We have audited the accompanying financial statements of
Dhanlaxmi Bank Limited (“the Bank”), which comprise the Balance
Sheet as at 31^st March, 2026, the Profit and Loss Account, the Cash
Flow Statement for the year then ended, and notes to the financial
statements, including a summary of significant accounting
policies and other explanatory information in which are included
the financial results for the year ended on that date of:

The Head Office, Treasury and top 20 branches audited by us and
the remaining 246 branches/offices audited by the respective
Statutory Branch Auditors appointed by the Bank for this purpose.

In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid financial statements
together with the Principal Accounting Policies and Notes
appended thereto give the information required by the Banking
Regulation Act, 1949 as well as the Companies Act, 2013 (the
“Act”) in the manner so required for banking companies and are
in conformity with accounting principles generally accepted in
India and give a true and fair view of the state of affairs of the
Bank as at 31^st March, 2026, its profit and its cash flows for the year
ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in
accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the "Auditor's Responsibilities for
the Audit of the Financial Statements" section of our report. We are
independent of the Bank in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India ('ICAI')
together with the ethical requirements that are relevant to our
audit of the financial statements under the provisions of the Act
and the Rules made thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and
the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the year ended 31 .03.2026. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined
the matters described below to be the key audit matters to be
communicated in our report.

Other Matters

We did not audit the financial statements of 246 branches and
processing centres included in the financial statements of the
Bank whose financial statements reflect total assets of '11933,86
Crore as at 31^st March 2026 and total revenue of ?1020.02 Crore
for the year ended on that date, as considered in the financial
statements. These branches and processing centres cover 73.49%
of gross advances, 84.25% of deposits and 68.26% of non¬
performing assets as at 31^st March 2026 and 56.86% of revenue
for the year ended 31^st March 2026. The financial statements of
these branches have been audited by the branch auditors whose
reports have been furnished to us, and our opinion in so far as
it relates to the amounts and disclosures included in respect of
branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of the above matter.

Information other than the Financial Statements and Auditor's
Report thereon

The Bank's Management and Board of Directors are responsible
for the other information. The other information comprises the
information included in the Annual Report, but does not include
the financial statements and our auditor's report thereon. The
Bank's annual report is expected to be made available to us after
the date of this auditor's report.

Our opinion on the financial statements does not cover the
other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our
responsibility is to read the other information when it becomes
available and, in doing so, consider whether the other information
is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be
materially misstated. When we read the Bank's annual report, if
we conclude that there is a material misstatement of this other
information, we are required to communicate the matter to those
charged with governance.

Responsibilities of Management and those charged with
governance for the Financial Statements

The Bank's Management and Board of Directors are responsible
for the matters stated in section 134(5) of the Act with respect to
the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Bank in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act read with relevant rules
issued thereunder, in so far as they apply to the Bank and provisions
of Section 29 of the Banking Regulation Act, 1949 and circulars
and guidelines issued by the Reserve Bank of India ('RBI') from time
to time. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Bank and for preventing and
detecting frauds and other irregularities; selection and application
of appropriate accounting policies, making judgments and
estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial
control that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, management and Board
of Directors are responsible for assessing the Bank's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless management and Board of Directors either

intends to liquidate the Bank or to cease operations, or has no
realistic alternative but to do so.

Those Management and Board of Directors are also responsible
for overseeing the Bank's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.

As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the
audit. We also

• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.

• Obtain an understanding of internal controls relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we
are also responsible for expressing our opinion on whether the
Bank has adequate internal financial controls with reference to
financial statements in place and the operating effectiveness
of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management and Board of Directors.

• Conclude on the appropriateness of management and Board
of Directors use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that
may cast significant doubt on the Bank's ability to continue as
a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report
to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up
to the date of our auditor's report. However, future events or
conditions may cause the Bank to cease to continue as a
going concern.

• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

Materiality is the magnitude of the misstatements in the financial
statements that, individually or aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning of
the scope of our audit work and evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatement in the
financial statements.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter

should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

The Balance Sheet and the Profit and Loss Account have been
drawn up in accordance with the provisions of Section 29 of the
Banking Regulation Act, 1949 and Section 133 of the Companies
Act, 2013 read with relevant rules issued thereunder.

1. As required by Sub Section 3 of section 30 of the Banking
Regulation Act, 1949, we report that:

a) we have obtained all the information and explanations
which, to the best of our knowledge and belief, were
necessary for the purpose of our audit and have found
them to be satisfactory;

b) the transactions of the Bank, which have come to our
notice, have been within the powers of the Bank;

c) The returns received from the Offices and branches of the
Bank have been found adequate for the purpose of our
audit;

d) the profit and loss account shows a true balance of profit
for the year then ended.

2. Further, as required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;

b) In our opinion, proper books of account as required by law
have been kept by the Bank so far as it appears from our
examination of those books and proper returns adequate
for the purposes of our audit have been received from
branches not visited by us;

c) The reports on the accounts of the branch offices of the
Bank audited by branch auditors under Section 143(8)
of the Act have been forwarded to us and have been
properly dealt with by us in preparing this report;

d) The Balance Sheet, the Profit and Loss Account and the
Cash Flow Statement dealt with by this Report are in
agreement with the books of account and with the returns
received from the branches not visited by us;

e) In our opinion, the aforesaid financial statements comply
with the Accounting Standards specified under Section
133 of the Act read with relevant rules issued thereunder,
to the extent they are not inconsistent with the accounting
policies prescribed by RBI;

f) On the basis of written representations received from the
directors as on 31 March, 2026 and taken on record by the
Board of Directors, none of the directors are disqualified as
on 31 March, 2026 from being appointed as a director in
terms of Section 164(2) of the Act;

g) With respect to the adequacy of the internal financial
controls with reference to the financial statements of the
Bank and the operating effectiveness of such controls,
refer to our separate Report in "Annexure A” to this report;

h) With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements of
Section 197(16) of the Act, as amended;

The Bank is a Banking Company as defined under Banking
Regulation Act, 1949. Accordingly, the requirements prescribed
under Section 197 of Act do not apply;

i) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, as amended, in our opinion
and to the best of our information and according to the
explanations given to us:

i) The Bank has disclosed the impact of pending litigations
on its financial position in its financial statements - Refer
Schedule 12 and Note No. 16(d) of Schedule 18 to the
financial statements;

ii) The Bank has made provision, as required under the
applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including
derivative contracts - Refer Note No 16(f) of Schedule 18 to
the financial statements;

iii) There has been no delay in transferring amounts required
to be transferred to the Investor Education and Protection
Fund by the Bank.

iv) (a) The Management has represented that, to the best

of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have
been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources
or kind of funds) by the Bank to or in any other person
or entity, including foreign entity (“Intermediaries”),
with the understanding, whether recorded in writing
or otherwise, that the intermediary shall, whether,
directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on
behalf of the Bank (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;

(b) The Management has represented, that, to the
best of its knowledge and belief, no funds (which
are material either individually or in the aggregate)
have been received by the Bank from any person
or entity, including foreign entity (“Funding Parties”),

with the understanding, whether recorded in writing
or otherwise, that the Bank shall, whether, directly or
indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf
of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been
considered reasonable and appropriate in the
circumstances, nothing has come to our notice that
has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material
misstatement.

v) The bank has not declared or paid any dividend during
the year and hence the compliance of Section 123 of the
Act is not applicable.

vi) Based on our examination which included test checks, the
Bank has used an accounting software for maintaining its
books of account which has a feature of recording audit
trail (edit log) facility and the same has been operated
throughout the year for all transactions recorded in the
software. Further, during the course of our audit we did
not come across any instance of audit trail feature being
tampered with. Additionally, the audit trail has been
preserved by the Bank as per the statutory requirements
for record retention.