Dear Members,
Your Board of Directors ("Board") is pleased to
present the Eighteenth Annual Report on the business and operations of the Bank together
with the Audited Financial Statements of the Bank and Independent Auditors' Report
for the Financial Year ("FY") ended March 31, 2026.
A. FINANCIAL SUMMARY AND HIGHLIGHTS
The Bank's performance during the FY ended March 31, 2026, as
compared to the previous FY is summarized below:
| Particulars |
FY 2025-26 |
FY 2024-25 |
| Advances (Net of provision) |
12,878.8 |
9,974.3 |
| Deposits and borrowings |
17,116.4 |
13,289.9 |
| Total Income |
2,519.9 |
2,171.0 |
| Operating and Interest Expenses |
2,135.9 |
1,781.8 |
| Operating Profit |
384.0 |
389.2 |
| Provisions and Contingencies (including tax) |
232.1 |
274.2 |
| Profit for the year |
152.0 |
115.0 |
| Add: Surplus brought forward from previous year |
406.9 |
317.9 |
| Amount available for appropriation |
558.9 |
432.9 |
| Statutory Reserve under Section 17 of the Banking Regulation
Act, 1949 |
38.0 |
28.7 |
| Investment Fluctuation Reserve |
(1.5) |
(7.0) |
| Capital Reserve |
13.0 |
4.2 |
| Surplus carried to Balance Sheet |
509.4 |
406.9 |
| EPS (Basic) - In H |
14.30 |
10.82 |
| EPS (Diluted) - In H |
14.29 |
10.75 |
a) Key Performance Highlights:
• The Net Interest Income of the Bank for the year was H1,098.7
Crores as compared to H1,106.1 Crores in the previous year.
• The Bank has achieved a Profit of H152 Crores for the year ended
March 31, 2026, as compared to Profit of H 115.0 Crores in the previous year.
• The Gross Loan Portfolio witnessed a jump of 29.4% to H 13,261
Crores (Including IBPC) and there was a substantial rise in deposits by 32.2% from
H10,579.6 Crores to H 13,994 Crores.
• The Balance sheet size grew to H 19,884 Crores as on March 31,
2026, as compared to H 15,614.4 Crores as on March 31, 2025 (YoY growth of 27.34%).
• The CASA constituted 22.6% of the overall deposits of the Bank.
• The Capital Adequacy Ratio ("CRAR") was 20.45%
as on March 31, 2026 (March 31, 2025: 25.8%) as compared to the statutory minimum required
15%.
• The Provision Coverage Ratio ("PCR") as on
March 31, 2026 was at 37.3% and including the CGFMU benefit, PCR was at 96.65%.
• Cost to Income ratio for the year ended March 31, 2026 was 73.7%
as compared to 70.6% for the previous year. The Return on
Assets remained unchanged at 0.9% in FY'26, consistent with 0.9%
in FY'25.
• The number of banking outlets increased from 710 as on March 31,
2025 to 717 as on March 31, 2026, including, 197 Unbanked Rural Centres.
B. OVERVIEW OF BUSINESS & OPERATIONS
In a challenging global macroeconomic and geopolitical environment,
marked by persistent inflationary pressures and evolving monetary policies, the global
economy witnessed moderate growth during FY 2025-26. Despite these headwinds, the Indian
economy continued to demonstrate resilience, supported by strong domestic demand,
infrastructure-led growth, and ongoing policy reforms, thereby strengthening its position
in the global economic landscape.
The banking and financial sector played a crucial role in sustaining
this growth momentum, contributing to overall financial stability and economic
development. The sector remained well-capitalised and resilient under the regulatory
oversight of the Reserve Bank of India, although relatively tight liquidity conditions led
to increased competition for deposits. The overall environment continues to present
significant opportunities for Small Finance Banks to deepen financial inclusion and expand
access to formal banking services.
During FY 2025-26, the Bank continued to demonstrate resilience across
its core business segments while progressing on its strategic priorities. The Bank
sustained growth in advances and deposits, supported by a continued focus on retail
deposit mobilisation, customer engagement, and a diversified product suite.
During the year, the Bank faced continued challenges in the Micro
Finance segment, in line with industrywide stress. To address these challenges, the Bank
has adopted a calibrated and disciplined approach, including strengthening underwriting
standards, moderating incremental disbursements, and enhancing collection efficiencies to
safeguard asset quality. Notably, disbursements in Inclusive Finance witnessed a recovery
towards pre-stress levels in the fourth quarter of FY 2025-26, reflecting early signs of
stabilization in the portfolio.
The Bank has been subscribing to the Credit Guarantee Fund for Micro
Units ("CGFMU") scheme since FY 2022-23, which has continued to provide
support during the period of stress. During the year, the Bank has received claims of
approximately H 370 Crore under CGFMU, with additional claims under process, thereby
helping to mitigate the credit risk and support capital protection.
The Bank continued its strategic focus on secured assets, with
sustained momentum in products such as mortgage and commercial vehicle financing. During
the year, the Bank has launched new secured product lines, including Machinery Finance and
Gold Loans. These initiatives have contributed to a gradual improvement in the portfolio
mix, with an increasing share of non-microfinance assets. This transition remains aligned
with the Bank's objective of achieving a balanced, diversified, and lower-risk growth
profile.
The Bank has strengthened its liability franchise through steady growth
in granular retail deposits, driven by customer-centric products and a hybrid distribution
model. Digital deposits now constitute 14% of total deposits and -40% of retail deposits
within one year.
Further, the Bank also accelerated digital initiatives and
partnerships, launching products such as Credit on UPI and a Secured Credit Card.
The Bank remained committed to sustainable growth, supported by a
strong regulatory compliance framework, prudent risk management practices, and continued
investments in digital capabilities and customer-centric offerings.
The Bank shall be focussing on the following during FY 2026-27:
a) Microbanking: Sustaining focus on Individual Loans with
continued coverage under government-backed credit guarantee schemes, while building on the
recovery momentum witnessed towards the end of FY 2025-26. Continuing to capitalize on
growth opportunities in the MSME segment by leveraging deep customer relationships and
distribution capabilities.
b) Retail Assets: Driving deeper market penetration and maintaining
momentum in secured products such as Mortgage and Commercial Vehicle Finance to achieve a
balanced and lower-risk growth profile. Scaling up newer product lines, including
Machinery Finance and Gold Loans, while maintaining a strong focus on asset quality.
Continuing to offer a comprehensive suite of deposit and lending products catering to
diverse customer segments, with emphasis on innovation and long-term financial solutions.
c) Digital Banking: Accelerating the Bank's digital journey
through strategic partnerships to offer a wider range of products and services. Launching
new digital offerings and enhancing customer reach through scalable, technology- led
solutions, while strengthening the digital product portfolio, including Credit on UPI and
Secured Credit Cards.
C. DIVIDEND
The Bank has formulated and implemented a Dividend Distribution Policy
pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing
Regulations"), the applicable provisions of the Companies Act, 2013 ("Act"),
the circulars / guidelines / directions issued by the RBI with an objective to
appropriately reward the shareholders through dividends for reposing their confidence in
the Bank while retaining the capital required for supporting future business growth. The
said Policy is available on the website of the Bank at:- https://suryoday.bank.in/assets/
pdf/policies/suryoday-dividend-distribution-policy- fy-26-27-1.0.pdf.
In line with the aforementioned Policy and considering the Bank's
financial performance during the FY 2025-26, the Board of Directors at their meeting held
on May 07, 2026, has recommended a Final Dividend of H 1.50 per Equity Share of face value
H 10/- (Rupees Ten only) each fully paid-up (i.e., 15% of the face value) for the FY ended
March 31, 2026, subject to approval by the Shareholders at the ensuing 18th
Annual General Meeting ("AGM") of the Bank to be held on Thursday, August
06, 2026. The aforesaid dividend, if declared by the Shareholders at the 18th
AGM shall be paid to the Shareholders within 30 days from the date of approval /
declaration by the members of the Bank in the 18th AGM. The Record date fixed
for determining the entitlement of Members to the Dividend for FY ended March 31, 2026, is
Friday, July 17, 2026.
Pursuant to the provisions of the Income Tax Act, 2025, as amended by
the Finance Act, 2026 and the Rules framed thereunder, the dividend income is taxable in
the hands of the members, therefore, the dividend will be paid to the members by your Bank
after Deduction of Tax at Source ("TDS") at the applicable rates or Tax
treaty, at the time of making payment of the dividend.
D. TRANSFER TO RESERVES
As per the requirements of the RBI Regulations and other applicable
Regulations, the Bank has transferred to/(Transfer from) the following amounts to various
reserves during FY ended March 31, 2026:
| Amount transferred to/(from) |
J in Crores |
| Statutory Reserve |
37.99 |
| Capital Reserve |
13.01 |
| Investment Fluctuation |
(1.48) |
| Reserve |
|
E. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
("IEPF")
In accordance with Section 124 and 125 of the Act read with the
Investor Education and Protection Fund ("IEPF") Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), all the equity
shares of the Bank in respect of which dividend amounts have not been paid or claimed by
the shareholders for seven consecutive years or more are required to be transferred to
demat account of IEPF Authority. As, the Bank has not declared any dividend since its
inception hence, there was no unclaimed/unpaid dividend or shares of the Bank liable to be
transferred to IEPF during FY 2025-26.
F. CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Bank during
the year under review.
G. SHARE CAPITAL
a) Authorised capital:
During the year under review, there was no change in the Authorised
Share Capital of the Bank and as at March 31, 2026, the Authorised Capital of the Bank
stood at H 150,00,00,000 (Rupees One Hundred and Fifty Crores) divided into 15,00,00,000
(Fifteen Crores) Equity Shares of H 10 (Rupees Ten) each.
b) Issued, Subscribed and Paid up Capital:
During the year under review, the Bank has issued and allotted 5,000
(Five Thousand only) Equity Shares of face value of H 10/-(Rupees Ten) each pursuant to
the exercise of Options by the employee(s) of the Bank under Suryoday ESOP Scheme-2019 ("ESOP
Scheme, 2019"). Consequently, there has been increase in Paid- up capital of the
Bank, from H 106,28,48,240/- (Rupees One Hundred Six Crores Twenty-Eight Lakh Forty-Eight
Thousand Two Hundred and Forty Only) divided into 10,62,84,824 (Ten Crores Sixty-Two Lakh
Eighty-Four Thousand Eight Hundred and Twenty-Four only) Equity Shares of H 10/- (Rupees
Ten) each to H 106,28,98,240/- (Rupees One Hundred Six Crores Twenty-Eight Lakh
Ninety-Eight Thousand Two Hundred and Forty Only) divided into 10,62,89,824 (Ten Crores
Sixty-Two Lakh Eighty-Nine Thousand Eight Hundred and Twenty Four only) Equity Shares of
H10/- (Rupees Ten) each fully paid-up as on March 31, 2026.
c) Issue of Equity Shares with Differential Rights and / or Sweat
Equity Shares
During the year under review, the Bank has neither issued any equity
shares with differential rights nor any Sweat Equity shares.
d) Debt Instruments
As at March 31, 2026, the Bank had one series of Debentures issued on
Private placement basis consisting of 1000 Nos. of 12.5% Rated, Listed, Unsecured,
Subordinated, Redeemable Lower Tier II Bonds in the form of Non-Convertible Debentures
having face value of H 10 Lakhs each, amounting to H 100 Crores, which are listed on BSE.
During the FY 2025-26, the Bank has not issued any debentures, bonds or
any non-convertible securities or warrants.
H. CREDIT RATINGS OF VARIOUS INSTRUMENTS
The details of ratings assigned by ICRA/ and CRISIL for various
instruments of the Bank are as under:
| Particulars |
Rating |
Rating agency |
| Long term issuances/Long Term issuances (NCD/ Sub-Debt) |
A (Stable) |
ICRA |
| Certificate of Deposits |
A 1 + (A One Plus) |
ICRA |
| Certificate of Deposits |
A 1 + (A One Plus) |
CRISIL |
I. CAPITAL ADEQUACY RATIO
a) As per operating guidelines for Small Finance banks, the Bank is
required to maintain a minimum Capital Adequacy Ratio ("CRAR") of 15%
with minimum Common Equity Tier I (CET I) of 6%.
b) As at March 31, 2026, the CRAR of the Bank stood at 20.45% well
above the regulatory minimum requirement of 15%. Tier I ratio of the Bank stood at 19.59%
well above the regulatory requirement of 6% and Tier II capital was at 0.86%.
J. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURE COMPANIES
The Bank did not have any Subsidiary, Associate or Joint Venture
Company during FY 202526. Accordingly, no statement is required to be reported in Form
AOC-1.
K. ANNUAL RETURN
The Annual Return as mandated under the provisions of Section 92(3)
read with Section 134(3)(a) of the Act in prescribed Form MGT-7 is available on the
website of the Bank and the same can be accessed at
https://survodav.bank.in/assets/pdf/form-mgt-7-
annual-return-financial-year-2025-26.pdf
L. BOARD OF DIRECTORS
The composition of the Board is governed by the relevant provisions of
the Act, and the rules made thereunder, the SEBI Listing Regulations, the Banking
Regulation Act, 1949 (the "BR Act"), the Guidelines/
Regulations/Circulars issued by the RBI, as amended, from time-to-time and all other
applicable laws and the Articles of Association of the Bank.
As of March 31, 2026, and also as on the date of this Report, the Board
has an optimum combination of Executive and Non-Executive Directors with Independent
Directors constituting more than one- half of its total strength. As on March 31, 2026,
the Board comprised of Ten (10) Directors, consisting of Seven (7) Independent Directors,
including One (1) Woman Independent Director, One (1) Managing Director & Chief
Executive Officer ("Managing Director & CEO"), One (1) Whole-time
Director ("Executive Director") and One (1) Non-Executive Non-Independent
(Investor) Director ("Investor Director"), overall representing to 70%
Independent Directors and 30% Non-Independent Directors.
None of the Directors of the Bank is disqualified as per provisions of
Section 164(2) of the Companies Act, 2013. The Directors have provided necessary
disclosures, as required under various provisions of the Companies Act, 2013, SEBI Listing
Regulations and RBI guidelines.
Further, the certificate pursuant to Regulation 34(3) and sub-clause
(i) of Clause 10 of Para C of Schedule V of the SEBI Listing Regulations for the FY ended
on March 31, 2026, issued by Tushar Shridharani & Associates LLP, Practicing Company
Secretaries (LLPIN - ACL-9350 Unique Code: L2025MH018100) confirming that none of the
Directors on the Board of the Bank have been debarred or disqualified from being appointed
or continuing as Directors of the Bank by the Securities Exchange Board of India ("SEBI")/
the Ministry of Corporate Affairs ("MCA") or any such statutory
authority, is attached as Annexure-1 to this Report.
During the FY 2025-26 and after the end of financial year up to the
date of this report, following changes took place in the Board of Directors of the Bank:
a) Appointments:
i. The Shareholders of the Bank vide Special Resolution passed through
Postal Ballot on April 15, 2025, accorded their approval for the appointment of Mr. Vivek
Anant Karve (DIN: 06840707) as a Non-Executive Independent Director of the Bank to hold
office for a period of Five (5) consecutive years effective from January 21, 2025 upto
January 20, 2030 (both days inclusive), not liable to retire by rotation.
ii. Basis the recommendations made by the Nomination and Remuneration
Committee ("NRC"), the Board of Directors of the Bank at their
meeting held on March 12, 2026, had appointed Mr. Sunil Satyapal Gulati (DIN:00016990) and
Mr. Alok Sethi (DIN:00277481) as Additional Directors (under Non-Executive Independent
category) on the Board of the Bank with effect from March 12, 2026. The Board, also
subject to the approval of the Shareholders of the Bank, had appointed Mr. Sunil Satyapal
Gulati (DIN:00016990) and Mr. Alok Sethi (DIN:00277481) as a NonExecutive Independent
Directors on the Board of the Bank for a period of Five (5) consecutive years effective
from March 12, 2026 to March 11, 2031 (both days inclusive), not liable to retire by
rotation. As permissible under the applicable provisions of the Act and the Rules made
thereunder, the SEBI Listing Regulations and pursuant to the Circulars issued in this
regard by the MCA and SEBI, the Board at its meeting held on May 07, 2026 had accorded its
approval for seeking approval of the Shareholders of the Bank through Postal Ballot
Process for the appointment of Mr. Sunil Satyapal Gulati (DIN:00016990) and Mr. Alok Sethi
(DIN:00277481) as an Independent Directors of the Bank for a period of Five (5)
consecutive years effective from March 12, 2026 to March 11, 2031 through Special
Resolution. Subsequently, the Shareholders of the Bank vide Special Resolution passed
through Postal Ballot on June 08, 2026 (being last date of e-voting), accorded their
approval for appointment of Mr. Sunil Satyapal Gulati (DIN:00016990) and Mr. Alok Sethi
(DIN:00277481) as NonExecutive Independent Directors of the Bank to hold office for a
period of Five (5) consecutive years effective from March 12, 2026 upto March 11, 2031
(both days inclusive), not liable to retire by rotation.
b) Re-appointments:
i. Mr. Ranjit Jayant Shah (DIN:00088405), NonExecutive Non-Independent
(Investor Director), was re-appointed at the Seventeenth (17th) AGM of the Bank
held on September 11, 2025, and is liable to retire by rotation at ensuing AGM.
ii. Based on the approval of the Shareholders at the 17th
AGM of the Bank, held on September
11, 2025, and approval granted by the Reserve Bank of India vide its
Letter No. DoR.GOV. No.S5685/29.44.006/2025-26 dated October 16, 2025, Mr. Baskar Babu
Ramachandran (DIN:02303132), has been re-appointed as Managing Director & CEO of the
Bank for a further period of Three (3) years, effective from January 23, 2026 to January
22, 2029, in terms of the provisions of Section 35B of the BR Act.
iii. Mr. Krishna Prasad Nair (DIN:02611496) who was appointed as a
Non-Executive Independent Director of the Bank for a period of Five (5) years with effect
from July 22, 2021 has been re-appointed as Non-Executive Independent Director of the Bank
for the second term of Three (3) consecutive years, effective from July 22, 2026 to July
21, 2029 (both days inclusive), vide Special Resolution passed through Postal Ballot on
February 28, 2026. Further, based on the application submitted by the Bank, the RBI vide
its Letter No. DoR. GOV.No.S1240/29.44.006/2025-26 dated May
12, 2026, has accorded its approval for the re-appointment of Mr. Nair
as a Non- Executive Part-time Chairman of the Bank, for the same period i.e. for a period
of Three (3) years with effect from July 22, 2026, in accordance with the provisions of
the BR Act and the rules, guidelines and circulars issued by the RBI, from time to time in
this regard, which has been duly taken on record by the Board of Directors of the Bank on
May 12, 2026.
c) Directors Retiring by Rotation:
i. Mr. Ranjit Jayant Shah (DIN:00088405), NonExecutive Non-Independent
(Investor) Director, is liable to retire by rotation at the ensuing AGM and, being
eligible, has offered himself for re-appointment, to hold office upto November 01, 2026
(i.e. upto completion of his total term of 8 years as permissible under the provisions of
the BR Act). Accordingly, the proposal for his re-appointment as a Director, to hold
office up to November 01, 2026, in accordance with the BR Act and the applicable circulars
and regulations issued by the RBI from time to time, will be placed before the
Shareholders for approval at the ensuing AGM.
d) Directors and Officers Liability Insurance Policy:
The Bank has a Directors and Officers Liability Insurance Policy, which
protects Directors and Officers of the Bank for any breach of fiduciary duty. Further, the
Board is apprised about the insurance coverage under the said Policy annually.
e) Director e-KYC (DIR-3 KYC):
All the Directors of the Bank have complied with timely submission of
Form DIR-3 KYC during the FY 2025-26.
M. KEY MANAGERIAL PERSONNEL
As of March 31, 2026, Mr. Baskar Babu Ramachandran (DIN:02303132),
Managing Director & CEO, Mr. Hemant Premchand Shah (DIN:10548728), Whole-time Director
(Executive Director), Mr. Kanishka Chaudhary, Chief Financial Officer and Mr. Krishna Kant
Chaturvedi, Company Secretary & Compliance Officer, were the Key Managerial Personnel
of the Bank in terms of Section 203(1) of the Act and Rule 8 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014. No changes in the Key Managerial
Personnel during the FY 2025-26.
N. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
Pursuant to Regulation 17(5) of SEBI Listing Regulations, the Bank has
implemented a Code of Conduct for Directors and Senior Management Personnel ("SMPs").
This code attempts to set forth the guiding principles on which the Directors and SMPs of
the Bank shall operate and conduct the Bank's business with its various stakeholders.
All the Directors and SMPs have affirmed their adherence to the Code for FY 2025-26 and a
declaration by the Managing Director & CEO to this effect forms part of Report on
Corporate Governance. The Bank's Code of Conduct for Directors and SMPs can be
accessed on the website of the Bank at:- https://suryoday.
bank.in/assets/pdf/policies/suryoday-code-of-
conduct-applicable-to-directors-&-sr-mgmt-of-the- bank-fv-26-27-1.0.pdf.
O. MEETINGS OF THE BOARD OF DIRECTORS
During the year under review, Ten (10) Meetings of the Board of
Directors were held and the gap between any two meetings were well within the statutorily
permissible limits as per the provision of the Act read with Rules made thereunder and
Secretarial Standard 1 issued by the Institute of Company Secretaries of India, and SEBI
Listing Regulations. The details of meetings of the Board and Board Committees together
with the attendance for each Director, have been comprehensively disclosed in the
Corporate Governance Report.
P. MEETING OF COMMITTEES OF THE BOARD
The Board has constituted several Board Level Committees to deal with
specific matters and the terms of reference of each Committee is defined. These Committees
have been formed in compliance with the applicable provisions of the Act and relevant
rules made thereunder, SEBI Listing Regulations, BR Act, RBI Circulars & Guidelines,
Articles of Association of the Bank and other pertinent guidelines issued from time to
time.
As at March 31, 2026, there were Ten (10) Committees of the Board as
given below:
| Name of the Committee |
| (i) Audit Committee of the Board |
| (ii) Risk Management Committee of the Board |
| (iii) Nomination and Remuneration Committee |
| (iv) Stakeholders' Relationship Committee |
| (v) Corporate Social Responsibility & ESG Committee (formerly known
as Corporate Social Responsibility Committee) |
| (vi) IT Strategy Committee |
| (vii) Customer Service Committee |
| (viii) Credit Committee of the Board |
| (ix) Special Committee of the Board for monitoring and follow up of cases
of frauds |
| (x) Board Committee for Review of Wilful Defaulters |
The details of composition, number of meetings held and date thereof
and Terms of Reference/Charter of the above Committees are available in the Corporate
Governance Report forming part of the Annual Report of the Bank for FY 2025-26.
Further, in order to facilitate the Board effectiveness, efficiency and
faster decision making, the Bank has also constituted a few Management Level Committees
for better governance and supervision. The Bank has constituted various Management Level
Committees viz. Investment Committee (IC), Risk Management Committee of the Executives
(RMCE), Vendor Management Committee (VMC), Asset Liability Management Committee (ALCO),
Branch Level Customer Service Committees, Standing
Committee on Customer Service, New Product Approval Committee,
Executive Credit Committee, Management Committee for Staff Accountability, Information
Security Steering Committee (ISSC), IT Steering Committee, Executive Committee (EXECOM),
Internal Complaints Committee etc.
Q. MEETING OF INDEPENDENT DIRECTORS
As per the requirement of Section 149(8) read with Schedule IV of the
Act and Regulation 25 of the SEBI Listing Regulations, a meeting of the Independent
Directors of the Bank is required to be held at least once a year in absence of
non-independent directors and members of the management.
During the year under review, Two (2) meetings of Independent Directors
of the Bank were held on May 06, 2025, and November 05, 2025, and various matters were
discussed & reviewed at the meeting inter-alia covering the following:
• The quality, quantity, and timeliness of flow of information
between the management of the Bank and the Board of Directors that is necessary for the
Board of Directors to effectively and reasonably perform their duties;
• Review of Performance of Non-Independent Directors, the Board of
Directors as a whole, Chairperson of the Bank;
• Whether adequate time is spent by the Board/ Committees on
discussions on important issues.
• Review of the existing corporate, governance practices.
• Review of the Report on directives and suggestions from the
previous meeting of
Independent Directors.
R. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted the required declarations
that they meet the criteria of Independence as laid down under Section 149(6) and 149(7),
Schedule IV of the Act and Regulation 16(1)(b) and Regulation 25(8) of the SEBI Listing
Regulations. The Board had assessed the veracity of the confirmations submitted by the
Independent Directors, as required under Regulation 25(9) of the SEBI Listing Regulations.
Pursuant to the Companies (Creation and Maintenance of Databank of
Independent Directors) Rules, 2019 read with the Companies (Appointment and Qualifications
of Directors) Rules, 2014, the Independent Directors of the Bank have successfully
registered their names in the online databank of Independent Directors maintained &
administered by the Indian Institute of Corporate Affairs. The Independent Directors have
also confirmed that they were not aware of any circumstance or situation which existed 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, all the Independent Directors are
independent of the Management.
During the year, there has been no change in the circumstances
affecting their status as Independent Directors of the Bank and they are not debarred from
holding the office of Director under any SEBI Order or any other statutory authority.
The Bank has also received from its Directors, a statement that they
have complied with the Code of Conduct for Directors and Senior Management of the Bank.
S. STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY,
EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS
APPOINTED DURING THE YEAR
In the opinion of the Board, the Independent Directors are persons of
integrity and possess the requisite experience, expertise and proficiency required under
all applicable laws and the policies of the Bank.
T. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL
PERSONNEL AND SENIOR MANAGEMENT
As per the provisions of sub-section (3) of Section 178 of the Act, the
Bank has a Policy on appointment of Directors and Senior Management employees which
includes formulating criteria for determining qualifications, attributes and independence
of a Director.
This Policy has been disclosed on the Bank's website at:-
https://suryoday.bank.in/assets/pdf/policies/
survodav-compensation-policv-fv25-26-1.0.pdf and https://suryoday.bank.in/assets/pdf/policies/policy-
on-appointment-of-directors-and-senior-managerial- personnel-fv-26-27-1.0.pdf
The Board has, in accordance with the RBI guidelines on compensation,
formulated the Compensation Policy which became effective in FY 2020-21, as amended from
time to time. The Compensation Policy institutes a mechanism for alignment of compensation
of Whole-time Directors, Chief Executive Officer, Material Risk Takers, Control Function
Staff and other Senior Managerial Personnel with the extent of risks taken. The
Policy also establishes standards of compensation including fixed and
variable, which are in alignment with the applicable rules and regulations including the
RBI guidelines in this regard and which is based on the trends and practices of
remuneration prevailing in the banking industry. The remuneration of Whole-time Directors,
Material Risk Takers, Key Managerial Personnel and Senior Management is governed by the
Compensation Policy of the Bank. This Policy has been disclosed on the Bank's website
at: https://survodav.bank.in/assets/pdf/policies/ survodav-compensation-policv-fv25-26-1.0.pdf
The Non-Executive Directors including Independent Directors are paid remuneration by
way of sitting fees for attending the meetings of the Board and its Committees, which is
determined by the Board based on applicable regulatory provisions. Further, expenses
incurred by them for attending meetings of the Board and Committees, if any, are
reimbursed at actuals.
Pursuant to Regulation 19(4) read with Part D of Schedule II of the
SEBI Listing Regulations, as amended, the NRC and the Board of Directors of the Bank is
required to devise a policy on diversity of Board of Directors. The Bank has formulated
this Policy in compliance with the SEBI Listing Regulations and the same is available on
the website of the Bank at https://survodav.bank.in/assets/pdf/
policies/suryoday-policy-to-promote-diversity-of- board-of-directors-fv-26-27-1.0.pdf.
The Bank has an effective mechanism for succession planning, which
focuses on orderly succession of the Chairperson, Directors, Key Management Personnel and
Senior Management. The NRC implements this mechanism in concurrence with the Board of
Directors.
U. PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of Section 178(2) read with Schedule IV of
the Companies Act, 2013 and Regulation 19 of SEBI Listing Regulations, for the FY 2025-26,
the Board of Directors of the Bank had engaged Excellence Enablers Private Limited ("Excellence
Enablers"), an external agency for carrying out the Annual Evaluation of Board,
Statutory Committees of the Board and Individual Directors in order to ensure objectivity,
transparency and benchmarking with leading governance practices. The external agency
administered the evaluation process based on structured questionnaires and evaluation
criteria aligned with applicable regulatory requirements and industry's best
practices. Further, the performance evaluation of the Committees of the Board was carried
out in accordance with the criteria for evaluation as set out in the Policy for
Performance Evaluation of the Bank read with the Terms of Reference/Charter of the
respective Board Committees.
Mr. M Damodaran, the founder of Excellence Enablers had one-on-one
interactions with the Members and the Chairpersons of the Board Committees and took their
views and inputs on the performance of the Board Committees.
All the Directors provided their responses to the questionnaires based
on the said criteria. Each of the Committees evaluated its own performance. The
Independent Directors, reviewed the performance of non-independent Directors and the
performance of the Board as a whole.
The feedback and outcome of the Board's Performance Evaluation was
submitted to the NRC and the Board. Further, the Report on the Performance Evaluation of
the Committees was submitted to the respective Board Committees and the feedback on
Individual Directors was shared separately to the all Board members.
The Board has taken on record the Performance Evaluation Report for FY
2025-26 and advised the Management for taking necessary actions towards enhancing the
processes / reporting mechanism, wherever required/applicable, as suggested in the
Performance Evaluation Report, including focused approach towards Board's exposure to
senior management team, risk governance, Cyber and AI- related risks, and greater focus on
Strategy/Financial matters, which was agreed by the Management for necessary action in a
time-bound manner.
V. State of the Bank's Affairs in terms of Section 134(3)(i) of
the Act
The state of affairs of the Bank in detail is provided separately under
different sections of the Board's Report and also under Management Discussion and
Analysis.
W. FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
In accordance with the Regulation 25(7) of the SEBI Listing Regulations
and RBI guidelines, the Bank has conducted various familiarisation programmes during FY
2025-26 for the Independent Directors to enable them to familiarise with the Bank, its
Management, Bank's Business, and its operations for better understanding of their
roles & responsibilities and rights for effective contribution in sustainable growth
of the Bank.
The Bank has also facilitated various Training programs from the
eminent institutions for the Independent Directors of the Bank.
The details of the familiarisation programme(s) for the Independent
Directors of the Bank have been provided separately in the Report on Corporate Governance
forms part of the Annual Report and can be accessible on website of the Bank at:-
https://suryoday.bank.in/assets/ pdf/policies/ssfb-familiarization-programmes-
independent-directors.pdf
X. EMPLOYEES STOCK OPTION SCHEME AND OPTIONS GRANTED DURING FY 2025-26
The Bank has, from time to time, granted Stock Options to its key
employees to attract, hire and retain talented and experienced personnel from the
industry. ESOP has served as a tool to reward and motivate employees for long association
and in recognition of dedicated service to the Bank, pursuant to the approval of its
Members. Rewarding employees with stock options aligns with the long-term growth of the
Bank and ensures active participation by a team of motivated employees in ensuring the
desired growth of the organisation.
In this regard, the Stock Option Scheme titled ‘ESOP Scheme
2016' was initially approved by the Members of the Bank at their Extra Ordinary
General meeting ("EGM") held on December 22, 2016 and thereafter, the
amended Scheme was approved by the members of the Bank at their AGM held on August 30,
2018. Thereafter, in order to modify and align the terms with the amended Regulations, the
Bank had launched new Scheme Suryoday ESOP Scheme 2019 ("ESOP Scheme 2019"),
which was initially approved by the Members at the AGM held on September 26, 2019 and
thereafter amendments to the Scheme were approved by the Members at their EGM held on July
27, 2020. Further, in terms of Regulation 12(1) of the Securities and Exchange Board of
India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (the "SEBI
SBEB Regulations"), as amended, the ratification to the ESOP Scheme 2019 was also
approved by the Members of the Bank at their AGM held on September 20, 2021.
It may kindly be noted that after coming into effect of the ESOP Scheme
2019, the earlier Scheme i.e. ESOP Scheme 2016 was closed for the purpose of granting new
Options, however, Options in 2 categories viz. those which were granted under ESOP Scheme
2016, Options granted and vested under ESOP Scheme 2016 and vested but not exercised, were
treated as valid till their eligible exercise period under the scheme.
The grant of Options to employees under Suryoday ESOP Scheme 2019 is
approved by the NRC. In alignment with the Bank's Compensation Policy, ESOP when
determining the number of options to be granted are offered at the time of hiring as well
as part of the Annual Performance Review. The number of options to be granted are
determined basis factors such as scale, designation, performance, grades, period of
service, role significance, and contribution to the Bank's overall performance.
Further, pursuant to RBI Circular No. RBI/2019-20/89 DOR. Appt.BC.
No.23/29.67.001/ 2019-20 dated
November 4, 2019 read with RBI/2021-22/95 DOR. GOV. REC. 44/
29.67.001/2021-22 dated August 30, 2021, the Bank is under obligation to pay part of the
overall compensation to certain categories of senior Management employees of the Bank in
the form of share linked instruments as variable pay with a linkage to the overall
performance of the Bank, performance of the concerned Business Unit and the
Individual's Performance along with appropriate malus and claw-back arrangements. The
same is in accordance with the Compensation Policy of the Bank.
Taking into consideration the requirements of the abovementioned RBI
Circulars and the growth plans of the Bank for coming years and in order to attract, hire
and retain talented and experienced personnel from the industry, as well as to reward and
motivate existing employees for their long association and in recognition of their
dedicated service to the Bank, the NRC and the Board of Directors had recommended to
increase the pool of Option by adding 40,00,000 (Forty Lakhs only) Options in the ESOP
Scheme 2019 to be utilised for granting Options to the Employees for coming years, which
was subsequently approved by the Members at their 16th AGM of the Bank held on
September 12, 2024. With this, the total pool size of Options in Suryoday ESOP Scheme 2019
shall be 80,00,000 (Eighty Lakhs only) Options.
The Board of Directors at their meeting held on June 25, 2026, based on
the recommendation of the NRC has recommended modifications in the Clause of the ESOP
Scheme, 2019 pertaining to Exercise Period which are detailed in the Notice of the ensuing
18th AGM of the Bank for approval of the Shareholders.
The Bank is currently granting Options from ESOP Scheme 2019.
The applicable disclosure with regard to Employee Stock Option granted
during FY 2025-26 is provided in Annexure-2 to this report.
Y. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Pursuant to Section 186(11) of the Act, loans made, guarantees given,
securities provided or acquisition of securities by a banking company in the ordinary
course of its business are exempted from the disclosure requirement under Section 134(3)
(g) of the said Act. Details of Investments are given in Schedule 8 to the Financial
Statements forms part of the Annual Report.
Z. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
During FY 2025-26, the Bank did not engage in any material significant
transactions with related parties that could potentially create conflicts of interest
between the Bank and these parties. The related party transactions, if any, during the
year were carried out at arm's length basis and in the ordinary course of business
operations. Any transactions entered with the related parties are monitored and reviewed
by the ACB and Board every quarter.
During the year under review, there were no contracts or arrangements
with related parties as referred to under Section 188(1) of the Act.
As per Section 134(3)(h) of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, there are no related party transactions that are
required to be reported in form AOC-2. The requisite disclosure has been made under
Schedule 18 of the notes forming part of Audited Financial Statements for FY ended March
31, 2026.
The Related Party Transaction Policy as approved by the Board can be
accessed on the website of the Bank at: https://suryoday.bank.in/assets/pdf/
policies/suryoday-related-party-transaction-policy- fy-26-27-1.0.pdf. The Related
Party Transaction policy is reviewed by the ACB on an annual basis. The Bank does not have
a subsidiary company as on date; hence the Bank is not required to formulate a specific
policy on dealing with material subsidiaries.
AA. RISK MANAGEMENT FRAMEWORK
The Bank is exposed to various risks which broadly fall under one or
more of the categories of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and
Information and Cyber Security Risk etc. The Chief Risk Officer of the Bank is in-charge
of the Risk Management functions under the oversight of the Risk Management Committee of
the Board ("RMCB").
The Bank has a robust framework for risk management in the form of
regular review of products and processes by the Compliance Department, periodic internal
audit of processes and operations, regular review of risk policies and periodic reporting
to the RMCB and the Board. The RMCB overviews the nature of the relevant risks, impact
thereof on the business of the Bank, implementation of the risk management policies and
processes and reviewing of these Policies to address the risks. Further details on the
Risk Management are covered in the Management Discussion & Analysis, forming part of
the Annual Report.
BB. INTERNAL FINANCIAL CONTROLS (IFC) WITH REFERENCE TO THE FINANCIAL
STATEMENTS
The Board has reviewed the adequacy and effectiveness of the
Bank's internal financial controls with reference to its financial statements.
Internal controls are in place and were operating effectively for the period. There were
no material or serious observations with respect to the inefficiency or inadequacy of such
controls.
AB. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION
OF THE BANK
No material changes and commitments have occurred after the closure of
FY 2025-26 till the date of this report, affecting the financial position of the Bank.
AC. MANAGEMENT DISCUSSION & ANALYSIS
The Report on Management Discussion & Analysis for FY 2025-26, as
stipulated in SEBI Listing Regulations forms part of the Annual Report.
AD. CORPORATE GOVERNANCE
The Bank is committed to establishing and adhering to the best
Corporate Governance practices through transparency in disclosures, accountability,
integrity, true & fairness, putting in place robust systems & processes and
adhering to the compliance & governance policies framed in accordance with the rules
and regulations applicable to the Bank. The Bank continuously endeavours enhancing the
governance and assurance functions.
The Report on Corporate Governance along with the Certificate issued by
Tushar Shridharani & Associates LLP, Practicing Company Secretaries of the Bank
confirming the compliance with the conditions stipulated in the SEBI Listing Regulations
forms part of the Annual Report.
AE. CORPORATE SOCIAL RESPONSIBILITY (CSR) & ESG INITIATIVES
As part of its commitment to social responsibility, the Bank strives to
enhance the economic, environmental, and social well-being of unserved and underserved
communities. Our mission is to foster inclusive growth and improve the quality of life for
those at the margins of society.
The Bank operates a robust three-tier governance structure to oversee
its CSR vision, comprising the Board of Directors, the CSR & ESG Committee, and the
Head of CSR & ESG. This structure ensures that all activities and funds are closely
monitored for maximum impact and transparency.
Bank's projects are designed to create sustainable change through:
• Financial & Digital Literacy: Empowering women,
adolescents, and parents with essential banking and digital skills.
• Health & Wellness: Improving preventive and reproductive
health outcomes.
• Livelihood & Skill Development: Enhancing employability
and livelihood for marginalized groups.
• Community Development: Driving grassroots initiatives to
uplift targeted communities.
During the year under review, the Bank has scaled its reach primarily
through two key implementing partners:
• Suryoday Foundation: Impacted over 80,000 beneficiaries
across six projects in Maharashtra, Tamil Nadu, and Odisha, focusing on financial
literacy, women's empowerment, and community engagement.
• Rotary Club of Madras: Provided critical dental care to over
10,000 children via mobile dental camps covering 15 zones of the Chennai Corporation, as
well as Urban Primary and Community Health Centres.
The Bank's CSR initiatives and activities are aligned to the
requirements of Section 135 of the Act. The Annual Report on CSR activities in FY 2025-26
including those of ongoing projects are mentioned in the prescribed format in accordance
with the Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014 and attached as Annexure-3 to this Report. The
CSR Policy is also available on the Bank's website at:-
https://suryoday.bank.in/assets/ pdf/policies/survodav-csr-policv-fv26-27-1.0.pdf .
The Bank understands the importance of integrating on the three pillars
of ESG i.e., Environmental, Social, and Governance into its operations and decisionmaking
processes. The Bank aims to balance its financial performance in alignment with the above
mentioned three pillars of ESG. The Bank is in the process of evaluating to make
contributions to the projects working in the areas of protection of Environment, like
check dams, tree plantations etc. This would also be in line with our ESG goals of the
Bank.
AF. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, the
top 1000 listed companies based on their market capitalisation as on March 31, every
fiscal year, are mandatorily required to submit a Business Responsibility and
Sustainability Report ("BRSR") on the environmental, social and
governance disclosures as part of their Annual Report. The said Report describing the
initiatives undertaken by the Bank from environmental, social and governance perspective
has been uploaded on the website of the Bank and the same can be accessed at
https://suryoday.bank.in/assets/ pdf/business-responsibility-and-sustainability-
reporting-2025-26.pdf
As stipulated in SEBI Listing Regulations, the BRSR describing the
initiatives undertaken by the Bank from environmental, social and governance perspective
forms part of the Annual Report.
AG. STATUTORY AUDITORS AND THEIR REPORT
M/s. Mukund M. Chitale & Co., Chartered Accountants, (Firm
Registration Number 106655W), the Statutory Auditors, were appointed by the Shareholders
of the Bank at their 16th AGM held on September 12, 2024 to hold office for a
period of Three (3) years from the conclusion of the Sixteenth (16th) AGM until
the conclusion of the Nineteenth (19th) AGM of the Bank to be held in the year
2027 for the purpose of the Audit of the Bank's Financial Statements for the
Financial Years 2024-25 upto 2026-27.
Given that the Bank's Balance Sheet size as on March 31, 2025,
stood at H 15,614 Crores and hence, in accordance with the Guidelines for Appointment of
Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excluding
RRBs), UCBs and NBFCs (including HFCs) issued by the Reserve Bank of India ("RBI")
vide Circular No. DoS.CO.ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 read with
Bank's Policy on Appointment of Statutory Auditors, the Bank was required to appoint
one additional Audit firm as its Joint Statutory Auditor. Accordingly, pursuant to the RBI
approval, the Audit Committee of the Board ("ACB") on August 13, 2025 and
thereafter, the Board of Directors on August 14, 2025, have recommended the appointment of
M/s. Gokhale & Sathe, Chartered Accountants (Firm Registration Number 103264W) as one
of the Joint Statutory Auditors of the Bank, to hold office for a period of Three (3)
years from the conclusion of Seventeenth (17th) AGM until the conclusion of the
Twentieth (20th) AGM of the Bank to be held in year 2028, for the purpose of
the audit of the Banks' Financial Statements for the Financial
Years 2025-26 upto 2027-28, subject to the approval of the RBI every
year for the remaining Two (2) years i.e. FY 2026-27 and FY 2027-28. The Shareholders of
the Bank at their 17th AGM held on September 11, 2025 have accorded their
approval for the appointment of M/s. Gokhale & Sathe, Chartered Accountants (Firm
Registration Number 103264W), as one of the Joint Statutory Auditors of the Bank [along
with existing Statutory Auditors, M/s. Mukund M. Chitale & Co., Chartered Accountants,
(Firm Registration No. 106655W)], both the Auditors to be termed as ‘Joint Statutory
Auditors'.
Pursuant to para 6.1 of the RBI Circular No. RBI/2021- 22/25 Ref. No.
DoS. CO. ARG/ SEC.01/08.91.001/2021- 22 dt. April 27, 2021, the ACB need to monitor and
assess the independence of the Auditors and conflict of interest position in terms of
relevant regulatory provisions, standards, and best practices. Accordingly, the ACB and
the Board of Directors at their respective meetings held on May 07, 2026, have reviewed
the performance of M/s. Mukund M. Chitale & Co., Chartered Accountants, (Firm
Registration Number 106655W) and M/s. Gokhale & Sathe (Firm Registration Number
103264W), Joint Statutory Auditors of the Bank, in terms of RBI Circular No.
RBI/2021-22/25 Ref. No. DoS. CO. ARG/ SEC.01/08.91.001/2021-22 dt. April 27, 2021, and
found the same to be satisfactory and that they were acting independently without conflict
of interest with the management.
In accordance with para 3.1 of the RBI Circular No. RBI/2021-22/25 Ref.
No. DoS. CO. ARG / SEC.01/08.91.001/2021-22, dated April 27, 2021, the Bank is required to
take prior approval of the RBI for their continuation on an annual basis. Accordingly, the
Board of Directors of the Bank, based on the recommendation made by the ACB at their
meeting held on May 07, 2026, had recommended the re-appointment/continuation of M/s.
Mukund M. Chitale & Co., Chartered Accountants, (Firm Registration No. 106655W) and
M/s. Gokhale & Sathe, Chartered Accountants, (Firm Registration No. 103264W), as the
Joint Statutory Auditors of the Bank for the FY 2026-27, for their third and second year
respectively, for approval of the RBI.
Thereafter, based on the application submitted by the Bank, the RBI
vide letter No. Ref.CO. DOS. RPD. No. S1724/08.62.005/2026-27 dated June 05, 2026
(receivedby the Bank on June 05,2026), has accorded its approval for the
re-appointment/continuation of M/s. Mukund M. Chitale & Co., Chartered Accountants,
(Firm Registration No. 106655W) and M/s. Gokhale & Sathe, Chartered Accountants, (Firm
Registration No. 103264W), as the Joint Statutory Auditors of the Bank for the FY 2026-27,
for their third and second year respectively.
The Report, provided by the Joint Statutory Auditors, M/s. Mukund M
Chitale & Co., Chartered Accountants (Firm Registration No. 106655W) and M/s. Gokhale
& Sathe, Chartered Accountants (Firm Registration No. 103264W) on the financial
statements of the Bank for FY ended March 31, 2026, forms part of the Annual Report. There
has been no qualification, reservation, adverse remark or disclaimer given by the Auditors
in their Report. Also, no offence of fraud was reported by the Joint Statutory Auditors of
the Bank under Section 143(12) of the Act.
AH. SECRETARIAL AUDITORS AND THEIR REPORT
Pursuant to the provisions of Section 204 of the Act read with Rule 9
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Regulation 24A of the SEBI Listing Regulations, the ACB and the Board of Directors of the
Bank at their respective meetings held on May 08, 2025, had recommended the appointment of
M/s. Tushar Shridharani & Associates LLP, Practising Company Secretaries, (LLPIN -
ACL- 9350 Unique Code: L2025MH018100), being a peer reviewed firm of Company Secretaries
in Practice as Secretarial Auditors of the Bank for period of Five (5) consecutive years
commencing from FY 2025-26 till FY 2029-30, and to provide such other services as
permissible under applicable laws on such terms and conditions including remuneration that
may be fixed plus applicable taxes and other out-of-pocket expenses as may be mutually
agreed upon between the ACB and/ the Board of Directors of the Bank, which was
subsequently approved by the Members of the Bank at their 17th AGM held on
September 11, 2025. M/s. Tushar Shridharani & Associates LLP, Practising Company
Secretaries, Secretarial Auditor conducted Secretarial Audit of the Bank for FY 2025-26
and issued Secretarial Audit Report. The Secretarial Audit Report for FY 2025-26 i.e.,
Form No. MR-3 is annexed to this Report as Annexure-4. The report is
self-explanatory and does not contain any qualification, reservation or adverse remark.
The Secretarial Auditor has confirmed that they have subjected
themselves to Peer Review process by the Institute of Company Secretaries of India ("ICSI")
and hold valid certificate issued by the Peer Review Board of ICSI.
Further, the Bank had reviewed the performance evaluation of
Secretarial Auditors basis the various parameters including following and found their
performance satisfactory:
1) Quality of Services
2) Scope and Nature of Assignment
3) Expertise and Experience
4) Timeliness and Responsiveness
5) Attention to detail
The Shareholders at their 17th AGM held on September 11,
2025, while approving the appointment of Secretarial Auditors, had approved H 2,25,000
(Rupees Two Lakhs and Twenty-five Thousand Only) plus applicable taxes and other out-
of-pocket expenses on actuals, in connection with the Secretarial Audit for the Financial
Year ending March 31, 2026, excluding the Fees payable for any certifications and other
professional services, as permissible under the Act, SEBI Listing Regulations and other
applicable SEBI Regulations. The ACB and Board have reviewed the performance of
Secretarial Auditors for FY 2025-26 and found the same to be satisfactory and that they
were acting independently without conflict of interest with the management. The fees for
Secretarial Audit for the FY 2026-27 shall remain unchanged.
AI. ADHERENCE TO SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF
COMPANY SECRETARIES OF INDIA
During the year under review, the Bank has complied with the
Secretarial Standards on meetings of the Board and its Committees (SS-1) and General
Meetings (SS-2) issued by the ICSI, and as amended from time-to-time.
AJ. STATUS OF IMPLEMENTATION OF IFRS CONVERGED INDIAN ACCOUNTING
STANDARDS (IND AS)
The banks have been advised to follow the Indian Accounting Standards
as notified under the Companies (Indian Accounting Standards) Rules, 2015, subject to any
guideline or direction issued by the RBI in this regard. The Banks in India currently
prepare their financial statements as per the guidelines issued by the RBI, the Accounting
Standards notified under Section 133 of the Act and generally accepted accounting
principles in India ("Indian GAAP"). In January 2016, the Ministry of
Corporate Affairs ("MCA") issued the roadmap for implementation of new
Ind AS, which were based on convergence with the International Financial Reporting
Standards ("IFRS"), for scheduled commercial banks, insurance companies
and nonbanking financial companies ("NBFCs"). In March 2019, RBI deferred
the implementation of Ind AS for banks till further notifications as the recommended
legislative amendments were under consideration of Government of India. The Bank had
undertaken preliminary diagnostic analysis of the GAAP differences between Indian GAAP
vis-a-vis Ind AS and shall proceed for ensuring the compliance as per applicable
requirements and directions in this regard.
AK. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Bank follows a zero-tolerance approach towards sexual harassment
and remains firmly committed to ensuring the safety, dignity and well-being of all
employees. It strives to foster a safe, inclusive and respectful workplace across all its
operations. The Bank believes in the right of all its employees to work with dignity, in a
safe and secure environment and towards this objective, is committed to creating and
maintaining a safe and secure work environment, free from sexual harassment whereby its
employees are expected to treat their co-workers with respect, dignity and in a
professional manner. The Bank strongly disapproves of offensive or inappropriate sexual
behaviour at workplace and expects all employees to avoid any action or conduct which
could be viewed as sexual harassment.
The Bank has adopted a Policy for Prevention of Sexual Harassment ("POSH
Policy") at the workplace in accordance with the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed
thereunder, which is available on website of the Bank at https://suryoday.
bank.in/assets/pdf/policies/suryoday-policy-on-
prevention-of-sexual-harassment-fv-25-26-1.0.pdf
The Bank is providing necessary awareness to the employees of the Bank
about the POSH Policy by circulation of the awareness emails, displaying the posters /
pamphlets at a conspicuous place at the branches and other offices of the Bank. The Bank
is also conducting a programme ‘Female Connect' to create awareness amongst
female employees of the Bank about the POSH Policy and their rights thereunder.
The Bank is providing necessary awareness to the employees of the Bank
about the POSH Policy by circulation of the awareness emails, displaying the posters /
pamphlets at a conspicuous place at the branches and other offices of the Bank. The Bank
is also conducting a programme ‘Female Connect' to create awareness amongst
female employees of the Bank about the POSH Policy and their rights thereunder.
Details of complaints received and resolved by the ICC during FY
2025-26 are as follows:
| Number of complaints pending at the beginning of the year: |
0 |
| Number of complaints received during the year: |
0 |
| Number of complaints disposed of during the year: |
0 |
| Number of complaints pending at the end of the of the year: |
0 |
During the year, there were no appeals filed under the said Policy.
Further, the Annual Report under Sexual Harassment of Women at
workplace (Prevention, Prohibition and Redressal) Act, 2013, of the ICC, for the Calendar
year ended December 31, 2025 had been filed with the District Collector, Thane.
AL. COMPLIANCE WITH MATERNITY BENEFIT ACT, 1961
The Bank is compliant with the applicable provisions of the Maternity
Benefit Act, 1961 and has policies, systems and processes in place to ensure ongoing
compliance.
AM. DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAs
No disclosure on divergence in asset classification and provisioning
for NPAs is required with respect to RBI's supervisory process for the year ended
March 31, 2026, in terms of the requirements prescribed in RBI circular.
AN. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Bank has in place a Whistle Blower Policy which has been formulated
as part of corporate governance norms and transparency where employees, customers and
other stakeholders of the Bank including Non-Governmental Organizations ("NGOs")
are encouraged to voice genuine concerns of grievances about unprofessional conduct
without the fear of reprisal to the person raising the concern.
The Policy provides a framework to promote responsible and secure
whistle blowing with respect to any breach or violation of the Bank's Code of Conduct
on any matter.
Please refer:- https://suryoday.bank.in/assets/
pdf/policies/suryoday-whistle-blower-policy-fy26- 27-1.0.pdf for text of the Policy.
The functioning of the Whistle Blower mechanism is subject to review by the ACB.
During the year under review, no complaints were received under this
Policy.
AO. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
• CONSERVATION OF ENERGY AND FOREIGN EXCHANGE EARNINGS &
OUTGO:
The Bank has been actively pursuing various initiatives aimed at
achieving its goal of reducing power consumption. The Bank closely monitors the usage of
desktops, laptops and other electronic devices, ensuring that those are switched off when
not in use. The use of LED lighting continues as part of Bank's ongoing efforts to
improve energy efficiency. Through installation of energy efficient appliances like
Sensor-based lighting for close monitoring of the usage and imparting consistent awareness
on mindful consumption among employees and staff members.
There was foreign exchange outgo of H 0.18 Crores for the FY'26.
Further, there were no earnings in foreign exchange.
• TECHNOLOGY ABSORPTION
The Bank remains committed to technology- driven business initiatives
to simplify and enhance the banking experience for customers. Throughout FY'26,
several efforts were made to further bolster the Bank's technological capabilities
through continuous innovation and adoption. The Bank has automated various processes to
improve turnaround time and reduce manual dependencies. Regulatory-focused processes were
automated to ensure timely, consistent execution and adherence to guidelines.
These achievements underscore the Bank's strategic focus on
digital transformation through intelligent automation, delivering business value year over
year.
AP. DEPOSITS
Being a banking company, the disclosures relating to deposits as
required pursuant to Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read
with Section 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014
are not applicable to the Bank. The details of the deposits received and accepted by the
Bank as a Banking company have been disclosed in the financial statements for FY ended
March 31, 2026 forming part of the Annual Report for FY 2025-26.
AQ. MAINTENANCE OF COST RECORDS
Being a banking company, the cost records as specified by the Central
Government under Section 148(1) of the Act, are not applicable to the Bank.
AR. DETAILS IN RESPECT OF FRAUDS, IF ANY, REPORTED BY AUDITORS OTHER
THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year under review, no frauds have been reported by the
Statutory Auditors or the Secretarial Auditors under Section 143(12) of the Act.
AS. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
OR TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year under review, no significant or material orders passed
by the Regulators or Courts or Tribunals, which would impact the going concern status of
the Bank or its future operations.
AT. AWARDS AND RECOGNITIONS:
During the year under review, the Bank was recognised in various
ways/by several institutes. Some of the key achievements and awards won by the Bank are
listed below:
a) Ambition Box Employee Choice Awards 2025
b) Ecosystem-Led Innovation-Platinum Winner for Driving Digital
Transformation to Modernize New Age Banking at Infosys Finacle Innovation Awards
c) Indian Banks Association (IBA) for Best Fintech Bank & DPI
Adoptions and Digital Financial Inclusion
d) Bharat Fintech Summit- CIO/ CTO of the year award
e) Bharat Fintech Summit'26- Digital Innovation in Bank- Retail
part of the Fintech & Digital Excellence Award
AU. PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under
Section 197(12) of the Act read with Rule 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of
Section 136 of the Act, the same would be available for inspection during working hours at
the Registered Office of the Bank. A copy of this statement may be obtained by the Members
by writing to the Company Secretary of the Bank.
The ratio of the remuneration of each Director and employees of the
Bank as required under the provisions of Section 197(12) of the Act read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms
part of this report as Annexure-5.
AV. PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
No proceedings are initiated/pending against the Bank under the
Insolvency and Bankruptcy Code, 2016.
AW. The details of difference between amount of valuation done at the
time of one-time settlement and the valuation done while taking loan from the banks or
financial institutions along with the reason thereof:
Being a Banking Company, the aforesaid provision is not applicable to
your Bank.
AX. RECOMMENDATIONS OF AUDIT COMMITTEE :
During the FY 2025-26, there was no incidence, where the Board has not
accepted any recommendations of the Audit Committee.
The Audit Committee has acted in accordance with the Charter approved
by the Board, covering oversight of financial reporting, auditors' performance,
related party transactions and internal controls.
AY. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the
Board of Directors of the Bank hereby confirms that:
a) in the preparation of the Annual Accounts, the applicable Accounting
Standards have been followed along with proper explanation relating to material
departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Bank as on March 31, 2026, and of
the profit of the Bank for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the Bank and for preventing and detecting fraud and other irregularities;
d) the annual accounts are prepared on a going- concern basis;
e) the requisite internal financial controls followed by the Bank are
adequate and were operating effectively;
f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and were operating
effectively.
ACKNOWLEDGEMENTS
The Board of Directors of your Bank would like to place on record their
sincere gratitude for the guidance and co-operation received from the RBI, SEBI, Stock
Exchanges, MCA, Depositories and other statutory and regulatory authorities and thank all
the stakeholders of the Bank including the investors, customers, bankers, shareholders,
debenture holders, vendors, debenture trustee, trustee, Registrars and all other valued
partners for their continued support. The Board also would like to express their
appreciation for the sincere and dedicated efforts put in by all the employees of the Bank
at all levels for their teamwork and continued commitment towards growth of the Bank, its
customers and other stakeholders and look forward to their continued contribution in
building this ‘Bank of Smiles' into a world class organization.
| For and on behalf of the Board |
|
| Sd/- |
Sd/- |
| Krishna Prasad Nair |
Baskar Babu Ramachandran |
| Part-time Chairman |
Managing Director & CEO |
| & Independent Director |
DIN: 02303132 |
| DIN: 02611496 |
|
| Date: June 25, 2026 |
|
|