of its personnel access to the Chairman of the Audit Committee of the Board and that the policy contains adequate provisions for protecting whistle blowers from unfair termination and other unfair prejudicial employment practices.

In the FY 2024-25, Twelve (12) complaints received under Whistle Blower Mechanism were placed before the Audit Committee of Board.

The Bank in line with the RBI prescribed framework, has devised a Policy Document on the "Protected Disclosure Scheme." The complaints under the Scheme cover the areas such as corruption, misuse of office, criminal offences, suspected/ actual fraud, failure to comply with existing rules and regulations such as Reserve Bank of India Act, 1934,

Banking Regulation Act 1949, etc. and acts resulting in financial loss/ operational risk, loss of reputation, etc. detrimental to depositors' interest/ public interest. Reserve Bank of India (RBI) will be the Nodal Agency to receive complaints under the Scheme.

The complaint under the Scheme should be sent in a closed/ secured envelope addressed to The Chief General Manager, Reserve Bank of India, Department of Banking Supervision, Fraud Monitoring Cell, Third Floor, World Trade Centre, Centre 1, Cuffe Parade, Mumbai 400005. The envelope should be superscripted "Complaint under Protected Disclosures Scheme for Banks". Complaints can also be made to RBI through e-mail: dbspd@rbi.org.in by giving full details as specified above.

The policy document is available on the intranet page of the Bank as well as on the Bank's official website under link: https://www.jkbank.com/pdfs/policy/latest/Policy_protected. pdf

It is hereby affirmed that no unfair treatment will be meted out to a Complainant by virtue of his/her having reported a Disclosure under this Policy. The Bank, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Complainant(s). Complete protection will, therefore, be given to Complainant(s) against any unfair practice like retaliation, threat or intimidation of termination/suspension of service, disciplinary action, transfer, demotion, refusal of promotion, including any direct or indirect use of authority to obstruct the Complainant's right to continue to perform his/ her duties/functions including making further Disclosure under the policy. In FY 2024-25, the Bank has not received any complaint under the "Protected Disclosure Scheme".

Risk is an integral part of banking business. Bank has exerted focused efforts in building a robust, and sustainable risk governance framework and to create risk awareness culture across all tiers of the organisation's hierarchy and is continuing to do so. Risk Management underscores the fact that the survival of an organisation depends heavily on its capabilities to be proactive and prepare for the change rather than just be reactive for the change. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and mitigated.

Bank has a well-defined and comprehensive risk management framework in place to strengthen its capacity to recognise and address risks. This framework is clearly based on systematic identification and understanding of different risks, disciplined risk assessment, measurement procedures, mitigation and continuous monitoring. Risk Management is an integral part of the Bank's organizational structure and plays vital part in formulation of business strategy. It allows greater control in achieving an appropriate balance between acceptable risks and expected returns, while at the same time maintaining the sound financial position. The Bank's Risk Management framework focuses on the management of key areas of Risk such as Credit Risk, Market Risk, Operational Risk, Liquidity Risk and Pillar II Risks; quantification and mitigation thereof.

The Bank has also put in place a Risk Appetite Framework (RAF) that articulates the risk appetite and drills down the same into a limit framework for various risk categories. Risk appetite defines the levels and types of risk that are acceptable, within risk capacity, in order to achieve strategic objectives and business plans. The risk appetite framework, which is approved by the Board, bolsters effective risk management by promoting sound risk-taking through a structured approach, within agreed boundaries. The Risk Appetite applies to Bank at an enterprise level, branches, offices and other departments. With the objective of aptly integrating risk appetite into business functions, Bank aims to maintain an effective risk management process which sets out key elements for risk appetite framework which is not limited to credit, market, liquidity and operational risks, but incorporates all major risks faced by the Bank. This includes reputational, concentration and strategic risks, as well as risks that do not appear to be significant in isolation, but when combined with other risks could lead to material losses.

The key components of the Bank's Risk Management architecture rely on the risk governance structure, comprehensive processes and internal control mechanism based on approved policies and guidelines. The Bank's risk management processes are guided by way of policies adopted appropriately for various risk categories, independent risk oversight and periodic monitoring by Board of Directors, Committee of the Board of Directors (Integrated Risk Management Committee of Board) and Senior Management Committees-Credit Risk Management Committee, Market Risk Management Committee, Operational Risk Management Committee and Asset Liability Committee (ALCO). The policies approved from time to time by Board of Directors, Committee of Board (IRMC) form the basis for governing framework for each type of risk. The risk management policies and procedures established are updated on continuous basis in compliance with RBI guidelines and benchmarked to the best practices. The Board sets the overall risk appetite and philosophy for the Bank and has an oversight of all the risks assumed by the Bank.

Bank has an independent Risk Management Vertical headed by the Chief Risk Officer, who reports to IRMC of Board and monitors the development and implementation of methodologies for risk identification, assessment, measurement, monitoring and mitigation for all risks. The Board of Directors with its Committee-Integrated Risk Management Committee (IRMC) reviews risk management policies of the Bank pertaining to Credit, Operational, Liquidity, Market and Pillar II Risks that includes strategic risk and reputational risk, Internal Capital Adequacy Assessment Process (ICAAP) and stress testing.

The Management Level Committees-Credit Risk Management Committee (CRMC), Operational Risk Management Committee (ORMC) and Market Risk Management Committee (MRMC) for Credit Risk, Operational Risk and Market Risk operate within the broad risk management framework of the Bank to assess and minimize these risks. Information security and business continuity plan also forms part of risk management function in the Bank. Treasury activities are separately monitored by mid office which reports to Risk Management Vertical. The Bank has Stress Testing Policy to measure impact of adverse stress scenarios on the adequacy of capital. The stress scenarios are idiosyncratic, generic and a combination of both.

In terms of Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top 1000 Listed Entities based on their market capitalization as on 31^st March every year are required to submit their Business Responsibility and Sustainability Report (BRSR) on the environmental, social and governance disclosures as a part of the Annual Report. The Bank's BRSR is annexed as Annexure-6 to this report.

The Bank does not engage in any form of child labour / forced labour / involuntary labour and does not adopt any discriminatory employment practices. The Bank has duly constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention and Redressal) Act, 2013 and the rules made thereunder dealing with complaints of harassment or discrimination.

The Committee functions in line with the relevant Act passed by the Parliament in 2013. The Committee ensures that all complaints are resolved within defined timelines. During the year, two complaints were lodged before the Internal Complaints Committee. Accordingly, due inquiry proceedings were conducted in the cases, as stipulated in the Act and adequate opportunity was provided to both complainants and respondents to present/defend their case. Both the complaints were disposed of within the requisite time frame of 90 days.

During the Financial Year 2024-25, one accidental death has occurred on 28^th May, 2024 (Late Prem. Lal - Banking Attendant, Code No: 21059). The employee was covered for an amount of Rs. 20.00 lacs, which has been settled by the Insurer (Bajaj Accidental Insurance).

Loans, Guarantees & Investment in Securities Pursuant to Section 186(11) of the Act, the provisions of Section 186 of the Act, except sub-section (1), do not apply to a loan made, guarantee given, or security provided by a banking company in the ordinary course of its business. 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.

Considering the nature of the Industry in which the Bank operates, transactions with related parties of the Bank are in the ordinary course of business and are also at arm's length basis. There was no materially significant related party transaction entered by the Bank with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Bank. The policy on Related Party Transactions and dealing with related parties as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Bank and the link for the same is below: https://www.jkbank.com/investor/ stock Exchange Intimation/ corporate Governancepolicies.php Statement of related party transactions under sub section (1) of Section 188 of the Companies Act, 2013 is annexed as Annexure 5 to this report.

The Bank as on 31^st March, 2025 has cases under the IBC resolution, the details whereof along with existing status is tabulated as under:

The Bank during the financial year 2024-25 has detected/ reported 35 cases of frauds to the Reserve Bank of India involving an amount of 198.15 Crores.

Out of the above 35 frauds, 1 fraud case involving an amount of Rs.27.60 Crore was deactivated from fraud portfolio on

01.08.2024 (originally declared as fraud in year 2021) in compliance to court order dated 27.05.2024 passed by Hon'ble High Court of Punjab and Haryana at Chandigarh. RBI while acknowledging the deactivation vide its mail date

16.08.2024 advised the Bank to ensure compliance to the judgement dated March 27, 2023 of the Hon'ble Supreme Court, judgement dated May 27, 2024 of the Hon'ble Court of Punjab & Haryana and of Para 2.1.1 of the Master Directions on Fraud Risk Management in commercial banks dated July 15, 2024, while re-examining the account from angle of fraud. The Bank following principles of natural justice, particularly the rule of audi alteram partem, issued Show-Cause notices to the borrowers' and after re-examining their replies in light of the already conducted internal investigation and Forensic Audit Report, the account was again re-classified as fraud in FY 2024-25.

Also in FY 2024-25, the fraud amounts in three fraud cases pertaining to FY 2023-24 were revised by an amount of Rs.59.56 Lacs, Rs.51.48 Lacs and in one case fraud amount was reduced by Rs.30.76 lacs. The fraud amounts in these cases were thus respectively revised to Rs.170.94 Lacs, Rs.199.11 Lacs & Rs.95.58 Lacs.

During the year under review, one fraud was reported by the statutory auditors under Section 143 (12) of the Companies Act, 2013 to the Ministry of Corporate Affairs, Govt. of India.

Pursuant to Section 129 of the Companies Act, 2013, the Bank has prepared Consolidated Financial Statements of the Bank, its Subsidiary (JKB Financial Services Ltd.) and also its Associate (J&K Grameen Bank) which shall be laid before Shareholders at the 87^th Annual General Meeting of the Bank along with Bank's Financial Statements under sub-section (2) of Section 129 i.e. Standalone Financial Statements of the Bank. Further, pursuant to the provisions of Accounting Standard (AS) 21 - Consolidated Financial Statements notified under Section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 issued by the Ministry of Corporate Affairs, the Consolidated Financial

Statements of the Bank along with its Subsidiary/Associate for the year ended March 31, 2025 form part of this Annual Report. The statement in form AOC-1 pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules 2014 is annexed as Annexure-4 to this report.

The Statutory Central and Branch auditors of the Bank are appointed by the Comptroller & Auditor General of India (C&AG) pursuant to Section 139 (5) of the Companies Act, 2013. The Bank had three (3) Statutory Central Auditors appointed by the C&AG of India for the year under report as given below:

1. M/s Gupta Gupta & Associates LLP, Chartered Accountants

2. M/s JCR & Co. LLP, Chartered Accountants

3. M/s Lunawat & Co., Chartered Accountants (Only for Q1 FY 2024-25)

4. M/s Dhar Tiku & Co., Chartered Accountants (From Q2- Q4 FY 2024-25)

For the FY 2024-25, there are no qualifications, reservation or adverse remarks made by the Statutory Central Auditors in the audit report.

The details of total fees (excluding taxes), for all services, paid by the Bank on a consolidated basis to the Statutory Central Auditors are tabulated below:

As on date of this report, the Bank has not received the comments under Section 143 (6) of the Companies Act, 2013 from the Comptroller and Auditor General of India on the accounts of the Bank for the year ended 31^st March, 2025 and the same alongwith Bank's reply to the comments shall be read out at the 87^th Annual General Meeting.

Pursuant to Section 204 of the Companies Act 2013, your Bank has appointed CS Dhaman Kumar Pandoh, Proprietor of M/s D K Pandoh & Associates, Company Secretaries as its Secretarial Auditor to conduct the Secretarial Audit of the Bank for the FY 2024-25. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting the audit. The report of Secretarial Auditor for the FY 2024-25 is annexed to this report as Annexure 3. The Bank's replies to the comments of Secretarial Auditor are furnished as under:

Further, the Audit Committee and the Board of Directors of the Bank at their respective meetings held on July 25, 2025 have recommended the appointment of M/s D K Pandoh & Associates, Practicing Company Secretaries (ICSI Firm

Registration No. S2016JK420900), as Secretarial Auditors of the Bank at an overall audit fees of Rs. 90,000 (Rupees Ninety Thousands) per annum in addition to out of pocket expenses, outlays and taxes as applicable, to conduct secretarial audit of the Bank for a period of 5 (Five) years i.e. from FY 2025-26 till (and including) FY 2029-30.

The resolution in this regard is being proposed at ensuing AGM for approval of the Members.

The Bank is in compliance with all applicable Secretarial Standards as notified from time to time.

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

The RBI had issued a circular in February 2016 requiring banks to implement Indian Accounting Standards ("Ind AS") and prepare standalone and consolidated Ind AS financial statements with effect from 1 April, 2018. Banks were also required to report the comparative financial statements for fiscal 2018, to be published along with the financial statements for the year beginning 1 April, 2018. However, the RBI in its press release issued on 5 April, 2018 deferred the applicability of Ind AS by one year (i.e., 1 April, 2019) for scheduled commercial banks. Further, RBI in a circular issued on 22 March, 2019 has deferred the implementation of Ind AS till further notice.

The Bank had undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also identified and evaluated data gaps, processes and system changes required to implement Ind AS. The Bank is in the process of implementing necessary changes in its IT systems wherever required and other processes in a phased manner. The Bank is also submitting proforma Ind AS financial statements to RBI on a half-yearly basis.

Also, in line with the RBI guidelines on Ind AS implementation, the Bank has formed a Ind AS Project Steering Committee comprising of members from the concerned functional areas, headed by the Executive Director. The Steering Committee reviews the proforma Ind AS financial statements. Accounting impact on the application of Ind AS shall be recognised as and when it becomes statutorily applicable to banks and in the manner so prescribed.

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 Directors' Report i.e. August 02, 2025.

The Credit Rating and change/revision in the Credit Ratings for various debt instruments issued by the Bank from time to time are provided in the Corporate Governance Report forming part of the Annual Report.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in "Annexure 2" forming part of this report.

1. The disclosures to be made under sub- section (3) (m) of Section 134 of the Companies Act, 2013 read with rule (8) (3) of the Companies (Accounts) Rules, 2014 by your Bank are explained as under:

The Bank is committed to environmental sustainability and achieving a low-carbon footprint through various energy conservation initiatives integrated within our technology strategy. Our technological advancements are designed not only to enhance operational efficiency and customer service but also to contribute meaningfully to our broader ESG goals.

The extensive digitalization of our processes, as detailed in the Technology Absorption section, forms the cornerstone of our energy conservation efforts. Initiatives such as our end-to-end digital loan origination journeys, the bank-wide e-Office solution, and online account opening solution substantially reduced paper consumption, the need for physical document transport, and energy use associated with printing. Furthermore, by empowering customers with comprehensive digital channels like mPay Delight+ and internet banking, we reduce the frequency of branch visits, leading to a lower carbon footprint for both the Bank and its customers. The deployment of Interactive Signage Kiosks as an alternative to paper notices further supports this goal by using low-power LED displays.

In our infrastructure, we prioritize energy efficiency. The Bank's Data Center is located in a highly energy-efficient facility in Noida, and our Disaster Recovery Center is housed in Asia's largest Rated 4 Hyper-scale Datacenter, which is USGBC LEED Platinum Certified.

We are strategically investing in cloud computing and virtual servers, which optimize energy consumption compared to traditional on-premise hardware. Across all our offices and banking outlets, we consistently procure Energy Star compliant computing and communication hardware to significantly reduce power consumption. These concerted efforts in adopting green IT practices demonstrate our dedication to promoting sustainability across all our operations.

At J&K Bank, our strategic focus remains firmly on harnessing the power of technology to deliver a superior, secure, and seamless banking experience. In our continuous pursuit of digital excellence and customer centric innovation, we have launched several key initiatives during the financial year.

These advancements not only place our services at the forefront of the industry but also enhance operational efficiency, strengthen our risk management framework, and contribute to our sustainability goals.

Our key achievements in technology absorption are categorized as follows:

We have significantly upgraded our digital platforms

to provide an enriched and convenient "Bank-in-a-

Pocket" experience for our customers.

• Revamp of Digital Platforms: To enhance our digital presence, we launched a redesigned corporate website (jkbank.com) with a user- friendly interface, Search Engine Optimization (SEO), social media integration, and geocoordinate feature for branch locators. We also implemented a new Digital Insurance platform, allowing customers to browse, compare, and purchase insurance products from our partners through an assisted journey at branches, with future integration planned for our mobile and internet banking channels.

• Major Enhancements in mPay Delight+: Our flagship mobile application, mPay Delight+, saw numerous upgrades. Key new features include a native UPI 'Scan & Pay' function accessible even from the pre-login screen, a comprehensive credit card management module, cardless cash withdrawals at ATMs, online submission of Form 15G/15H and download of TDS/Interest certificates, and the ability to subscribe to social security schemes. A simplified 'mPay Lite' version was also introduced for elderly and nontech-savvy users.

We rolled out a new, scalable cloud-hosted UPI platform, significantly reducing transaction failures and enabling advanced features like Aadhaar OTP-based registration and UPI Lite. On an average the platform processes over 15 crore UPI transactions per month valued at over Rs.8k crores. We also introduced UPI-QR SoundBox for instant audio payment alerts to merchants and enabled dynamic UPI QR payments on our POS terminals.

Automating and re-engineering internal processes has been a core focus, leading to improved turnaround times (TAT) and operational efficiency.

• Digital Loan Origination Journeys: We have transformed our retail lending capabilities by rolling out end-to-end automated online journeys for key products, including Housing Loans, TwoWheeler Loans, Car Loans, and Credit Card Onboarding. These journeys automate credit decisioning, improve processing TAT, and offer unparalleled convenience to customers.

• Introduced Online Journey for Kissan Credit Card (KCC) Renewals: We have completely transformed the renewal process for KCC Loans by introducing a paperless, Do-It-Yourself (DIY) journey. Customers can submit their renewal consent either through a dedicated web portal or simply by sending an SMS from their registered mobile number, with requests processed within 30 Minutes.

• Enterprise-Wide Automation: A state-of-the- art Enterprise Reconciliation Solution was implemented to automate the reconciliation lifecycle for all digital channels, minimizing manual intervention and ensuring greater accuracy. To strengthen governance, a Self-Audit Continuous Control Monitoring Solution (CCM) was introduced to identify and address operational deficiencies in real-time. Furthermore, the bank-wide rollout of the eOffice application suite has automated file and correspondence management, with significant percentage of notes achieving same-day decisioning.

• Vehicle Hypothecation Management: A

new portal integrated with the RTO/Vahan system allows branch staff to manage vehicle hypothecation (addition, cancellation, and extension) in real-time, starting with the cancel- hypothecation service in Jammu, Kashmir, and Delhi.

Our commitment to innovation is reflected in the modernization of our core technology and our collaborative approach to building a robust financial ecosystem.

• Core Banking System (CBS) Enhancement: To improve system performance, Capacity Augmentation, Performance Tuning of critical services of CBS was undertaken. In addition, other measures for improving the transaction processing speed at the CBS, In-Memory caching solution initiative has been undertaken which shall substantially off-load the load from CBS and shall serve as the first step towards our journey of hollowing out the core.

• Launch of Open Banking & API Gateway: A significant milestone was the launch of our Open Banking and API Gateway platform, enabling secure and seamless integration with trusted fintech partners and corporate clients. Multiple API integrations with Corporate clients and fintech partners have been successfully delivered.

• Cloud Adoption and Modernization: We successfully set up a Cloud Landing Zone, establishing a virtual Data Center on the cloud to reduce turnaround time for new projects. The migration of our UPI and IMPS solutions to the cloud now supports a growth of 20 crore transactions monthly and has been recognized with the "Best Cloud Futurist Award".

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflow:

1. During the Year ended 31.03.2025, the Bank earned Rs.198.47 lakhs and spent Rs.176.88 lakhs in foreign currency. This does not include foreign currency cash flow in

derivatives and foreign currency exchange transactions.

2. Except as reported in para 16 (m) of Schedule 18, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status of the Bank's operations in future.

3. No Stock options were issued to the Directors of your Bank.

4. There has been no change in the nature of business of the Bank.

5. 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 section 73 and 74 of the Companies Act, 2013 are not applicable.

6. There is no application or proceeding pending against the Bank under the Insolvency and Bankruptcy Code, 2016 during the year under report.

7. There was no instance of one-time settlement with any other Bank or financial institution during the year under report.

In accordance with the provisions of Companies Act, 2013, the Annual Return of the Bank for the financial year 202425 in the prescribed Form MGT-7 is available on the website of the Bank at: https://www.jkbank.com/investor/financials/ annualReturns.php.

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Board of Directors hereby state that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) accounting policies have been selected and applied consistently. Reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

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

(d) the annual accounts have been prepared on a going concern basis;

(e) internal financial controls have been laid down to be followed by the Bank and such internal financial controls are adequate and operating effectively; and

(f) proper and adequate systems are in place to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with Generally Accepted Accounting Principles.

These controls and processes are driven through various policies, procedures and certifications. The control environment of the Bank is adequate enough to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Bank's financial statements. The processes and controls are reviewed periodically.

The cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 are not required to be maintained by the Bank.

Certificate issued by Managing Director & CEO and Chief Financial Officer of the Bank, for the financial year under review, was placed before the Board of Directors in their meeting held on May 05, 2025 in terms of the Regulation 17(8) of the Listing Regulations.

Based on the condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's supervisory process for the financial year ended March 31, 2025.

Details of customer complaints and grievance redressal is reported in Schedule 18 - Notes on Accounts of the Financial Statements, which form part of the Annual Report.

The Bank has complied with the applicable provisions of Maternity Benefit Act, 1961 for female employees of the Bank with respect to leaves and maternity benefits thereunder.

The Directors thank the valued customers, shareholders, well-wishers and correspondents of the Bank in India and abroad for their goodwill, patronage and support. The Directors acknowledge with gratitude the valuable and timely advice, guidance and support received from Government of India, Government of UTs of Jammu & Kashmir and Ladakh, Reserve Bank of India, Securities and Exchange Board of India (SEBI), Insurance Regulatory Developmental Authority (IRDA), NABARD, SIDBI, IBA, FIMMDA, FEDAI, Stock Exchanges, Ministry of Corporate Affairs, Registrar of Companies, Comptroller & Auditor General of India, Financial Institutions and the Central Statutory Auditors of the Bank in the functioning of the Bank.

The Directors place on record their deep appreciation of the valuable contribution of the members of the staff at all levels for the progress of the Bank during the year and look forward to their continued cooperation in realization of the corporate goals in the years ahead.