$ Operating profit represents total income as reduced by interest expended and operating expenses.

3. FINANCIAL PERFORMANCE OF THE GROUP

Subsidiaries and the Associate Companies of the Bank continued to deliver steady performance. Consolidated net profit attributable to the group for FY 2024-25 is H 4158.85 Crore as against H 3,880.43 Crore in FY 2023-24.

4. SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATES

As on March 31, 2025, the Bank has following subsidiaries and associate company:

Note: During the year, the Bank divested stake in Equirus Capital Private Limited (ECPL) equivalent to 70.50 lakh shares i.e 9.81% of paid-up equity share capital of ECPL. Following this stake sale, ECPL ceased to be an Associate Company of the Bank with effect from November 15, 2024.

Federal Operations and Services Limited (FedServ) is a wholly owned subsidiary company of The Federal Bank Limited (the Bank) incorporated on October 26, 2018. FedServ received approval from RBI on November 09, 2018, for commencing its operations. FedServ started its operations w.e.f. December 01, 2018. As on March 31, 2025, FedServ's Board of Directors has following five members-

Executive Director.

Mr. Venkatraman Venkateswaran, Non- Executive Director.

Mr. Johnson K Jose, Non- Executive Director.

Mr. Narayanan Nair Rajanarayanan, Additional Non-Executive Director

Mr. Prashant Preman, Wholetime Director.

During the year ended on March 31, 2025, FedServ has taken significant operational activities of the Bank. FedServ is carrying out 235 operational activities of the Bank as on March 31, 2025. Company does not deal in loans and advances, neither it accepts deposits. FedServ is operating from Four locations: - Kochi in Kerala, Visakhapatnam in Andhra Pradesh, Bengaluru in Karnataka and Indore in Madhya Pradesh.

The total revenue of FedServ for the year ended on March 31, 2025, was H 105.13 Crores. H 102.85 Crores pertains to services provided by the Company to the Bank and H 2.28 Crores relates to the indirect incomes. The Company had a net profit before tax of H 8.92 Crores for the year ended on March 31, 2025. The Net worth of FedServ at the beginning of the year was H 26.18 Crores and closing net worth of FedServ as on March 31, 2025, was H 33.67 Crores.

FedServ will help the Bank in serving the customers better and reducing the cost of operations significantly. FedServ will also help the Bank to improve turnaround time of various operational processes, improve First Time Right (FTR) rate and enable the Bank to become FIRST CHOICE Bank of customers. The Profit after tax of the Company for the year ended March 31, 2025, increased to H 7.91 Crores from H 5.98 Crores for the year ended March 31, 2024. The total assets of the Company increased to H 44.06 Crores as on March 31, 2025, from H 35.54 Crores as on March 31, 2024.

Fedbank Financial Services Limited ("Fedfina") is a subsidiary company of The Federal Bank Limited (the "Bank"), which was incorporated on April 17, 1995, in Aluva, Kochi, State of Kerala under the Companies Act, 1956 and was granted a certificate of incorporation by the Registrar of Companies, Kochi, Kerala. The Reserve Bank of India had also issued Certificate of registration dated August 24, 2010, granting approval to Fedfina to carry on the business of a non-banking financial institution without accepting public deposits. Presently, the Registered and Corporate office of Fedfina is at Mumbai, Maharashtra. Fedfina have a well-tailored suite of products targeted to match our customers' needs, which includes mortgage loans, business loans, and gold loans. It also distributes loan products of the Bank. It has broadened its geographical presence by establishing new branches across India providing multiple loan products to various segments of borrowers. With the opening of 75 branches during the year, the branch network has now reached to 694 branches as on March 31, 2025, across 18 states for multiple products. Fedfina's Board of Directors comprises of the following ten directors as on March 31, 2025:

Mr. Shyam Srinivasan- Non-Executive Chairman & Non-Executive Director

Mr. Parvez Kasim Mulla – Managing Director and Chief Executive Officer

Mr. Ramesh Sundararajan - Non-Executive - Independent Director

Mr. Sunil Satyapal Gulati - Non-Executive - Independent Director

Ms. Sonal Nitin Dave- Non-Executive - Independent Director

Ms. Mona Mukund Bhide – Non-Executive - Independent Director

Mr. Muralidharan Rajamani- Non-Executive - Independent Director

Mr. Maninder Singh Juneja – Non-Executive Nominee Director

Mr. Harsh Dugar- Non-Executive Nominee Director

Mr. Krishnan Venkat Subramanian-Non-Executive Nominee Director Fedfina's credit ratings has upgraded to AA+/Stable by CARE ratings, India Ratings and CRISIL, boosting the confidence of our stakeholders at large.

The Total revenue of the Company for the financial year ended March 31, 2025, has increased to H 2,07,982 Lakh as against H 1,62,300 lakhs for the previous year ended March 31, 2024. Similarly, Net Interest Income (NII) grew by 32% from H 81,212 Lakhs in FY 2024 to H 1,07,081 Lakhs this year. The revenue increased by 28% on the back of growth of 19% in loan book during the year. The net profit of the Company decreased by 8% to 22,518 lakhs for the financial year ended March 31, 2025, as against H 24,470 lakhs for the financial year ended March 31, 2024. The Net worth of Company at the beginning of the financial year, that is, April 1, 2024, was H 2,26,083 lakhs and closing Net worth of Fedfina as on March 31, 2025, was H 2,54,736 lakhs.

As of March 31, 2025, the AUM increased by 30% compared to FY 2023-24, reaching H 15,81,154 lakhs while disbursements improved by 38% to H 18,78,732 lakhs.

Over the past year, H 113,089 lakhs of the gold loan AUM were through co-lending, and Fedfina conducted portfolio sell-down transactions totaling H 2,12,960 lakhs. At the end of the year, 25.1% of the AUM was off the books.

As on March 31, 2025, the Bank has one Associate Company named M/s. Ageas Federal Life Insurance Company Limited (Formerly known as IDBI Federal Life Insurance Co Ltd.). The Bank has an investment in the life insurance sector through a joint venture with Ageas Insurance International N.V., a leading European Insurance group. The joint venture entity, Ageas Federal Insurance Company Limited (formerly IDBI Federal Life Insurance), commenced the operations in March 2008. As on March 31, 2025, the Bank has a total stake of H 208 Crores in the equity of the Company holding 26% of the equity capital. The total premium collected by Ageas Federal Life Insurance Company Limited during the period ended March 31, 2025, was H 3,073 Crores.

On the financial front, the company has made a net profit after tax of H 86 Crores in FY 2024-25. This was the 13^th consecutive year of profit for the company. The total premium rose by 14 % to H 3,073 crores in FY 2024-25 from H 2,697 Crores in FY 2023-24. As on March 31, 2025, Ms. Shalini Warrier, Executive Director and Mr. Venkataraman Venkateswaran, Group President &

CFO of the Bank are representing as a Non-Executive Directors in Ageas Federal Life Insurance Company Limited. The Board of Directors, at its meeting held on March 25, 2025, approved the execution of a binding Memorandum of Understanding with Ageas Insurance International NV ("Ageas") and Ageas Federal Life Insurance Company Limited ("AFLIC"), for acquisition of 4% equity stake by the Bank in AFLIC, from Ageas. Reserve Bank of India vide its letter CO.DoR.RAUG.AUT.No.S8449/24.01.002/2024-25 accorded its approval to Federal Bank for acquisition of additional 4% stake in Ageas Federal Life Insurance Company Limited (AFLIC) for up to H 105 crores. The Bank had subsequently executed (i) a binding Memorandum of Understanding on March 28, 2025, with Ageas and AFLIC, for acquisition of 4% equity stake by the Bank in AFLIC, from Ageas and (ii) a Share Purchase Agreement on April 30, 2025, with Ageas and AFLIC for acquisition of 4% equity stake by the Bank in AFLIC, from Ageas. During the year, the Bank divested stake in Equirus Capital Private Limited (ECPL) equivalent to 70.50 lakh shares i.e 9.81% of paid-up equity share capital of ECPL. Following this stake sale, ECPL ceased to be an Associate Company of the Bank with effect from November 15, 2024.

The Consolidated Financial Statements of the Bank along with its Subsidiaries and Associate prepared for the year 2024-25 forms part of this Annual Report.

The financial position and performance of its Subsidiaries

& Associate are given in Form AOC-1, the statement containing salient features of the financial statements of the subsidiaries/Associate Companies/Joint Venture form part of the Annual Report.

In accordance with third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of the Bank, containing therein its Standalone and the Consolidated Financial Statements has been hosted on its website, www. federalbank.co.in. Further, as per fourth proviso to the said Section, the Audited Annual Accounts of the said Subsidiary Companies of the Bank, considered as part of the Consolidated Financial Statements have also been hosted on the Bank's website, www.federalbank.co.in. The said documents have been hosted on the website of the Subsidiary Companies of the Bank also, in compliance with the said Section.

5. FINANCIAL PERFORMANCE AND STATE OF THE AFFAIRS OF THE BANK

During the year under review, some of the significant events are listed below: (i) The Total Business (Total Deposit + Net Advances) crossed H 5.18 Lakh Crore (ii) The Total Deposit & Advances (Net) at H 2.84 Lakh Crore

& H 2.35 Lakh Crore respectively.

(iii) Net Profit Crossed H 4,000 Crores

(iv) Recorded decadal best Asset quality ratios, NNPA at 0.44% & GNPA at 1.84%.

During the year under review, CRAR of the Bank has increased to 16.40% for the FY 2024-25 as against 16.13% in the previous year, after considering dividend @ 60% of paid-up capital. Net worth has improved to H 33,121.64 Crore from H 29,089.41 Crore. Total Debts to Total Assets is at 6.80%. As on March 31, 2025, Gross Advances increased by 12% to H 2,38,134.44 Crore as compared to H 2,12,622.66 Crore as March 31, 2024. Corporate Institutional Banking grew by 8% & Commercial Banking at 27% on Year-on-Year basis. Retail Book up by 14% with 10% growth in Core Retail segment, 9% growth in Agriculture segment, 11% growth in Business Banking segment, 35% growth in Commercial Vehicle/ Construction Equipment segment, 21% growth in gold loan segment & 19% growth in Micro Finance segment on a Year-on-Year basis. (Credit segments are based on internal classifications and are realigned at the beginning of every FY. Vertical wise advance figures do not account for sale via IBPC.) With the expanding network of banking outlets & customers, the Total Deposits grew further from H 2,52,534.02 Crore as on March 31, 2024, to H 2,83,647.47 Crore as on March 31, 2025, registering a growth of 12%. The Current Account & Savings Account (‘CASA') deposits have recorded an increase of 16% from H 74,199.74 Crore as on March 31, 2024, to H 85,757.19 Crore as on March 31, 2025. Investments increased by 9% to H 66,245.61 Crore for FY 2024-25 from H 60,859.53 Crore as on March 31, 2023. During the FY under review, the Total Income of the Bank has increased by 19% to H 30,166.50 Crore as against the total income of H 25,267.53 Crore for FY 2023-24. The Net Profit of the Bank grew by 9% to H 4,051.89 Crore as against H 3,720.60 Crore in the previous year. Operating profit for the year ended increased by 18% to H 6,101.13 Crore from H 5,174.48 Crore. The profit margin for the year ended decreased to 13.43% as against 14.72% in the previous year. Consequently, Return on Average Equity (‘ROAE') is at 13.03% for FY 2024-25 & Return on Average Asset (‘ROAA') stood at 1.23% for FY 2024-25. Correspondingly, Basic earnings per share (‘EPS') increased from H 16.07 in FY 2023-24 to H 16.54 as at the end of FY 2024-25 whereas diluted earnings per share (‘DEPS') is up from H 15.87 to H 16.37.

The Gross NPA of the Bank as on March 31, 2025 stood at H 4,375.54 Crore. Gross NPA as a percentage to Gross Advances is at 1.84%. The Net NPA stood at H 1,040.38 Crore & Net NPA percentage is at 0.44% as on March 31, 2025. The Provision Coverage Ratio (excluding technical write offs) stood at 75.37% as on March 31, 2025.

During the FY under review, the Bank has added 85 new banking outlets taking the total count of banking outlets to 1,589 as on March 31, 2025. Out of the total banking outlets, 274 are in metros, 223 are in rural, 781 in semiurban & 311 in urban centres. Apart from above, the Bank has 2,080 ATMs/ Recyclers as on March 31, 2025. The Bank also has its Digital Banking Unit at Kolkata, Representative Office at Abu Dhabi & Dubai & an International Financial Service Centre (IFSC) Banking unit (IBU) in Gujarat International Finance Tec-City (GIFT City).

There is no change in the nature of business of the Bank for the year under review. Further information on the business overview & outlook & state of the affairs of the Bank is discussed in detail in the Management Discussion & Analysis Report.

No material changes and commitments which could affect your Bank's financial position have occurred between the end of the financial year of your Bank and date of this report.

6. DIVIDEND, DIVIDEND DISTRIBUTION POLICY & TRANSFER TO RESERVE

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) as amended, the Bank has formulated and adopted a dividend distribution policy, which was reviewed by the Board. The policy is available on the website of the Bank at https://www.federalbank.co.in/ our-commitments.

In view of the overall performance of the Bank and while retaining capital to support future growth, the Board at its meeting held on April 30, 2025, recommended a final dividend of H 1.20 (60 %) per equity share of H 2/- each fully paid-up, subject to the approval of members at the ensuing 94^th Annual General Meeting (AGM). The record date for payment of dividend is mentioned in the notice of the ensuing 94^th AGM of the Bank. In terms of Accounting Standard (AS) - 4 ‘contingencies and events occurring after the balance sheet date' as notified by the Ministry of Corporate Affairs (MCA) under Section 133 of the Companies Act, 2013 (Act) read together with the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Rules, 2021, such proposed dividend has not been recognised as a liability as on March 31, 2025. Further, shares issued on exercise of stock options after March 31, 2025, till record date will also be eligible for such proposed dividend. 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 tax, if any. For details, shareholders are requested to refer to the Notice of 94^th Annual General Meeting of the Bank.

7. CAPITAL STRUCTURE & FUND RAISING

Consequent to the allotment of equity shares as mentioned below, the total paid-up equity shares capital of the Bank increased by H 4.09 Crores to H 491.16 Crores as on March 31, 2025, as compared to H 487.07 Crores, as on March 31, 2024. The equity shares allotted pursuant to exercise of Stock options under Employee Stock Option Scheme rank pari-passu with the existing equity shares of the Bank.

The Bank has instituted Employee Stock Option Schemes, duly approved by the shareholders of the Bank to enable its employees including Whole Time Directors to participate in the future growth and financial success of the Bank. The Employee Stock Option Schemes are formulated in accordance with the SEBI guidelines, as amended from time to time. The eligibility and number of options to be granted to an employee is determined based on various parameters such as scale, designation, performance, grades, period of service, Bank's performance and such other parameters as may be decided by the Nomination, Remuneration, Ethics and Compensation Committee of the Board from time to time in its sole discretion. The Bank's shareholders had approved The Federal Bank Limited Employee Stock Option Scheme 2010 (ESOS 2010) on December 24, 2010, The Federal Bank Limited Employee Stock Option Scheme 2017 (ESOS 2017) on July 14, 2017, and The Federal Bank Limited Employee Stock Option Scheme 2023 (ESOS 2023) and The Federal Bank Limited Employee Stock Incentive Scheme 2023 (ESIS 2023) on August 18, 2023. Whereas the approval for extension of The Federal Bank Limited Employee Stock Option Scheme 2023 and The Federal Bank Limited Employee Stock Incentive Scheme 2023 to employees of subsidiary company(ies) / associate company(ies) was not passed as per the voting results in the 92^nd AGM held on August 18, 2023, consequently, the respective clauses/ statements in the Scheme Documents are deemed non-operational and invalid.

Under ESOS 2010, the Nomination, Remuneration, Ethics and Compensation Committee granted 3,47,20,200 options during the year 2011-12, 2,44,84,750 options during the year 2012-13, 2,60,94,250 options during the year 2013-14, 1,11,56,450 options during 2014-15, 10,25,000 options during the year 2015-16, 9,65,000 options during the year 2016-17, 1,00,000 options during the year 2017-18, 55,29,550 options during the year 2023-24 and 23,14,750 options during the year 2024-25. The options granted which are non-transferable, with vesting period of 1 to 5 years subject to standard vesting conditions, must be exercised within five years from the date of vesting. During FY 2025, 2,35,000 options had been exercised and as on March 31, 2025, 78,73,800 options were in force.

Under ESOS 2017, the Nomination, Remuneration, Ethics and Compensation Committee granted 2,23,18,348 options during the year 2017-18, 3,72,31,307 options during the year 2018-19, 3,05,24,986 options during the year 2019-20, 1,68,84,159 options during the year 2020-21, 37,33,250 options during the year 2021-22, 45,03,375 options during the year 2022-23, 1,05,000 options during the year 2023-24 and 49,98,000 options during the year 2024-25. The options granted which are non-transferable, with vesting period of 1 to 4.25 years subject to standard vesting conditions, must be exercised within five years from the date of vesting. During FY 2025, 1,48,51,893 options had been exercised and as on March 31, 2025 3,80,75,617 options were in force.

Under ESIS 2023, the Nomination, Remuneration, Ethics and Compensation Committee granted 25,000 options during the year 2023-24. The options granted which are non-transferable, with vesting period of 1 to 3 years subject to standard vesting conditions, must be exercised within four years from the date of vesting. As on March 31, 2025, no option had been exercised and 25,000 options were in force.

Under ESOS 2023, the Nomination, Remuneration, Ethics and Compensation Committee granted 16,00,000* options during the year 2024-25. The options granted which are non-transferable, with vesting period of 1 to 4 years subject to standard vesting conditions, must be exercised within five years from the date of vesting.

Other statutory disclosures as required under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 on ESOS are given in website of the Bank in the link: https://www. federalbank.co.in/web/guest/shareholder-information.*

As of March 31, 2025, the Bank has a total outstanding issued debt capital of H3,195 crores. This includes H1,695 crores in rated, unsecured, redeemable, non-convertible, Basel III compliant Tier II subordinated bonds. During the year, the Bank issued 1,50,000 units of listed, unsecured, rated, redeemable, non-convertible securities amounting to H1,500 crores. Also, the Bank redeemed H300 crores worth of Basel III compliant subordinated bonds by exercising a call option.

The Bank's overall Capital Adequacy Ratio (CAR) under Basel III stood at 16.40 % at the end of fiscal 2025, well above the benchmark requirement stipulated by the RBI. Of this, the common equity tier I (CET I) CAR was 15.04% and tier II CAR under Basel III stood at 1.36%

8. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Sections 124 and 125 of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules'), all unpaid or unclaimed dividends are required to be transferred by the Bank to the Investor Education and Protection Fund ("IEPF" or "Fund") established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/unclaimed account.

As a result, the unclaimed/ unpaid dividend for the year 2016-17 amounting to H 1,02,81,125 which remained unpaid and unclaimed for a period of 7 years has been already transferred by your Bank to the IEPF.

Further, the unpaid dividend amount pertaining to the financial year 2017-18 will be transferred to IEPF during the Financial Year 2025-26 within statutory timelines. Members are requested to ensure that they claim the dividends referred above before they are transferred to the said Fund. The due dates for transfer of unclaimed dividend to IEPF are provided in the report on Corporate Governance.

The Bank has uploaded the details of unclaimed/ unpaid dividend for the financial year 2017-18 onwards on its website viz., https://www.federalbank.co.in/unclaimed-dividend-warrants and on website of the Ministry of Corporate Affairs viz., www.iepf.gov.in and the same gets revised/updated from time to time pursuant to the provisions of IEPF (Uploading of Information Regarding Unpaid and Unclaimed Amount lying with Companies) Rules, 2012.

Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on September 7, 2016 and subsequently amended vide notification dated February 28, 2017, all the equity shares of the Bank in respect of which dividend amounts have not been paid or claimed by the shareholders for 7 consecutive years or more are required to be transferred to demat account of IEPF Authority. The said requirement does not apply to shares in respect of which there is a specific Order of Court, Tribunal or Statutory Authority, restraining transfer of the shares.

Upon transfer of such shares, all benefits (like dividend, bonus, split, consolidation etc.), if any, accruing on such shares shall also be credited to the Account of IEPF and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. Shares which were transferred to the demat account of IEPF Authority can be claimed back by the shareholder by following the procedure prescribed under the aforesaid rules. Accordingly, 3,66,525 number of equity shares were transferred to demat account of IEPF Authority. The Bank had sent individual notice to all the members concerned and has also published the notice in the leading English and Malayalam newspapers.

The details of the nodal officer appointed by the Bank under the provisions of IEPF are disseminated in the website of the Bank viz., https://www.federalbank.co.in/unclaimed-dividend-warrants.

9. CAPITAL EXPENDITURE

As on March 31, 2025, the Gross Fixed Assets at cost stood at H 3,151.11 Crores and net fixed assets (cost less accumulated depreciation) at H 1,478.27 Crores. Fixed assets additions during the year amounted to H 721.45 Crores.

Building on a year of numerous milestones, your Bank, under its new leadership is poised to embark on a new ‘Breakthrough phase'. By reorienting the balance sheet for greater efficiency, streamlining processes to enhance cost effectiveness and fostering a results-driven organizational mindset, your Bank expects to deliver superior outcomes in the years ahead. And in keeping with the Federal ethos, this growth will be pursued responsibly - maintaining your Bank's commitment to the environment and other stakeholders, while simultaneously enhancing value for its shareholders.

The Bank has received several prestigious awards and recognitions from various revered institutions during the FY 2024-25, some of them are as under: –

Fortune India ranks Federal Bank among the Top 50 Future Ready Employers of India 2025.

Federal Bank featured in ET's list of Future Ready Organisations 2024-25 under the Large-Scale Enterprises category.

Federal Bank is in the Top 30 Future Ready Workplaces of India Inc. by Fortune India, curated in partnership with CIEL HR.

Federal Bank receives the prestigious award for "Leader in Digital Lending Transformation and Documentation" at the Bharat Collection and Lending Summit 2025 for the Bank's initiatives in digital lending and digital documentation

Federal Bank wins the 'Best Bank in AI & ML Adoption' and the 'Best Bank for Financial Inclusion' at the 20^th Annual IBA Technology Awards 2024. The Bank is also a runner-up in the category 'Digital Sales, Payments and Engagement'.

Federal Bank won Gold in three categories at the prestigious Infosys Finacle Innovation Awards 2024, including Modern Technologies-led Innovation, Product Innovation & Transformation Excellence reflecting our commitment to pioneering advancements & excellence in the banking industry.

Federal Bank has been recognised as the winner in the category of "Best in Robotic Process Automation (RPA) Implementation (Private Sector Banks)" at the 5^th Annual BFSI Excellence Awards 2024.

Feddy, the AI chat bot of Federal Bank, wins the SKOCH Silver Award for its innovative feature - Conversational Banking at the 100^th SKOCH Summit.

Federal Bank has been honoured with the award in the category "Promising - Data Quality Improvement - Commercial" at the CRIF Data Excellence Awards, 2024, in recognition of the commendable achievement in data submission to Credit Information Companies and for ensuring highest standards of data quality.

Federal Bank wins DataShield Architect Award at the Data Innovation Awards 2025. The Data Innovation Awards 2025 recognized exceptional achievements in data, AI, cloud, sustainability, and digital transformation. Federal Bank has been awarded the Best CSR Project – Health Sector (Large Enterprises Category) for 'Sanjeevani' program at the KMA Green Palms Sustainability Summit 2025.

Federal Bank wins e4M Real Time Programmatic Advertising Awards 2024 for the category 'Best Use of Programmatic for Social Good' for the #EndDependence Campaign released to celebrate Independence Day. Federal Bank bags 3 awards at ASSOCHAM - HR Trailblazer Awards 2023 in the categories Talent Acquisition Best Practices Award, Workplace Well-being & Mental Health Advocate Award & Learning & Development Trailblazer Award.

Federal Bank bags two awards at the ACI South Asia Converge 2024. Operation Excellence Award among Private Sector Banks for implementing real-time blacklisting of merchants using ACI's fraud management solution PRM (ProActive Risk Manager).

Best Customer Experience Initiative among Private Sector Banks for implementing 'ATMLendPro', which allows instant loan (BYOM) processing for customers who experience ATM withdrawal declines due to 'Insufficient Funds', based on their eligibility.

Federal Bank's innovative product Flash Pay Smart Keychain bagged the Best Payment Experience Award at the 11^th Edition Payments Reloaded Industry Awards 2024.

Federal Bank won the award for 'Innovative HR Initiatives' in the Service Sector from Kerala Management Association (KMA) Excellence Awards 2024

The Equity Shares of the Bank continue to remain listed on BSE Limited and the National Stock Exchange of India Limited. The global depository receipts of the Bank are listed on the London Stock Exchange.

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

The details of Credit Ratings of your Bank as on March 31, 2025, are as follows:

Fixed Deposits CRISIL AAA/Stable CRISIL Ratings Limited Short Term CRISIL A1+ CRISIL Ratings Limited fixed deposits Certificate of CRISIL A1+ CRISIL Ratings Limited Deposits Tier II bonds CARE AA+/Stable CARE Ratings Limited Issuer Rating CARE AA+/Stable CARE Ratings Limited Infrastructure CARE AA+/Stable CARE Ratings Limited Bonds Tier II bonds IND AA+/Stable India Ratings and Research Private Limited Infrastructure IND AA+/Stable India Ratings and Bonds Research Private Limited

During the year under review, Rating for fixed deposits was upgraded from AA+(Positive) to AAA(Stable).

The Annual Return for the Financial Year ended March 31, 2025 as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 shall be posted on the Bank's website, https://www.federalbank.co.in/ shareholder-information.

The Bank complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

The provisions of the Section 186 of the Companies 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.

During the financial year under review and till the date of approval of this Directors' Report:

Mr. Siddhartha Sengupta (DIN: 08467648) and Mr. Manoj Fadnis (DIN: 01087055) were appointed as Independent Directors of the Bank for a period of 5 years with effect from June 13, 2019, to hold office up to June 12, 2024 (both days inclusive). The Board of Directors of the Bank at its meeting held on March 27, 2024, recommended the reappointment of both Mr. Siddhartha Sengupta and Mr. Manoj Fadnis as Independent Directors, not liable to retire by rotation, for a second term of 3 years with effect from June 13, 2024, to June 12, 2027, subject to the approval of the shareholders of the Bank. The shareholders of the Bank subsequently have given their approval through Postal Ballot on May 18, 2024, for the re-appointment of Mr. Siddhartha Sengupta and Mr. Manoj Fadnis for a period of 3 years w.e.f June 13, 2024, to June 12, 2027.

Mr. Shyam Srinivasan (DIN: 02274773) retired from the office of the Managing Director & CEO of the Bank at the end of September 22, 2024, on expiry of his distinguished 14 years tenure.

Based on the Bank's application on May 06, 2024, for the appointment of new Managing Director & Chief Executive Officer of the Bank, the RBI, vide its letter dated July 22, 2024, approved the appointment of Mr. Krishnan Venkat Subramanian as the Managing Director & Chief Executive Officer of the Bank under Section 35B of the Banking Regulation Act, 1949, for a period of 3 (three) years, with effect from September 23, 2024 after the expiry of the term of Mr. Shyam Srinivasan as Managing Director & CEO on September 22, 2024. Accordingly, Mr. Krishnan Venkat Subramanian (DIN: 00031794) took charge as the Managing Director & Chief Executive Officer of the Bank with effect from September 23, 2024.

The Board of Directors had appointed Mr. Sudarshan Sen (DIN: 03570051) as an Additional Independent Director under Section 161 of the Companies Act, 2013 vide Circular Resolution approved on February 11, 2020. Mr. Sudarshan Sen was then appointed as an Independent Director of the Bank pursuant to Section 149 of the Companies Act, 2013 ("the Act") read with Companies

(Appointment and Qualification of Directors) Rules, 2014, the SEBI Listing Regulations, Section 10A and other applicable provisions of the Banking Regulation Act, 1949, by the Shareholders at the 89^th Annual General Meeting of the Bank held on July 16, 2020 to hold office for a period of five (5) years with effect from February 11, 2020. Accordingly, the first term of Mr. Sudarshan Sen was completed on February 10, 2025. During the year Nomination, Remuneration, Ethics and Compensation Committee ("the Committee" or "NRC") of the Board of Directors of the Bank (the "Board") discussed the performance evaluation of Mr. Sudarshan Sen (DIN: 03570051) and considering his knowledge, acumen, expertise, experience and substantial contribution and time commitment, approved and recommended his reappointment as an Independent Director for the second term of 3 years effective from February 11, 2025, to February 10, 2028. Pursuant to the recommendation of the NRC vide circular resolution dated October 09, 2024, the Board at its meeting held on October 10, 2024, recommended the re-appointment of Mr. Sudarshan Sen as an Independent Director of the Bank for the second term of 3 (Three) years effective from February 11, 2025, to February 10, 2028 (both days inclusive), subject to the approval of the members of the Bank.

The shareholders of the Bank subsequently have given their approval through Postal Ballot on November 30, 2024, for the re-appointment of Mr. Sudarshan Sen for a period of 3 years effective from February 11, 2025, to February 10, 2028.

The Board at its meeting held on April 4, 2025, inter alia, considered, noted, and accepted the resignation of Ms. Shalini Warrier (DIN: 08257526). Subsequently, Ms. Shalini Warrier, Executive Director was relieved from her services as an Executive Director with effect from the closing business hours on May 23, 2025.

Mr. Venkatraman Venkateswaran was appointed as the Executive Director on the Board of the Bank with effect from July 10, 2025 as per RBI approval letter DoR.GOV. No. 2798/08.38.001/2025-26 dated July 09, 2025. The appointment of Mr. Venkatraman Venkateswaran is subject to approval of shareholders at the ensuing Annual General Meeting.

In accordance with the provisions of the Act and the Articles of Association of the Bank, Mr. Harsh Dugar (DIN:00832748) Executive Director the Bank, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re-appointment.

The Board is of the opinion that the independent directors appointed on the Board possesses necessary integrity, expertise and experience (including the proficiency).

Necessary information pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in respect of directors to be appointed and re-appointed at the ensuing Annual General Meeting are given in the Annexure to the Notice convening the 94^th Annual General Meeting.

None of the Directors of your Bank are disqualified for being appointed as directors, as specified in Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

The details of the Key Managerial Personnel of the Bank as on March 31, 2025, is as follows:

Mr. Krishnan Venkat Subramanian* – Managing Director & Chief Executive Officer.

Ms. Shalini Warrier** – Executive Director

Mr. Harsh Dugar – Executive Director

Mr. Venkatraman Venkateswaran*** - Chief Financial Officer

Mr. Samir P Rajdev – Company Secretary

During the year, Mr. Shyam Srinivasan (DIN: 02274773) retired from the office of the Managing Director & CEO of the Bank w.e.f. the closing business hours of September 22, 2024, on expiry of his distinguished 14 years term.

*Mr. Krishnan Venkat Subramanian (DIN: 00031794) was appointed as the Managing Director & Chief Executive Officer of the Bank with effect from September 23, 2024.

** Ms. Shalini Warrier, Executive Director, (DIN: 08257526) resigned as an Executive Director with effect from the closing business hours on May 23, 2025.

*** Mr. Venkatraman Venkateswaran was appointed as the Executive Director on the Board of the Bank with effect from July 10, 2025 as per RBI approval letter DoR. GOV.No. 2798/08.38.001/2025-26 dated July 09, 2025. The appointment of Mr. Venkatraman Venkateswaran is subject to approval of shareholders at the ensuing Annual General Meeting.

The Bank has received declaration from all the Independent Directors that they continue to meet the criteria of independence as provided under the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and comply with the Code for Independent Directors as specified under Schedule IV of the Act. In terms of the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 read with the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019, the Independent Directors of the Bank has enrolled his/ her name in the online databank of Independent Directors maintained by the Government.

The Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

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

Detailed composition of the mandatory Board committees namely Audit Committee, Credit Investment & Raising Capital Committee, Risk Management Committee, Nomination Remuneration, Ethics & Compensation Committee, Stakeholders Relationship Committee, Customer Service, Marketing Strategy and Digital Banking Committee, Special Committee of the Board for monitoring and follow up of cases of frauds, Information Technology & Operations Committee, HR Committee, CSR Committee and the Review Committee of the Board on identification of Wilful Defaulters, its number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report. There have been no situations where the Board has not accepted any recommendation of the Audit Committee.

The Bank has formulated and adopted a comprehensive ‘Compensation Policy' for its Directors, Key Managerial Personnel and Employees, in terms of relevant provisions of the Companies Act, 2013 read with the rules made thereunder, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the guidelines/ circulars issued by the RBI, in this regard, from time to time. The Compensation Policy is reviewed annually. In line with this practice, the Policy was reviewed by the Board based on the recommendation of the Nomination, Remuneration, Ethics, and Compensation Committee to ensure alignment with applicable regulatory requirements.

The criteria for making payments to Independent Directors/ Non-executive Directors of the Bank are contained in the Comprehensive Compensation Policy for Non-Executive Directors and is available on the website at https://www. federalbank.co.in/shareholder-information.

The Bank affirms that the remuneration paid to its directors is in accordance with the provisions of the aforementioned Policy and is fully compliant with the relevant regulatory guidelines.

In accordance with relevant provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and SEBI Guidance Note on Board Evaluation, the Board has carried out an annual performance evaluation of its own performance and of the directors individually, as well as the evaluation of the working of its various Committees for the year under consideration.

The evaluation process was initiated by putting in place, a structured questionnaire after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning, such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, and governance. Thereafter a separate exercise was carried out in digital mode using a board evaluation software to evaluate the performance of individual Directors, including the Chairman of the Board, who were evaluated on specified parameters. The performance evaluation of the Independent Directors was carried out by the entire Board, other than the Independent Director concerned. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Directors expressed their overall satisfaction with the evaluation process.

If Board is of appropriate size and has the appropriate balance and diversity of background, business experience, industry knowledge, skills and expertise in areas vital to the Bank's success, representing sectors laid down by the regulators, given its current and future position.

New Board members participate in an orientation program to educate them on the organization, their responsibilities, and the organization's activities, the Board encourages a culture that promotes candid communication.

The Board oversees management's procedures for enforcing the organization's code of conduct, Action Taken Reports on the discussion/directions of the Board are submitted at regular intervals to the Board.

The Board oversees risk management through inputs from the Risk Management Committee

The Board considers the quality and appropriateness of financial reporting, including the transparency of disclosures.

The Board ensures compliance with the relevant provisions of the Companies Act and other regulatory provisions as applicable to the Bank.

The Board oversees the compliance processes.

The Board views the organization's performance from the competitive perspective - industry and peers' performance, industry trends and budget analysis and with reference to areas where significant differences are apparent etc.

The Board ensures compliance with the relevant provisions of the Companies Act and other regulatory provisions as applicable to the Company.

The Board has defined an effective Code of Conduct for the Board and Senior Management

Whether the Board monitors and manages potential conflicts of interest of management, members of the board of directors and shareholders, including misuse of corporate assets and abuse in related party transactions.

The Committee Terms of Reference and composition continue to be appropriate.

The mandate, composition and working procedures of committees of the Board of Directors is clearly defined and disclosed.

Committee meetings are organized properly in number, timing and location.

The Committee is effective in carrying out its mandate.

The Committee members receive adequate material in advance of Committee meetings, in sufficient time and detail to permit members to effectively consider issues to be dealt with

The Committee allocates the right amount of time for its work.

Whether the Committee has fulfilled its functions as assigned by the Board and laws as may be applicable.

Whether adequate independence of the Committee is ensured from the Board.

Whether the Committee's recommendations contribute effectively to decisions of the Board.

Attendance at the Board and Committee meetings

Study of agenda in depth prior to meeting and active participation at the meeting

Contributes to discussions on strategy as opposed to focus only on agenda.

Participate constructively and actively in the Committees of the Board in which they are Chairpersons or Members

Exercises his skills and diligence with due and reasonable care and brings an independent judgement to the Board.

Knowledge and Competency: i) How the person fares across different competencies as identified for effective functioning of the entity and the Board ii) Whether the person has sufficient understanding and knowledge of the entity and the sector in which it operates.

The Director remains abreast of developments affecting the company and external environment in which it operates independent of his being apprised at meetings.

Whether person is independent from the entity and the other directors and there are no conflict of interest

Whether the person demonstrates highest level of integrity (including conflict of interest disclosures, maintenance of confidentiality, etc.)

Works effectively with the Board as a whole.

Ability to elicit inputs from all Board Members and steer the discussions to a logical conclusion.

Works with the Board and directs the management for creating an effective process for long-range or strategic planning for the Company.

Whether the Chairperson displays efficient leadership, is open-minded, decisive, courteous, displays professionalism, able to coordinate the discussion, etc. and is overall able to steer the meeting effectively.

Whether the Chairperson is able to keep shareholders' interest in mind during discussions and decisions.

Whether the Chairperson is impartial in conducting discussions, seeking views and dealing with dissent, etc.

Handling of critical situations concerning the Bank.

Thinks strategically to promote growth, improve financial performance and gain competitive advantage.

Understands financial planning, budgeting and management of the organization's investments and overall organization financial perspective.

21.2.3. MD & CEO and Executive Directors a. Quantitative Targets:

Achievements of performance against targets set. b. Qualitative Targets:

Apprises the Board regarding the organization's financial position and operational budget so as to enable the Board to make informed financial decisions.

Provides Leadership in developing strategies and organizational plans with the management and the Board of Directors

Ensures that the Board is kept informed about all issues concerning the Bank.

Media interaction and ability to project positive image of the Company.

Effectively pursues the performance goals in relation to mission and objective of the organization.

Motivating employees, providing assistance & directions and supervising & safeguard of confidential information.

Establishment of internal control processes, monitoring policies and encouraging suggestions.

Cultivates effective Relationship with Industry Foras, Community and business leaders and Regulatory Bodies and Public Officials.

Ensures compliance with all legal and regulatory requirements.

Undertaking of various Developmental initiatives within the organisation.

Compliance with ethical standards & code of conduct and exercising duties diligently.

The agenda and related information are circulated in advance of meetings to allow board members sufficient time to study and understand the information, Information on the annual operating plans and budgets and other updates are provided to the Board; Updates on operating results of the Bank is furnished to the Board, periodically etc. Update on the compliance with the regulatory, statutory or listing requirements are placed before the Board.

The details of familiarization programmes are disclosed on the Bank's website, www.federalbank.co.in/ shareholder-information.

The Bank recognizes the growing importance stakeholders assign to ESG practices and is always in the forefront to adopt the best practices. Details of the ESG initiatives undertaken by the Bank during the Financial Year is included in the Annual report as part of the ESG section/ Business Responsibility and Sustainability Report.

The Bank has been formally undertaking Corporate Social Responsibility (CSR) activities well before the introduction of provisions related to CSR under Companies Act, 2013. With the introduction of Section 135 of the Act making CSR mandatory, the Bank extended its ambit of activities to undertake interventions in identified areas by the Bank or indirectly through its trust. Our founder's values & ethos based on trust got embedded in the Bank's policies & principles. CSR in the Bank began with the first act of cultivating banking habits in the agrarian society to effectively utilize idle money for productive purposes.

Pursuant to the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules), as amended, the Bank has constituted the CSR Committee of the Board.

The Bank has constituted and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Act) under which various developmental initiatives are undertaken.

The details of the CSR initiatives undertaken during the financial year ended March 31, 2025, and other details required to be given under section 135 of the Companies Act, 2013 read with rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure A forming part of this Report.

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, separate Section on Management Discussion and Analysis, as approved by the Board, which includes details on the state of affairs of the Bank, forms part of this Annual Report.

In terms of Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability Report (BRSR) is mandatory for the top 1000 listed companies, based on market capitalization. The disclosure requirement in BRSR is based on National Guidelines on Responsible Business Conduct Principles, which is divided into 2 (two) parts i.e. Essential Indicators (to be reported on a mandatory basis) and Leadership Indicators (to be reported on a voluntary basis). Further, Securities and Exchange Board of India vide Circular with ref no. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12^th July, 2023, based on the recommendations of the ESG Advisory Committee and pursuant to public consultation, introduced the BRSR Core which is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) / metrics under 9 ESG attributes.

The Bank has provided BRSR, which indicates the Bank's performance against the principles of the ‘National Guidelines on Responsible Business Conduct'. This would enable the Members to have an insight into environmental, social and governance initiatives of the Bank.

The Bank believes that Corporate Governance derives from value system, best management practices, adherence of ethical standard, encompassing its culture, its policies, and its relationships with the stakeholders. Your Bank is committed to achieving and adhering to the highest Corporate Governance standards and has been an integral part of its business. Integrity, transparency, and accountability are the important ingredients of Corporate Governance. The Bank gives importance to uphold the integrity of every transaction which it enters into and the honesty in its internal conduct would be evaluated by stakeholders.

Pursuant to Regulation 34 of the SEBI Listing Regulations, a separate section i.e., ‘Report on Corporate Governance' has been annexed to this Annual Report along with the certificate issued by the Secretarial Auditor of the Bank confirming compliance with the mandatory requirements relating to Corporate Governance under the SEBI Listing Regulations. The corporate governance framework of the Bank incorporates all the mandatory requirements as prescribed in the SEBI Listing Regulations.

The Bank also submits with the Stock Exchanges, the quarterly Report on Corporate Governance in terms of Regulation 27(2) of the SEBI Listing Regulations. The said Reports are available on the Bank's website viz., URL: https://www.federalbank. co.in/shareholder-information

Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no related party transactions to be reported under Section 188(1) of the Act and Form AOC-2 is not applicable to the Bank. During the year under review, your Bank has not entered any materially significant transaction with its related parties, which could lead to a potential conflict of interest between the Bank and these parties. Prior omnibus approval for transactions which are of repetitive nature is obtained from the Audit Committee and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee. The policy on Related Party Transactions 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 www. federalbank.co.in/our-commitments. The details of related party transactions are provided in the notes forming part of the standalone financial statements and the consolidated financial statements.

The Bank has through the years developed and stabilized an effective internal control system calibrated to the risk appetite of the Bank and aligned to the scale, size and complexity of its operations. The scope and authority of the internal audit function is defined in the Audit and Inspection Policy of the Bank, duly approved by the Board of Directors. In order to help Bank in achieving its mission of adopting the best professional practices prevailing in the industry, while framing the policy, substantial inputs are taken from - RBI guidance note on Risk Based Internal Audit, ‘The internal audit function in banks' published by Basel Committee on Banking Supervision and RBI Circular on ‘Concurrent Audit System'. Audit and Inspection Policy is reviewed annually. Policy is reviewed considering changes in the guidelines of RBI, Basel Committee recommendations, ICAI guidelines, other statutory / regulatory guidelines, directions of Board/ Audit Committee of the Board issued from time to time and periodic internal guidelines/ instructions issued by the Bank. Risk based Audit framework is reviewed in line with the present business model and industry best practices. At the enterprise level, the Internal Audit Department, on a continuous basis, assesses and monitors the effectiveness of the control systems and its adequacy to meet the growing complexities. The audit function essentially validates the compliance of Bank's processes and operations with regulatory guidelines, accounting procedures and Bank's own internal rules and guidelines. A department level group meets on periodical intervals to discuss latest internal/ RBI/ regulatory guidelines for ensuring that the required changes are implemented for making the audit function updated and dynamic.

The Bank has a robust system towards escalating the audit findings to appropriate levels in the hierarchy of Management and discussions in various committees towards suggesting corrective action and its follow up. The Bank in compliance of the requirements of Section 138 of the Companies Act, 2013, has designated the Head of Internal Audit Department as Chief Internal Auditor of the Bank. Chief Internal Auditor of the Bank directly reports to the Managing Director & CEO of the Bank. Audit Committee of the Board reviews the adequacy and effectiveness of the Internal Audit Function. The Bank has various types of audits which inter-alia include Risk Based Internal Audit, Information System Audit, Third Party Risk Audit, Offsite Audit (audit through use of technology and data analysis), Concurrent Audit, Gold Loan Audit and Management Audit. Branches / Departments are risk rated and the frequency of Risk Based Internal Audit / Management Audit is decided based on the Risk Rating of the unit. Significant Audit findings and observations are presented to Internal Audit Review Committee of Executives and a report on the meetings of Internal Audit Review Committee of Executives along with significant audit findings, directions / suggestions of the Committee and action taken in such cases are placed to the Audit Committee of the Board for review periodically. Other findings are placed before a department level committee called the ‘Internal Audit Department Review Committee' for review and its observations are placed before Internal Audit Review Committee of Executives. As per the requirement of Companies Act, 2013, Bank has formulated Internal Financial Controls framework. Risk and Controls associated with each process in the Bank are documented under the Internal Financial Controls Framework. Internal Audit Department plays a significant role in testing the control effectiveness for each process under the framework. The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the bank's internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management protect the bank and its reputation.

The information on conservation of energy and technology absorption pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is mentioned below.

Your Bank has undertaken various initiatives for the conservation of energy and have taken efforts to contribute to low carbon economy. Details of the same are available in the Business Responsibility and Sustainability Report of the Bank which is part of the Annual Report of the Bank and is also available on the Bank's website https://www.federalbank. co.in/shareholder-information Your Bank is also using better technology to improve energy efficiency, recycling and generating energy from renewable sources. Details of the same are available in the Business Responsibility and Sustainability Report of the Bank which is part of the Annual Report of the Bank and is also available on the Bank's website https://www.federalbank.co.in/ shareholder-information Foreign Exchange earnings and outgo are part of the normal banking business of the Bank.

IT provides the strong foundation that enables your Bank to grow extensively and gain market share. In the following paragraphs, we provide more details of the entire governance structure over IT, with focus on information security.

IT governance comprise processes that ensure the effective and efficient use of IT in enabling our organization to achieve its goals. It is an integral part of corporate governance and consists of the organizational structures, leadership and process that ensure IT sustains and extends the organization's strategy and objectives.

The governance of IT is effectively supervised by the Board of Directors through the IT & Operations Sub-Committee consisting of minimum three Directors with at least one Independent Director. All members of the Committee have extensive experience in IT & Operations and are able to provide effective guidance and direction to the management team. Executive Level Committee which oversees the IT governance function include the Operations Risk Management Committee (ORMC), the Information Security Committee (ISC), the IT Steering Committee (ITSC) and the Project Steering Committee (PSC).

Your Bank has a well-defined Information System Security Policy and a Cyber Security Policy. The effective implementation of these policies is supervised by the Information Security Committee and by the IT & Operations Committee of the Board. Your Bank keeps updating the technology infrastructure and software to stay current in the market. These upgrades are done after proper testing and trials. Increasingly, Artificial Intelligence (AI) and Machine Learning (ML) are being integrated to personalize customer experience, detect fraud, automate routine processes and provide predictive insights for better decision making.

In recognition of the need for enhanced systems security, your Bank conducts a wide range of system audits, using internal and external auditors. These range from the quarterly Vulnerability Assessments (VA) and Penetration Testing (PT) to concurrent audits to an annual end to end audit of IT infrastructure. All the applications, both web based, and mobile based apps exposed to internet are subjected to external penetration testing (PT) before releasing to use.

Bank has deployed best in the class infrastructure to provide availability of service to users and customers without fail. The installed infrastructure is tested for its reliability and robustness by periodic audits. In addition, periodic Disaster Recovery Tests are conducted to ensure the ability to move to the Disaster Recovery infrastructure in the event of downtime in the main production capability.

More details on digital initiatives of the Bank are available in the Management Discussion and Analysis Report, forming part of this Annual Report.

The Bank's Risk Management framework is based on a clear understanding of various risks, robust risk assessment and measurement procedures and constant monitoring. The Board of Directors oversees all the risks assumed by the Bank. Specific Committees are constituted to facilitate focused oversight of various functions. The Risk Management Committee of the Board sets the standards and governs the risk management functions, thereby bringing in a top to down focus on risk management. The Risk Management Committee of the Board reviews all risk management policies of the Bank. The Committee reviews the Risk Appetite framework, Internal Capital Adequacy Assessment Process (ICAAP) and Stress testing. The Committee oversees setting up of risk limits and exposure ceilings, implementation of Basel III guidelines and the activities of the executive level risk management committees. The Committee assesses the level and direction of major risks pertaining to credit, market, liquidity, operational, reputation, technology, information security, compliance and capital as a part of the risk dashboard. In addition, the Committee oversees risks of subsidiaries covered under the Group Risk Management Framework.

The Risk Management Policies approved by the Board of Directors and reviewed from time to time with updated regulatory and internal guidelines form the governing framework for each type of risk.

The Integrated Risk Management Department of the Bank co-ordinates and administers the risk management functions in the Bank. The Department has four divisions for managing the main risk streams, Credit risk, Market risk, Operational risk and Information Security Division. Dedicated teams within the divisions are responsible for assessment, monitoring and reporting of various material risks. Default risk and asset quality of loan portfolio are monitored and managed by the Credit Risk Division. Market Intelligence Unit (MIU) formed for the purpose of monitoring large value accounts is linked to Credit Risk Division. The Bank has established an independent Mid Office as part of Market Risk Division for monitoring and management of risks in Bank's Treasury portfolios. A dedicated ALM team manages the liquidity risk and interest rate risk. A dedicated E&S/ESG team is also established as part of the Integrated Risk Management Department. Operational Risk Management, Business Continuity Management, Third Party Risk Management are taken care by Operational Risk Division. Governance, Risk and Compliance related to Information Security and Security Event Management is handled by Information Security Division. All the divisions are independent of business operations and coordinate with representatives of the business units to implement the Bank's risk management Policies and frameworks. Executive level risk management Committees namely, Credit Risk Management Committee, Asset Liability Management Committee, E&S Committee, Operational Risk Management Committee and Information Security Committee regularly assess the respective risks and direct corrective actions wherever required. The risk management functions are coordinated by a Senior Executive designated as Chief Risk Officer who reports directly to the Managing Director & CEO. All material risks of the Bank emerging in the course of its business are identified, assessed and monitored in the Internal Capital Adequacy Assessment Process (ICAAP). In our view, all the material risks of the Bank are identified, assessed and managed adequately.

As mandated by RBI guidelines for Entities with asset size of H 15,000 crore and above as at the end of the previous year, the Statutory Audit of the Bank shall be conducted under joint audit of a minimum of two audit firms (Partnership firms / Limited Liability Partnerships (LLPs)).

The Shareholders in the 92^nd Annual General Meeting held on August 18, 2023, approved the appointment M/s. Suri

& Co, Chartered Accountants (Registration No. 004283S), Chennai, together with M/s. MSKA & Associates, Chartered Accountants (Registration No. 105047W), Mumbai for a period of three (3) years as Joint Statutory Auditors of the Bank from the conclusion of 92^nd AGM till the conclusion of 95^th AGM respectively.

As per the requirement of the Companies Act, 2013, M/s. Suri & Co, Chartered Accountants and M/s. MSKA & Associates,

Chartered Accountants have confirmed that their appointment if made would be within the limits specified under Section 141(3) (g) of the Act and they are not disqualified to be appointed as statutory auditor/s in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

RBI vide letter Ref CO. DOS. RPO. No. S4045/08.09.005/2024-25 dated August 27, 2024, had granted approval for appointment of M/s Suri & Co, Chartered Accountants (FRN 004283S) and M/s. MSKA & Associates, Chartered Accountants (FRN 105047W) as the Joint Statutory Auditors of the Bank, for the FY 2024-25 for their second year.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Suri & Co, Chartered Accountants (Registration No. 004283S), Chennai, and M/s. MSKA & Associates, Chartered Accountants (Registration No. 105047W), Mumbai have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

There is no qualification or adverse remark in Auditors' Report. There were some incidents of fraud requiring reporting by the Auditors under Section 143(12) of the Act.

Pursuant to the provisions of Section 204 of The Companies Act, 2013, your Bank has appointed M/s. M Damodaran & Associates LLP, Company Secretaries, Chennai as Secretarial Auditor to conduct Secretarial Audit of the Bank for the FY 2024-25. Accordingly, the Secretarial Audit Report for FY 2024-25 is annexed to this report as Annexure B. The Audit Report issued by the Secretarial Auditors for the said FY form part of this Report which is self-explanatory.

No offence of fraud was reported by the Secretarial Auditor of the Bank.

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023, the Bank has obtained Secretarial Compliance Report, certified by CS M. Damodaran, M/s M Damodaran & Associates LLP for Financial Year ended March 31, 2025, on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and the copy of the same was submitted with the Stock Exchanges.

Further as per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank at its ensuing AGM proposes the appointment of M/s SEP & Associates, Kochi (ICSI Unique Code:P2019KE075600). Peer Reviewed Practising Company Secretaries, as the Secretarial Auditor of the Bank for a period of 5 years (First Term) with effect from FY 25-26 to FY 29-30.

The Bank has a robust Fraud Risk Management Framework which provides guidance on managing the Fraud Risk. Cases detected / reported are investigated and appropriate process refinements and systemic corrections are implemented to avert similar incidents in future. Various mitigation measures and surveillance mechanisms are employed to combat both internal and external frauds. Regular sensitization programs for employees and the public on various frauds and prevention techniques foster an atmosphere of vigilance.

The Preventive Vigilance Workshop, curated by the Vigilance Department, elucidates the gaps exploited by fraudsters to perpetrate frauds against Banks. This program also imparts strategies to avert such frauds. Additionally, Fraud Prevention Committee meetings are regularly conducted at branches to familiarize employees with the various modus operandi of trending frauds and their preventive measures. Annual Preventive Vigilance Audits are conducted in identified branches based on risk rating.

The Bank is committed to raising public awareness about financial frauds through multiple communication channels, including SMS, emails, posters at branches, ribbon messages on the Bank's website, and the internet banking webpage. Special emphasis is placed on cyber fraud awareness. The "Twice is Wise" cybersecurity campaign, launched in 2020, serves as a friendly reminder to remain vigilant against cyber frauds. This nationwide initiative educates citizens about cyber safety and underscores the importance of staying smart to combat financial crimes. Posters and videos cautioning the public about novel fraud incidents are disseminated through social media handles, TV channels, web channels, and more. The Bank has implemented a robust Whistle Blower Policy, known as the Protected Disclosure Scheme (PDS). This policy underscores our commitment to maintaining the highest standards of ethics and integrity in all our operations and aims to establish an effective vigil mechanism within the Bank to identify and address aberrations at the earliest. It serves as a robust mechanism through which directors, employees, employee representative bodies, customers, other stakeholders, non-governmental organizations (NGOs), and members of the public can report any unethical practices or concerns. The policy guarantees confidentiality and protection to the whistleblower against any personal vindictive actions such as humiliation, retaliation, harassment, or any other form of unfair treatment. A dedicated email ID is provided for sending complaints or disclosures under PDS. The PDS policy is available on the Bank's website and Intranet - https://www.federalbank.co.in/documents/10180/45777/ Whistle+Blower+policy+or+PDS.pdf/558aea51-1335-4546-9c9a-28c5030377a1?t=1719555373881

During the financial year under review, the Bank has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Bank's operations in future.

In terms of Section 136 of the Companies Act, 2013, the copy of the financial statements of the Bank, including the consolidated financial statements, the auditor's report and relevant annexures to the said financial statements and reports are being sent to the Members and other persons entitled thereto, excluding the information in respect of the employees of the Bank containing the particulars as specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5 (2) of the said Rules is available on the website: https://www.federalbank.co.in/ shareholder-information. The ratio of the remuneration of each Director to the median remuneration of the employees of the Bank and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure C.

The Bank had constituted Internal Complaints Committee, as per letter and spirit contained in the provisions of "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", at 9 Zones and Head Office to prevent and redress the complaints relating to sexual harassment and to organize workshops/ awareness programs to empower women employees while handling cases relating to sexual harassment. Workshops/ awareness programs regarding women empowerment were conducted at various locations pan India. The data with regard to the redressal of complaints by the Internal Complaints Committee are as follows:

The Bank is in compliance with the provisions of Maternity Benefit Act,1961. More details are available in the Business Responsibility and Sustainability Report of the Bank which is part of the Annual Report of the Bank and is also available on the Bank's website https://www.federalbank.co.in/ shareholder-information.

As per section 3(7) of The Insolvency and Bankruptcy Code, 2016, Corporate person does not include any financial service provider, thereby the Bank is excluded from the purview of the Code. There have been several applications made or are pending in the name of the Bank as a Financial creditor against any default occurred as part of the course of business. The particulars of the corporate debtor and claim value is annexed to this report as Annexure D.

Policy on Board Diversity of the Bank mainly depends on the qualifications for appointment of Directors of the Bank as contained in the Banking Regulation Act, 1949 and satisfying the Fit and Proper Criteria for directors as per the regulatory requirement of RBI. The Bank continuously seeks to enhance the effectiveness of its Board and to maintain the highest standards of corporate governance and recognizes and embraces the benefits of diversity in the boardroom. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities. In forming its perspective on diversity, the Bank also takes into account factors based on its own business model and specific needs from time to time. Board Diversity enhances the quality of performance of the Board; ushers in independence in the performance of the Board; eradicates the gender bias in the Board; achieves sustainable and balanced performance and development; supports the attainment of strategic objectives & also ensures compliance of applicable law/s and good corporate practices.

Nomination, Remuneration, Ethics and Compensation Committee has the responsibility for leading the process for Board appointments and for identifying and nominating, for approval by the Board, candidates for appointment to the Board. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of directors to the Board. Board appointments will be based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender. While making Board appointments, the regulatory requirements for appointment of at least one-Woman Independent Director on the Board of the Bank is also considered.

To the best of our knowledge and belief and according to the information and explanations obtained to us, the Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013: i. that in the preparation of the annual financial statements for the year ended March 31, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii. that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at March 31, 2025, and of the profit of the Bank for the year ended on that date; iii. that proper and sufficient care has been taken 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; iv. that the annual financial statements have been prepared on a going concern basis; v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; vi. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively;

Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

Neither the Managing Director nor the Whole-time Directors of the Bank received any remuneration or commission from any of its subsidiaries.

Issue of equity shares with differential rights as to dividend, voting or otherwise.

There were no revisions in the financial statements.

Issue of share (including sweat equity shares) to employees of the Company under any scheme as permitted under any provision of Companies Act, 2013 except Employee Stock Option Scheme (ESOS) as mentioned elsewhere in the Directors' Report.

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

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

The Board of Directors extends its heartfelt appreciation to every member of the Federal family for their unwavering dedication, hard work, and commitment. The Bank's accomplishments this year underscore the collective dedication and high standards consistently demonstrated by its people. The Board also takes this opportunity to express its sincere gratitude to the Government of India, the Reserve Bank of India, various State Governments, and regulatory authorities both in India and abroad for their continued guidance, support, and cooperation. We are equally thankful to Investment Banks, Rating Agencies, and Stock Exchanges for their steadfast support.

We remain deeply grateful to our esteemed customers and all well-wishers for their continued trust and patronage.

Above all, to you—our valued shareholders—we express our profound gratitude for the enduring confidence and faith you have placed in us.

For and on behalf of the Board of Directors of

Sd/- Mr. Abhaya Prasad Hota

Date: 30.07.2025 Chairman of the Board Place: Aluva (DIN - 02593219)

## Total number of employees include the employees recruited under Fixed Tenure Engagement.