19. ACCOUNTING FOR PROVISIONS, CONTINGENT

LIABILITIES AND CONTINGENT ASSETS

a) As per the Accounting Standard 29, the bank recognizes
provisions only when it has a present obligation as a
result of past event, it is probable that an outflow of
resources is required to settle the obligation and when
a reliable estimate of the amount can be made. The
required disclosure for contingent liability is made on
possible obligation that arises from past events, the
existence of which depends on occurrence or non¬
occurrence of future event not under control.

b) Contingent assets are not recognized in the financial
statement since this may result in the recognition of
income that may never be realized.

SCHEDULE - 18: Disclosure in Financial Statements - 'Notes to Accounts'

• The Financial Statements have been prepared in conformity with Forms A & B of the Schedule III to the Banking
Regulation Act, 1949 read with Section 133 of the Companies Act, 2013 read together with paragraph 7 of the
Companies (Accounts) Rules 2014 to the extent applicable and practices generally prevalent in the banking
industry in India. During the year, all the 578 branches have been subjected to statutory audit.

• Reconciliation of inter branch / office adjustment accounts has been completed up to 31.03.2025.

b) Draw down from Reserve: During the year there has been no draw down from the reserves to the Profit
& Loss account.

c) Basel III disclosures

In accordance with RBI Guidelines banks are required to make Pillar 3 disclosures under Basel III capital regulations.
Accordingly, necessary disclosures have been made available on the Bank's website https://www.tmb.in/pages/
basel-disclosures.These disclosures have not been subjected to audit by the Statutory Central Auditors.

b) Liquidity coverage ratio (LCR):

Quantitative information on Liquidity Coverage Ratio (LCR) for the year ended March 31, 2025 is given below:

The Liquidity Coverage Ratio (LCR) is one of the key reforms of Basel Committee to develop a more resilient
banking sector. The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks
by ensuring that banks have an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be
converted easily and immediately into cash to meet their liquidity needs for a 30 calendar days liquidity stress
scenario. The LCR is expected to improve the banking sector's ability to absorb shocks arising from financial
and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real
economy. The LCR is calculated by dividing the bank's stock of HQLA by its total net cash outflows over a 30-
days stress period. HQLA of the bank is in the form of Government Securities and highly marketable and liquid
securities / bonds. The Bank has been maintaining HQLA mainly in the form of SLR investments over and above
the mandatory requirements.

The guidelines for LCR were effective January 1, 2015, with the minimum requirement at 60%, which would rise in
equal annual steps to reach 100% on January 1, 2019. In order to accommodate the burden on banks cash flows
on account of the Covid19 pandemic, RBI had permitted the banks to maintain LCR as under: vide their circular Ref
DOR.BP.BC.No.65/21.04.098/2019-20 dated 17.04.2020.

iii) Qualitative disclosure about LCR:

The main drivers of LCR: The bank is having adequate stock of unencumbered high-quality liquid assets (HQLA)
that can be converted easily and immediately into cash to meet liquidity needs for a 30 calendar days under
liquidity stress scenario.

The net cash outflows for the next 30 days has been calculated after deducting the cash inflows from the outflows
for the period. The inflows and outflows have been calculated based on RBI prescribed haircuts and run-off factors.

The Bank's LCR is more than the minimum regulatory requirement for all the dates from April'24 to March'25. LCR
of the bank for the Annual Financial Year 2024-25 stood at 163.29%.

Composition of HQLA

The Level 1 Assets of our bank comprises of Cash in hand & Cash at ATM, Excess CRR and SLR, MSF & FALLCR are as
per permitted extent. Level 1 asset is the main driver of HQLA of the Bank.

Level 2A and Level 2B assets are well within the regulatory cap of 40% and 15% of the stock of HQLA respectively
after the required haircut.

Corporate Bonds not issued by a Bank/Financial/NBFC which have been rated AA- or above by an Eligible Credit
Rating Agency have been classified under Level 2A assets. Similarly Bonds not issued by a Bank/FI/NBFC which
have been rated not lower than BBB- have been classified under level 2B Assets.

Outflows & Inflows:

Deposits are the main source of funds for the Bank.

Currency mismatch in LCR:

LCR is expected to be met and reported in a single currency. The bank is not having significant liabilities and
HQLAs in any foreign currency.

Description of the degree of centralization of liquidity management and interaction between the group's units:

The Bank does not belong to any group and does not have any associate, subsidiaries, joint venture, etc.

C) Net Stable Funding Ratio

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level
with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR.
The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.

Net Stable Funding is a liquidity measure which is the indication of the long term liquidity health of the Bank and
is measured as under.

NSFR= (Available Stable Funding (ASF)) / (Required Stable Funding (RSF)) >=100%

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding
sources, including contractual maturity of its liabilities and the differences in the tendency of different types
of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity
characteristics and residual maturities of the various assets held by the bank including Off-Balance Sheet (OBS)
exposures. The result should be minimum of 100% to ensure liquidity comfort.

The table given below sets out the un-weighted and weighted value of the NSFR components as on 31st March
2025 based on audited financials.

At a consolidated level, the NSFR of the bank is at 163.90% as on 31st March 2025 (174.15% as on 31st March 2024)
against the requirement of 100% as per RBI guideline

iii) Details of single borrower limit (SBL)/group borrower limit (GBL) exceeded by the Bank.

Single Borrower limit / Group Borrower limit has not been exceeded during the financial year (not exceeded
the same for previous year) .

e) Divergence in Asset Classification and provisioning:

Divergence in Asset classification and Provisioning for NPAs. The divergence observed by RBI for the financial
year 2023-24 in respect of the Bank's asset classification and provisioning under the extant prudential norms on
income recognition, asset classification and provisioning is within the prescribed limit for disclosure.

f) Disclosure of transfer of Loan exposures:

i) Loans that are not in default or stressed, transferred and acquired to or from other entities - NIL (For Previous
FY 2023-24 - NIL)

ii) Particulars of stressed loans transferred acquired - NIL (For Previous FY 2023-24 - NIL)

e) Factoring exposures - Nil (For Previous FY 2023-24 - NIL)

f) Intra-group exposures as on 31.03.2025

i) Total amount of intra-group exposures - NIL (For Previous FY 2023-24 - NIL)

ii) Total amount of top 20 intra-group exposures - NIL (For Previous FY 2023-24 - NIL)

iii) Percentage of intra-group exposures to total exposure of the bank on borrowers/customers - NIL (For
Previous FY 2023-24 - NIL)

iv) Details of breach of limits on intra-group exposures and regulatory action thereon, if any - NIL (For Previous
FY 2023-24 - NIL)

g) Unhedged foreign currency exposure (UFCE)

Bank has a laid down policy for hedging Foreign Currency Exposure, Bank insists on hedging the unhedged
foreign currency risk of our Borrowers. In case of extreme resistance to hedge the Foreign Currency Exposure or
bear the additional Interest Rate the Bank insists on case to case basis on the customer to place suitable term
deposits with the bank under lien to the unhedged exposure to take care of the likely losses arising out of adverse
currency movements.

Items which are effective hedge of each other, natural hedges and financial hedges already made are excluded
for arriving at the UFCE.

Bank makes incremental provisioning and capital provisioning as prescribed by RBI, and adopts the provisioning
and capital provisioning requirements of RBI in respect of those entities on which total exposure of the Banking
system is above H50 crore. Bank follows the RBI guidelines in respect of smaller entities (i.e. total exposure of the
Banking system is at H50 crore or less) and make an incremental provisioning of 10 bps over and above the extant
standard asset provisioning for the unhedged exposure.

The provisioning required for currency induced Credit Risk for the bank on account of the unhedged Foreign
Currency Exposure of the borrowers was estimated at H2.06 Crore (Previous Year - H 1.90 Crore). Bank holds
required provision towards the same. Bank holds additional capital of H 16.54 Crore (Previous Year - H3.19 Crore)
towards the unhedged foreign currency exposure as per extant guidelines.

j) Pending Litigations with Directorate of Enforcement under FEMA on Transfer of certain shares and issue
of Bonus shares thereon:-

The Bank had received a show-cause notice dated 17.12.2014 from the office of the Special Director, Directorate
of Enforcement, Chennai, which was simultaneously issued to 26 persons/entities, including Standard Chartered
Bank (SCB) and SCB's Head of operations, in connection with the alleged violation in transfer of shares on
13.05.2007, 26.12.2011 and 11.06.2012.

Subsequently, after considering all our submissions / written replies / responses / personal hearing, the Directorate
of Enforcement had levied a penalty of Rs.16.99 Crores on our bank, vide its order dated 14.08.2020.

In the meantime, on 27.01.2021, the Deputy legal advisor of the Directorate of Enforcement has filed an appeal
before the appellate tribunal for foreign exchange, New Delhi with a prayer for confiscation of shares/de-nova
proceedings. We understand from the other noticee (previous Directors/officials) that they have also gone for
appeal against the order of DoE. Considering the situation, Bank has also filed an appeal before the Appellate
Tribunal, New Delhi on 04.11.2022.

On 05.12.2022, the Appellate Tribunal was not inclined to hear the main issue in the absence of pre-deposit of the
penalty amount before the Tribunal, as required under law. We have therefore agreed to deposit the amount of
penalty and the penalty was deposited on 16.12.2022 and the bank is having necessary provision.

The Bank has also pre-deposited amount of Rs.45 Lakhs, on May 25, 2024, being 20% of Rs. 225 Lakhs, levied by
Directorate of Enforcement for alleged FEMA violation against 11 persons who were Directors / Company Secretary
of the Bank at the time of transfer of above shares and is shown as Contingent Liabilities. Further, the bank has
also provided a sum of Rs. 2 Lakhs on the basis of legal opinion towards leviable penalty in respect of show-cause
notice from Directorate of Enforcement, for the issue of Bonus Shares to the above-said transferees.

k) Transfer of Dividend and shares to IEPF:

Unclaimed Dividend and shares pertaining to the Financial Years 2009-13, 2015-16 (1st Interim) have been
transferred to IEPF during the FY 2024-25 and we are in the process of transferring the Unclaimed Dividend and
shares pertaining to the Financial Years 2015-16 (2nd Interim), 2016-17 (1st Interim), 2016-17 (2nd Interim) which will
be completed during the FY 2025-26.

15) Disclosure Requirements as per Accounting Standards where RBI has issued guidelines in
respect of disclosure items for Notes to Accounts:

15.1 Changes in Accounting Policies (AS-5):

There were no material Income/Expenditure pertaining to prior period requiring disclosure as per AS5.

The Bank has applied its significant accounting policies in the preparation of these financial statements, consistent
with those followed in the annual financial statements for the year ended 31 March 2024 except for classification,
measurement and valuation of the Bank's investments which are carried out in accordance with the RBI Master
Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023
dated September 12, 2023 (the RBI Investment Master Direction) effective April 01, 2024.

Transitional adjustment on account of Available For Sale (AFS) portfolio and other securities has been credited to
opening "General Reserve" to the extent H5695 Lakhs (net of taxes) (Which includes reversal of provision for depreciation
of H 3067 Lakhs and transfer of investment reserve of H 2534 Lakhs).

Subsequently, the valuation gains or loss for the year ended march 31, 2025 of performing investments under available
for sale (AFS) and Fair Value through Profit and Loss ('FVTPL') (Including Held for Trading (HFT)) categories have been
recognised through AFS reserve and profit and loss account respectively. Accordingly, the amounts for periods prior to
April 1, 2024 are not comparable.

15.2 Revenue Recognition (AS-9):

The heads of income recognized on cash basis are neither material enough nor do they require disclosure under AS 9
on Revenue Recognition.

2) Corporate/ Wholesale banking includes all advances to trusts, partnership firms, companies, and statutory bodies,
which are not included under Retail Banking. Revenue comprises of interest and fees / charges earned from such
clients and expenses are those incurred on interest towards funds utilized and other allocated overheads.

3) Retail banking comprises of lending of funds and other banking services to any legal person including small
business customers, on the basis of the borrower, nature of the product, granularity of the exposure and quantum
thereof. Revenue comprises of interest and fees / charges earned from such clients and expenses are those
incurred on interest towards funds utilized and other allocated overheads.

4) Other banking operations includes items not included above i.e. para-banking activities like bancassurance, third
party product distribution, demat services and other banking transactions and includes items like deposits in
RIDF, MSME Funds etc. Income earned from such services and costs related thereto are reported thereunder.

15.9. Accounting for Investment in associates in CFS (AS-23)

The Bank has no associates. Hence reporting under AS 23 is not applicable.

15.10. Discontinuing Operation (AS-24):

The bank has not discontinued any operations. Hence reporting under AS 24 is not applicable.

15.11. Intangible assets (AS-26)

Depreciation on software is calculated on straight line method at 33.33%.

15.12. Impairment of Assets (AS-28)

In the opinion of the management, there is no impairment to the assets to which AS 28 "Impairment of Assets" applies.

15.13. Contingent Liabilities and Provisions (AS-29)

The details of provisions and contingencies, contingent liabilities, the movement of provisions on NPA's and
depreciation on investment which are considered material are disclosed elsewhere under the appropriate headings
as per RBI guidelines.

15.15. Issue of fresh shares:NIL

15.16. Dividend:

Final Dividend (paid during the year 2024-25)

The Board, in its meeting held on 22.04.2024, had approved/declared Final dividend for the financial year 2023-24,
at the rate of Rs. 10 /- (Rupees Ten only) per share, i.e.100% on the fully paid up equity shares of Rs.10/- each. The
same was approved by shareholders in the Annual General Meeting held on 27.09.2024. The record date for the same
was fixed as Tuesday, September 20, 2024. The payout (Rs. 1,58,35,14,540/- Rs.10/- x 15,83,51,454 shares) process was
completed by 08.10.2024.

Proposed dividend recommendation if any:

A final dividend for the financial year 2024-25, has been proposed at the rate of H11/- (Rupees Eleven per share), i.e 110%
on the fully paid up equity shares of H10/- each subject to the approval of the shareholders in the upcoming Annual
General Meeting.

15.17. Corporate Social Responsibility:

The bank was required to spend Rs.26.08 crore (Previous year Rs. 22.10 crore) during the financial year 2024-25
towards Corporate Social Responsibility (CSR) in accordance with companies Act, 2013. The bank has spent an
amount of Rs.26.08 crore (Previous year Rs. 22.10 crore) in respect of CSR activities across the country. None of the CSR
expenditure incurred by the Bank is to entities controlled by related parties identified by the bank as per Accounting
Standard 18, Related Party Disclosures. The amount spent as above is for the purpose other than for construction/
acquisition of any asset in 2024-25/2023-24.

16 Fixed assets (Land and Building) include property held in Chennai, land (UDS 753.117 sqft Rs.10.76 lakh) and building
(Rs.11.10 lakh) purchased during January 1993. While the UDS of land was registered in Bank's name, the building
was to be handed over to the Bank after construction, by the corporate debtor, who are in corporate insolvency
resolution process, which they failed to do so and the bank had preferred a suit in Madras High Court against
them for specific performance and damages which is pending.

17 TMB Employee stock option plan 2024 (TMB ESOP Plan 2024), as approved by the shareholders in March 2025, is
yet to be implemented.

18 In respect of certain branches/offices where additional information was required, the data available at Controlling/
Head office was considered.

19 Previous year's figures have been regrouped wherever necessary to conform to this year's classification.

20 Figures have been rounded off to the nearest thousand rupees in the Financial Statements.

Sd/-

Salee S Nair

Managing Director & CEO
DIN: 09231101

Sd/- Sd/- Sd/- Sd/-

M.D.Vincent A.Niranjan Sankar S.R.Ashok D.N.Nirranjan Kani

Executive Director Director Director Director

DIN: 09850306 DIN: 00084014 DIN: 07933713 DIN: 00455352

Sd/- Sd/- Sd/- Sd/-

K.V.Rama Moorthy B.Prabaharan C.Chiranjeeviraj S.Sridharan

Director Director Director Director

DIN: 07034994 DIN: 00209875 DIN: 08730382 DIN: 07205781

Sd/- Sd/- Sd/- Sd/-

R.Deepak Shankar R.Kanagavalli A.Shidambaranathan C.S.Ram Kumar

Director Director Director Director

DIN: 05223027 DIN: 00883998 DIN: 02904738 DIN: 09777115

Sd/- Sd/- Sd/- Sd/-

Thomas Mathew D.Ramesh V.Jayaraman R.Ananda Ganesan

Director Executive Vice President Executive Vice President Executive Vice President

DIN: 10642487

Sd/- Sd/- Sd/-

Sd/- K.Vijayan P.R.Ashok Kumar S. IIangovan

J. Sundaresh Kumar Chief Quality Control Officer Country Head Branch Banking Head of Internal Audit

Chief Compliance Officer

Sd/- Sd/- Sd/-

Sd/- Laxman Karkala Kudva Sanjoy Kumar Goel Swapnil Yelgaonkar

K. Arvind Chief Risk Officer Chief Financial Officer Company Secretary

Head of Integrated Treasury

^{Vide our report of even date attached} vide our report of even date attached

^{For Sundaram} & ^Srinivasan For Chandran & Raman

^{Chartered Accountants} Chartered Accountants

^{FRN No. 004207S} _{FRN No. 000571S}

^Sd/- Sd/-

^Thoothukudi S Ramkumar S G Kalyanaraman

23.04.2025 Partner (M.No.238820) Partner (M.No.010652)