Directors Report of Kotak Mahindra Bank Ltd.

Mar 31, 2025

Your Directors have pleasure in presenting the Fortieth Annual Report of Kotak Mahindra Bank Limited (“Bank”) together with the audited
Financial Statements for the financial year (“FY”) ended 31^st March, 2025.

FINANCIAL HIGHLIGHTS
(A) CONSOLIDATED*

	FY 2024-25	FY 2023-24A
Total Income Total expenditure, excluding provisions and contingencies Operating Profit Provisions and contingencies, excluding provision for tax Profit Before Tax$ Provision for Taxes Profit After Tax Add: Share in Profit of Associates Consolidated Profit for the Group Earnings per share: Basic ( H ) Diluted (H)	106,902.24	94,273.91
	74,053.97	68,438.06
	32,848.27	25,835.85
	3,859.24	1,972.47
	28,989.03	23,863.38
	7,043.29	5,886.55
	21,945.74	17,976.83
	180.25	236.38
	22,125.99	18,213.21
	111.29	91.45
	111.29	91.45

Notes:

* The Financial Statements of the Indian subsidiaries (excluding insurance companies) and associates are prepared as per the Indian Accounting Standards in
accordance with the Companies (Indian Accounting Standards) Rules, 2015. The Financial Statements of the subsidiaries and associates used for preparation
of the consolidated financial statement are in accordance with the Generally Accepted Accounting Principles in India (“GAAP") specified under Section 133 and
relevant provisions of the Companies Act, 2013 (“Act").

a Previous year amounts have been re-classified for consistency with the current year presentation, wherever necessary.

$ On 18^th June, 2024, the Bank has completed the divestment of 70% stake (through a combination of fresh growth capital and share sale) in
Kotak Mahindra General Insurance Company Limited (“KGI"), its subsidiary, to Zurich Insurance Company Limited (“Zurich"). The Bank sold 553,181,595
equity shares of KGI for a consideration of H 4,095.82 crore resulting in net gain from such sale of H 3,803.40 crore (pre-tax), considering the carrying value
of investment in consolidated financials. Consequent to this sale, KGI ceased to be a subsidiary of the Bank and became an associate, with effect from
18^th June, 2024. The Bank continues to hold the remaining 30% of the share capital of Zurich Kotak General Insurance Company (India) Limited (Formerly known as
Kotak Mahindra General Insurance Company Limited), as at 31^st March, 2025.

(B) STANDALONE

	FY 2024-25	FY 2023-24A
Total Income	67,880.86	56,072.01
Total expenditure, excluding provisions and contingencies	43,354.39	36,484.56
Operating Profit	24,526.47	19,587.45
Provisions and contingencies, excluding provision for tax	2,942.36	1,573.73
Profit Before Tax*	21,584.11	18,013.72
Provision for Taxes	5,134.03	4,232.14
Profit After Tax	16,450.08	13,781.58
Add: Surplus brought forward from the previous year	45,103.02	37,760.09
Amount available for appropriation	61,553.10	51,541.67
Less: Appropriations
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949	4,112.52	3,445.40
Transfer to Capital Reserve	2,065.27	-
Transfer to Special Reserve	150.00	125.00

	FY 2024-25	FY 2023-24A
Transfer to Investment Reserve Account Transfer to Investment Fluctuation Reserve Account Transfer to Capital Redemption Reserve Dividend paid ** Surplus carried to Balance Sheet	-	831.63
	500.00	1,200.00
	-	500.00
	397.62	336.62
	54,327.69	45,103.02

Notes:

* On 18^th June, 2024, the Bank completed the divestment of 70% stake (through a combination of fresh growth capital and share sale) in
Kotak Mahindra General Insurance Company Limited (“KGI"), its subsidiary, to Zurich Insurance Company Limited (“Zurich"). The Bank sold 553,181,595 equity
shares of KGI for a consideration of H 4,095.82 crore, resulting in net gain from such sale of H 3,519.90 crore (pre-tax), for the year ended 31^st March, 2025.
Consequent to this sale, KGI ceased to be a subsidiary of the Bank and became an associate, with effect from 18^th June, 2024.

a Previous year amounts have been re-classified for consistency with the current year presentation, wherever necessary.

**The Bank has complied with all criteria specified in the Reserve Bank of India circular dated 4^th May, 2005 on payment of dividend on equity shares and the
Board of Directors of the Bank has recommended a dividend of H 2.50 per equity share (Face Value of H 5/-) for FY2024-25 (previous year: H 2.00 per equity
share), from the profits for FY2024-25. As per the requirements of revised AS 4 - ‘Contingencies and Events Occurring after the Balance Sheet Date, the dividend
pay-out is appropriated from the amount available for appropriation in the year of pay-out.

FINANCIAL PERFORMANCE

On a standalone basis, Profit After Tax (“PAT”) of the Bank was H 16,450.08 crore in FY 2024-25 compared to H 13,781.58 crore in FY 2023-24. Net
Interest Income (“NII”) of the Bank for FY 2024-25 was H 28,341.78 crore as against H 25,993.20 crore in FY 2023-24.

The consolidated PAT was H 22,125.99 crore in FY 2024-25 compared to H 18,213.21 crore in FY 2023-24. Further, the Group had a Net Worth
of H 157,395.08 crore as on 31^st March, 2025 (H 129,892.40 crore as on 31^st March, 2024). The book value per equity share was H 791.64 as on
31^st March, 2025 (H 653.41 as on 31^st March, 2024).

Further details about the financial performance of your Bank are available in the Management’s Discussion and Analysis Report, annexed
to this Report.

CAPITAL

During the year, your Bank allotted 302,095 equity shares arising out of the exercise of Employees Stock Options granted to the
Eligible Employees of your Bank and its subsidiaries.

After the allotment of the aforesaid equity shares, the total issued, subscribed and paid-up share capital of your Bank as at 31^st March, 2025
stood at H 9,941,114,965/- comprising 1,988,222,993 equity shares of H 5/- each.

DIVIDEND

The Board of Directors of your Bank have, at their meeting held on 3^rd May, 2025, recommended a dividend of H 2.50 per equity share for
FY 2024-25. The dividend, if approved by the members, would entail a pay out of approximately H 497.07 crore (Previous Year: H 397.59 crore),
based on the capital as on 28^th June, 2025. The dividend would be paid to all the eligible equity shareholders, whose names would appear in the
Register of Members / List of Beneficial Owners on the Record Date fixed for this purpose i.e. 18^th July, 2025.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and as reviewed and adopted by the Board of Directors of your Bank, is available
on the Bank’s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/governance/policies.html

DEBENTURES AND BONDS

Your Bank has not issued any capital under Tier II / Infrastructure Bond Issuance during FY 2024-25.

As at 31^st March, 2025, outstanding Infrastructure Bonds aggregated H 4,845 crore. All the Bonds have been issued on a private placement basis
and are listed on BSE Limited ("BSE") / National Stock Exchange of India Limited ("NSE"), as the case may be.

CAPITAL ADEQUACY RATIO

Your Bank has a Capital Adequacy Ratio of 22.25% as of 31^st March, 2025 under Basel III, with Tier I Capital being 21.10% (of which, Common
Equity Tier 1 Capital is 21.10%).

CREDIT RATINGS

The details of all credit ratings obtained by your Bank for various instruments, including debt instruments outstanding as on 31^st March, 2025,
are disclosed in the Report on Corporate Governance, annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73
and 74 of the Act are not applicable to your Bank.

REMOVAL OF SUPERVISORY RESTRICTIONS - LETTER OF RESERVE BANK OF INDIA DATED 12^th FEBRUARY, 2025

Your Bank had received an order dated 24^th April, 2024 ("Order") from RBI, directing the Bank to cease and desist, with effect from
24^th April, 2024 from on-boarding new customers through the Bank’s online and mobile banking channels and issuing fresh credit cards.
The Order was based, inter alia, on the deficiencies observed by RBI in the Information Technology (IT) Examinations of the Bank, for the
years 2022 and 2023.

RBI had, vide its letter dated 12^th February, 2025, communicated its decision to the Bank to lift the aforementioned restrictions placed on the
Bank, having satisfied itself of the remedial measures undertaken by the Bank to address the supervisory concerns and the submission of
compliances made to it (including the report of the external Auditor).

OPERATIONS
CONSUMER BANKING

The Consumer Banking business serves a wide spectrum of customers across domestic individuals and households, non-residents, small and
medium sized business segments for a range of products from Savings and Current Accounts to Term Deposits, Credit Cards, Unsecured and
Secured Loans, Working Capital, Digital Payments, Insurance Protection and Investments.

Your Bank continues to focus on customer centricity and has built propositions around this principle by leveraging digital capabilities. During
FY 2024-25, your Bank strategically organised the Consumer Bank into three core segments viz., Product, Distribution and Proposition.
The Distribution segment engages customers through three distinct channels viz., the branch network, digital and voice.

Aligning Distribution Architecture with customer personas

Your Bank’s physical branches are now designed with targeted customer personas in mind. For instance, a branch located in a residential area
addresses different customer needs compared to one in a commercial hub. This persona-driven approach is shaping all aspects of your Bank’s
branch strategy, including branch staff skill set requirements and capacity planning.

In FY 2024-25, your Bank not only enhanced its existing applications but also launched the new Kotak Mobile Banking App to further elevate
customer experience. Each of your Bank’s digital apps is designed to deliver an intuitive UI/UX, relevant functionalities and targeted propositions
tailored to the needs of diverse customer segments.

Your Bank’s Voice platform serves as a bridge between digital and physical channels, supporting both customers and frontline teams. It offers
a dedicated hotline for customer assistance, while also enabling branch colleagues to access information on products, processes and systems.
This integrated support ensures seamless resolution of inquiries, ultimately enhancing the overall customer experience.

Curated propositions through customer lens

Your Bank’s product strategy has evolved from a ‘one-size-fits-all’ approach to one that is differentiated and segment-relevant. This approach
balances cost efficiency with customer value creation. A manifestation of this approach is evident in the recent launch of Kotak Solitaire, your
Bank’s new proposition for the affluent customer segment. It harnesses the entire product suite to deliver suitable financial solutions, exclusive
credit lines and elite lifestyle privileges.

Further, all the three channels work on deepening customer engagement guided by defined personas right from the onboarding stage
through co-origination of products and continuing across the customer lifecycle, with personalised nudges and targeted offers. By driving
customer engagement using a customer 360 approach and by integrating data analytics and leveraging data across operations, your Bank has
strengthened its risk underwriting and customer profiling.

To elevate customer service at your Bank’s branches, the focus has been on two key areas viz., branch decongestion and optimising the time
spent by your Bank’s colleagues on operational tasks. Decongestion is achieved by redirecting customer interactions to digital and voice
channels, ensuring faster and more convenient service. For customers who continue to visit branches, your Bank enhanced operational
efficiency through its Frontline Digitisation Initiatives. The key initiatives include optimisation of transaction (NEFT, IMPS and IFT) processing
times through Transaction Authorisation System (TAS), reduction of batch processing time for daily branch reports and introduction of an
AI-powered bot.

Impact of the above strategies
Strengthening the liabilities franchise

Your Bank’s deposits grew by 11% in FY 2024-25, driven by a strong 18% YoY growth in ActivMoney. The persona-based approach adopted by
your Bank, has played an enabling role in optimising the deposit mix, as reflected in the efficient Current Account (CA) to Savings Account (SA)
ratio and cost of funds.

Building momentum on assets while managing risk

Alongside strengthening liabilities, your Bank has maintained a strategic focus in growing the Consumer Assets segment, which has enhanced
portfolio granularity and improved the overall yield. The Consumer Assets book grew 17% YoY despite the RBI restriction on issuance of credit
cards. Your Bank acquired a ? 3,330 crore portfolio of personal loans from Standard Chartered Bank, India during the year.

Your Bank’s secured business, consisting of Home Loans and Loan Against Property (“LAP”) and Working Capital, registered growth of 19%
each in FY 2024-25 and the unsecured loans business, excluding credit cards, grew 24%, primarily supported by the ? 3,330 crore personal loan
acquisition (from Standard Chartered Bank, India) during the year. Mortgages remain a key focus for deepening affluent customer relationships
and increasing wallet share. Your Bank has been a strong player in the LAP market and continues to focus on this product by leveraging its
strength in the self-employed segment.

Your Bank has strengthened the Business Banking segment, reaffirming its strong commitment to this segment. This secured business portfolio,
primarily comprising Small and Medium Enterprises ("SMEs"), continues to perform well across industry segments and geographies. In this
business, your Bank is able to serve the customer for all their financial and non-financial needs.

Kotak811 - where Banking meets Technology

In FY 2024-25, Kotak811 integrated advanced technologies and data analytics to enhance customer experiences and accelerate growth.
The key highlights are below:

• Restarted Acquisition: Revamped its technology stack and strengthened the guardrails by leveraging Artificial Intelligence ("AI")/
Machine Learning ("ML") to deliver secure, frictionless and scalable customer onboarding.

• Enhanced the Kotak811 App: With minimalistic and unbiased design that offers more than 100 features, Kotak811 App continues to be
a top-ranking app on both App store and Play store. It provides seamless digital journeys for sachet-sized cards, loans, investment and
protection plans, all accessible in 2-3 clicks. Notably, Kotak811 is among the few banking apps that facilitates and rewards digital payments.

• Optimising Physical Interaction: Supported by the hybrid platforms, sales officers can now offer multiple services in the same interaction
such as enrolling for multiple financial products.

Strengthening Customer Service

Your Bank has strengthened its customer service and grievance redressal systems through the deployment of Salesforce system, enabling
service request automation and transitioning from manual processes to API-driven executions. Supported by a dedicated team (following the
Kaizen principles), these enhancements led to a 28% YoY reduction in net customer complaints.

COMMERCIAL BANKING

Your Bank’s Commercial Banking business focuses on meeting the banking and financial needs of various segments, with specialised
units offering financial solutions in the areas of Commercial Vehicles (“CV”), Construction Equipment (“CE”), Tractor and Farm Equipment
(“TFE”), SMEs operating in the Agriculture Value Chain and Microcredit. The majority of customers to whom this business caters, are from the
semi-urban and rural area segment, forming a part of the priority sector. This business plays a significant role in meeting the financial inclusion
goals by financing deep into ‘Bharat’.

During the year, the CV industry has de-grown by approximately 1%. Your Bank has grown 2% in unit terms during the same period.
The CE industry grew at a modest rate of 2% during the year. Disbursements for your Bank grew around 6% YoY basis, thus helping in
gaining market share.

The slow market growth in CV and CE segments was primarily on account of the implementation of election model code of conduct, heat
wave and overall lower than expected government spending. On the collection side, your Bank saw some deterioration due to aforementioned
factors. However, with risk analytics and credit policy interventions, improvement was visible in Q4 FY 2024-25.

The Tractor industry grew by approximately 7% during the year, backed by near normal monsoon, government support and rising adoption
of mechanisation. Your Bank’s disbursement growth in the Tractor business was in line with the industry growth, maintaining its leadership
position. Priority Sector Lending (“PSL”) book constitutes more than 90% of these loans, demonstrating your Bank’s continued commitment
towards making difference in the lives and livelihood of farmers. This was aided by focus on new products / customer segments, deeper
geographies and productivity per employee through digital adoption for onboarding and collections.

FY 2024-25 commenced on a stable footing with respect to Kharif and Rabi crop output. Steady agriculture commodity prices for a reasonable
time horizon, a near normal monsoon and continued government policy thrust for value chain integration across key sectors provided a steady
backdrop for Agriculture credit flow and value-added supply chain building. Agri Business Group (ABG), with a stable portfolio quality continued
to adopt a risk-calibrated focused New To Bank (“NTB”) growth strategy, with sharper customer segmentation, strategic distribution and
differentiated underwriting approaches to strengthen portfolio resilience.

FY 2024-25 was one of the most challenging years for the Microcredit business. There was an increase in delinquency levels across the industry,
mainly due to over-leveraging by borrowers. The weak and erratic monsoons in FY 2023-24, heatwave in Q1 FY 2024-25, followed by floods in
certain States, impacted rural household incomes, leading to issues in repayment capacity of the borrowers. Your Bank had taken a cautious
stance with respect to disbursements and took several measures to improve collections and on-board better quality customers. The credit costs
have been higher for the Microcredit business during the year. There has been some improvement in collection efficiency witnessed during
Q4 FY 2024-25, post the implementation of guardrails announced by Self-Regulatory Organization (SRO).

The gold loan industry in India experienced a healthy growth of over 56%, driven by factors such as increased gold prices and the need for
quick, collateral-based financing solution. Your Bank is now offering gold loans from over 480 branches i.e., from approximately 25% of its total
branch network.

RBI guidelines on PSL require banks to lend 40% of their Adjusted Net Bank Credit (“ANBC”) to fund certain types of activities carried out by
specified borrowers. The shortfall in the amount required to be lent to the priority sectors and weaker sections may be required to be deposited
in funds with government sponsored Indian development banks, such as the National Bank for Agriculture and Rural Development, the Small
Industries Development Bank of India, the National Housing Bank, MUDRA Limited and other financial institutions, as decided by the RBI,
from time to time.

As prescribed in the RBI guidelines, your Bank’s PSL achievement is computed on a quarterly average basis. Total average PSL for FY 2024-25 was
H 139,713.24 crore (FY 2023-24: H 121,619.65 crore), constituting 45.09% (FY 2023-24: 44.06%) of ANBC, against the requirement of 40% of ANBC.

WHOLESALE BANKING

Your Bank’s Wholesale Banking business caters to a wide range of corporate customer segments, including major Indian corporates,
conglomerates, financial institutions, public sector undertakings, multinational companies, financial sponsors (including private equity funds
and foreign portfolio investors), new-age companies, SME and realty businesses. It offers a comprehensive portfolio of products and services
to these customers, including working capital finance, medium-term finance, project finance, trade and supply chain finance, foreign exchange
services, other transaction banking services, custody services, debt capital markets and treasury services.

Your Bank focused on growing its granular customer base in the SME and Mid-Market segments where growth opportunities are still attractive
and both these segments have grown faster than the rest of the segments this year. The growth in these segments were higher than market
growth, signifying that your Bank has gained market share. Given the long term trajectory of India’s economic growth, these segments are a
platform for Wholesale Bank growth. Your Bank has restructured its processes and digital offerings with a view to make banking more attractive
and easier for these emerging corporates. With enhanced professionalisation and formalisation of SMEs, many of today’s SMEs will emerge as
Large Corporates of the Viksit Bharat in a decade or so and your Bank is excited about the opportunities that lie ahead. Your Bank strives to be the
‘House Bank’ to these SMEs and offer, along with the rest of the Kotak Group, the entire bouquet of banking services, beyond lending, including
corporate salary, insurance, cross border funding, wealth management, financial advisory and even potentially Initial Public Offerings ("IPOs").

In the larger corporate space, your Bank has increased its share in short term and working capital loans. The focus was on participating in
customers trade financing and other transaction banking services, which helped garner a greater share of customer flows. Through a sustained
focus on technology-led transaction banking growth, customer experience enhancement and a front line focused on structuring solutions, your
Bank made progress in deepening client relationships, improving operational efficiency and expanding wallet share across client segments.
These, along with the focus on higher product penetration and fee incomes, ensured that your Bank was able to deliver healthy growth in
profitability and maintained an attractive return on equity.

These initiatives have strengthened your Bank at a time when the market has thrown up a number of challenges. Credit demand continued to
remain muted throughout the year. Liquidity in the system was tight for most part of the year and this pushed up the cost of funds for banks.
However, irrational pricing from banks and buoyant capital markets kept customer yields under check, thus exerting pressure on the spreads
for wholesale banks. The expectations of a fall in benchmark interest rates would have put further pressure on yields and spreads. The strategic
initiatives undertaken by your Bank to drive granular growth and enhance profitability, have significantly strengthened its position to effectively
navigate these and other emerging challenges.

Your Bank has, over the years, invested in developing expertise and forming Centre-of-Excellence in areas, such as, Structured Lending,
Infrastructure Financing, Real Estate Financing, Banking for Financial Sponsors and Custodial Services, among others. Your Bank’s expertise

in these areas is disproportionately higher than its asset share. Your Bank seeks to leverage on this expertise to deepen existing relationships,
acquire new quality customers on a consistent basis and secure value addition through deeper penetration of varied products and services.

Capital markets were buoyant during the year and a strong capital market proposition helped your Bank strengthen its position in the
capital market space. Your Bank was selected as the Banker to an Issue and sponsor bank for the country’s top IPOs during the year. Your
Bank handled 19 mainboard IPOs during the year, with a cumulative issue size of over H 84,000 crore. Custody flows were also strong for most
of the year. Your Bank successfully on-boarded new clients across both, domestic and offshore custody businesses, positioning itself well
for future growth.

During the year, your Bank has continued to invest in strengthening its digital capabilities driving innovations and efficiency while focusing
on customer-centricity. A cornerstone of this digital journey is Kotak fyn, a comprehensive platform designed to streamline corporate banking
across trade, payments, collections, account services and loans. During the year, your Bank continued to enhance features and offerings in
Kotak fyn, while also focusing on increasing digital penetration across its wholesale banking and retail corporates.

Key milestones achieved on the web Kotak fyn platform, during the year included:

• 1.7 times increase in the on-boarded base

• 1.6 times growth in active users on the platform

• 2.9 times growth in daily user logins

• 1.2 times growth in transactions processed

Your Bank has further strengthened its omni-channel proposition by extending trade approvals through the Kotak fyn app. This has delivered
notable impact across its customers, leading to 1.5 times growth in registered users and 1.2 times growth in transactions approved through the
Kotak fyn app. Looking ahead, Kotak fyn will continue to evolve by seamlessly integrating technology with a deep understanding of enterprise
needs, ensuring that your Bank and its clients stay ahead in an increasingly digital world.

Your Bank took a strategic step by establishing a dedicated project team to specially focus on simplifying and advancing customer and employee
journeys, focusing on technological advancements, simplifying processes and reducing Turn Around Time ("TAT"). Significant strides were
made in simplification and automation of various banking processes, leading to numerous qualitative benefits. This has not only minimised
errors and operational risks but also helped your Bank to enhance overall efficiency and provide better service delivery. There was a reduction in
TAT for ad-hoc and renewal requests, which significantly boosted client satisfaction and productivity. The introduction of dedicated helpdesks
for Kotak fyn, automated processes and streamlined operations reduced the workload on the front and mid-office staff and enhanced client
servicing. Simplified processes for account opening and servicing also played a crucial role in improving customer experience and reducing
operational complexities.

Do It Yourself (“DIY”) and automation efforts also played a crucial role in FY 2024-25. The implementation of online facilities and the introduction of
DIY journeys for the creation of term deposits on Kotak fyn facilitated product penetration, while making linkage from Kotak fyn to your Bank, more
user-friendly and efficient. These initiatives not only reduced the effort required from front-office staff but also improved the speed and
convenience of customer interactions.

For the merchant ecosystem, your Bank has developed the ‘Sampark Setu’ platform, a bank-level unified platform, designed in-house to include
all digital payment modes. It acts as a central hub for the merchants, enabling seamless on-boarding, settlement, reconciliation, risk and
compliance. Hosted on the Kotak cloud, it is designed to build high availability, scalability, security, operational efficiency and audit control.

Overall, the initiatives undertaken in FY 2024-25 have laid a strong foundation for continued improvements in operational efficiency, customer
service and productivity in FY 2025-26.

Your Bank remains committed to building a high-quality differentiated corporate franchise and continues to focus on maintaining the health
and profitability of the business.

PRIVATE BANKING

Your Bank’s Private Banking division caters to a number of distinguished Indian families and is one of the oldest and the most respected Indian
private banking institution. It manages wealth for 60% of India’s top 100 families (Source: Forbes India Rich List 2024), with clients ranging from
entrepreneurs to business families and professionals.

Your Bank provides an open architecture proposition to its customers, offering a plethora of private banking products. This business has a
strong distribution capability for private clients through distribution / referral model across equities, fixed income and alternates, catering to

Ultra High Net worth Individual (“UHNI”) and High Net worth Individual (“HNI”) investors. In addition to comprehensive financial solutions that
go beyond investments, your Bank provides banking and credit, consolidated reporting, family office services, offshore investments and other
various products and services to its clients. Referral for estate planning services are also provided to the clients. With an in-depth understanding
of client requirements and expertise across various asset classes, your Bank offers the widest range of financial solutions. Your Bank has added
approximately 2,692 new families in FY 2024-25, to its client base.

The Private Banking division of your Bank celebrated a significant milestone of completing 20 years. The crucial pillars were driving brand
salience, digital and technology, customer experience and expanding your Bank''s footprints offshore. Your Bank strived to enhance its offerings
through continuous innovation in platform, proposition and cutting-edge technologies. This, in turn, helped to enrich client experience across
all touchpoints.

INTERNATIONAL BANKING UNITS

Your Bank has two International Banking Units (“IBUs”) based at Gujarat International Finance Tec-City (“GIFT City”), Gandhinagar, Gujarat and
DIFC, Dubai, United Arab Emirates.

The GIFT City Branch is regulated by the International Financial Services Centre Authority (IFSCA), which facilitates your Bank’s participation
in syndication of overseas loans, lending to clients in international markets and providing External Commercial Borrowing to eligible Indian
corporates. Your Bank also undertakes offshore client’s forex and derivative transactions to help them with the management of interest rate and
currency risks, in addition to investments in offshore bonds.

The DIFC Branch is your Bank’s first overseas branch at Dubai, regulated by the Dubai Financial Services Authority (“DFSA”). This Branch
complements your Bank’s ability to advise and arrange global investment products, provide loans and accept deposits from its overseas
private banking customers that qualify under the Professional client criteria of the DFSA. Your Bank has developed capabilities to advise and
arrange global investments through this Branch. Your Bank also has tie-ups with some leading names in the international investments space
and arranges access to their services to eligible customers of the Branch. The IBUs have their respective treasuries, which not only manage
regulatory and liquidity requirements but also offer banking services through products like term credit facilities for various purposes, trade
finance, foreign exchange solutions, etc.

ASSET RECONSTRUCTION

Your Bank’s Asset Reconstruction Division looks at opportunities and takes exposure in distressed / Non-Performing Assets ("NPA") accounts
through Security Receipts (SR) investments, Stressed / NPA portfolio buyout from other banks, priority funding and working capital assistance,
with an aim to resolve and turn them around. Your Bank has been active in the distressed asset buyouts and investments space, for
almost two decades.

The resolution process has gained momentum with the support of various judicial forums like Debt Recovery Tribunals (DRTs), Debt Recovery
Appellate Tribunals (DRATs), Magistrate Courts, High Courts, Supreme Court and National Company Law Tribunal (NCLT) proceedings under the
Insolvency and Bankruptcy Code, 2016. Your Bank adopts various measures thoughtfully, diligently and with compassion to resolve the stressed
and bad accounts.

Your Bank did sizable investments, both in corporate and retail stressed assets space in FY 2024-25 and expects a lot of opportunities on the
acquisition side, especially in retail stressed loans segment as well as corporate loans of large exposures in the coming years. If the prices
offered are reasonable and attractive, your Bank shall be open to acquire several of them, post critical analysis and evaluation.

TREASURY

Your Bank’s Treasury actively contributes by way of:

(i) Balance Sheet Management: The Balance Sheet Management Unit (“BMU”) is primarily responsible for managing the liquidity and interest rate
risks within the Bank''s overall risk appetite and framework. The BMU actively plans and manages the Bank’s liquidity requirements in the given
market context. Additionally, the BMU ensures the maintenance of regulatory reserves and other stipulated ratios for prudent management
of liquidity and interest rate risk, while also maintaining adequate liquidity buffers and efficiently managing the reserves portfolio.

(ii) Proprietary Trading: The Proprietary Trading Desk actively trades in Fixed Income products (viz. Bonds, Debentures, Money Markets
Instruments and INR Derivatives), Foreign Exchange and Equity. Within the Proprietary Trading Desk, the Primary Dealer Desk participates
in primary auctions of Government securities, makes market in these securities and engages in their retailing. The Proprietary desks also
provide market access to sales teams to facilitate customer transactions and requirements.

(iii) Customer Transactions: The customer facing desks at Treasury assist and manage customer transactions across Foreign Exchange,
Derivatives and Bullion products. The Forex and Derivatives Desk facilitates customer access to foreign currency markets through cash
and derivatives products for remittances, trade transactions and for managing Foreign Exchange and Interest Rate risks.

(iv) Bullion: The Bullion desk provides efficient working capital solutions to domestic jewellery manufacturers, as per the prescribed rules of
the RBI. Your Bank also imports gold and silver to meet the needs of customers, under a license from the RBI.

For more details on Operations of your Bank, please refer to the Management''s Discussion and Analysis Report, annexed to this Report.

TECHNOLOGY AND DIGITISATION

FY 2024-25 marked an important year in your Bank’s technology and digital transformation journey. Your Bank’s technology teams worked
relentlessly to rebuild and modernise the technology infrastructure, with a strong focus on resiliency, efficiency, speed, scale, data and security.
These efforts also resulted in resolving the regulatory restrictions, highlighted in the RBI Order dated 24^th April, 2024, which were subsequently
removed by its letter dated 12^th February, 2025.

Your Bank has built an in-house team of high-quality engineers, reducing reliance on external vendors. This strategic shift has enhanced
the Bank’s technical capabilities and enabled the development of unified platforms that accelerate digital transformation across products,
services and channels.

These foundational principles have driven several transformational initiatives, anchored around three key themes:

(i) Upgradation of the Core Banking Solution (“CBS”): Your Bank has made significant progress in upgrading its CBS by building horizontal
and vertical layers around it. This has reduced system load, improved monitoring and ensured the availability of critical services under
stress. IT governance and risk management practices have also been strengthened, with a focus on cybersecurity, data encryption and
enhanced user access controls.

(ii) Creation of unified and interoperable platforms: These platforms are designed to modernise the core infrastructure and serve as a
robust foundation for powering front-end applications. They enable seamless integration, faster development cycles and consistent
performance across channels.

(iii) Leveraging data and analytics: Your Bank has advanced its capabilities in predictive analytics, customer behaviour modelling and
operational efficiency. AI and ML are embedded across various layers, from intelligent automation in backend processes to personalised
experiences in customer-facing applications. The development of advanced data analytics frameworks has empowered the Bank to derive
actionable insights, supporting business decisions and scalable growth.

Additionally, your Bank is building Kotak AI, a proprietary Generative AI platform that will serve as the cognitive core of its ecosystem. Unlike
traditional bolt-on solutions, Kotak AI is being deeply integrated into the Bank’s technology fabric, enabling predictive insights, contextual
intelligence and seamless automation across interactions.

This transformation in the underlying infrastructure has empowered the front-end digital applications (“apps”) and platforms to be fast,
intuitive and secure.

Your Bank developed a suite of digital apps / platforms, designed specifically to meet the unique needs of diverse customer segments. Recently
launched apps include:

• For affluent, non-residents and self-employed customers, the new Kotak Bank App emphasises speed, simplicity and security as
its core tenets.

• For a billion Indians (core India), Kotak811 offers full-stack digital banking with sachet-sized products and features of rewards and
cashback on transactions.

• For Merchants, ‘Sampark Setu’ platform, a Bank-level unified platform, designed in-house to include all digital payment modes, acts as a
central hub for the merchant ecosystem, enabling seamless onboarding, settlement, reconciliation, risk and compliance.

FY 2024-25 marked a pivotal year in your Bank’s digital transformation journey. Anchored in a robust technology foundation and
a customer-first mindset, your Bank has modernised its infrastructure, strengthened cybersecurity and built intuitive digital experiences,
laying the groundwork to deliver best-in-class customer service through fast, secure and scalable in-house systems.

HUMAN RESOURCES

FY 2024-25 was a year of transformation for your Bank and its Human Resource (“HR”) function, a year defined by conscious intent, collective
commitment and measurable change. With customer centricity at the core, your Bank has sharpened its focus on building a workplace where
every Kotakite can thrive, not just through policies and programmes, but also by creating an environment where purpose, growth and belonging
are woven into the everyday experience.

The HR function anchored its initiatives around two key priorities: first, to ensure the Bank creates an employee experience that enhances
overall engagement and continues to be recognised as a Great Place to Work and second, to focus on retaining key talent.

Key HR initiatives taken by your Bank, were categorised under the Five Pillars of Talent Engagement, as follows:

1. Best of Kotak for Kotakites: Kotak Staff Home Loan Policy

2. Colleague Development

a. Kotak Young Leaders Council

b. Strategic Leadership and Executive Education Programmes

c. Managerial Effectiveness Programmes

d. Talent Marketplace platform

3. Building a Culture of Appreciation through a comprehensive multi-format recognition framework

4. Transparent Communication

a. Amber, our AI powered real-time feedback platform

b. My Kotak My Say

c. Townhall and Leadership Connects

d. KotakWorld, our Intranet platform

5. Enhanced Colleague Value Proposition

a. Diversity, Equity, Inclusion and Belonging Initiatives

b. Health and Wellbeing

c. Caring Kotakite

d. Careers and Rewards

For more details on the Key HR initiatives, please refer to the Management’s Discussion and Analysis Report, annexed to this Report.
EMPLOYEES

As of 31^st March, 2025, the full-time employee strength of the Kotak Group was over 114,000 and the Bank, at the standalone level, had over
75,000 employees.

The information required pursuant to Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, as amended from time-to-time, is given as an Annexure to this Report. In terms of Section 136(1) of the
Act, the Annual Report and financial statements are being sent to the members, excluding the statement containing particulars of employees.
The Annexure is available for inspection and any member interested in obtaining a copy of the Annexure, may send an email to the
Company Secretary at [e-mail]

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013

Your Bank continues with the belief of zero tolerance towards sexual harassment at workplace and continues to uphold and maintain
itself as a safe and non-discriminatory organisation. To achieve the same, your Bank reinforces the understanding and awareness of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH”). Your Bank has formulated a central
Steering Board Committee, besides having an Internal Committee in three regions for reporting any untoward instance of sexual harassment.
Any complaint pertaining to sexual harassment is diligently reviewed and investigated and treated with great sensitivity. The Internal Committee
members have been trained in handling and resolving complaints. Your Bank also has an online e-learning POSH Awareness module, which
covers the larger employee base.

As of 1^st April, 2024, 17 complaints were pending for disposal. All these complaints were disposed off during FY 2024-25.

The Bank received a total of 43 complaints during FY 2024-25, of which, 29 were disposed off as of 31^st March, 2025. 13 complaints out of
14 complaints, which were pending as on 31^st March, 2025, have been disposed off, as on the date of this Report.

PROHIBITION OF INSIDER TRADING

Your Bank has adopted the Kotak Mahindra Bank Limited - Insider Trading Code of Conduct (Code) for prohibition of insider trading in the
securities of the Bank as well as other listed and proposed to be listed companies and a Code of Practices and Procedures for Fair Disclosure of
Unpublished Price Sensitive Information (Fair Disclosure Code).

Your Bank has also formulated and adopted the Policy for Determination of Materiality of Events or Information of the Bank, in terms
of Regulation 30 of the SEBI Listing Regulations. The Policy for Determination of Materiality of Events or Information and the Code of
Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information of the Bank, are available on the Bank’s website
viz., URL: https://www.kotak.com/en/investor-relations/governance/policies.html

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

Your Bank is committed to its ‘Vision Statement’ of upholding its Global Indian Financial Services Brand, creating an ethos of trust
across all constituents, developing a culture of empowerment and a spirit of enterprise, thereby becoming the most preferred employer
in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors, the highest standards
of transparency, probity and accountability. The Kotak Group endeavours to develop a culture, where it is safe and acceptable for all employees
and directors to raise / voice genuine concerns in good faith and in a responsible as well as effective manner.

A vigil mechanism has been implemented through the adoption of a Whistle Blower Policy with an objective to enable employees / directors /
suppliers / vendors / service providers / all other applicable stakeholders, raise genuine concern or report evidence of activity by the Bank
or its employee or director or vendor that may constitute instances of corporate fraud, unethical business conduct, a violation of Central
or State laws, rules, regulations and / or any other regulatory or judicial directives, any unlawful act, whether criminal or civil, irregularities
like alteration, forgery or fabrication of documents, impropriety, abuse or wrong doing, misuse of office / position, theft / embezzlement,
misappropriation of asset, bribery / corruption, collusion with vendor / customers, deliberate breaches and non-compliance with the Bank’s
policies, processes, data leakage, questionable accounting / audit matters / financial malpractice, ethics violation, conflict of interest, dual
employment and unauthorised disclosure of confidential information about the Bank or any of its customers. The concerns can be reported
online on the following website viz., URL: https://www.speakup.co.in/ which is managed by an independent third party. Safeguards to avoid
discrimination, retaliation or harassment and confidentiality have been incorporated in the said Whistle Blower Policy.

All employees and Directors have access to the Chairperson of the Audit Committee in appropriate and exceptional circumstances. Further, the
Chairperson of the Audit Committee has access rights to the whistle blower portal. The Audit Committee reviews a synopsis of the complaints
received and the resolution thereof, every quarter under the said Whistle Blower Policy.

Your Bank is taking several initiatives to encourage employees to blow the whistle and report incidences of any fraud or unusual events. During
the year under review, your Bank has initiated periodic email, SMS and poster campaigns for educating employees on the process of whistle
blowing, creating awareness and encouraging employees to blow the whistle and report incidences of any concerns. In addition, the same has
been reiterated and made an integral part of your Bank’s Code of Conduct and training.

The Whistle Blower Policy is available on the Bank’s intranet as well as website viz., URL: https://www.kotak.com/en/investor-relations/
governance/policies.html

SHARE-BASED EMPLOYEE BENEFITS

The Bank has implemented the Kotak Mahindra Equity Option Scheme 2023 (“ESOP Scheme 2023”) and the Kotak Mahindra Stock Appreciation
Rights Scheme 2023 (“SARs Scheme 2023”) in place of the Kotak Mahindra Equity Option Scheme 2015 (“ESOP Scheme 2015”) and the
Kotak Mahindra Stock Appreciation Rights Scheme 2015 (“SARs Scheme 2015”), respectively.

The Employee Stock Options (“ESOPs”) and Stock Appreciation Rights (“SARs”) granted to the employees of the Bank and its subsidiaries,
currently operate under the following schemes:

(i) ESOP Scheme 2023

(ii) ESOP Scheme 2015

(iii) SARs Scheme 2023; and

(iv) SARs Scheme 2015.

During FY 2024-25, after receiving the requisite approvals, the Board implemented the Kotak Mahindra Performance Linked Restricted Stock
Unit Scheme 2025 (“PRSU Scheme”) to create, grant, issue, offer and allot 9,000,000 (Ninety Lakh) Performance Linked Restricted Stock Units
(“PRSUs”). In order to create the pool for PRSUs, the ESOP pool available under ESOP Scheme 2023 was reduced from 20,000,000 (Two Crore)

equity shares (equivalent to 1.01% of the issued equity shares of the Bank, as at 31^st December, 2024), to 11,000,000 (One Crore Ten Lakh) equity
shares. No PRSUs have been granted till the date of this Report.

The objective of aforesaid schemes is to enable the Bank and its subsidiaries to attract and retain appropriate human talent and encourage
value creation and value sharing with the employees, by aligning the interest of the employees with the long-term interest of the Bank and its
subsidiaries. The appreciation of rights under SARs Scheme 2023 are settled in cash. The aforesaid schemes are available on the website of the
Bank at https://www.kotak.com/en/investor-relations/governance/policies.html and are in compliance with the SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB & SE) Regulations, 2021"), as applicable.

The relevant details of the aforesaid schemes, as required under the SEBI (SBEB & SE) Regulations, 2021, are available on the Bank’s website
viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html These details, along with the certificate(s)
from the Secretarial Auditor, as required under the SEBI (SBEB & SE) Regulations, 2021, stating that the schemes have been implemented in
accordance with the SEBI (SBEB & SE) Regulations, 2021, as applicable and also in accordance with the relevant resolution(s) passed by the
members, would be available for inspection by the members during the Annual General Meeting ("AGM").

ENVIRONMENT, SOCIAL AND GOVERNANCE PRACTICES

Your Bank is committed to consistently work towards enhancing its Environment, Social and Governance ("ESG") performance. Your Bank
has a comprehensive ESG policy framework that outlines key focus areas and offers guidance on practices related to corporate governance,
environmental initiatives, employee engagement, policy updates and other ESG initiatives. Your Bank’s performance on ESG parameter is reported
to the Corporate Social Responsibility and Environmental, Social and Governance Committee (“CSR & ESG Committee”) and the Board, periodically.

The ESG sections of the Integrated Annual Report encompass details on employee diversity, well-being and development, environmental
management, financial inclusion and community focused interventions, customer experience, data privacy and cybersecurity.

For more details on ESG, please refer to the ESG disclosures, forming part of the Integrated Annual Report of the Bank.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Your Bank has been publishing the Business Responsibility and Sustainability Reporting (“BRSR”) since FY 2021-22. Your Bank undertook limited
assurance in FY 2022-23 for BRSR parameters on a voluntary basis, striving to lead sustainability disclosure by being an early adopter. Your Bank
has also undertaken reasonable assurance for BRSR core parameters for FY 2023-24 and FY 2024-25.

The environmental performance of your Bank, encompasses resource consumption (energy and water), Greenhouse Gas (GHG) emissions
(Scope 1, 2 and 3), waste management and initiatives undertaken to minimise the impact. The disclosure on social performance encompasses
workforce diversity (gender and employees with disabilities), employee turnover rates, median salaries, occupational health and safety
standards, training, inclusive development through procurement from Micro, Small and Medium Enterprises (MSMEs) and job creation in
smaller towns, community development efforts and a customer-centric approach. Governance-related performance covers ethics, transparency
and accountability, while also valuing the interests of all stakeholders and being responsive to them. It involves upholding and promoting
human rights, responsibly influencing public and regulatory policies in a transparent way and engaging with consumers to provide value in a
responsible manner. For more details on the governance aspect, please refer to the Report on Corporate Governance, annexed to this Report.

BRSR, including the BRSR Core parameters for FY 2024-25, is part of the Integrated Annual Report of the Bank and is also available on the Bank’s
website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

CORPORATE SOCIAL RESPONSIBILITY

Your Bank has successfully expanded its social footprint, positively impacting a large section of the population by fostering sustainable and
inclusive growth through its Corporate Social Responsibility (“CSR”) programmes. The Bank''s CSR projects align with the guidelines and robust
framework outlined in Kotak Mahindra Bank Limited''s Corporate Social Responsibility Policy ("CSR Policy"). Your Bank collaborated with
multiple organisations to implement CSR Projects in specific areas (“focus areas”) defined under its CSR Policy namely Education, Livelihood,
Entrepreneurship & Innovation, Healthcare, Environment & Sustainable Development, Sports and Relief & Rehabilitation.

Your Bank''s CSR Policy outlines its vision, mission, governance and focus areas to fulfil its inclusive agenda. The CSR Policy also highlights
your Bank’s intent to create lasting value for communities in need, by addressing pressing development challenges and reflects your Bank’s
commitment to contribute towards United Nations’ Sustainable Development Goals (SDGs).

The CSR Policy is available on the Bank’s website viz., URL: https://www.kotak.com/en/investor-relations/sustainability.html

Your Bank’s CSR Projects are compliant with the CSR mandate as specified under Section 135 read with Schedule VII of the Companies Act, 2013,
along with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules”), as amended from time to time and in line with
notifications issued by the Ministry of Corporate Affairs (“MCA”), from time to time.

The CSR expenditure requirement of your Bank for FY 2024-25, as per Section 135 of the Act was H 285.53 crore. After setting off H 1.99 crore
from the excess CSR expenditure incurred in FY 2023-24, your Bank''s total CSR obligation for FY 2024-25 stood at H 283.54 crore.

For FY 2024-25, your Bank spent H 236.44 crore on CSR Projects, H 3.55 crore on Administrative Overheads and H 1.21 crore on Impact Assessment
for eligible projects. In addition, an amount of H 44.54 crore, which was the unutilised expenditure for ongoing CSR Projects during FY 2024-25,
was transferred to the ‘Kotak Mahindra Bank Limited Unspent CSR Account FY 2024-25’ on 28^th April, 2025. Your Bank is committed to utilise this
amount within the stipulated period, as specified under the CSR Rules.

Together with the spend on CSR Projects, Impact Assessment, CSR Administrative and the amount transferred to the Unspent CSR account, the
total CSR expenditure for FY 2024-25 was H 285.74 crore.

The excess CSR expenditure spend of H 2.20 crore for FY 2024-25 would be carried forward to be set-off in subsequent financial years. Additional
details are described in the Annual Report on CSR activities for FY 2024-25, annexed to this Report.

Your Bank also maintains the Unspent CSR accounts pertaining to funds earmarked for its Ongoing CSR Projects for previous financial years.
Your Bank is committed to utilising the amount available in the Unspent CSR accounts towards completing the Board-approved Ongoing CSR
Projects within the stipulated time limit specified under the Act. The details of the same are more particularly described in the ''Annual Report
on Corporate Social Responsibility activities of the Bank for FY 2024-25'', annexed to this Report.

A detailed outline of your Bank''s CSR Policy, the composition and functioning of the CSR & ESG Committee and the CSR Project spends during
FY 2024-25 are provided in the Annual Report on CSR activities annexed to this Report, as well as in the BRSR section of the Integrated Annual
Report for FY 2024-25.

SUBSIDIARIES AND ASSOCIATES

As of 31^st March, 2025, your Bank had 20 subsidiaries in various businesses, as listed below:

Sr. No.	Name of the subsidiary	Business activity
1.	Kotak Mahindra Prime Limited	Car Finance and other Lending
2.	Kotak Mahindra Investments Limited	Lending and Investments
3.	Kotak Infrastructure Debt Fund Limited	Infrastructure Financing
4.	Kotak Securities Limited	Stock Broking, Distribution
5.	Kotak Mahindra Capital Company Limited	Investment Banking
6.	Kotak Mahindra Life Insurance Company Limited	Life Insurance
7.	Kotak Mahindra Asset Management Company Limited	Mutual Fund Asset Management, Portfolio Management
8.	Kotak Mahindra Trustee Company Limited	Trustee Company for Mutual Fund
9.	Kotak Mahindra Pension Fund Limited	Pension Fund Management
10.	Kotak Alternate Asset Managers Limited (Formerly known as Kotak Investment Advisors Limited)	Alternate Asset Management, Investment Advisory
11.	Kotak Mahindra Trusteeship Services Limited	Trusteeship Services
12.	Kotak Mahindra (UK) Limited	Distribution of financial products and dealing in securities
13.	Kotak Mahindra (International) Limited	Advisory Services, Investments
14.	Kotak Mahindra Inc.	Broker / Dealer
15.	Kotak Mahindra Asset Management (Singapore) Pte. Limited	Asset Management
16.	Kotak Mahindra Financial Services Limited	Advisory Services for Middle East
17.	IVY Product Intermediaries Limited	Marketing and distribution of various financial products / services
18.	BSS Microfinance Limited	Business Correspondent
19.	Sonata Finance Private Limited	Business Correspondent
20.	Kotak Karma Foundation	Centre of Excellence for part of Bank’s CSR activities

The various activities of the subsidiaries, their performance and financial position are outlined in detail in the Management’s Discussion and
Analysis section annexed to this Report.

Highlights of a few subsidiaries are given below:

Kotak Mahindra Prime Limited and Kotak Mahindra Investments Limited

The passenger car market in India saw a growth of 1.87% in FY 2024-25. Total Unit Sales of Cars and MUVs was 42.86 lakh in FY 2024-25
compared to 42.07 lakh in FY 2023-24. The Two-wheeler market in India saw a growth of 9.11% in FY 2024-25. Total Unit Sales of Two Wheelers
crossed 196.11 lakh in FY 2024-25. Profit of Kotak Mahindra Prime Limited in FY 2024-25 was higher than FY 2023-24, due to growth in
Asset Under Management (“AUM”), resulting in higher Net Interest Income (NII) and other income.

Profit Before Tax of Kotak Mahindra Investments Limited for FY 2024-25 at ? 674.51 crore was lower than ? 690.51 crore for FY 2023-24, primarily
due to NPA provisions, decrease in processing fees, increase in operating cost offset by increase in IPO income and reversal of standard asset
provision. Net Interest Margin for FY 2024-25 was 4.82%.

Kotak Securities Limited and Kotak Mahindra Capital Company Limited

Kotak Mahindra Capital Company Limited (Kotak Investment Bank) was ranked No. 1 in the Equity Capital Markets for third year in a row and
continued to be the Left Lead Banker of Choice. FY 2024-25 was a stellar year for Indian Equity Capital Markets, with the highest-ever activity
across all the product categories, viz., Initial Public Offering (IPOs), follow-on primary raises via Qualified Institutional Placements (QIPs) and
sell-downs. Indian Equity Capital Markets hit all-time high in FY 2024-25, led by strong FII and DII inflows in H1FY25. While FIIs turned net sellers
(USD 15.6 billion) by the end of FY 2024-25, record DII inflows of USD 71.6 billion sustained market momentum. This reflects growing market
resilience and strong domestic fundamentals. A total of ? 386,469 crore (versus ? 209,746 crore in FY 2023-24, up 184% YoY) was raised in
FY 2024-25 across primary market deals, i.e., IPOs, QIPs, Further Public Offering (FPO) and Rights Issues. All sectors saw capital market deals
being executed on the back of strong investor response.

The Institutional Equities division of Kotak Securities Limited (“KSL”) in FY 2024-25, registered the highest-ever growth in revenues and
maintained its leadership position in both, the cash equities and derivatives segments. In FY 2024-25, overall market volumes in the institutional
segment increased by 46% YoY for the cash segment and by 24% YoY for the derivatives segment. Kotak Institutional Equities saw significant
growth in revenues YoY and was able to maintain its yields across client segments. It continued to add new clients to its franchise and was able
to maintain its leadership position in the distribution of IPOs, QIPs, open offers and the execution of block trades.

FY 2024-25 witnessed market volume growth in equity cash segment, with average daily volumes (excluding proprietary segment) increasing
to ? 78,015 crore in FY 2024-25 from ? 56,866 crore in the previous financial year and equity derivative segment increasing to ? 140,724 crore in
FY 2024-25 from ? 105,035 crore in previous financial year. Consequently, KSL’s volumes also increased for equity cash and derivative segments.

Kotak Mahindra Life Insurance Company Limited

Kotak Mahindra Life Insurance Company Limited ("KLI") has solvency ratio of 2.45 against a regulatory requirement of 1.50. The Net worth of
KLI increased by 9.21% to ? 6,403.07 crore as on 31^st March, 2025 from ? 5,863.23 crore as on 31^st March, 2024. The Indian Embedded Value (IEV)
was ? 17,612 crore (31^st March, 2024: ^15,242 crore) as on 31^st March, 2025, up 15.6% YoY. The Value of New Business (“VNB”) for FY 2024-25
stood at ? 959 crore (FY 2023-24: ? 1,053 crore) and the VNB margin was 25%. On an individual, Annual Premium Equivalent (“APE”) Basis (Single
1/10), KLI has registered 5.73% growth against private insurance industry growth of 15.09% and overall industry growth of 10.46%. KLI’s market
share for Individual New Business premium (APE terms) was 3.51% for FY 2024-25 among private insurers. This was due to higher proportion of
traditional policies compared to industry. On a group APE Basis (Single 1/10), KLI’s market share for Group New Business premium (APE terms)
was 10.67% for FY 2024-25 among private insurers. KLI saw an increase in its AUM (including shareholders) by 14.55% YoY to ? 91,806.85 crore
in FY 2024- 25.

Kotak Mahindra Asset Management Company Limited

The Mutual Fund industry registered 34.88% YoY growth in FY 2024-25 over FY 2023-24 with the Annual Average Assets under
Management (“AAUM”) for FY 2024-25 standing at ? 66.18 lakh crore. The AAUM of Kotak Mahindra Mutual Fund stood at ? 468,820 crore
for FY 2024-25, up 35.27% from ? 346,589 crore in FY 2023-24. AAUM Market Share was 7.09% in FY 2024-25 (7.07% FY 2023-24).
Kotak Mahindra Asset Management Company Limited is ranked No. 5 in the industry on the basis of AAUM.

BSS Microfinance Limited and Sonata Finance Private Limited

The Board of Directors of Sonata Finance Private Limited (“Sonata”) and BSS Microfinance Limited (“BSS”) at their respective meetings
held on 12^th August, 2024, have approved a Scheme of Amalgamation of Sonata with BSS, on a going concern basis, under the provisions of
Sections 230 and 232 of the Act and the rules made thereunder. The Scheme would, however, be subject to the approval of the respective
shareholders and creditors of Sonata and BSS and the approval of the concerned National Company Law Tribunal (NCLT) and other regulatory
authorities, if required.

MATERIAL SUBSIDIARY

Kotak Mahindra Life Insurance Company Limited is a material subsidiary of the Bank. The Bank’s Policy for determining material subsidiaries,
in line with the SEBI Listing Regulations, is available on the Bank’s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-
relations/governance/policies.html

ASSOCIATES

As at 31^st March, 2025, your Bank had the following associates:

(i) Infina Finance Private Limited

(ii) Phoenix ARC Private Limited

(iii) Zurich Kotak General Insurance Company (India) Limited (Formerly known as Kotak Mahindra General Insurance Company Limited)

Further, pursuant to the provisions of Section 136(1) of the Act, the Annual Report of the Bank, containing the standalone and consolidated financial
statements and all otherrelevant documents required to be annexed thereto and the separate audited financial statements in respect of each of the
subsidiaries, are available on the Bank’s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html
Pursuant to the provisions of Section 129(3) of the Act, the Statement containing the salient features of the Financial Statements of the said
subsidiaries and associates of the Bank, in Form AOC-1, forms part of the Integrated Annual Report.

The financial statements of the subsidiaries (other than Kotak Karma Foundation, a Section 8 company, whose accounts are excluded from
consolidation in accordance with the requirements of Accounting Standard 21 on “Consolidated Financial Statements”) used for consolidation
of the Bank’s consolidated financial statements are special purpose financial statements prepared in accordance with GAAP specified under
Section 133 of the Act read with relevant notifications.

BOARD OF DIRECTORS
BOARD COMPOSITION

The composition of the Board of Directors of the Bank is governed by the Act, the Banking Regulation Act, 1949 (“BR Act”) and Regulation 17 of
the SEBI Listing Regulations and is in conformity with the same. As on 31^st March, 2025, the Board of Directors comprised eleven (11) Directors,
including six Independent Directors viz., Mr. C S Rajan, Non-Executive Independent Part-time Chairman, Mr. Uday Shankar, Dr. Ashok Gulati,
Ms. Ashu Suyash, Mr. Cornelis Petrus Adrianus Joseph ("Eli") Leenaars and Ms. Ketaki Bhagwati, Independent Directors, two Non-Executive
Non-Independent Directors viz., Mr. Amit Desai and Mr. Uday Kotak and three Executive Directors viz., Mr. Ashok Vaswani, Managing Director & CEO,
Ms. Shanti Ekambaram, Whole-time Director designated as Deputy Managing Director and Mr. Jaideep Hansraj, Whole-time Director
(Executive Director).

The size of the Board is commensurate with the size and business of the Bank. The Board meets the criteria prescribed under Section 10(A)(2)
of the BR Act and the circulars issued by the RBI, from time to time. The Board mix provides a combination of professionalism, knowledge,
experience and skills required in the banking industry and also meets the criteria prescribed under the Policy on Board Diversity
adopted by the Board.

CHANGES IN COMPOSITION OF THE BOARD

Ms. Ketaki Bhagwati (DIN: 07367868) was appointed as an Independent Director of your Bank for an initial term of four years, with effect from
18^th May, 2024 to 17^th May, 2028 (both days inclusive). The said appointment was approved by the members of the Bank at its AGM held on
3^rd August, 2024.

The Board of Directors of the Bank, at their meeting held on 12^th September, 2024, approved the appointment of Mr. Jaideep Hansraj
(DIN: 02234625) as an Additional Director and a Whole-time Director, for a period of three years, with effect from the date of receipt of the
approval of the RBI and the members of the Bank. The Board, subsequently, approved the designation of Mr. Hansraj as Whole-time
Director (Executive Director). The RBI granted its approval on 11^th February, 2025, following which, Mr. Hansraj became the Whole-time
Director (Executive Director) of the Bank, effective from the same date. On 20^th February, 2025, the members of the Bank, accorded their approval
to Mr. Hansraj’s appointment, through a postal ballot.

Further, the Board of Directors of the Bank had, at their meeting held on 31^st May, 2025, subject to the approval of RBI and the members,
approved the appointment of Mr. Paritosh Kashyap (DIN: 07656300) as an Additional Director and a Whole-time Director, designated as
Whole-time Director (Executive Director), for a period of three years, with effect from the date of receipt of all the regulatory and statutory
approvals, as may be necessary from the RBI or any other regulatory / statutory authority. As on the date of the Report, the appointment is yet
to take effect.

Mr. C. Jayaram, Non-Executive Non-Independent Director and Mr. Uday Khanna, Independent Director, retired from the Board of the Bank,
upon completion of their respective term of eight years, pursuant to the provisions of Section 10A(2A)(i) of the Banking Regulations Act,
1949, on 30^th April, 2024 and 15^th September, 2024, respectively. The Board places on record its appreciation for the contributions made by
Mr. Jayaram and Mr. Khanna, during their respective tenures with the Bank. Further, Mr. KVS Manian resigned as the Joint Managing Director,
with effect from 30^th April, 2024.

The Board of Directors of the Bank, at their meeting held on 31^st May, 2025, accepted the request of Ms. Shanti Ekambaram to retire as
a Director and the Deputy Managing Director of the Bank, from the services of the Bank, on completion of her current term as the
Deputy Managing Director, on 31^st October, 2025. The Board places on record its appreciation for the contribution made by Ms. Ekambaram,
during her tenure with the Bank.

As on the date of this Report, the Board of your Bank has eleven Directors, including three Women Directors. The Board currently comprises of
six Independent Directors, two Non-Executive Non-Independent Directors and three Executive Directors.

All the Directors of the Bank have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that
they are not disqualified from being appointed as Directors in terms of Section 164(2) of the Act.

DIRECTORS RETIRING BY ROTATION

At the meeting of the Board of Directors of the Bank held on 28^th June, 2025, the Board approved the proposal for re-appointment of
Ms. Shanti Ekambaram (upto the end of her current term as a Director and the Deputy Managing Director of the Bank i.e. 31^st October, 2025) and
Mr. Ashok Vaswani, as Directors of the Bank, liable to retire by rotation at the ensuing AGM, in terms of Section 152 of the Act and recommended
the same to the members for their approval.

The details of the Directors along with the rationale for their proposed appointment / re-appointment, as mentioned above, are included in the
Notice convening the Fortieth AGM of the Bank.

DECLARATION FROM INDEPENDENT DIRECTORS

All the Independent Directors of the Bank have submitted the requisite declarations stating that they meet the criteria of independence as
prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The Board reviewed and assessed the veracity
of the aforesaid declarations, as required under Regulation 25(9) of the SEBI Listing Regulations. In the opinion of the Board, all the Independent
Directors fulfill the said conditions as mentioned in the Act, alongwith the rules framed thereunder and the SEBI Listing Regulations and are
independent of the management. All the Independent Directors of the Bank have complied with the provisions of sub rule (1) and (2) of Rule 6 of
the Companies (Appointment and Qualification of Directors) Rules, 2014 with respect to registration with the Indian Institute of Corporate Affairs
for the Independent Directors’ Database. There has been no change in the circumstances affecting their status as Independent Directors of the
Bank. In the opinion of the Board, the Independent Directors possess the requisite integrity, experience, expertise and proficiency required
under all applicable laws and the policies of the Bank.

DIRECTOR E-KYC

Pursuant to the requirement prescribed under the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Directors of the
Bank have complied with the KYC registration for FY 2024-25.

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 claims for any breach
of fiduciary duty.

BOARD EVALUATION¹

The Board conducted the performance evaluation of individual Directors, Chairperson, Board Committees and the Board as a whole for FY2024-25,
in accordance with the provisions of the Act and the SEBI Listing Regulations, including the Guidance Note on Board Evaluation issued by the
Securities and Exchange Board of India on 5^th January, 2017.

The Nomination and Remuneration Committee (“NRC”) of the Board approves the criteria and the mechanism for carrying out the said
performance evaluation process. Accordingly, the NRC approved the assessment questionnaire designed for the annual performance evaluation,
which broadly covered the following criteria:

(ii) Committees - Composition and quality, process and procedure, terms of reference and certain committee specific questions.

(iii) Chairperson - Key focus areas covering understanding of the role, team work attributes, utilisation of domain expertise, effective
communication, etc. and other parameters.

(iv) Individual Directors - Function and duties, professional and ethical conduct, management relations, understanding of role, commitment,
effective contribution, independent view to decision making, utilisation of domain expertise, etc.

The aforesaid questionnaire was circulated to all the Directors of the Bank for the annual performance evaluation. The Board evaluated
the effectiveness of its functioning and that of the Committees and of Chairperson and individual Directors through the annual Board
Evaluation Process.

The Bank had engaged an independent professional services firm for issuing a report on the performance evaluation (“Board Evaluation
Report”), based on the responses received from the Directors. The Board Evaluation Report was placed before the Independent Directors and
the Board at their respective meetings held on 28^th June, 2025 and performance evaluation, for FY 2024-25, was carried out by them.

The Directors noted that the results of the performance evaluation indicated a high degree of satisfaction among the Directors. The Board
deliberated on the Board Evaluation Report and basis suggestions, agreed to continue focus on training, education and enhancing skill sets of
Board members essential for the Bank, in the future. These would be monitored and reported to the Board periodically.

Further, the Bank has taken necessary steps to comply with the suggestions which had arisen from the Board performance evaluation
for FY 2023-24.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, following officials of the Bank are the Key Managerial Personnel (“KMP”), as on the date of this Report:

(i) Mr. Ashok Vaswani, Managing Director & CEO

(ii) Ms. Shanti Ekambaram, Deputy Managing Director

(iii) Mr. Jaideep Hansraj, Whole- time Director (Executive Director)

(iv) Mr. Devang Gheewalla, Group Chief Financial Officer

(v) Ms. Avan Doomasia, Company Secretary

Mr. Jaideep Hansraj was appointed as a Whole-time Director (Executive Director) and KMP of the Bank, for a period of three years, with effect
from 11^th February, 2025, upon receipt of all the regulatory and statutory approvals.

Mr. KVS Manian ceased to be the Joint Managing Director and KMP of the Bank, on 30^th April, 2024.

Mr. Devang Gheewalla was appointed as the Group Chief Financial Officer and KMP of the Bank, with effect from 1^st April, 2024, consequent upon
the superannuation of Mr. Jaimin Bhatt on 31^st March, 2024.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT
PERSONNEL

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, Act and
SEBI Listing Regulations. The NRC has formulated the criteria for appointment of Directors and Senior Management Personnel, including KMPs.
Based on the criteria set, the NRC recommends to the Board, the appointment of Directors and Senior Management Personnel, including KMPs.

The Bank adheres to the process and methodology prescribed by the RBI in respect of the ‘Fit & Proper’ criteria as applicable to Private Sector
Banks, signing of Deeds of Covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and
collectively in order to be eligible for being appointed / re-appointed as a Director of the Bank. The prescribed declarations / undertakings
given by the Directors, other than that of the members of the NRC, are placed before the NRC and the declarations / undertakings given by the
members of the NRC are placed before the Board, for its review and noting.

The said declarations / undertakings are obtained from all the Directors on an annual basis and also at the time of their appointment /
re-appointment, in compliance with the said laws. An assessment on whether the Directors fulfil the prescribed criteria is carried out by the NRC
and the Board, on an annual basis and also at the time of their appointment / re-appointment.

The details of the remuneration paid to the Non-Executive Independent Part-time Chairman, Executive and Non-Executive Non-Independent
Directors of the Bank, for the year ended 31^st March, 2025 are provided in the Report on Corporate Governance, annexed to this Report.

The Non-Executive Independent Part-time Chairman of the Bank, receives a fixed remuneration as recommended by the Board and approved by
RBI and the members of the Bank, from time to time. This is in addition to payment of sitting fees, car with driver, as per applicable policy and
reimbursement of expenses for official purposes / attending duties as a Chairman.

Compensation Policy for Non-Executive Directors

The Board of Directors of the Bank has formulated and adopted a comprehensive Compensation Policy for Non-Executive Directors (“NEDs”).

The remuneration payable to the NEDs, other than Part-time Non-Executive Chairman, is in accordance with the provisions of the Circular
dated 26^th April, 2021 and the Circular on Review of Fixed Remuneration granted to Non-Executive Directors dated 9^th February, 2024, issued
by RBI which, inter alia, provides for payment of compensation to NEDs, other than the Chair of the Board, in the form of a fixed remuneration
commensurate with an individual director’s responsibilities and demands on time and which is considered sufficient to attract qualified
competent individuals, for an amount not exceeding H 30 lakh per annum, including any statutory modification or amendment or re-enactment
thereof for the time being in force and the provisions of the Act.

The above mentioned policy is available on the Bank’s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/
governance/policies.html

The salient features of the Compensation Policy for NEDs are, inter alia, as follows:

(i) Compensation structure is divided into:

• Sitting fees

• Reimbursement of expenses

• Compensation in the form of Fixed Remuneration

(ii) Amount of sitting fees and remuneration to be decided by the Board, from time to time, subject to the regulatory limits.

(iii) Overall cap on compensation in the form of fixed remuneration for each NED (excluding the Part-time Non-Executive Chairman) of
H 30 lakh per annum or such other amount as may be prescribed by the RBI, from time to time.

(iv) NEDs are not eligible for any stock options of the Bank.

(v) The Part-time Non-Executive Chairman is entitled to a fixed remuneration, as may be approved by the Board, RBI and the members,
from time to time. This is in addition to the sitting fees for attending the meetings of the Board / Committees. The Bank may provide car
with a driver for the use of the Part-time Non-Executive Chairman of the Bank and all expenses incurred on such car will be on actuals and
borne by the Bank.

The fixed remuneration payable to the NEDs, other than Part-time Non-Executive Chairman, was revised from H 20 lakh to H 30 lakh per annum,
from FY 2024-25. The Board also approved the criteria for granting such remuneration.

Compensation Policy (for employees, including Executive Directors and KMPs)

The remuneration paid to the employees is in line with the Compensation Policy of the Bank, which is, inter alia, based on the RBI Guidelines.
The said policy is available on the Bank’s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/
governance/policies.html

The salient features of the Compensation Policy of the Bank are, as follows:

Objective:

• To maintain fair, consistent and equitable compensation practices in alignment with Kotak’s core values and strategic business goals

• To ensure effective governance of compensation and alignment of compensation practices with prudent risk taking

• To have mechanisms in place for effective supervisory oversight and Board engagement in compensation

• To ensure that the compensation practices are within the regulatory framework stipulated, from time to time, by the RBI.

Compensation structure comprises total remuneration consisting of:

• Fixed Pay, which includes perquisite pay / benefits

• Variable Pay, which includes Performance Bonus / Incentive, Long Term Incentive Pay in the form of cash bonuses, all share-linked
instruments (e.g. ESOPs, SARs, PRSUs, etc.)

• Other payments, which includes Joining / Sign on Bonus, Severance package, Deferred Incentive Plans, etc.

Further, the employees have been broadly classified into following categories:

(i) Category I - Comprising Managing Director & CEO and Whole-time Directors (WTDs)

(ii) Category II - Material Risk Takers (MRTs):

These include employees (excluding employees under Category III) whose actions may have material impact on the risk exposures of the
Bank and who satisfy both qualitative and quantitative criteria, as given below:

a) Qualitative Criteria: Employees in Grade M10 and above; Business and Function Heads in reporting hierarchy up to two levels below
Managing Director & CEO.

b) Quantitative Criteria: Fixed Cost To Company (FCTC) is H 1.5 crore p.a. and above.

This excludes employees under Category III.

(iii) Category III - Risk control and compliance employees, comprising staff in Grade M10 and above in the following Control functions:

• Risk & Policy function

• Financial Control including group consolidation

• Compliance

• Internal Audit

• Back-office Operations

• Vigilance

• Legal

• Secretarial

• Human Resources

• Corporate Social Responsibility

(iv) Category IV: Other employees - This includes all employees, not explicitly covered in the first three categories.

The limits on the ratio of total Variable Pay (including Cash or Non Cash Pay) to Fixed Pay and the limits on the ratio of Cash v/s Non Cash
within Variable Pay, are outlined for each category of employee classification. Further, Malus and Clawback clauses are applicable as per the
Compensation Policy.

The NRC and the Board of the Bank have reviewed and approved all the amendments to the said Compensation Policy.

DISCLOSURES PURSUANT TO RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014

The disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed
to this Report.

MEETINGS OF THE BOARD / COMMITTEES

During FY 2024-25, fourteen meetings of the Board of Directors were held. The details of Board and Committee meetings held during the year,
attendance of Directors at the Board and Committee meetings and constitution of various Committees of the Board are provided separately in
the Report on Corporate Governance, annexed to this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors, based on the representations received from the operating management, confirm in pursuance of Sections 134(3) and 134(5)
of the Act, that:

(i) your Bank has, in the preparation of the annual accounts for the financial year ended 31^st March, 2025, followed the applicable accounting
standards and guidance provided by the Institute of Chartered Accountants of India along with proper explanations relating to material
departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of your Bank as at 31^st March, 2025 and of the profit of your Bank for the
financial year ended 31^st March, 2025;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and
operating effectively.

REPORT ON CORPORATE GOVERNANCE

The Bank is committed to achieving and adhering to the highest standards of Corporate Governance and constantly benchmarks itself with best
practices, in this regard.

Pursuant to Regulation 34 of the SEBI Listing Regulations, a separate section titled ‘Report on Corporate Governance’ has been annexed to this
Report along with the certificate issued by the Secretarial Auditor of the Bank confirming compliance with the mandatory requirements relating
to Corporate Governance under the SEBI Listing Regulations. The Report on Corporate Governance also contains certain disclosures required
under the Act, including the details of the Board meetings held during the financial year ended 31^st March, 2025.

The Bank also files with the Stock Exchanges, the Report on Corporate Governance in terms of Regulation 27(2) of the
SEBI Listing Regulations on a quarterly, half yearly and annual basis. The said Reports are available on the Bank’s website
viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/governance/sebi-listing-disclosures.html

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies
(Management and Administration) Rules, 2014, the Annual Return of the Bank is available on the Bank’s website
viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

SECRETARIAL STANDARDS

Your Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by
the Central Government under Section 118(10) of the Act for FY 2024-25.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
the Board of Directors of your Bank, had appointed Rupal D. Jhaveri, Practising Company Secretary, a peer reviewed proprietorship firm, to
act as the Secretarial Auditor of the Bank for FY 2024-25. The Secretarial Audit Report for the financial year ended 31^st March, 2025, as required
under Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations, is annexed to this Report. The Secretarial Auditor’s Report does
not contain any qualifications, reservations, adverse remarks or disclaimers.

Kotak Mahindra Life Insurance Company Limited (“KLI”), your Bank’s material unlisted subsidiary, has completed its secretarial audit and there
are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report of KLI for the financial year ended
31^st March, 2025. The said Secretarial Audit Report of KLI is also annexed to this Report.

In terms of the provisions of the SEBI Listing Regulations, your Bank has submitted the Annual Secretarial Compliance Report for FY 2024-25 to
the Stock Exchanges within the prescribed time and the same is available on websites of BSE (www.bseindia.com). NSE (www.nseindia.com)
and on the Bank’s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/governance/sebi-listing-disclosures.html

In compliance with Regulation 24A of the SEBI Listing Regulations and Section 204 of the Act, the Board has, at its meeting held on 31^st May, 2025
approved the appointment of Parikh & Associates, Practising Company Secretaries, a peer reviewed firm (Firm Registration No. P1988MH009800)
as Secretarial Auditors of the Bank for a term of five consecutive years commencing from FY 2025-26 upto FY 2029-30, subject to the approval
of the members at the ensuing AGM. Accordingly, the approval of members of the Bank is being sought for the said appointment, at the
ensuing Fortieth AGM.

STATUTORY AUDITORS

Pursuant to the Bank’s Policy on appointment of Statutory Auditors (“Statutory Auditors Policy”) and the Circular No. DoS.CO.ARG/
SEC.01/08.91.001/2021-22 dated 27^th April, 2021 issued by RBI (“RBI Circular” / “Guidelines”), prescribing the guidelines for Appointment
of Statutory Auditors (SAs) and in accordance with the requirements of Section 139 of the Act, read with Companies (Audit and Auditors)
Rules, 2014, KKC & Associates LLP, Chartered Accountants (Firm Registration No: 105146W/W100621) (“KKC”) and M/s. Deloitte Haskins & Sells,
Chartered Accountants (Firm Registration No: 117365W) (“Deloitte”), are the Joint Statutory Auditors of the Bank.

The term of KKC, as one of the Joint Statutory Auditors of the Bank, expires at the conclusion of the ensuing Fortieth AGM of the Bank
and the Bank is required to appoint a second Joint Statutory Auditor in place of KKC, pursuant to the above mentioned RBI Circular and
Statutory Auditors Policy.

In this regard, based on a review of the profile, including the size, experience and area of specialisation and recommendation of the
Audit Committee and the approval of RBI, the Board has, on 28^th June, 2025, inter alia, approved and recommended for the approval of the
members, the appointment of M M Nissim & Co LLP, Chartered Accountants (Firm Registration No: 107122W/W100672) (“Nissim”), as the second
Joint Statutory Auditor of the Bank, to hold office from the conclusion of the Fortieth AGM until the conclusion of the Forty-third AGM of the
Bank, for the purpose of the audit of the Bank’s standalone and consolidated financial statements from FY 2025-26 to FY 2027-28.

Nissim has consented to act as one of the Joint Statutory Auditors of the Bank and have intimated that such appointment would be in accordance
with the conditions prescribed in Section 139 of the Act and have also confirmed their eligibility to be appointed as Statutory Auditors, in terms
of Section 141 of the Act, applicable rules thereunder and RBI Guidelines. The approval of members of the Bank is, accordingly, being sought for
the appointment of Nissim as one of the Joint Statutory Auditors, at the ensuing Fortieth AGM.

As per the applicable provisions of law, including RBI Circular / Guidelines and the BR Act, the appointment of Joint Statutory Auditors would
be subject to the approval of the RBI, every year.

At the Thirty-Ninth AGM of the Bank, the members had approved an overall audit remuneration / fee not exceeding H 41,000,000/-
(Rupees Four Crore Ten Lakh only), to the Joint Statutory Auditors of the Bank for the time being in office for the audit / review of financials, as
the case may be, in respect of FY 2024-25, in addition to any out of pocket expenses, outlays and taxes, as applicable.

Further, based on the recommendation of the Audit Committee, the Board approved an overall annual remuneration / fee of an amount
not exceeding H 50,000,000 (Rupees Five Crore only), in addition to any out of pocket expenses, outlays and taxes, as applicable, to the
Joint Statutory Auditors for the time being in office, for the audit / review of financials, as the case may be, in respect of FY 2025-26, to be
mutually agreed between the Bank and both the Joint Statutory Auditors, depending on the scope of work undertaken by each of them, subject
to the approval of the members of the Bank.

The approval of members of the Bank is, accordingly, being sought pursuant to the provisions of Section 142 and other applicable provisions,
if any, of the Act and the relevant rules thereunder and pursuant to Section 30 of the BR Act and RBI Circular for fixing the remuneration of the
Joint Statutory Auditors for FY 2025-26, at the ensuing Fortieth AGM.

As required under Regulation 33(1)(d) of the SEBI Listing Regulations, the Joint Statutory Auditors have confirmed that they have subjected
themselves to the peer review process of the Institute of Chartered Accountants of India (“ICAI”) and that they hold a valid certificate issued by
the Peer Review Board of ICAI.

There are no qualifications, reservations or adverse remarks or disclaimers on the Financial Statements and Internal Control over Financial
Reporting made by Deloitte and KKC in the Statutory Auditors’ Report for FY 2024-25.

INTERNAL FINANCIAL CONTROL

The Board of Directors confirm that your Bank has laid down set of standards, processes and structure which enables it to implement internal
financial controls across the organisation with reference to financial statements and that such controls are adequate and are operating
effectively. Controls are reviewed / revisited / updated / deleted each year for change in processes / organisational changes / product changes, etc.
Testing is done for all the controls with the help of an independent firm of Chartered Accountants, on behalf of Management, who confirm to
the Audit Committee of the Bank, the existence and operating effectiveness of controls over financial reporting. During the year under review,
no material or serious observations were observed for inefficiency or inadequacy of such controls.

IMPLMENTATION OF IND AS

The Ministry of Finance, Government of India, had vide its press release dated 18^th January, 2016, outlined the roadmap for
implementation of International Financial Reporting Standards (“IFRS”) converged Indian Accounting Standards (“Ind AS”) for
Scheduled Commercial Bank (excluding RRBs), Non-Banking Financial Companies and Insurance companies. RBI, vide its circular dated
22^nd March, 2019, deferred the implementation of Ind AS for Scheduled Commercial Banks (“SCB”) till further notice, pending the consideration
of some recommended legislative amendments by the Government of India. The RBI has not issued any further notification on implementation
of Ind AS for SCBs.

The Bank has formed Steering Committee for Ind AS implementation. The Steering Committee headed by the Deputy Managing Director
comprises representatives from Finance, Risk, Information Technology and Treasury. The Committee closely reviews progress of Ind AS
implementation in the Bank and provides guidance on critical aspects of the implementation. Further, there may be new regulatory guidelines
and clarifications for Ind AS application, which the Bank will need to suitably incorporate in its implementation. The Bank prepares Proforma
Ind AS Financial statements on a half yearly basis and submits to RBI.

RELATED PARTY TRANSACTIONS

During the year, your Bank has not entered into any materially significant transaction with its related parties, which could lead to a potential
conflict of interest between the Bank and these parties. All the related party transactions that were entered into during the year were
on an arm’s length basis and in the ordinary course of business. Hence, pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, there are no related party transactions to be reported under Section 188(1) of the Act and disclosure in Form
AOC-2 is not applicable to the Bank.

The Bank has a Board approved ‘Policy on dealing with Related Party Transactions’. The same is available on the Bank’s website
viz., URL: https://www.kotak.com/en/investor-relations/governance/policies.html

All related party transactions are placed before the Audit Committee for its review and approval on a quarterly basis. Omnibus approval of the
Audit Committee is obtained for the related party transactions, which are repetitive in nature. Further, during the financial year, the Bank had
engaged the services of an external professional firm for verification of the related party transactions, their disclosures and for validation of the
process followed by the Bank.

Members may refer to Note 7 of Schedule 18B - Notes to Accounts of the Standalone Financial Statement (Other Disclosures) and Note 22 of
Schedule 17 - Notes to Accounts of the Consolidated Financial Statement of your Bank, which sets out related party disclosures pursuant to
Accounting Standards AS-18.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The provisions of Section 186 of the Act except sub-section (1), do not apply to loans made, guarantees given and securities provided by a
banking company in the ordinary course of its business and are exempted from the disclosure requirement under Section 134 (3)(g) of the Act.

The particulars of investments made by the Bank are disclosed in Schedule 8 of the Financial Statements.

RISK MANAGEMENT POLICY

Pursuant to Regulation 21 of the SEBI Listing Regulations, your Bank has a Risk Management Committee, details of which can be referred
to in the Report on Corporate Governance, annexed to this Report. While Risk Management is the responsibility of the Board of Directors,
it has delegated its powers relating to monitoring and reviewing risks associated with the Bank to the Risk Management Committee. Your
Bank has a robust Risk Management Framework and has also adopted a Group Enterprise-wide Risk Management framework supported by
appropriate policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other risks. Details
of identification, assessment, mitigations, monitoring and the management of these risks are mentioned in the Management’s Discussion and
Analysis Report, annexed to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Bank has undertaken various initiatives for the conservation of energy. Details of the same are available
in the BRSR section of the Integrated Annual Report for FY 2024-25 and is also available on the Bank’s website
viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

The Bank has used information technology extensively in its operations as detailed in the para on ‘Technology and Digitisation’.

Foreign Exchange earnings and outgo are part of the normal banking business of your Bank.

REPORTING OF FRAUDS BY AUDITORS

During FY 2024-25, no instances of fraud committed in the Bank, by its officers or employees were reported by the Joint Statutory Auditors and
Secretarial Auditor under Section 143(12) of the Act, to the Audit Committee or the Board of Directors of the Bank.

MAINTENANCE OF COST RECORDS

Being a banking company, your Bank is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING
CONCERN STATUS AND OPERATIONS IN FUTURE

During the year under review, no significant and / or material order was passed by any regulatory authority or Court or Tribunal against the
Bank, which could impact the going concern status or its future operations.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE BANK

There have been no material changes and commitments which affected the financial position of your Bank, between the end of the financial
year to which the financial statements relate and upto the date of this Report.

DESPATCH OF ANNUAL REPORT

Pursuant to the General Circular No. 9 / 2024 dated 19^th September, 2024 read together with General Circular No. 14 / 2020 dated 8^th April, 2020,
General Circular No. 17 / 2020 dated 13^th April, 2020 and General Circular No. 20 / 2020 dated 5^th May, 2020 (“MCA Circulars”), the Integrated Annual
Report for FY 2024-25 will be sent by e-mail to those members who have registered their e-mail address with the Bank / its Registrar and Share
Transfer Agent / respective Depository Participants, as the case may be. A letter providing the QR Code and the web-link, giving the exact path,
where complete details of the Integrated Annual Report 2024-25 is available, will be sent to those members, who have not registered their e-mail
address. Members who wish to have a physical copy, may write to the Company Secretary of the Bank at [e-mail] or
submit a written request to the Registered Office of the Bank. The Integrated Annual Report of your Bank and the Annual Reports of your Bank’s
subsidiaries, are available on the Bank’s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

ANNEXURES

The following statements / reports / certificates are annexed to the Directors’ Report:

(i) Annual Report on Corporate Social Responsibility Activities of the Bank for the financial year ended 31^st March, 2025.

(ii) Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(iii) Secretarial Audit Report of the Bank, pursuant to Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations.

(iv) Secretarial Audit Report of Kotak Mahindra Life Insurance Company Limited, a material subsidiary of the Bank, pursuant to
Regulation 24A of the SEBI Listing Regulations.

(v) Report on Corporate Governance pursuant to Schedule V Part C of the SEBI Listing Regulations along with Certificate from the Secretarial
Auditor regarding compliance of conditions of Corporate Governance as stipulated in Schedule V Part E of the SEBI Listing Regulations.

(vi) Management’s Discussion and Analysis Report pursuant to Schedule V Part B of the SEBI Listing Regulations.

ACKNOWLEDGEMENT

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the RBI, MCA, SEBI,
Stock Exchanges, Insurance Regulatory and Development Authority of India and other Government and Regulatory agencies. Your Directors
acknowledge the continued support of the members and also wish to place on record their appreciation for employees for their commendable
efforts, commitment, teamwork and professionalism.

For and on behalf of the Board of Directors

C S Rajan

Chairman

Date: 28^th June, 2025
Place: Mumbai

1

Board - Competencies, composition and structure, board dynamics, board functioning, process and procedures, oversight of committee
composition and functioning, ethics and compliance.

*GRI 2-18

---

Mar 31, 2024

Your Directors have pleasure in presenting the Thirty-Ninth Annual Report of Kotak Mahindra Bank Limited ("Bank") together with the audited Financial
Statements for the financial year ("FY") ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS

(A) Consolidated* :

('' in crore)

	FY 2023-24	FY 2022-23*
Total Income	94,273.91	68,142.03
Total expenditure, excluding provisions and contingencies	68,438.06	48,056.17
Operating Profit	25,835.85	20,085.86
Provisions and contingencies, excluding provision for tax	1,972.47	439.68
Profit Before Tax	23,863.38	19,646.18
Provision for Taxes	5,886.55	4,865.74
Profit After Tax	17,976.83	14,780.44
Add: Share in Profit of Associates	236.38	144.57
Consolidated Profit for the Group	18,213.21	14,925.01
Earnings per equity share:
Basic (?)	91.45	74.96
Diluted (?)	91.45	74.94

Notes:

* The Financial Statements of the Indian subsidiaries (excluding insurance companies) and associates are prepared as per the Indian Accounting Standards in accordance
with the Companies (Indian Accounting Standards) Rules, 2015. The Financial Statements of the subsidiaries and associates used for preparation of the consolidated
financial statements are in accordance with the Generally Accepted Accounting Principles in India (“GAAP") specified under Section 133 and relevant provisions of the
Companies Act, 2013 (“Act").

('' in crore)

^A Previous year amounts have been re-classified for consistency with the current year presentation, wherever necessary
(B) Standalone:

	FY 2023-24	FY 2022-23*
Total Income	56,072.01	41,333.90
Total expenditure, excluding provisions and contingencies	36,484.56	26,485.92
Operating Profit	19,587.45	14,847.98
Provisions and contingencies, excluding provision for tax	1,573.73	456.99
Profit Before Tax	18,013.72	14,390.99
Provision for Taxes	4,232.14	3,451.69
Profit After Tax	13,781.58	10,939.30
Add: Surplus brought forward from the previous year	37,760.09	30,455.85
Amount available for appropriation	51,541.67	41,395.15
Less: Appropriations
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949	3,445.40	2,734.83
Transfer to Capital Reserve	-	0.99
Transfer to Special Reserve	125.00	115.00
Transfer to Investment Reserve Account	831.63	-
Transfer to Investment Fluctuation Reserve Account	1,200.00	525.32
Transfer to Capital Redemption Reserve	500.00	-
Dividend paid 1	336.62	258.92
Surplus carried to Balance Sheet	45,103.02	37,760. 09

Notes:

A Previous year amounts have been re-classified for consistency with the current year presentation, wherever necessary.

FINANCIAL PERFORMANCE

On a standalone basis, Profit After Tax ("PAT") of the Bank was '' 13,781.58 crore in FY 2023-24 compared with '' 10,939.30 crore in FY 2022-23. Net Interest
Income ("NII") of the Bank for FY 2023-24 was '' 25,993.20 crore as against '' 21,551.92 crore in FY 2022-23.

The consolidated PAT was '' 18,213.21 crore in FY 2023-24 compared with '' 14,925.01 crore in FY 2022-23. Further, the Group had a Net Worth of
'' 129,892.40 crore as on 31^st March, 2024 ('' 111,754.10 crore as on 31^st March, 2023). The book value per equity share was at '' 653.41 as on
31^st March, 2024 ('' 562.55 as of 31^st March, 2023).

Further details about the financial performance of your Bank are available in the Management''s Discussion and Analysis Report, annexed to this Report.
CAPITAL

During the year, your Bank allotted 1,364,316 equity shares arising out of the exercise of Employees Stock Options granted to the Executive Directors and
Eligible Employees of your Bank and its subsidiaries.

After the allotment of the aforesaid equity shares, the total issued, subscribed and paid-up share capital of your Bank as at 31^st March, 2024 stood at
'' 9,939,604,490/- comprising 1,987,920,898 equity shares of '' 5/- each.

As approved by the Board of Directors, your Bank had exercised the ''Call Option'' available on 1,000,000,000, 8.10% Perpetual Non-Cumulative Preference
Shares of the face value of '' 5/- each ("PNCPS"), at par, for extinguishment of PNCPS. The payment of the Call Option Price on the PNCPS and the divided
declared thereon was done on 13^th March, 2024, to the eligible PNCPS holders. Upon such payment, the PNCPS issued by your Bank, stood extinguished.
Accordingly, your Bank created Capital Redemption Reserve of '' 500 crore, out of the profits available for appropriations.

DIVIDEND

The Board of Directors of your Bank had, at their meeting held on 4^th May, 2024, recommended a dividend of '' 2.00 per equity share for
FY 2023-24. The dividend, if approved by the members, would entail a pay out of approximately '' 397.59 crore based on the capital as of 29^th June, 2024
(Previous Year: '' 298 crore). The dividend would be paid to all the eligible equity shareholders, whose names would appear in the Register of
Members/List of Beneficial Owners on the Record Date fixed for this purpose i.e. 19^th July, 2024.

Further, the Board of Directors of your Bank, on 22^nd February, 2024, declared a dividend on PNCPS of the face value of '' 5/- each, issued by the Bank, carrying
a dividend rate of 8.10% p.a., to be paid on a pro-rata basis for the period commencing from 1^st April, 2023 to 13^th March, 2024 (being the Extinguishment
Date) for FY 2023-24, as per the terms of issuance of PNCPS. This has entailed a dividend pay out of '' 38.51 crore (Previous Year: '' 40.50 crore).

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations") and as reviewed and adopted by the Board of Directors of your Bank, is available on the Bank''s website
viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/governance/policies.html

DEBENTURES AND BONDS

Your Bank has not issued any capital under Tier II during FY 2023-24.

During the year under review, your Bank has allotted Senior Unsecured Rated Listed Redeemable Long Term Bonds in the nature of Non-Convertible
Debentures ("Bonds") amounting to '' 1,895 crore on 23^rd June, 2023 and '' 1,000 crore on 14^th February, 2024. As of 31^st March, 2024, outstanding Bonds
aggregated '' 4,845 crore. All the Bonds have been issued on a private placement basis and are listed on BSE Limited ("BSE")/National Stock Exchange of
India Limited ("NSE").

CAPITAL ADEQUACY RATIO

Your Bank has a Capital Adequacy Ratio of 20.55% as of 31^st March, 2024 under Basel III, with Tier I Capital being 19.25% (of which, Common Equity
Tier 1 Capital is 19.25%).

CREDIT RATINGS

The details of all credit ratings obtained by your Bank for various instruments, including debt instruments outstanding as on 31^st March, 2024, are disclosed
in the Report on Corporate Governance, annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of
the Act, are not applicable to your Bank.

RESERVE BANK OF INDIA ORDER DATED 24^th APRIL, 2024

Your Bank had received an order dated 24^th April, 2024 ("Order") from RBI, inter alia, directing the Bank to cease and desist, with effect from 24^th April, 2024
from (i) on-boarding new customers through the Bank''s online and mobile banking channels; and (ii) issuing fresh credit cards. The Order was based,
inter alia, on the deficiencies observed by RBI in the Information Technology ("IT") Examinations of the Bank, for the years 2022 and 2023.

The Order does not impact servicing and cross-sell of products (excluding issuance of fresh credit cards) to the existing customer base through all channels
and does not impact on-boarding of new customers through channels other than online/mobile banking channels.

Your Bank has taken concrete steps to adopt new technologies to strengthen its IT systems and continues to work with RBI to swiftly resolve the issues,
at the earliest.

The management has evaluated the impact of the Order and assessed that there is no impact on the going concern and has no material impact on financial
statements, including internal financial controls over financial reporting and on its operations.

OPERATIONS
CONSUMER BANKING

The Consumer Banking business services a wide spectrum of customers across domestic individuals and households, non-residents, small and medium
business segments, for a range of products from Savings and Current Accounts to Term Deposits, Credit Cards, Unsecured and Secured Loans, Working
Capital, Digital Payments, Insurance Protection and Investments.

As of 31^st March, 2024, your Bank had 1,948 branches, 3,291 Automated Teller Machines ("ATMs") and Recyclers and 4,435 Micro ATM installations.

ActivMoney, a two-way auto sweep facility, was re-launched and re-positioned as a tool for smarter money management, aiding higher income and liquidity.
It also allows flexibility to access funds anytime and offers attractive interest rates on Fixed Deposits and waiver of penalty in case of pre-closure.

The additional rate of interest on fixed deposits for senior citizens was increased for a few select long-term tenors, for (i) deposits below '' 2 crore and

(ii) bulk deposits i.e. '' 2 crore to less than '' 5 crore.

With a vision to provide exclusivity to your Bank''s premium customers, Privy League, a flagship programme for High Net Worth customers was re-launched
in FY 2023-24. The programme entails multiple first-of-its kind experiences namely Debit Card with unique and exclusive designs, access to luxury concierge,
multiple lifestyle discounts and membership on favourite categories such as dining and travel.

Your Bank is continuously working towards improving digital synergies to enhance overall customer experience during onboarding.

Your Bank has successfully integrated the investment process through Kotak Cherry, with the savings on-boarding journey, enabling customers with an
option to activate seamless Investments in Mutual Funds, including Systematic Investment Plans ("SIP"). Easy and convenient transaction process from
Kotak Cherry has led to growth in SIP registration.

Mirroring some of the initiatives in the Privy Savings Account space, new variants of Debit Cards have been introduced to deliver superior features and
experience to customers, namely, Privy Neon Card, Privy Platinum LED Card and Privy Black Metal Card.

A digital journey for current account opening for small businesses has been launched, which has opened up a new avenue for online bank account opening
backed by a convenient and paperless experience. This journey also offers an online current account with a pay-as-per-usage feature and a free QR code.

Further, the Global Service Account proposition, a current account specially designed to meet the unique banking needs of the Service Export Sector, has
also been launched.

Kotak Start-up Current Account was re-launched with enhanced features such as preferential trade and forex pricing, specially curated offers and much
more to help start-ups in their entrepreneurial journey.

Your Bank has also received the ''Receiving Office License'' for mobilisation in Government of India Floating Rate Savings Bonds (FRSB) 2020 (Taxable)
or RBI Bonds in FY 2023-24, which is a popular investment instrument amongst retail investors and has an attractive rate of interest and high credibility.
The investment process in RBI Bonds is digitised, through which the customers can login to net banking and invest in RBI Bonds seamlessly.

To strengthen the Corporate Salary proposition, a wide array of exclusive benefits like complimentary protection benefits, free credit card and lifetime zero
charges to customers are offered by your Bank. The said account has been designed for corporate professionals, providing a gamut of attractive deals and
services across lifestyle, travel, healthcare and dining. During the year, your Bank has invested heavily on consumer research to garner critical understanding
of latent consumer needs and is, amongst others, building customer-centric value propositions for microsegments within the salaried customer base.
In order to facilitate larger acquisition of premium customers, a new salaried offering was created with insurance protection benefits and greater focus on
a specialized proposition for the women workforce.

The remit platform, which facilitates customers to digitally remit money abroad has become one of the primary modes of such transactions. This, along
with centralized processing of all other outward remittances, has improved operational efficiency and enhanced the execution Turn Around Time (TAT).
Your Bank has forged successful strategic partnerships with multiple brokers to facilitate international investment and has enabled Kotak GIFT City and
Dubai International Finance Centre ("DIFC") on their remit platform. This would further facilitate individual customers to remit funds with ease for capital
investments abroad.

During the year, your Bank enabled the bundling of a Cyber Insurance policy along with the digital Kotak811 account on-boarding journey. With regard to life
insurance, customized propositions targeting various segments and persona were created.

In line with its customer first objective, Relationship Manager ("RM") ''e-Konnect'', platform was launched, which facilitates customers to seamlessly connect
with their RMs. This omni-channel interface enables the Privy League Black customers to interact with their RM and Service Manager over chat, voice or
video calls, in a secure environment through Internet Banking or the Mobile Banking app.

From 2021, Kotak811 operates as a ''Semi-Autonomous'' Digital Bank within your Bank, with additional focus on service, user experience, engagement and
cross-selling.

Your Bank also offers bulk tax payment solution using Net banking and Host-to-Host channel for payment of Direct Taxes. This has provided ease to
Corporate and Small and Medium Enterprises ("SME") clients for quicker tax payments using seamless digital journey and enhanced customer experience.
As digital transactions are being encouraged and scaled up across ecosystems, your Bank is making strides into opening a plethora of options to further
ease tax-paying journey for the tax payers.

A ''Net Banking Lite platform'' has been launched for accessing Net Banking from Mobile Devices. It has also improved the Scan and Pay option with new
features such as gallery upload, generate QR, etc., underpinned by enhanced technology.

Your Bank launched Myntra Kotak co-brand credit card in FY 2023-24, catering to rising trend of lifestyle purchases among Millennials and GenZ customers.
The value proposition on the existing PVR card was enhanced by upgrading the same to PVR-INOX card, which would now provide offers across both
PVR and INOX movie screens.

Your Bank continues its focus on building the human capital, by nurturing talent and building human capital, leveraging technology and expertise.

KAIRA, the internal employee response agent, has Artificial Intelligence (AI) integrated into the information and knowledge retrieval processes, making
it easier for employees to access the right information at the right time. This helps to improve the information management, enhancing efficiency and
ultimately delivering a superior customer experience.

Kotak Learning and Performance Partner (KLAPP) was further enriched with enabling tools to aid the frontline customer facing staff of your Bank to offer
customised solutions to the customers on investments and current accounts.

COMMERCIAL BANKING

Your Bank''s Commercial Banking business focuses on meeting the banking and financial needs of various segments, with specialised units offering
financial solutions in the areas of Commercial Vehicles ("CV"), Construction Equipment ("CE"), Tractor and Farm Equipment ("Tractor"), SMEs operating
in the Agriculture Value Chain and Microcredit. Majority of the customers to whom this business caters, are from the semi-urban and rural area segment,
forming part of the priority sector. This business plays a significant role in meeting the financial inclusion goals by financing deep into ''Bharat''.

The Agriculture Value chain segment saw volatility across multiple commodities and incremental risks on account of extreme weather, regional conflicts
and general elections. These factors continue to hamper limit utilizations, leading to a muted growth in your Bank''s advances. A more selective and cautious
approach in the choice of business in this segment has been adopted by your Bank, considering the continuing aggressive appetite of the lenders. Overall
collections and recoveries in the segment have improved during the year. Your Bank''s focus has been to improve processes to reduce the turn-around-time
for on-boarding new clients. New initiatives taken for the small-ticket agriculture loans to farmers in the dairy and other sectors have started showing initial
traction. The entire process of on-boarding new customers under this model is digital (RM assisted).

During the year, your Bank acquired Sonata Finance Private Limited ("Sonata"), a Non-Banking Finance Company - Micro Finance Institution, registered
with the RBI, which became a subsidiary of the Bank, with effect from 28^th March, 2024. Your Bank is on track to leverage its outreach and cater to the
requirements of its increasing customer base.

Gold loan industry in India experienced a healthy growth of over 25%, driven by factors such as increased gold prices and the need for quick, collateral-based
financing solution. Your Bank is now offering gold loans from over 600 branches i.e. approximately 30% of its total branch network.

Your Bank''s Crop Loan Non-performing asset ("NPA") recovery and portfolio quality improved as compared to the last year, due to better resolution and
collection focus.

The RBI guidelines on priority sector lending require banks to lend 40% of their Adjusted Net Bank Credit ("ANBC"), to fund certain types of activities carried
out by specified borrowers. The shortfall in the amount required to be lent to the priority sectors and weaker sections may be required to be deposited
in funds with government sponsored Indian development banks, such as the National Bank for Agriculture and Rural Development, the Small Industries
Development Bank of India, the National Housing Bank, MUDRA Ltd. and other financial institutions as decided by the RBI from time to time.

As prescribed in the RBI guidelines, the Bank''s priority sector lending achievement is computed on a quarterly average basis. Total average priority sector
lending for FY 2023-24 was '' 121,619.65 crore (FY 2022-23: '' 114,217.85 crore), constituting 44.06% (FY 2022-23: 48.80%) of ANBC, against the requirement
of 40% of ANBC.

Your Bank''s Wholesale Banking business caters to a wide range of corporate customer segments, including major Indian corporates, conglomerates,
financial institutions, public sector undertakings, multinational companies, financial sponsors (including private equity funds and foreign portfolio investors),
new-age companies, SME and realty businesses. It offers a comprehensive portfolio of products and services to these customers, including working
capital finance, medium-term finance, project finance, trade and supply chain finance, foreign exchange services, other transaction banking services,
custody services, debt capital markets and treasury services.

Your Bank has, over the years, invested in developing expertise and forming Centre-of-Excellence in areas, such as Structured Lending, Infrastructure
Financing, Real Estate Financing, Financial Services and Custodial Services, amongst others. Your Bank seeks to leverage on this expertise to deepen
existing relationships and acquire new quality customers on a consistent basis and secure value addition through cross-sell of varied products and services.

Your Bank''s structuring expertise has been leveraged to deliver customized solutions and improve returns.

The Custody and Clearing business continued on a growth trajectory on the back of a robust domestic growth and returning confidence in the
Foreign Portfolio Investors. With vibrancy in Indian Stock Markets, your Bank expects the business growth in this segment to continue in the coming year.

Your Bank''s robust growth in its SME business has resulted in a granular and sticky Micro, Small and Medium Enterprise ("MSME") asset base, which is
expected to grow rapidly.

During the year, your Bank has continued to excel in its journey towards becoming a leading player in the digital banking space. Your Bank''s relentless
focus on integrating advanced technology into banking operations has not only enhanced customer experience, but also strengthened business continuity
practices. Your Bank''s commitment to digital innovation has kept the Bank at the forefront of banking transformation, allowing it to stay competitive and
meet the evolving needs of the customer.

Your Bank offers a comprehensive product portfolio, including a diverse range of financial products under Cash Management Services and Trade. In the
payments technology stack, enhanced focus is on UPI stability along with strategic initiatives, including Merchant Management system. A new payments
platform has been introduced, enhancing customer User Interface/User Experience and increasing transaction processing speed significantly. Your Bank
has witnessed four times growth in tax payments from the platform. It is focused on ensuring operational resilience and offering structured solutions to
meet client specific requirements. In the Collections stack, your Bank has enhanced its NACH tech stack on scalability, resiliency and faster settlements.
Along with this, customer experience has also been enhanced by building and scaling the product portfolio. In the Acquiring business, your Bank is helping
merchants accept transactions from foreign card holders. The aim is to grow this offering further in the coming year. Your Bank has also seen a significant
increase in market share in the capital market and IPO transactions with specialized processing teams and enhanced focus on regulatory compliance.

Kotak fyn, your Bank''s leading digital initiative for business, has been ensuring accessibility and convenience to customers. Fyn is the comprehensive
corporate banking portal for corporate customers. In the dynamic environment today, where customer requirements keep changing, fyn has been developed
alongside these requirements. Offerings on the portal have been enhanced to make it easy for customers to lodge transactions in bulk. The portal can also
be seamlessly integrated with the customer''s SAP/ERP systems using Host-to-host functionality, making it easy for customers to initiate transactions.
This year, fyn was also launched as a mobile application, making it easy for checkers and authorizers to approve transactions.

Alongside fyn, your Bank went live with many initiatives to digitize the trade journey for customers. One such initiative is the electronic Bank Guarantees (eBGs)
launched in partnership with National E-Governance Services Limited (NeSL). This initiative digitizes the Bank Guarantee process making it a paperless process
and reducing TATs by nearly 70%. Supply chain finance business grew significantly last year and your Bank is seeing high traction on these assets. Your Bank''s
digital offering is able to provide linkages capabilities with counterparties and enable seamless financing including auto settlement.

Your Bank remains committed to building a high-quality differentiated corporate franchise and continues to focus on maintaining the health and profitability
of the business.

PRIVATE BANKING

Your Bank''s Private Banking division caters to a number of distinguished Indian families and is one of the oldest and the most respected Indian private
banking institution. It manages wealth for 58% of India''s top 100 families (Source: Forbes India Rich List 2023), with clients ranging from entrepreneurs to
business families and professionals.

Your Bank provides an open architecture proposition to its customers, offering a plethora of private banking products. This business has a strong
distribution capability for private clients through distribution/referralmodelacross equities, fixed income and alternates catering to
Ultra High Net worth Individuals ("UHNI") and High Net worth Individual ("HNI") investors. In addition to comprehensive financial solutions that go beyond
investments, your Bank provides banking and credit, consolidated reporting, family office services, offshore investments and other various products and
services to its clients. Referral for estate planning services are also provided to the clients. With an in-depth understanding of client requirements and
expertise across various asset classes, your Bank offers the widest range of financial solutions. Your Bank has added approximately 2,280 new families in
FY 2023-24, to its client base.

The Private Banking division of your Bank has made significant investments in digital and technology, recognizing them as crucial pillars for future growth.
Your Bank strived to enhance its offerings through continuous innovation in platform, proposition and cutting - edge technologies. This, in turn, helps to
enrich client experience across all touchpoints. Your Bank is leveraging data analytics to anticipate client trends and segmentation, which is essential for
providing personalized and tailored services and to maximize its resource utilization effectively.

Your Bank has two International Banking Units (“IBUs") based at Gujarat International Finance Tec-City (“GIFT City"), Gandhinagar, Gujarat and DIFC, Dubai,
United Arab Emirates.

The GIFT City Branch is regulated by the International Financial Services Centre Authority (IFSCA), which facilitates your Bank''s participation in syndication
of overseas loans, lending to clients in international markets and providing External Commercial Borrowing to eligible Indian corporates. Your Bank
also undertakes offshore client''s forex and derivative transactions to help them with the management of interest rate and currency risks, in addition to
investments in offshore bonds.

The DIFC Branch is your Bank''s first overseas branch at Dubai, regulated by the Dubai Financial Services Authority (“DFSA"). This Branch complements your Bank''s
ability to advise and arrange global investment products, provide loans and accept deposits from its overseas private banking customers that qualify under the
Professional client criteria of the DFSA. Your Bank has developed capabilities to advise and arrange global investments through this Branch. The Branch also has
tie-ups with some leading names in the international investments space and arranges access to their services to eligible customers of the Branch.

The IBUs have their respective treasuries which not only manage regulatory requirements and liquidity buffers viz., Liquidity Coverage Ratio (LCR), etc., but
also offer banking services through products like term credit facilities for various purposes, trade finance, foreign exchange solutions, etc.

ASSET RECONSTRUCTION

Your Bank''s Asset Reconstruction Division looks at opportunities and takes exposure in distressed/NPA accounts through Security Receipts (“SR")
investments, Stressed/NPA portfolio buyout from other banks, priority funding and working capital assistance, with an aim to resolve and turn them around.
Your Bank has been active in the distressed asset buyouts and investments space for almost two decades.

The resolution process has gained momentum with various judicial forums Debt Recovery Tribunals (DRTs), Debt Recovery Appellate Tribunals (DRATs),
High Courts and National Company Law Tribunal (NCLT) proceedings under the Insolvency and Bankruptcy Code, 2016. Your Bank adopts various measures
thoughtfully, diligently and with compassion to resolve the stressed and bad accounts.

Your Bank did sizable investments, both in corporate and retail stressed assets space in FY 2023-24 and expects a lot of opportunities in the acquisition
side, especially in retail stressed loans segment in the coming years. If the prices offered are reasonable and attractive, your Bank shall be open to acquire
several of them, post critical analysis and evaluation.

TREASURY

Your Bank''s Treasury actively contributes by way of:

(i) Balance Sheet Management: The Balance Sheet Management Unit ("BMU") ensures maintenance of regulatory reserves and adequate liquidity
buffers and requisite investments. The BMU also manages interest rate and liquidity risk, within the overall risk appetite of your Bank.

(ii) Proprietary Trading: The Proprietary Trading Desk actively trades in products, such as Fixed Income Securities, Money Markets, Derivatives,
Foreign Exchange and Equity. The Proprietary Desk also helps in interbank access to teams servicing customer requirements. The Primary Dealer
Desk, which is a part of the Proprietary Trading Desk, actively participates in primary auctions of Government securities, makes market in Government
securities and engages in retailing of Government securities.

(iii) Customer Transactions: The customer facing desks at the Treasury assist and manage customer transactions across Foreign Exchange, Derivatives
and Bullion products. The Forex and Derivatives Desk facilitates customer access to foreign currency markets through cash and derivatives products
for remittances, trade transactions and for managing Foreign Exchange and Interest Rate risks.

(iv) Bullion: The Bullion desk provides efficient working capital solutions to domestic jewellery manufacturers as per the prescribed rules of the RBI.
Your Bank also imports gold and silver to meet the needs of customers, under a license received from the RBI.

For more details on Operations of your Bank, please refer to the Management''s Discussion and Analysis Report, annexed to this Report.

HUMAN RESOURCES

FY 2023-24 was a year that saw significant changes and elevated actions around building the enhanced employee experience and nurturing one of the
greatest assets of your Bank i.e. Our People. Through a multitude of strategic initiatives, the Human Resources (“HR") function of your Bank implemented
various initiatives to revamp HR processes, policies, systems and aligning them with evolving business needs. The efforts spanned a wide spectrum from
fortifying employee engagement, launching health and wellness programs to centralizing HR processes.

Key HR initiatives taken by your Bank were, as under:

(i) Health and Wellness

(ii) Leadership and Manager Connect

(iii) Diversity and Inclusion

(iv) Employee Experience

(v) Kotak Young Leaders Council

(vi) My Kotak My Say

(vii) Employee Development

(viii) Talent Management

(ix) Caring Kotakite (Employee Volunteering)

For more details on the Key HR intiatives, please refer to the Management''s Discussion and Analysis Report, annexed to this Report.

EMPLOYEES

As of 31^st March, 2024, the full-time employee strength of the Kotak Group was over 116,000 and the Bank, at the standalone level, had over
77,900 employees.

The information required pursuant to Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended from time-to-time, is given as an Annexure to this Report. Further, the statement containing particulars
of employees as required above is given as an Annexure and forms part of this Report. In terms of Section 136(1) of the Act, the annual report and the
financial statements are being sent to the members, excluding the aforesaid Annexure. The Annexure is available for inspection and any member interested
in obtaining a copy of the Annexure, may send an email to the Company Secretary at [e-mail]

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)
ACT, 2013

Your Bank continues with the belief of zero tolerance towards sexual harassment at workplace and continues to uphold and maintain itself as a safe and
non-discriminatory organisation. To achieve the same, your Bank reinforces the understanding and awareness of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH"). Your Bank has formulated a central Steering Board Committee besides having an
Internal Committee in three regions for reporting any untoward instance of sexual harassment. Any complaint pertaining to sexual harassment is diligently
reviewed and investigated and treated with great sensitivity. The Internal Committee members have been trained in handling and resolving complaints.
Your Bank also has an online e-learning POSH Awareness module, which covers the larger employee base.

As of 1^st April, 2023, 12 complaints were pending for disposal. All these complaints were disposed off during FY 2023-24.

The Bank received a total of 45 complaints during FY 2023-24, of which, 28 were disposed off as of 31^st March, 2024. All the 17 complaints which were
pending as on 31^st March, 2024, have been disposed off, as on the date of this Report.

PROHIBITION OF INSIDER TRADING

Your Bank has adopted the Kotak Mahindra Bank Limited - Insider Trading Code of Conduct ("Code") for prohibition of insider trading in the securities of
the Bank as well as other listed and proposed to be listed companies and a code of practices and procedures for uniform and universal dissemination of
unpublished price sensitive information ("Fair Disclosure Code").

Your Bank has also formulated and adopted the Policy for Determination of Materiality of Events or Information of the Bank, in terms of Regulation 30 of the
SEBI Listing Regulations. The Policy for Determination of Materiality of Events/Information and the Code of Practices and Procedures for Fair Disclosure of
UPSI of the Bank, is available on the Bank''s website viz., URL: https://www.kotak.com/en/investor-relations/governance/policies.html 1

WHISTLE BLOWER POLICY¹/VIGIL MECHANISM

Your Bank is committed to its ''Vision Statement'' of upholding its Global Indian Financial Services Brand, creating an ethos of trust across all constituents,
developing a culture of empowerment and a spirit of enterprise, thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors, the highest standards of
transparency, probity and accountability. The Kotak Group endeavours to develop a culture where it is safe and acceptable for all employees and directors
to raise/voice genuine concerns in good faith and in a responsible as well as effective manner.

A vigil mechanism has been implemented through the adoption of a Whistle Blower Policy with an objective to enable employees/directors/suppliers/
vendors/service providers/all other applicable stakeholders, raise genuine concern or report evidence of activity by the Bank or its employee or director
or vendor that may constitute instances of corporate fraud, unethical business conduct, a violation of Central or State laws, rules, regulations and/or any
other regulatory or judicial directives, any unlawful act, whether criminal or civil, irregularities like alteration, forgery or fabrication of documents, impropriety,
abuse or wrong doing, misuse of office/position, theft/embezzlement, misappropriation of asset, bribery/corruption, collusion with vendor/customers,

deliberate breaches and non-compliance with the Bank''s policies, processes, data leakage, questionable accounting/audit matters/financial malpractice,
ethics violation, conflict of interest, dual employment and unauthorised disclosure of confidential information about the Bank or any of its customers.
The concerns can be reported online on the following website viz., URL: https://www.speakup.co.in/ which is managed by an independent third party.
Safeguards to avoid discrimination, retaliation or harassment and confidentiality have been incorporated in the said policy.

All employees and Directors have access to the Chairperson of the Audit Committee in appropriate and exceptional circumstances. Further, the Chairperson
of the Audit Committee has access rights to the whistle blower portal. The Audit Committee reviews a synopsis of the complaints received and the
resolution thereof, every quarter under the said Policy.

Your Bank is taking several initiatives to encourage employees to blow the whistle and report incidences of any fraud or unusual events. During the year
under review, your Bank has initiated periodic email campaigns for educating employees on the process of whistle blowing, creating awareness and
encouraging employees to blow the whistle and report incidences of any concerns. In addition, the same has been reiterated and made an integral part of
your Bank''s Code of Conduct and training.

The Policy is available on the Bank''s intranet as well as website viz., URL: https://www.kotak.com/en/investor-relations/novernance/policies.html
EMPLOYEE STOCK OPTIONS AND STOCK APPRECIATION RIGHTS SCHEMES

During FY 2023-24, after receiving requisite approvals, the Board implemented the Kotak Mahindra Equity Option Scheme 2023 (“ESOP Scheme 2023") in
place of the existing Kotak Mahindra Equity Option Scheme 2015 ("ESOP Scheme 2015"). The Board also implemented Kotak Mahindra Stock Appreciation
Rights Scheme 2023 (“SARs Scheme 2023") in place of the existing Kotak Mahindra Stock Appreciation Rights Scheme 2015 (“SARs Scheme 2015").

The objective of both the schemes is to enable the Bank and its subsidiaries to attract and retain appropriate human talent and encourage value creation and
value sharing with the employees by aligning the interests of the employees with the long-term interests of the Bank and its subsidiaries. The appreciation
of rights under SARs Scheme 2023 are settled in cash.

The Employee Stock Options ("ESOPs") and Stock Appreciation Rights ("SARs") granted to the employees of the Bank and its subsidiaries currently operate
under the following Schemes:

(i) ESOP Scheme 2023;

(ii) ESOP Scheme 2015;

(iii) SARs Scheme 2023; and

(iv) SARs Scheme 2015

During the year under review, the Bank granted ESOPs and SARs to the eligible employees of the Bank and its subsidiaries, in accordance with the respective
schemes, from time to time. No new grants were made under the ESOP Scheme 2015 and SARs Scheme 2015, after the ESOP Scheme 2023 and the
SARs Scheme 2023, became effective on 22^nd December, 2023 and 1^st December, 2023, respectively.

The aforesaid schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
("SEBI (SBEB & SE) Regulations, 2021"), as applicable. No material changes were made to these schemes during the year under review.

The relevant details of the aforesaid schemes, as required under the SEBI (SBEB & SE) Regulations, 2021, are available on the Bank''s website
viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html These details, along with the certificate(s) from the
Secretarial Auditor, as required under the SEBI (SBEB & SE) Regulations, 2021, stating that the schemes have been implemented in accordance with
the SEBI (SBEB & SE) Regulations, 2021, as applicable and also in accordance with the relevant resolution(s) passed by the members, would be available
for inspection by the members during the Annual General Meeting ("AGM").

ENVIRONMENT, SOCIAL AND GOVERNANCE PRACTICES

In the financial and banking industry, Environment, Social and Governance Practices (“ESG") has become a critical area of focus and your Bank endeavours
to continually improve its ESG performance. Your Bank has a robust ESG policy framework which articulates ESG focus areas and provides guidance for ESG
practices such as corporate governance, environmental and employee related initiatives, policy revisions and other ESG related projects undertaken. There
is an ESG taskforce comprising representatives from relevant functions and subsidiaries to enable implementation of the framework. This taskforce plays a
critical role in recording and providing data on various ESG parameters which is subsequently collated, analysed and reported and the ESG performance is
reported to the Corporate Social Responsibility and Environmental, Social and Governance Committee (“CSR & ESG Committee") and the Board, periodically.
Your Bank adheres to the highest standards of corporate governance, which includes disclosure, transparency, accountability and responsiveness. Details
of some existing policies aligned to ESG principles have been provided in the BRSR section of the Annual Report for FY 2023-24.

The coverage of ESG disclosures on the operational environmental footprint and employee count has been extended to cover all locations where
your Bank and its subsidiaries operate, except Sonata Finance Private Limited, which was acquired recently in March 2024. Your Bank emphasises
on integration of ESG in its core business practices. Details of environmentalmanagement, employee diversity, well-being and development,
financial inclusion and community focused interventions, customer experience and data privacy are covered in the ESG sections of the Integrated Annual
Report. During FY 2023-24, your Bank has undertaken climate change risk assessments to understand impacts of climate on its portfolio (exposure to one
more sector) and its operations. For details on the same, please refer to the ESG disclosures in the Integrated Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report ("BRSR") showcases ESG performance with enhanced transparency and focuses to quantifiable
metrics by providing essential and voluntary indicators rather than qualitative and subjective metrics. Your Bank has been publishing the BRSR since
FY 2021-22, endeavouring to be at the forefront of sustainability reporting by being an early adopter of BRSR.

In July 2023, SEBI made a further amendment to the provisions of SEBI Listing Regulations by introducing BRSR Core for listed entities and mandating
reasonable assurance for it. The BRSR Core comprises key performance indicators under nine ESG attributes, which are a sub-set of the BRSR format and
is subject to undergo reasonable assurance. Your Bank has undertaken reasonable assurance for BRSR Core parameters for FY 2023-24.

The Bank''s disclosure on environmental performance covers aspects such as resource usage (energy and water), Greenhouse Gas (GHG) emissions
(Scope 1, 2 & 3) and waste disposed. Disclosure on social aspects covers the workforce diversity (gender and differently abled employees), turnover rates,
median wages, occupational health and safety, training, inclusive development (procurement from MSMEs and job creation in smaller towns), community
development and customer centric approach, etc., while governance related performance covers ethics, transparency and accountability, respecting the
interests of and being responsive to all its stakeholder, respect and promote human rights, engage in influencing public and regulatory policy in a responsible
and transparent manner and engage with and provide value to their consumers in a responsible manner. Further details on the governance aspect can be
referred to in the Report on Corporate Governance, annexed to this Report.

BRSR, including the BRSR Core parameters for FY 2023-24, is part of the Integrated Annual Report of the Bank and is also available on the Bank''s website
viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

CORPORATE SOCIAL RESPONSIBILITY

Your Bank has undertaken socially impactful Corporate Social Responsibility ("CSR") Projects for welfare and sustainable development of the population
at large, in accordance with the guidelines and robust mechanism laid out in the Kotak Mahindra Bank Limited''s Corporate Social Responsibility
Policy (“CSR Policy"). Your Bank has collaborated with implementing agencies across to implement projects in the CSR focus areas defined under its
CSR Policy viz., Education & Livelihood, Healthcare, Environment & Sustainable Development, Sports and Relief & Rehabilitation.

Your Bank''s CSR Policy sets out its vision, mission, governance and CSR focus areas to fulfill its inclusive agenda across many geographies of India.
The Policy also highlights your Bank''s intent to contribute towards the economic, environmental and social growth of the nation and also reflects
the organization''s commitment to contribute towards United Nation''s (“UN") Sustainable Development Goals (“SDGs"). Your Bank has enhanced
its CSR footprint in accordance with the guidelines led out in the CSR Policy, by focusing on sustainable, scalable and perceptible CSR Projects,
spreading in focused geographies and aligning to SDGs and the nationalnarrative. Your Bank''s CSR Policy is available on the Bank''s website
viz., : https://www.kotak.com/en/about-us/corporate-responsibility.html

Your Bank''s CSR Projects are compliant with the CSR mandate as specified under Section 135 read with Schedule VII of the Act along with the
Companies (Corporate Social Responsibility Policy) Rules, 2014 (“CSR Rules"), as amended from time to time and in line with notifications issued by
the Ministry of Corporate Affairs ("MCA"), from time to time.

The CSR expenditure requirement of your Bank for FY 2023-24 as per Section 135 of the Act and the CSR Rules, as amended from time to time,
was '' 230.24 crore. After setting-off '' 1.42 crore from the excess CSR expenditure spend for FY 2022-23, your Bank''s total CSR obligation for FY 2023-24
was '' 228.82 crore. As against this, the CSR expenditure of your Bank for FY 2023-24 was '' 230.81 crore.

For FY 2023-24, your Bank''s spend on CSR Projects was '' 116.17 crore, amount spent as CSR Administrative Overheads was '' 2.99 crore and the amount
spent on Impact assessment was '' 0.56 crore. An amount of '' 111.08 crore which was on account of the unutilised CSR Project expenditure of Ongoing
CSR Projects for FY 2023-24, has been transferred to the ''Kotak Mahindra Bank Limited Unspent CSR Account FY 2023-24'', in April 2024. Your Bank is
committed to utilise the aforesaid amount within the stipulated period of three years i.e. from 1^st April, 2024 to 31^st March, 2027, towards completion of the
Board approved Ongoing CSR Projects.

Together with the CSR Project spend, impact assessment, administrative overheads and amount transferred to Unspent CSR account, the total
CSR expenditure for FY 2023-24 was '' 230.81 crore, which is in excess by '' 1.99 crore over the total CSR obligation for FY 2023-24.

The excess CSR expenditure spend of '' 1.99 crore for FY 2023-24 is being carried forward to three succeeding financial years and would be available for
set-off in those financial years. The details are more particularly described in the Annual Report on CSR activities for FY 2023-24, annexed to this Report.

Your Bank also maintains the Unspent CSR accounts pertaining to funds earmarked for its Ongoing CSR Projects for the previous financial years. Details of
the same are provided in the Annual Report on CSR activities for FY 2023-24, annexed to this Report.

Your Bank is committed to utilise the amount available in Unspent CSR accounts towards completion of the Board approved Ongoing CSR Projects
within the stipulated time limit specified under the Act. The details of the same are more particularly described in the Annual Report on CSR activities for
FY 2023-24, annexed to this Report.

A brief outline of the CSR Policy, the composition of the CSR & ESG Committee and the CSR Project spends during the year under review, have been provided
in detail in the Annual Report on CSR activities annexed to this Report and also in the BRSR section of the Annual Report for FY 2023-24.

TECHNOLOGY AND DIGITISATION

Your Bank has made noteworthy advancements in the areas of Growth & Transformation and Risk & Resiliency, which have resulted in a number of projects
being executed across these two themes. It has led the way in embracing digital innovation and top-tier engineering talent to provide customer-centric
solutions and operational excellence, in a time when technology is changing the banking industry.

On Risk & Resiliency, your Bank has shown significant improvement in uptime and stability metrics for critical applications. Architecture review board is now
in place and Cloud 2.0 architecture blueprint with best practices for information security and operational resiliency is functional for all new initiatives. Your
Bank has invested in and implemented an enterprise service management tool for asset & inventory management and change management.

On the theme of Grow & Transform, various customer journeys were launched in the Consumer and Commercial Banking businesses, including journeys for
small business loans, top up loans and corporate salary customers. Additionally, your Bank hired more than 500 highly qualified and experienced engineers
to strengthen its technological foundation.

In order to improve customer service, the legacy tool has been replaced with a state-of-the-art platform called K Force, which has resulted in notable gains
in customer feedback and responsiveness.

Your Bank will continue to invest to fortify its IT systems. The primary focus is on accelerated execution of the comprehensive plan for core banking
resilience, continued demonstration of sustainable compliance to cyber security controls and strengthening of digital payment security controls.

Your Bank''s unwavering commitment to technological advancement is evidenced by its strategic initiatives aimed at enhancing customer experience
and operational efficiency. Your Bank has heavily invested in cutting-edge technologies such as artificial intelligence and data analytics to enable risk
management, fraud detection and personalized services and continues to take various technological initiatives.

The digital transformation journey of your Bank is anchored on the pillars for digital innovation, agility and security. Your Bank has enhanced its digital
platforms to offer customers seamless Omni channel experience, so as to streamline banking procedures, enable instantaneous fund transfers, enable
digital account opening and to provide secure authentication mechanisms. In addition, your Bank''s digital infrastructure has been strengthened by the use
of strong cybersecurity protocols, guaranteeing the integrity and confidentiality of client data.

Leveraging technology to foster deeper customer engagement, your Bank has introduced a range of digital solutions to cater to the evolving needs of
customers.

Your Bank remains steadfast in its commitment to harnessing technology for sustained growth and innovation. In order to empower both customers and
employees, your Bank will prioritise digital literacy and continue to explore emerging technologies with the goal of creating a futuristic digital ecosystem.

With a strategic combination of innovation, customer-focused thinking and operational efficiency, your Bank is positioned to take advantage of the changing
digital landscape and generate value for all stakeholders.

SUBSIDIARIES AND ASSOCIATES

As of 31^st March, 2024, your Bank had 21 subsidiaries in various businesses, as listed below:²

Sr. No.	Name of the subsidiary	Business activity
1.	Kotak Mahindra Prime Limited	Car Finance and other Lending
2.	Kotak Mahindra Investments Limited	Lending and Investments
3.	Kotak Infrastructure Debt Fund Limited	Infrastructure Financing
4.	Kotak Securities Limited	Stock Broking, Distribution
5.	Kotak Mahindra Capital Company Limited	Investment Banking
6.	Kotak Mahindra Life Insurance Company Limited	Life Insurance
7.	Kotak Mahindra General Insurance Company Limited	General Insurance
8.	Kotak Mahindra Asset Management Company Limited	Mutual Fund Asset Management, Portfolio Management
9.	Kotak Mahindra Trustee Company Limited	Trustee Company for Mutual Fund
10.	Kotak Mahindra Pension Fund Limited	Pension Fund Management
11.	Kotak Alternate Asset Managers Limited (Formerly known as Kotak Investment Advisors Limited)	Alternate Asset Management, Investment Advisory
12.	Kotak Mahindra Trusteeship Services Limited	Trusteeship Services
13.	Kotak Mahindra (UK) Limited	Distribution of financial products and dealing in securities
14.	Kotak Mahindra (International) Limited	Advisory Services, Investments
15.	Kotak Mahindra Inc.	Broker/Dealer
2	GRI 2-2

Sr. No.	Name of the subsidiary	Business activity
16.	Kotak Mahindra Asset Management (Singapore) Pte. Limited	Asset Management
17.	Kotak Mahindra Financial Services Limited	Advisory services for Middle East
18.	IVY Product Intermediaries Limited	Marketing and distribution of various financial products/services
19.	BSS Microfinance Limited	Business Correspondent
20.	Sonata Finance Private Limited (with effect from 28th March, 2024)	Business Correspondent
21.	Kotak Karma Foundation	Centre of Excellence for part of Bank''s CSR activities

On 28^th March, 2024, the Bank acquired 100% of the issued and paid-up capital of Sonata Finance Private Limited ("Sonata"), a Non-Banking Finance
Company - Micro Finance Institution registered with RBI for a total consideration of '' 537.12 crore. With this acquisition, Sonata has become a subsidiary
of the Bank.

Pursuant to the receipt of relevant regulatory approvals, the transaction for acquisition of 70% shareholding in Kotak Mahindra General Insurance Company
Limited ("KGI") by Zurich Insurance Company Limited by way of a combination of primary and secondary acquisitions, for a total consideration of
approximately '' 5,560 crore was completed upon fulfilment of other conditions precedent. Accordingly, KGI has ceased to be a subsidiary of your Bank, on
18^th June, 2024. The Bank now holds the remaining 30% of the share capital of KGI.

The various activities of the subsidiaries, their performance and financial position are outlined in detail in the Management''s Discussion and Analysis
section annexed to this Report.

MATERIAL SUBSIDIARY:

Kotak Mahindra Life Insurance Company Limited is a material subsidiary of the Bank. The Bank''s Policy for determining material subsidiaries, in line with the
SEBI Listing Regulations, is available on the Bank''s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/novernance/policies.html

ASSOCIATE COMPANIES:

As at 31^st March, 2024, your Bank had the following associate companies:

(i) Infina Finance Private Limited

(ii) Phoenix ARC Private Limited

KGI became an associate company of your Bank, on 18^th June, 2024.

Further, pursuant to the provisions of Section 136(1) of the Act, the Annual Report of the Bank, containing the standalone and consolidated financial
statements and all other relevant documents required to be annexed thereto and the separate audited financial statements in respect of each of
the subsidiaries, are available on the Bank''s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html
Pursuant to the provisions of Section 129(3) of the Act, the Statement containing the salient features of the Financial Statements of the said subsidiaries
and associates of the Bank, in Form AOC-1, is annexed to this Report.

The financial statements of the subsidiaries (other than Kotak Karma Foundation, a Section 8 company, whose accounts are excluded from consolidation
in accordance with the requirements of Accounting Standard 21 on "Consolidated Financial Statements") used for consolidation of the Bank''s consolidated
financial statements are special purpose financial statements prepared in accordance with GAAP specified under Section 133 of the Act read with relevant
notifications.

BOARD OF DIRECTORS
BOARD COMPOSITION

The composition of the Board of Directors of the Bank is governed by the Act, the Banking Regulation Act, 1949 ("BR Act") and Regulation 17 of the
SEBI Listing Regulations and is in conformity with the same. As on 31^st March, 2024, the Board of Directors comprised twelve Directors, including
six Independent Directors, three Non-Executive Directors and three Executive Directors. As on the date of this Report, the Board of Directors
comprises eleven Directors viz., Mr. C S Rajan, Non-Executive Independent Part-time Chairman, Mr. Uday Khanna, Mr. Uday Shankar, Dr. Ashok Gulati,
Ms. Ashu Suyash, Mr. Cornelis Petrus Adrianus Joseph ("Eli") Leenaars and Ms. Ketaki Bhagwati, Independent Directors, Mr. Amit Desai and
Mr. Uday Kotak, Non-Executive Directors, Mr. Ashok Vaswani, Managing Director & CEO and Ms. Shanti Ekambaram, Whole-time Director, designated as
Deputy Managing Director.

The size of the Board is commensurate with the size and business of the Bank. The Board meets the criteria prescribed under Section 10(A)(2) of the BR Act
and the circulars issued by the RBI, from time to time. The Board mix provides a combination of professionalism, knowledge, experience and skills required
in the banking industry and also meets the criteria prescribed under the Policy on Board Diversity adopted by the Board.

CHANGES IN COMPOSITION OF THE BOARD

Mr. Uday Kotak resigned as the Managing Director & CEO of the Bank, with effect from 1^st September, 2023. Pursuant to the the approvals of the Board of
Directors and the members of the Bank, Mr. Kotak became a Non-Executive Director of the Bank, with effect from 2^nd September, 2023.

Mr. Dipak Gupta, the then Joint Managing Director, assumed the duties of Managing Director & CEO, as an interim arrangement, for the period up to
31^st December, 2023, pursuant to the approval of the RBI and the members of the Bank. Mr. Gupta ceased to be a Director and Managing Director & CEO of
the Bank, upon completion of his term on 31^st December, 2023.

Pursuant to the approval granted by Board and the RBI, the members of the Bank approved the appointment of Mr. Ashok Vaswani as the Managing Director
& CEO of the Bank, for a period of three years, with effect from 1^st January, 2024.

Further, Mr. Eli Leenaars was appointed as a Director and an Independent Director of the Bank, for a term of four years, with effect from
1^st January, 2024, pursuant to the approvals of the Board and the members of the Bank.

Upon completion of his term on 31^st December, 2023, Mr. Prakash Apte ceased to be a Director and Non-Executive Independent Part-time Chairman of the
Bank.

The Board of Directors of the Bank, approved the appointment of Mr. C S Rajan, Independent Director, as the Non-Executive Independent Part-time Chairman
of the Bank, for a period of two years, with effect from 1^st January, 2024, subject to the approval of the RBI, which was subsequently received.

Mr. KVS Manian and Ms. Shanti Ekambaram, both Whole-time Directors, were re-designated as Joint Managing Director and Deputy Managing Director of
the Bank, respectively, with effect from 19^th March, 2024, till the end of their respective terms on 31^st October, 2025.

Based on the approval of the Board, the members of the Bank approved the re-appointment of Mr. Uday Shankar as an Independent Director of the Bank,
for a second term of three years, with effect from 16^th March, 2024, on the completion of his first term of five years.

Mr. KVS Manian resigned as the Joint Managing Director of the Bank on 30^th April, 2024.

Further, Mr. C Jayaram ceased to be a Director on the Board of the Bank on completion of his term of eight years on 30^th April, 2024, in line with the
provisions of Section 10A(2A)(i) of the BR Act.

Ms. Ketaki Bhagwati was appointed as an Additional Director and an Independent Director of the Bank for a period of four years, with effect from
18^th May, 2024, subject to the approval of the members. The approval of the members is being sought at the ensuing Thirty-Ninth AGM of the Bank. The
details of Ms. Bhagwati are included in the Notice convening the Thirty-Ninth AGM of the Bank.

As on the date of this Report, the Board of your Bank has eleven Directors, including three Women Directors. The Board currently comprises seven
Independent Directors, two Non-Executive Directors and two Executive Directors.

DIRECTORS RETIRING BY ROTATION

Mr. Amit Desai is liable to retire by rotation at the ensuing Thirty-Ninth AGM of the Bank, in terms of Section 152 of the Act and being eligible, has offered
himself for re-appointment as a Director. The Board has approved the said proposal and recommended the same to the members for their approval.

The details of Mr. Desai are included in the Notice convening the Thirty-Ninth AGM of the Bank.

DECLARATION FROM INDEPENDENT DIRECTORS

All the Independent Directors of the Bank have submitted the requisite declarations stating that they meet the criteria of independence as prescribed under
Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The Board has reviewed and assessed the veracity of the aforesaid
declarations, as required under Regulation 25(9) of the SEBI Listing Regulations. In the opinion of the Board, all the Independent Directors fulfill the said
conditions as mentioned in the Act and the SEBI Listing Regulations and are independent of the management. All the Independent Directors of the Bank
have complied with the provisions of sub rules (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 with respect
to registration with the Indian Institute of Corporate Affairs for the Independent Directors'' Database. There has been no change in the circumstances
affecting their status as Independent Directors of the Bank. In the opinion of the Board, the Independent Directors possess the requisite integrity, experience,
expertise and proficiency required under all applicable laws and the policies of the Bank.

DIRECTOR E-KYC

Pursuant to the requirement prescribed under the Companies (Appointment and Qualification of Directors) Rules, 2014, in FY 2023-24, all the Directors of
the Bank have complied with the KYC registration.

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.

BOARD EVALUATION¹

The Board conducted the performance evaluation of the individual Directors, Board Committees and Board as a whole for FY 2023-24, in accordance with
the provisions of the Act and the SEBI Listing Regulations, including the Guidance Note on Board Evaluation issued by the SEBI on 5^th January, 2017.

The NRC approves the criteria and the mechanism for carrying out the said performance evaluation process. Accordingly, the NRC approved the assessment
questionnaire designed for the annual performance evaluation, which broadly covered the following criteria:

(i) Board - Competencies, composition and structure, board dynamics, board functioning, oversight of committee composition and functioning, ethics
and compliance.

(ii) Committees - Composition and quality, process and procedure, terms of reference and certain committee specific questions.

(iii) Chairperson - Key focus areas covering understanding of the role, team work attributes, utilisation of domain expertise, effective communication, etc.
and certain other parameters such as efficient leadership, open-minded, driver of innovation, courteous, professionalism, impartial conduct, devotion
of sufficient time, effective communication and facilitation of productive deliberation.

(iv) Individual Directors - Function and duties, professional and ethical conduct, management relations, understanding of role, commitment, effective
contribution, independent view to decision making, utilisation of domain expertise, etc.

The aforesaid questionnaire was circulated to all the Directors of the Bank for the annual performance evaluation. The Board evaluated the effectiveness of
its functioning and that of the Committees and of individual Directors through the annual Board Evaluation Process.

The Bank had engaged an independent professional services firm for issuing a report on the performance evaluation (“Board Evaluation Report"), based
on the responses received from the Directors. The Board Evaluation Report was placed before the Independent Directors and the Board at their respective
meetings and performance evaluation for FY 2023-24 was carried out by them.

The Directors noted that the results of the performance evaluation indicated a high degree of satisfaction among the Directors. The Board deliberated on
the report and basis suggestions, agreed to enhance focus on identified topics, such as, technology and human resources. These will be monitored and
reported to the Board periodically.

Further, the Bank has taken necessary steps to comply with the suggestions which had arisen from the Board performance evaluation for FY 2022-23.
KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
following officials of the Bank are the Key Managerial Personnel (“KMP"), as on the date of this report:

(i) Mr. Ashok Vaswani, Managing Director & CEO

(ii) Ms. Shanti Ekambaram, Deputy Managing Director

(iii) Mr. Devang Gheewalla, Group Chief Financial Officer

(iv) Ms. Avan Doomasia, Company Secretary.

Mr. Uday Kotak and Mr. Dipak Gupta, ceased to be the Managing Director & CEO and KMPs of the Bank on 1^st September, 2023 and 31^st December, 2023,
respectively.

Mr. Ashok Vaswani was appointed as the Managing Director & CEO and KMP of the Bank, with effect from 1^st January, 2024.

Mr. KVS Manian ceased to be the Joint Managing Director ("JMD") and KMP of the Bank, on 30^th April, 2024.

Mr. Jaimin Bhatt ceased to be the Group Chief Financial Officer and KMP of the Bank, on account of his superannuation on 31^st March, 2024 and
Mr. Devang Gheewalla was appointed as the Group Chief Financial Officer and KMP of the Bank, with effect from 1^st April, 2024.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act. The NRC has
formulated the criteria for appointment of Directors and Senior Management Personnel. Based on the criteria set, the NRC recommends to the Board, the
appointment of Directors and Senior Management Personnel.

The Bank adheres to the process and methodology prescribed by the RBI in respect of the ''Fit & Proper'' criteria as applicable to Private Sector Banks, signing
of Deeds of Covenants which binds the Directors to discharge their responsibilities to the best of their abilities, individually and collectively in order to be
eligible for being appointed/re-appointed as a Director of the Bank. The prescribed declarations/undertakings given by the Directors, other than that of the
members of the NRC, are placed before the NRC and the declarations/undertakings given by the members of the NRC are placed before the Board, for its
review and noting.

The said declarations/undertakings are obtained from all the Directors on an annual basis and also at the time of their appointment/re-appointment, in
compliance with the said laws. An assessment on whether the Directors fulfil the prescribed criteria is carried out by the NRC and the Board, on an annual
basis and also at the time of their appointment/re-appointment.

The details of the remuneration paid to the Non-Executive Independent Part-time Chairman, Executive and Non-Executive Directors of the Bank, for the year
ended 31^st March, 2024 is provided in the Report on Corporate Governance annexed to this Report.

The Non-Executive Independent Part-time Chairman of the Bank, receives a fixed remuneration as recommended by the Board and approved by the
members of the Bank and the RBI, from time to time. This is in addition to payment of sitting fees, car with driver as per applicable policy and reimbursement
of expenses for official purposes/attending duties as a Chairman.

The Board of Directors of the Bank has formulated and adopted a comprehensive Compensation Policy for Non-Executive Directors ("NEDs")

The remuneration payable to the NEDs, other than Part-time Non-Executive Chairman, is in accordance with the provisions of the Circular dated
26^th April, 2021 and the Circular on Review of Fixed Remuneration granted to Non-Executive Directors (“NEDs") dated 9^th February, 2024, issued by RBI
which, inter alia, provides for payment of compensation to NEDs, other than the Chair of the Board, in the form of a fixed remuneration commensurate with
an individual director''s responsibilities and demands on time and which is considered sufficient to attract qualified competent individuals, for an amount not

exceeding '' 30 lakh per annum, including any statutory modification or amendment or re-enactment thereof for the time being in force and the provisions

of the Act.

The salient features of the Compensation Policy of the Bank for NEDs are, inter alia, as follows:

(i) Compensation structure is divided into:

• Sitting fees

• Compensation in the form of Fixed Remuneration

(ii) Amount of sitting fees and remuneration to be decided by the Board from time to time, subject to the regulatory limits.

(iii) Overall cap on compensation in the form of fixed remuneration for each NED (excluding the Part-time Non-Executive Chairman) of
'' 30 lakh per annum or such other amount as may be prescribed by the RBI, from time to time.

(iv) NEDs are not eligible for any stock options of the Bank.

(v) The Part-time Non-Executive Chairman is entitled to a fixed remuneration, as may be approved by the Board, members and RBI, from time to time.
This is in addition to the sitting fees for attending the meetings of the Board/Committees. The Bank may provide car with a driver for the use of the
Part-time Non-Executive Chairman of the Bank and all expenses incurred on such car will be on actuals and borne by the Bank.

The fixed remuneration payable to the Non-Executive Directors other than Part-time Non-Executive Chairman was revised from '' 20 lakh to
'' 30 lakh per annum, from FY 2024-25. The Board also approved the criteria for granting such remuneration.

Further, approval of the members is being sought at the ensuing Thirty-Ninth AGM of the Bank for revision in remuneration payable to the
Non-Executive Independent Part-time Chairman of your Bank from '' 3,600,000/- (Rupees Thirty-Six Lakh only) per annum to '' 5,000,000/-
(Rupees Fifty Lakh only) per annum to Mr. C S Rajan till the end of his tenure as Non-Executive Independent Part-time Chairman of the Bank till
31^st December, 2025, with effect from 1^st July, 2024, subject to such terms and conditions as may be approved by the RBI, from time to time. Details of the
same are included in the Notice convening the Thirty-Ninth AGM of the Bank.

The remuneration paid to the KMPs is in line with the Compensation Policy of the Bank which is based on the RBI Guidelines. The above mentioned policies
are available on the Bank''s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/governance/policies.html

The salient features of the Compensation Policy of the Bank are, as follows:

Objective:

• To maintain fair, consistent and equitable compensation practices in alignment with Kotak''s core values and strategic business goals

• To ensure effective governance of compensation and alignment of compensation practices with prudent risk taking

• To have mechanisms in place for effective supervisory oversight and Board engagement in compensation

• To ensure that the compensation practices are within the regulatory framework stipulated from time to time by the RBI.

Compensation structure comprises total remuneration consisting of:

• Fixed Pay, which includes perquisite pay/benefits

• Variable Pay, which includes Performance Bonus/Incentive, Long Term Incentive Pay in the form of cash bonuses, all share-linked instruments
(e.g. ESOP, SARS, etc.)

• Other payments, which includes Joining/Sign on Bonus, Severance package, Deferred Incentive Plans, etc.

Further, the employees have been broadly classified into following categories:

(i) Category I - Comprising Managing Director & CEO and Whole-time Directors ("WTDs")

(ii) Category II - Material Risk Takers ("MRTs"):

These include employees (excluding employees under Category III) whose actions may have material impact on the risk exposures of the Bank and
who satisfy both qualitative and quantitative criteria, as given below:

a) Qualitative Criteria: Employees in the Grade M10 and above; Business and Function Heads in reporting hierarchy up to two levels below
Managing Director & CEO.

b) Quantitative Criteria: Fixed Cost To Company (“FTCTC") is '' 1.5 crore p.a. and above.

This excludes employees under Category III.

(iii) Category III - Risk control and compliance employees, comprising staff in Grade M9 and above in the following Control functions:

• Risk & Policy function

• Financial Control including group consolidation

• Compliance

• Internal Audit

• Back-office Operations

• Vigilance

• Legal

• Secretarial

• Human Resources

• Corporate Social Responsibility

• Investor Relations

(iv) Category IV: Other employees - This includes all employees, not explicitly covered in the first three categories.

The limits on the ratio of total Variable Pay (including Cash or Non Cash Pay) to Fixed Pay and the limits on the ratio of Cash v/s Non Cash within
Variable Pay, is outlined for each category of employee classification. Further, Malus and Clawback clauses are applicable as per the Compensation Policy.

The NRC and the Board of the Bank have reviewed and approved all the amendments to the said Compensation Policy.

DISCLOSURES PURSUANT TO RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014

The disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report.
REPORT ON CORPORATE GOVERNANCE

The Bank is committed to achieving and adhering to the highest standards of Corporate Governance and constantly benchmarks itself with best practices,
in this regard.

Pursuant to Regulation 34 of the SEBI Listing Regulations, a separate section titled ''Report on Corporate Governance'' has been annexed to this
Report along with the certificate issued by the Secretarial Auditor of the Bank confirming compliance with the mandatory requirements relating to
Corporate Governance under the SEBI Listing Regulations. The Report on Corporate Governance also contains certain disclosures required under the Act,
including the details of the Board meetings held during the financial year ended 31^st March, 2024.³

The Bank also files with the Stock Exchanges, the Report on Corporate Governance in terms of Regulation 27(2) of the SEBI Listing Regulations on a
quarterly, half yearly and annual basis. The said Reports are available on the Bank''s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-
relations/governance/sebi-listing-disclosures.html

SECRETARIAL STANDARDS

Your Bank is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the
Central Government under Section 118(10) of the Act for FY 2023-24.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board of Directors of your Bank had appointed Rupal D. Jhaveri, Practising Company Secretary, a peer reviewed proprietorship firm, to act as the
Secretarial Auditor of the Bank for FY 2023-24. The Secretarial Audit Report for the financial year ended 31^st March, 2024, as required under Section 204 of
the Act and Regulation 24A of the SEBI Listing Regulations, is annexed to this Report. The Secretarial Auditor''s Report does not contain any qualifications,
reservations, adverse remarks or disclaimers.

Kotak Mahindra Life Insurance Company Limited ("KU"), your Bank''s material unlisted subsidiary, has completed its secretarial audit and there are no
qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report of KLI for the financial year ended 31^st March, 2024.
The said Secretarial Audit Report of KLI is also annexed to this Report.

In terms of the provisions of the SEBI Listing Regulations, your Bank has submitted the Annual Secretarial Compliance Report for FY 2023-24 to
the Stock Exchanges within the prescribed time and the same is available on websites of BSE (www.bseindia.com), NSE (www.nseindia.com) and on the
Bank''s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/novernance/sebi-listinn-disclosures.html

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors, based on the representations received from the operating management, confirm in pursuance of Sections 134(3) and 134(5) of the Act, that:

(i) your Bank has, in the preparation of the annual accounts for the financial year ended 31^st March, 2024, followed the applicable accounting standards
and guidance provided by the Institute of Chartered Accountants of India along with proper explanations relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent
so as to give a true and fair view of the state of affairs of your Bank as at 31^st March, 2024 and of the profit of your Bank for the financial year ended
31^st March, 2024;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating
effectively.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration)
Rules, 2014, the Annual Return of the Bank is available on the Bank''s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/
annual-reports.html

STATUTORY AUDITORS

Pursuant to the Bank''s Policy on appointment of Statutory Auditors ("Policy") and the Circular No. DoS.C0.ARG/SEC.01/08.91.001/2021-22 dated
27^th April, 2021 issued by RBI ("RBI Circular"/"Guidelines"), prescribing the guidelines for Appointment of Statutory Auditors (SAs) and in accordance with the
requirements of Section 139 of the Act, read with Rules made thereunder, KKC & Associates LLP Chartered Accountants (Firm Registration No: 105146W/
W100621) ("KKC") and Price Waterhouse LLP Chartered Accountants (Firm Registration Number: 301112E/E300264) ("PW"), are the Joint Statutory
Auditors of the Bank.

The term of PW, as one of the Joint Statutory Auditors of the Bank, expires at the conclusion of the ensuing Thirty-Ninth AGM of the Bank and the Bank is
required to appoint a second Joint Statutory Auditor in place of PW, pursuant to the above mentioned RBI Circular and Policy.

In this regard, based on a review of the profile, including the size, experience and area of specialization and recommendation of the Audit Committee
and the approval of RBI, the Board has, on 29^th June, 2024, inter alia, approved and recommended for the approval of the members, the appointment of
M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No: 117365W) ("Deloitte"), as the second Joint Statutory Auditor of the Bank, to
hold office from the conclusion of the Thirty-Ninth AGM until the conclusion of the Forty-Second AGM of the Bank, for the purpose of the audit of the Bank''s
standalone and consolidated financial statements from FY 2024-25 to FY 2026-27.

Deloitte has consented to act as one of the Joint Statutory Auditors of the Bank and have intimated that such appointment would be in accordance with
the conditions prescribed in Section 139 of the Act and have also confirmed their eligibility to be appointed as Statutory Auditors, in terms of Section 141 of
the Act and applicable rules and RBI Guidelines. The approval of members of the Bank is, accordingly, being sought for the appointment of Deloitte as one
of the Joint Statutory Auditors, at the ensuing Thirty-Ninth AGM.

As per the applicable provisions of law, including RBI Circular/Guidelines and the BR Act, the appointment of Joint Statutory Auditors would be subject to
the approval of the RBI every year.

At the Thirty-Eighth AGM of the Bank, the members had approved an overall audit remuneration/fee not exceeding '' 37,500,000/- (Rupees Three Crore
Seventy-Five Lakh only), plus outlays and taxes, as applicable, for FY 2023-24, allocated by the Bank between PW and KKC, depending upon their respective
scope of work.

Further, based on the recommendation of the Audit Committee, the Board approved an overall annual remuneration/fee of an amount not exceeding
'' 41,000,000 (Rupees Four Crore Ten Lakh only) in addition to any out of pocket expenses, outlays and taxes, as applicable, to the Joint Statutory Auditors
for the time being in office, for the audit/review of financials, as the case may be, in respect of FY 2024-25, to be mutually agreed between the Bank and both
the Joint Statutory Auditors, depending on the scope of work undertaken by each of them, subject to the approval of the members of the Bank.

The approval of members of the Bank is, accordingly, being sought pursuant to the provisions of Section 142 and other applicable provisions, if any, of the
Act and the relevant Rules thereunder and pursuant to Section 30 of the BR Act and RBI Circular for fixing the remuneration of the Joint Statutory Auditors
for FY 2024-25, at the ensuing Thirty-Ninth AGM.

As required under Regulation 33(1)(d) of the SEBI Listing Regulations, the Joint Statutory Auditors have confirmed that they have subjected themselves to the
peer review process of the Institute of Chartered Accountants of India (“ICAI") and that they hold a valid certificate issued by the Peer Review Board of ICAI.

There are no qualifications, reservations or adverse remarks or disclaimers on the Financial Statements and Internal Control over Financial Reporting made
by PW and KKC in the Statutory Auditors'' Report for FY 2023-24.

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirm that your Bank has laid down set of standards, processes and structure which enables it to implement internal financial
controls across the organisation with reference to financial statements and that such controls are adequate and are operating effectively. Controls are
reviewed/revisited/updated/deleted each year for change in processes/organisational changes/product changes, etc. Testing is done for all the controls
with the help of an independent firm of Chartered Accountants, on behalf of Management, who confirm to the Audit Committee of the Bank, the existence
and operating effectiveness of controls over financial reporting. During the year under review, no material or serious observations were observed for
inefficiency or inadequacy of such controls.

IMPLEMENTATION OF IND AS

The Ministry of Finance, Government of India (“GOI"), had vide its press release dated 18^th January, 2016 outlined the roadmap for implementation of
International Financial Reporting Standards ("IFRS") converged Indian Accounting Standards ("Ind AS") for Scheduled Commercial Bank (excluding RRBs),
NBFC and Insurance companies. The RBI vide its circular dated 22^nd March, 2019, deferred the implementation of Ind AS for Scheduled Commercial Banks
(“SCB") till further notice, pending the consideration of some recommended legislative amendments by GOI. The RBI has not issued any further notification
on implementation of Ind AS for SCBs.

The Bank has so far taken following steps for implementation of Ind AS:

(i) Formed Steering Committee for Ind AS implementation. The Steering Committee comprises representatives from Finance, Risk, Information
Technology and Treasury. The Committee closely reviews progress of Ind AS implementation in the Bank and provides guidance on critical aspects
of the implementation.

(ii) The Bank is currently in the process of implementing an IT solution for Ind AS reporting. Further, there may be new regulatory guidelines and
clarifications for Ind AS application, which the Bank will need to suitably incorporate in its implementation.

RELATED PARTY TRANSACTIONS

During the year, your Bank has not entered into any materially significant transaction with its related parties, which could lead to a potential conflict of
interest between the Bank and these parties. All the related party transactions that were entered into during the year were on an arm''s length basis and in
the ordinary course of business. Hence, pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no
related party transactions to be reported under Section 188(1) of the Act and disclosure in Form AOC-2 is not applicable to the Bank.

The members of the Bank had, vide resolutions passed on 12^th March, 2024, approved related party transactions by the Bank, as potential Material related
party transactions under the provisions of Regulation 23 of the SEBI Listing Regulations, with Infina Finance Private Limited (“Infina") and Mr. Uday Kotak
for FY 2024-25, at an arm''s length basis and in the ordinary course of business of the Bank. During the year, none of the related party transactions of the
Bank exceeded the applicable materiality threshold.

The Bank has a Board approved ''Policy on dealing with Related Party Transactions''. The same is available on the Bank''s website
viz., URL: https://www.kotak.com/en/investor-relations/governance/policies.html

All related party transactions are placed before the Audit Committee for its review and approval on a quarterly basis. Omnibus approval of the Audit
Committee is obtained for the related party transactions which are repetitive in nature. Further, the Bank had engaged the services of an external professional
firm for verification of the related party transactions during the year as also their disclosure and for validation of the process followed by the Bank.

Members may refer to Note 7 of Schedule 18B - Notes to Accounts of the Standalone Financial Statement (Other Disclosures) and Note 22 of
Schedule 17 - Notes to Accounts of the Consolidated Financial Statement of your Bank, which set out related party disclosures pursuant to Accounting
Standards AS-18.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The provisions of Section 186 of the Act except sub-section (1), do not apply to loans made, guarantees given and securities provided by a banking company
in the ordinary course of its business and are exempted from the disclosure requirement under Section 134(3)(g) of the Act.

The particulars of investments made by the Bank are disclosed in Schedule 8 of the Financial Statements.

RISK MANAGEMENT POLICY

Pursuant to Regulation 21 of the SEBI Listing Regulations, your Bank has a Risk Management Committee, details of which can be referred to in the Report
on Corporate Governance forming part of this Report. While Risk Management is the responsibility of the Board of Directors, it has delegated its powers
relating to monitoring and reviewing risks associated with the Bank to the Risk Management Committee. Your Bank has a robust Risk Management
Framework and the Bank has also adopted a Group Enterprise-wide Risk Management framework supported by appropriate policies and processes
for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. Details of identification, assessment, mitigations,
monitoring and the management of these risks are mentioned in the Management''s Discussion and Analysis Report annexed to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Bank has undertaken various initiatives for the conservation of energy. Details of the same are available in the BRSR of the Bank which is part of the
Annual Report of the Bank and is also available on the Bank''s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-
reports.html

The Bank has used information technology extensively in its operations as detailed in the para on ''Technology and Digitisation''.

Foreign Exchange earnings and outgo are part of the normal banking business of your Bank.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, other than the fraud reported to the Central Government, there were no instances of fraud by the officer(s) or employee(s) of
the Bank, which were reported by the Statutory Auditors, to the Audit Committee or the Board of Directors of the Bank, under Section 143(12) of the Act.

MAINTENANCE OF COST RECORDS

Being a Banking company, your Bank is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING
CONCERN STATUS AND OPERATIONS IN FUTURE

During the year under review, no significant and/or material order was passed by any regulatory authority or Court or Tribunal against the Bank, which could
impact the going concern status or its future operations.

As regards the RBI Order dated 24^th April, 2024, please refer paragraph titled, ''Reserve Bank of India Order dated 24^th April, 2024'', appearing earlier in this Report.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE BANK

There are no material changes and commitments which affected the financial position of your Bank, which occurred between the end of the financial year
to which the financial statements relate and up to the date of this Report.

DESPATCH OF ANNUAL REPORT

The MCA has issued GeneralCircular No. 20/2020 dated 5^th May, 2020 read with other relevant circulars issued from time to time, including
General Circular No. 09/2023 dated 25^th September, 2023 and the SEBI has issued Circular No.SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12^th May, 2020,
read with other relevant circulars issued from time to time, including Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2023/167 dated 7^th October, 2023, in
relation to limited relaxation from compliance with certain provisions of the SEBI Listing Regulations. Members who wish to have physical copy may write
to the Company Secretary of the Bank at [e-mail] or submit a written request to the Registered Office of the Bank. In accordance
with the aforesaid circulars, the weblink of the Annual Report and the Notice convening the AGM of the Bank is being sent in electronic mode only to
members whose e-mail address is registered with the Bank or the Depository Participant(s). Those members, whose email address is not registered with
the Bank or with their respective Depository Participant(s) and who wish to receive the Notice of the AGM and the Annual Report for the financial year ended
31^st March, 2024, can get their email address registered by following the steps as detailed in the Notice convening the AGM. The Annual Report of your
Bank and its subsidiaries are available on the Bank''s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

The following statements/reports/certificates are annexed to the Directors'' Report:

(i) Annual Report on Corporate Social Responsibility Activities of the Bank for the financial year ended 31^st March, 2024.

(ii) Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(iii) Secretarial Audit Report pursuant to Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations.

(iv) Report on Corporate Governance pursuant to Schedule V Part C of the SEBI Listing Regulations along with Certificate from the Secretarial Auditor
regarding compliance of conditions of Corporate Governance as stipulated in Schedule V Part E of the SEBI Listing Regulations.

(v) Management''s Discussion and Analysis Report pursuant to Schedule V Part B of the SEBI Listing Regulations.

ACKNOWLEDGEMENT

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the RBI, the SEBI, Stock Exchanges,
Insurance Regulatory and Development Authority of India and other Government and Regulatory agencies. Your Directors acknowledge the continued
support of the members and also wish to place on record their appreciation for employees for their commendable efforts, commitment, teamwork and
professionalism.

For and on behalf of the Board of Directors

C S Rajan

Chairman

Date: 29^th June, 2024
Place: Mumbai

1

The Bank has paid dividend at the rate of'' 0.405per share (on a proportionate basis) on the Non-Convertible Perpetual Non-Cumulative Preference Shares (“PNCPS") for
the period commencing from 1^st April, 2023 to 13^th March, 2024 (being the Extinguishment Date) for FY 2023-24 (Previous Year:'' 0.405 per share), to all PNCPS holders, as
per the list of beneficial holders on the Record Date of 5^th March, 2024. The Bank has complied with all criteria specified in the Reserve Bank of India (“RBI") circular dated
4^th May, 2005 on payment of dividend on equity shares and the Board of Directors of the Bank have proposed a dividend of'' 2.00 per share (Face Value '' 5/-) for FY
2023-24 (previous year. '' 1.50 per share) from the profits for FY 2023-24. As per the requirements of revised AS 4 - ‘Contingencies and Events Occurring after the
Balance Sheet Date’, this dividend pay-out is appropriated from the amount available for appropriation in the year of pay-out.

---

Mar 31, 2019

Directors' Report

To the Members of

KOTAK MAHINDRA BANK LIMITED

The Directors present their Thirty-fourth Annual Report together with the audited accounts of your Bank for the year ended 31st March, 2019.

FINANCIAL HIGHLIGHTS

(B) Kotak Mahindra Bank Limited - Standalone financial highlights:

* In accordance with the Companies (Indian Accounting Standards (IND AS)) Rules, 2015 the financial statements of the subsidiaries are being prepared in line with notified IND AS with effect from 1* April, 2018. The financial statements of the subsidiaries used for consolidation of the consolidated financial results are special purpose financial statements prepared in accordance with Generally Accepted Accounting Principles in India ('GAAP') specified under Section 133 of the Companies Act, 2013 read with relevant notifications.

** The Bank has paid a dividend at rate of Rs 0.70 per equity share for the year ended 31st' March, 2018 (previous year: 0.60 per equity share for the year ended 31st March, 2017) and has paid interim dividend at rate of 8.10% (on pro-rata basis) on preference shares for year ended 31st March, 2019 (previous year: NIL), to all shareholders, whose names appear on the Register of members / beneficial holders list on the book closure date. As per the requirements of revised AS 4 - 'Contingencies and Events Occurring After the Balance Sheet Date', this payout (including dividend distribution tax) has been appropriated from amount available for appropriation in the year of pay-out.

(A) Kotak Mahindra Bank Limited - Consolidated financial highlights *:

Â	31st March, 2019 Rs in crore	31st March, 2018 Rs in crore
Total Income	28,547.24	23,800.70
Total expenditure, excluding provisions and contingencies	20,199.06	16,642.53
Operating Profit	8,348.18	7,158.17
Provisions and contingencies, excluding tax provisions	962.39	939.95
Profit before tax	7,385.79	6,218.22
Provision for taxes	2,520.46	2,133.92
Profit after tax	4,865.33	4,084.30
Add: Surplus brought forward from the previous year	13,604.60	10,756.29
Amount available for appropriation	18,469.93	14,840.59
Appropriations:	Â	Â
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949	1,216.34	1,021.08
Transfer to Investment Reserve Account	31.06	Â
Transfer to Capital Reserve	6.99	24.00
Transfer to Special Reserve	40.00	55.00
Transfer to Investment Fluctuation Reserve Account	70.89	114.21
Transfer to Fraud Provision	1.40	-
Dividend Paid **	160.28	-
Corporate Dividend Tax	23.68	21.70
Surplus carried to Balance Sheet	16,919.29	13,604.60

 

Â	31st March, 2019 Rs in crore	31st March, 2018 Rs in crore
Total income	45,979.11	38,813.31
Total expenditure, excluding provisions and contingencies	34,358.03	28,630.34
Operating Profit	11,621.08	10,182.97
Provisions and contingencies, excluding provision for tax	1,045.36	1,024.74
Profit before tax	10,575.72	9,158.23
Provision for taxes	3,456.02	3,011.09
Profit after tax	7,119.70	6,147.14
Less: Share of minority interest	-	56.68
Add: Share in profit of Associates	84.43	110.51
Consolidated profit for the Group	7,204.13	6,200.97
Earnings per Equity Share:	Â	Â
Basic (Rs.)	37.78	32.70
Diluted (Rs.)	37.74	32.66

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.80 per equity share (previous year Rs. 0.70 per equity share) for the year ended 31st March, 2019. This would entail a payout of Rs 184.10 crore including dividend distribution tax based on the number of shares as at 30th April, 2019. The dividend would be paid to all the shareholders, whose names appear on the Register of members/ beneficial holders list on the book closure date.

In March 2019, your Directors declared an interim dividend on Perpetual Non-Cumulative Preference Shares of face value of Rs 5 each issued by the Bank, carrying a dividend rate of 8.10%, on pro-rata basis, in respect of the financial year 2018-19, as per the terms of issuance. This entailed a payout of Rs 32.37 crore (including dividend distribution tax).

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 201 5, the Board of Directors of the Bank have adopted a Dividend Distribution Policy which is in line with the parameters prescribed by SEBI for distribution of dividend. The Policy is available on the Bank's website viz. URL:https://www.kotak.com/en/investor-relations/governance/ policies.html

CAPITAL

During the year, authorized share capital of the Bank was altered and increased from Rs 1500 crore consisting of 300 crore equity shares of Rs.5 each to Rs 1900 crore divided into 280 crore equity shares of Rs.5 each and 100 crore preference shares of Rs.5 each.

In August 2018, your Bank has issued and allotted 100 crore 8.10% Perpetual Non-Cumulative Preference Shares (PNCPS) of Rs 5 each amounting to Rs 500 crore.

During the year, your Bank allotted 31,06,321 equity shares arising out of the exercise of Employees Stock Options granted to the whole time director and employees of your Bank and its subsidiaries.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of the Bank as at 31st March, 2019 stood at Rs 14,54,37,74,135 comprising of 1,90,87,54,827 equity shares of Rs.5 each and 100,00,00,000 preference shares of Rs.5 each.

Your Bank has a Capital Adequacy Ratio ('CAR') under Basel III as at 31st March, 2019 of 17.45% with Tier I being 16.93%.

During the year, your Bank has not issued any capital under Tier II. As on 31st March, 2019, outstanding Unsecured, Redeemable Non-Convertible, Subordinated Debt Bonds were Rs 456 crore. The outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II have matured during the year.

Further, in March 2019, your Bank has issued and allotted 1500 Senior Unsecured Rated Listed Redeemable Long Term Bonds in the nature of Non-Convertible Debentures bearing a face value of Rs.10 lakh each aggregating to Rs 150 crore.

OPERATIONS

Consumer Banking

Your Bank services a customer base in excess of 16 million customers covering a wide spectrum across domestic individual and households, non-residents, small and medium business segments for a range of products from basic savings & current accounts to term deposits, credit cards, unsecured and secured loans, working capital and investment advisory.

Your Bank continued its strategy of calibrated expansion of its branch network. As of 31st March, 2019, your Bank had 1500 branches and 2352 ATMs, covering 744 locations. Of the 112 new branches commissioned this year, 44 were in metro, 24 were in urban, 15 semi urban & 29 rural branches. Aided partly by 811, your Bank saw fast paced customer acquisition across all core banking products including savings and current accounts, term deposits, overdrafts and non-resident accounts. Bank has also set up 27 e-lobbies to enable convenience banking for customers. Your Bank also relocated 36 branches across metro and semi urban locations to give easier access and higher convenience to its customers.

Your Bank rolled out several initiatives aimed at offering a superior and differentiated customer experience. Strengthened its customer relationship management capability by setting up a new channel for phone based remote engagement, called VRM (Virtual Relationship Management) channel. This led to a wider coverage and enabled your Bank to reach out to more than 6 lakh customers and service them across deposit, lending and investment needs. In the Retail Institutional Business, for segments like housing societies, educational institutions, etc. introduced a range of services like apartment management solution, smart card solution, closed loop payment solutions, etc. This has helped your Bank strengthen its relationship in this segment. Your Bank extended the Silk program for woman customers to cover salaried base and offers distinctive features like cash back on point of sale (POS) based transactions, linked accounts for minors and discount on lockers. Proposition around Image debit cards was further strengthened with introduction of images of Bank's brand ambassador Ranveer Singh and exclusive art works of renowned artist, Seema Kohli for the Silk program. A new current account proposition was launched specifically for constituents of agriculture produce market committee (APMC) markets and will be available across the 2400 markets in the country. For the Arthias segment in Punjab, a customized solution via Arthia Rupay card was launched which would help your Bank to build a significant market share in the state of Punjab.

Your Bank entered into a banking alliance with government procurement agency, Haryana State Co-operative Supply and Marketing Federation Limited (HAFED) in Haryana and National Agency for Export Development (NAFED) at national level for mustard seed procurement. This would  give a significant boost to the current account book linked to this line of business. The merchant acquiring line of business which was started in 2017-18, gained significant momentum in 2018-19, with the transaction thru put crossing 2 crore figure. Value added features like EMI facility on point of sale transactions were also offered. For customers desirous of investing in mutual funds, a facility was made available in the form of online investment account. This feature was also made available on netbanking and mobile banking. For the internationally aligned customers, ability to subscribe to forex card online, via net or mobile was made available. In line with the regulatory requirement, all the ATMs of your Bank, have been upgraded to become Europay, Mastercard, Visa (EMV) compliant. As per the Government mandate, your Bank has successfully set up aadhaar enrolment centers in 145 branches and also surpassed the transaction volume mandate given by Unique Identification Authority of India (UIDAI). Your Bank also participated in the Pradhan Mantri Gram Swaraj Abhiyan and achieved 100% of the targets under this program. India's first bilingual voice bot in Banking - Keya that responds to customer's queries in English and Hindi was launched by your Bank. Keya handled 17 lakh calls without human assistance.

Your Bank continued to ramp up 811 acquisition numbers this year as well. In order to drive higher engagement with 811 customers, your Bank, this year, focused on cross selling various bank products to the existing 811 customers.

In line with its commitment to enhance customer experience, your Bank joined Ripple's leading enterprise blockchain network (RippleNet) to provide impetus to its cross-border inward remittances. Ripple's settlement solution, xCurrent, is now used to provide the customers with real-time cross-border transactions in a safe and secure manner. FCNR deposits in Singapore Dollar (SGD) was re-introduced to provide NRI customers in Singapore the facility of placing deposit in India under the FCNR (B) scheme. Your Bank participated in a host of events, ranging from business forums, sports leagues & industry awards, etc. to engage with the Mariner community in India.

The Corporate salary business scaled up significantly in 2018-19 and it now services over 3.5 million customers across more than 25000 corporates. Acquisition and servicing capability has been further streamlined to enable inroads in Tier 2 & 3 markets as well and will be the focus in 2019-20.

The year 2018-19 continued to be strong for your Bank's credit card business. Spend volumes on credit card have grown by 56% driven heavily by e-commerce transactions and higher spends per transaction. Digital/Paperless acquisition of Credit Card customers through Sales App and other digital channels like Mobile and Net Banking saw a growth of 290% versus last year, showcasing a superior on-boarding journey to the customers. The business also introduced a unique solution under its Commercial Cards product line which enables a "Do-it-yourself" payment interface for corporates to streamline their indirect expenses like statutory and other ad-hoc payments.

On the Salaried Personal loans segment, loans on mail and SMS was launched to enhance the bouquet of instant loan offering. These along with other digital channels have enabled Salaried Personal Loans book to grow by 45% year on year.

With a view to enhance customer experience, your Bank introduced multiple self-serve features on Home Loan and Loan against Property on Mobile Banking. This helped the customers view their loan details on the Mobile App itself including details like tax certificate, disbursement and repayment details through a click of a button. The service, which went live in January 2019 has already seen over 1 lakh+ hits on the Mobile Banking App Loan section.

Commercial Banking

Your Bank's Commercial Banking business focuses on meeting the banking and financial needs of various customer segments with deeper coverage that goes beyond metro and urban centers through an expanding network of branches and associates. The business has specialized units which offer financial solutions in the areas of Commercial Vehicles, Construction Equipment, Tractor and Agriculture business. It services the priority sector through providing finance for Tractor, Crop loans, Small Enterprises and Allied agricultural activities thereby helping your Bank meet its financial inclusion goal. In line with growing rural incomes, our Bank's Commercial Bank branches have experienced robust growth across product lines on savings as well as lending side.

Your Bank's Construction Equipment (CE) and Tractor Finance businesses reported significant growth and gained market share in their respective businesses, while Commercial Vehicle (CV) business witnessed a slight drop in market share due to margin pressures & change in load carrying norms. Tractor Finance businesses witnessed double digit volume growth and continued to gain market share. The Government spending in the infrastructure sector has led to a strong demand in the CE and CV industry.

Your Bank's Agriculture Financing business continued its focus on the agriculture value chain funding for various agro processing activities. It has registered good growth despite volatility and uncertainty in the commodities market. Microfinance Institutions (MFI) segment growth remains robust and asset quality remains good.

Branches in semi-urban and rural area comes under the umbrella of Commercial Bank. This network plays a crucial role in meeting the financial inclusion goals and credit demand of 'Bharat'. Branch network has expanded and the Liability book has grown at a healthy pace.

Wholesale Banking

Your Bank's Wholesale Banking business caters to a wide range of corporate customer segments including major Indian corporates, conglomerates, financial institutions, public sector undertakings, multinational companies, mid-market companies, small and medium enterprises and realty businesses. This segment offers a comprehensive portfolio of products and services to these customers including working capital finance, medium term finance, trade finance, foreign exchange services, other transaction banking services, custody services, debt capital markets and treasury services.

The year has witnessed significant disruptions in the corporate banking space driven by high NPAs in the industry and stress in certain industry segments. With more capital from banks, mutual funds and NBFCs chasing the high rated end of the corporate space, this space is witnessing high competition which in turn is pushing down yields for banks. The overall credit offtake in the economy has also been muted over the last few years. Despite these challenges, the Wholesale Banking business has been able to achieve growth in the large corporate space in a healthy and profitable manner. Over the years, the Wholesale Banking business has grown its market share through higher customer acquisition, improved customer service and product innovations.

At the same time, your Bank has remained cautious in its exposure, especially in certain segments, which witnessed increased stress and uncertainty during the year. This year, the Small and Medium Enterprise (SME) business was brought into the Wholesale Banking fold. The last couple of years has witnessed disruptions in the SME space from demonetization and rollout of GST which manifested as stress in the Bank's books as well. This year, a number of initiatives were taken to stabilize the business while integrating it with the rest of the Wholesale Bank. The SME business is well poised to capture the growth opportunities in the market. However, this year, owing to the phase of consolidation, growth in this segment was muted. Your Bank has been cautious on the real estate developer segment given the stress in the sector. Your Bank compensated for this slowdown by ramping up exposure to lower risk businesses such as Lease Rental Discounting; however the spreads were impacted by this mix change. Your Bank has also been cautious on its lending to Non-Banking Financial Institutions and therefore changed mix towards higher rated NBFCs given the challenges that the NBFC sector went through during the year.

Your Bank has remained as focused on adding new customers in a profitable manner as increasing wallet share with existing customers. The last few years have seen a healthy addition of New-to-Bank customers in the large corporate segment, which in turn sets a strong foundation for future growth in the business. Going forward, your Bank will focus on increasing the momentum in New-to-Bank customer acquisition in the SME space too.

Your Bank has an integrated Corporate and Investment Banking (CIB) approach towards certain top conglomerates and large corporates. The CIB model has ramped up well and has helped it to deepen its presence with these clients and gain further market share.

Robust risk management practices are in place and your Bank has achieved growth over the years without compromising the health of the book. At a time when most corporate banks in the industry are facing huge NPAs, your Bank has kept a tight control on asset slippages. Other than SME, the rest of the corporate segment has witnessed minimal additions to the Gross NPA this year. In SME, a number of initiatives have been taken to stabilize the business. Across corporate segments, your Bank has been proactive in rebalancing the portfolios to reflect economic situations and reduction in exposure to situations with heightened risk. Your Bank's focus on risk management has helped the business reduce its Risk Weighted Assets (RWA) as a percentage of assets over the past few years. The use of Risk Adjusted Return on Capital (RaRoC) pricing models has become ingrained in the way the Wholesale Banking division conducts its business and has helped to optimize pricing, better utilize capital and improve return on equity. Economic Value Add (EVA) measurement tools have been implemented that help your Bank monitor the true risk adjusted value being derived from each client. These initiatives ensure greater focus on improving income mix in favour of non-capital intensive income streams.

The strong momentum in the Integrated Global Transaction Banking Services (GTS) continues across its large suite of products. Current Account & Savings Account balances saw significant growth through innovative solutions and focused marketing efforts. Through focused efforts, your Bank has been successful in capturing a higher market share in Cash Management Services (CMS) from identified flagship accounts. Your Bank launched various receivable solutions across C2B and B2B clients which witnessed a growth of more than 300% in flows through client accounts. Products like Smart Collect, Application Program Interface (API) based e-collection offerings, customized value added solutions using National Automated Clearing House (NACH) as clearing system have helped your Bank to acquire as well as increase its wallet share among various key clients. With focus on product development and building new age platforms, your Bank became primary banker to major unicorn companies. Your Bank has also invested in product development for the acquiring business and are now bankers to top aggregators in the e-commerce space. Your Bank was also the largest banking player for Bharat Bill Payment System (BBPS) as a biller on boarding participant during the year. Your Bank believes that, in this dynamic environment, bringing the best of solutions to clients will require engagement with solution providers in the country and your Bank has partnered with fintechs to provide value added solutions. These initiatives have helped increase Current Account balances substantially. On the trade side, the funded and non-funded book continued a strong double digit growth momentum. Strong focus on fee income through trade flows led to a robust growth in fees earned through trade finance and services, with the wholesale business almost doubling this fee income. The strong growth in GTS products has helped your Bank to partly compensate for the fall in spreads in its traditional lending business.

The Custody business continued to witness strong growth despite market uncertainty seen during the second half of this year. Your Bank is today one of India's largest domestic Custodians with Assets Under Custody (AUC) upwards of US$ 30 Bn and is strongly positioned in the India focused offshore funds space. The Custody business added a number of marquee Alternative Investment Funds (AIF) & Portfolio Management Services (PMS) clients in the Domestic segment in addition to having a good market share amongst India based Foreign Portfolio Investments (FPIs). Your Bank also obtained a Professional Clearing Member (PCM) License to offer clearing services on the INDIA INX Exchange in GIFT City becoming the first bank custodian to do so.

Your Bank's dedicated Service Solutions vertical has helped ensure faster customer response and improve customer experience. This vertical is the single point of contact for all service related and documentation issues with personnel present across the country. Your Bank has been successful in significantly reducing Turn-Around-Time (TAT) across various processes including account opening and disbursals. Initiatives such as digitization and workflow automation have helped reduce TAT further.

Strengthening its organizational platform, your Bank continues to target productivity and efficiency improvements. There is greater focus on measuring and improving employee productivity including of its sales force through use of technology and digital tools. Given high focus in this area, costs have been kept well in control further improving profitability of the business.

Your Bank has undertaken a series of digital initiatives primarily focused on improving customer experience. These digital initiatives encompass the entire gamut of transaction banking and include initiatives such as creation of a complete C2B platform for our corporate clients which includes one view for products like BBPS, Unified Payment Interface (UPI) and E-Collections. Corporate mobility platform has been extended for all segments of your Bank and is witnessing good growth in adoption. A number of new product initiatives have been taken in e-commerce -acquiring, issuances, liquidity management, UPI, BBPS, API based solutions, over the counter products, Government based initiatives, aadhaar based initiatives and structured receivable and payable solutions. Bank is investing on NACH and escrow platforms to make onboarding and transaction experience seamless for clients. Furthermore, a few long term initiatives are in various stages of implementation which include an online trade portal, an integrated corporate portal, incorporation of the block chain based technology in foreign and domestic trade products and multiple digital initiatives being undertaken for various Government Bodies.

Wealth Management

Wealth Management, your Bank's private banking arm, acts as advisor to a number of distinguished Indian families and is of the oldest and the most respected Indian wealth management firms. Its customers range from entrepreneurs to business families and professionals.

The business has a strong advisory capability for private clients across equities, fixed income & alternates with complete alignment of interest which makes it the preferred advisor across HNI investors. In addition to comprehensive financial solutions, the business goes beyond investments and includes value added services such as assistance with investment structuring, banking and credit, consolidated reporting, referral for philanthropy services and concierge services. With an in-depth understanding of client requirements and expertise across various asset classes, the business offers the widest range of financial solutions through transaction-based investment approach and asset-advisory based approaches. It has built a formidable suite of products and services for high net worth individuals and offers the same through its Asset-Advisory model. As per the Reserve Bank of India guidelines, advisory activities that were being offered out of your Bank are now offered out of Kotak Investment Advisors Limited, a subsidiary of your Bank with effect from 20th April, 2019.

In addition, your Bank has also built a large Priority Banking business, assisting mass affluent customers with products and solutions developed to meet their financial requirements. The total relationship value across your Bank's Wealth & Priority offerings is ~ Rs 2,70,000 crore.

The business has won several accolades & received recognition at various forums and recently, it has been recognized as the Best Private Bank, India two years in a row by Euromoney Private Banking & Wealth Management Survey 2018 & 2019 & Best Private Bank, India Domestic 2018 by Asian Private Banker among others.

International Business

The GIFT City Branch, an International Financial Services Center Banking Unit of your Bank, has helped your Bank to participate in syndication of overseas loans, lending to clients in international markets and providing External Commercial Borrowing to eligible Indian corporates. Client forex and derivative transactions were also undertaken to help offshore clients with management of interest rate and currency risks, in addition to routine investments in offshore bonds.

Asset Reconstruction

Insolvency and Bankruptcy Code (IBC) initiated to resolve bad and stressed loan is settling down and it may take few more years to see the major impact of this landmark legislation.

During FY 2018-19, resolutions of some large NPA's of the country are seen at an advanced stage through the IBC process.

Your Bank which has been an active player in the business for several years has made significant progress in acquiring several NPA's in all the categories like SME, Corporate and Retail Assets. The size of the book through acquisition from other banks largely by auctions, have sizeably increased in the last financial year. Your Bank believes that the market will continue to be robust for acquiring bad loans and it should be able to continue to acquire sizeable loans at a fair price in the coming year, as well.

Treasury

Your Bank's treasury actively contributes to your Bank by way of:

• Proprietary Trading: The various proprietary trading desks actively trade in products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Equity. Primary Dealer Desk - part of the proprietary trading desk, actively participates in the primary auctions of government securities, makes market in government securities and engages in retailing of government securities.

• Customer Transactions:

o Forex &Derivatives: Facilitating customer access to foreign currency markets through cash & derivatives products for remittances, trade transactions and for managing foreign exchange and interest rate risks.

o Bullion: Under License from Reserve Bank of India (RBI), Bank imports gold and silver to meet needs of customers. The bullion desk provides efficient working capital solutions to domestic Jewellery manufacturers as per prescribed rules of RBI.

• Balance Sheet Management: The Balance Sheet Management Unit (BMU) ensures maintenance of regulatory reserves and adequate liquidity buffers and also manages the Interest rate risk & Liquidity risk within the Risk appetite of the Bank.

Human Resources

FY 2018-19 has been a year of strengthening initiatives in the area of digital adoption, employee engagement, employee wellness and development.

With the talent base of the Bank reaching to over 41,500 employees, more and more millennials being on boarded the average age of the employee base has gone younger by a year at 31 years now. Your Bank has taken various initiatives to engage using digital and technology platforms with employees. It has launched Mobile first app KLAPP for managing onboarding journey of from pre joining to post joining stage to transition from candidate to employee seamlessly. This has helped in engagement, quick assimilation and personalization of the onboarding journey for the new joinee.

Your Bank has also enhanced the focus on future readiness of mid to senior level employees through learning intervention of Digital Blurr, Design Thinking and Digi-Talk. With the renewed rigor on platform launched for on demand learning and byte size learning has enhanced the horizon for learning from behavioral and functional learning to developing skills for future career needs of the employees.

The focus on performance discussion has been enhanced with more through the year focus on "Talk2Do" between managers and their teams for constructive performance discussions.

With the objective to identify, build and nurture leaders across levels to deliver superior business results and address individual career aspirations your Bank continues to invest in spans, structures and assessment tools through various interventions of talent management, succession planning and career management.

Technology & Digitization

Technologies, this year, were leveraged to deliver customer experience, business efficiency, business collaborations and cybersecurity.

Mobile banking app continues to be the highest rated iOS app with 4.8 rating and Android app is at 4.5 rating. App was made more user friendly and saw improved customer experience with home page revamp and payment section revamp. App also became more comprehensive with new features like forex card section, premature withdrawal of fixed/recurring deposits, loan section, online investment account opening etc.

Newer channels, Keya Chatbot and WhatsApp Banking, were launched which use conversational banking approach and Natural Language Processing (NLP) to interact with customers. Keya Chatbot is enabled on all digital channels, viz. Mobile App, www.kotak.com website and Net Banking. Keya Chatbot is able to handle queries about products like Credit Card, Debit Card, Accounts, Fund Transfer, Bill Payment and Personal Loan. Your Bank is the first Indian bank to offer banking services on Whatsapp which allows customers to get services on WhatsApp without installing any app or visiting any webpages. Search and discovery use cases have been enabled on Google Assistant thru voice based interaction.

Kotak Net Banking features were further enhanced with revamped payment experience, online investment account opening, forex card section, buy insurance policies online, refreshed Home page for notifications and revamped Apply Now section.

To make website pages lighter and mobile friendly, which helps in improving SEO (Search Engine Optimization) ranking, 90+ Accelerated Mobile Pages (AMPs) made live on www.kotak.com. These AMP pages are 5 times faster than normal ones. Kotak website has been acknowledged as "Best in class brand for mobile experience" in Finance category - Google 'Masters of mobile' report.

Multiple digital payment methods were introduced for the Bank's customers including Visa Paywave, Samsung Pay, Bharat QR, UPI, BBPS (Bharat Bill Payment System) for Consumers & for Billers, AEPS (Aadhaar Enabled Payment System), AadhaarPay and FASTag - enabling more cashless payments for consumers, merchants, corporates, fintechs, billers etc. and reinforcing Kotak's commitment to the country's Digital India journey. M-store in the Mobile App has been re-branded to KayMall and encompasses multiple commerce categories like Travel (Train, Bus, Flights, Hotels), Shopping (Flipkart, Shopclues) and Subscriptions which the consumer can securely & seamlessly purchase from within the comfort of the Mobile App or Netbanking without having to use a third-party application. Some of the new products launched like Aadhaar Enabled Payment System (AEPS) and AadhaarPay have enabled last-mile payments for Business Correspondent Agents and have also allowed the Bank to service its customers for services like cash withdrawal and payments. For the second consecutive year, your Bank has been ranked amongst the Top 5 Banks in MeitY's 'Digital Payments Achievement Dashboard' (based on a point-scoring methodology) and has overachieved targets set by MeitY for FY 2018-19 on Digital Payments transaction @ -110% of target achievement.

Your Bank started fulfilling the digitally originated leads for Home loans and scaled up the Super-Fast Home Loan initiative.

There were certain digital initiatives of the Bank which were suspended basis the Supreme Court ruling on Aadhaar viz. credit card product as part of 811 Savings account opening journey by using Aadhaar stack and credit bureau; Project Velocity which aimed at servicing through biometric means was a hit with customers and branches with a high Net Promoter Score (NPS) of 77+ till September due to the immediate fulfilment of their service requests which had to be stopped post the ruling. But later different ways of automation were devised to keep the same experience of near realtime fulfilment; 811 FullKYC biometric based onboarding was suspended through this platform(s) post the ruling last year. However, subsequently, the non Aadhaar (scanned physical image based KYC with OTP authentication) full KYC platform for onboarding was made live.

Robotics Process Automation where more than 2 lakh transactions have been completed across multiple processes and Cognitive Machines Reading are the next scaleup areas which are taking shape in India and are said to bring in a culture of basic routine tasks being automated.

Ecosystem collaborations have been enabled thru the Bank's Open banking platform. The Bank has onboarded lending and payment application program interface (API) products, which have gone live with 57 partners availing those API products.

This year, the Bank focussed on SMEs and launched some initiatives around it. Your Bank is the first bank to take co-lending LIVE with Capital Float and participate in Market Place model of psbloansin59minutes.com. Digital processes have been set up for disbursing Business Loan instantly, for existing customers.

This year, technologies were put in place to provide support for customer lending. Starting with a Lead Management System to accept loan enquires, and track them, to systems to support loan application evaluation and a "business rule engine" that uses analytics to assist in disbursement decisions. The systems will provide a base for processing of a wide spectrum of different types loans from simple personal loans to the more complex housing loans in the coming years.

The foundation for NLP laid down last year to launch 'Keya' the first Artificial Intelligence (Al) powered Voicebot in the banking sector was further leveraged. The use of IVR was replaced by conversational banking, so that the customer's experience on calling the Bank's contact center was simplified and enhanced. A "Virtual Relationship Manager" capability was also introduced, to enable customers to telephonically connect to their personalized service manager.

With increased focus on digital solutions and heightened cybersecurity concerns, there is a need for constant innovation in the information security area. New solutions were implemented to mitigate the risk of APT (Advanced Persistent Threat) attacks. The solution detects and prevents custom malicious code being sent over the network into the Bank's environment.

SUBSIDIARIES & ASSOCIATES

As at 31st March, 2019, your Bank has nineteen (19) subsidiaries as listed below:

Domestic Subsidiaries

Kotak Mahindra Prime Limited

Kotak Mahindra Investments Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Life Insurance Company Limited

Kotak Mahindra General Insurance Company Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Mahindra Pension Fund Limited

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Infrastructure Debt Fund Limited

IVY Product Intermediaries Limited

BSS Microfinance Limited

International Subsidiaries

Kotak Mahindra (UK) Limited

Kotak Mahindra (International) Limited

Kotak Mahindra Inc.

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Limited

The key business segments where the subsidiaries operate include investment banking, stock broking, vehicle finance, advisory services, asset management, life insurance and general insurance.

Kotak Mahindra Life Insurance Company Limited (KLI) has recorded a growth of 23.8% on the gross premium, mainly coming from Individual renewal premium. KLI has solvency ratio of 3.02 against requirement of 1.50.

Capital Markets witnessed a significant slowdown in primary market activity compared to previous fiscal; accordingly, Kotak Securities Limited and Kotak Mahindra Capital Company Limited reported lower profits compared to the previous year.

The growth in the mutual funds industry continued albeit with a relatively modest pace in FY 2019. Kotak Mahindra Asset Management Company (KMAMC), continues to be the 7th largest Fund House in the country in terms of Quarterly Average Asset Under Management (QAAUM). Market share in QAAUM has grown to 6.14% from 4.32% 3 years back. KMAMC has outperformed strong growth in the mutual funds industry.

The NBFC sector experienced liquidity problems in September 2018. This not only resulted in increase in borrowing costs but also Kotak Mahindra Prime Limited and Kotak Mahindra Investments Limited (KMIL) had to maintain surplus liquidity for sometime, which had an impact on their bottomline. The liquidity concern in NBFC sector eased post January 2019. International subsidiaries have performed well and continue to add to the shareholders value.

KMIL on 26th April, 2019 sold off its entire equity stake of 19.77% held in Matrix Business Services India Pvt. Ltd. ('Matrix'), an associate company of KMIL. Accordingly, Matrix ceased to be an associate company of KMIL & consequently of the Bank from that date.

The various activities of the subsidiaries and the performance and financial position of the subsidiaries and associates are outlined in the Management Discussion and Analysis section appended to this Report.

The Bank's Policy for determining material subsidiaries is available on the Bank's website viz. URL: https://www.kotak.com/en/investor-relations/ governance/policies.html in line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. KLI is a material subsidiary of the Bank.

As at 31st March, 2019, your Bank has following four (4) Associate companies:

Infina Finance Private Limited

Phoenix ARC Private Limited

Matrix Business Services India Private Limited *

ACE Derivatives & Commodity Exchange Limited

• Ceased to be an Associate Company w.e.f. 26th April, 2019

The Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31st March, 2019, is being sent to all the members of your Bank. The financial statements of the subsidiaries used for consolidation of the Bank's consolidated financial results are special purpose financial statements prepared in accordance with Generally Accepted Accounting Principles in India ('GAAP') specified under Section 133 of the Companies Act, 2013 read with relevant notifications. Web link of the Annual Report is sent to all members whose email IDs are registered with the Bank/Depository Participant(s). For members who have not registered their email IDs, physical copies of the Annual Report are sent. It does not contain Annual Reports of your Bank's subsidiary companies. Your Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) either a hard or soft copy depending upon request by any member of your Bank. These Annual Reports will be available on your Bank's website viz. URL: https://www. kotak.com/en/investor-relations/financial-results/annual-reports.html and will also be available for inspection by any member at the Registered Office of your Bank during working hours.

EMPLOYEE STOCK OPTION & STOCK APPRECIATION RIGHTS SCHEMES

The stock options and the stock appreciation rights granted to the employees of the Bank and its subsidiaries currently operate under the following Schemes:

• Kotak Mahindra Equity Option Scheme 2007

• Kotak Mahindra Equity Option Scheme 2015

• Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2007

• Kotak Mahindra Bank Ltd. (IVBL) Employee Stock Option Scheme 2010

• Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2013

• Kotak Mahindra Stock Appreciation Rights Scheme 2015

The disclosures requirements under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, for the aforesaid ESOP& SARs Schemes, in respect of the year ended 31st March, 2019, are disclosed on the Bank's website viz. URL: https://www. kotak.com/en/investor-relations/financial-results/annual-reports.html

PROMOTER STAKE DILUTION MATTER

In August 2018, your Bank completed its issuance of Perpetual Non-Convertible Preference Shares (PNCPS) resulting in dilution of promoter stake to 19.70% of the paid-up capital of the Bank. However, the Reserve Bank of India (RBI) communicated to the Bank that the PNCPS issuance does not meet their promoter dilution requirement. The Bank has, by way of abundant caution, in December 2018, filed a writ petition with the Hon'ble Bombay High Court to validate its position. The writ petition is pending.

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), a separate section entitled 'Report on Corporate Governance' has been included in this Annual Report. The Report of Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A Business Responsibility Report containing the requisite details under Regulation 34 of the SEBI LODR Regulations is disclosed on the Bank's website viz. URL: https://www.kotak.com/en/investor-relations/financial-results/ annual-reports.html

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Mr. C Jayaram (DIN 00012214) retires by rotation at the Thirty Fourth Annual General Meeting (AGM) of the Bank and is eligible for re-appointment.

Appointment/Re-appointment of Directors

Dr. Shankar Acharya (DIN 00033242) who was Non-Executive Chairman of the Bank since July 2006, did not seek re-appointment as he completed 70 years of age and retired by rotation as a Director at the last Annual General Meeting of the Bank held on 19th July 2018. Mr. Prakash Apte (DIN 00196106), who has been on the Board of the Bank since March 2011 was appointed as part time Chairman of the Bank with effect from 20th July, 2018.

The Board of Directors of the Bank, at its meeting held on 14th/15th March, 2019, based on the recommendation of the Nomination and Remuneration Committee (NRC) and the results of the performance evaluation, re-appointed Mr. Prakash Apte, part-time Chairman of the Bank, as an Independent Director for a second term from 18th March, 2019 to 17th March, 2024, subject to necessary approvals. The Board, based on the recommendation of the NRC, also appointed Mr. Uday Shankar (DIN 01755963) as an Independent Director of the Bank with effect from 16th March, 2019 for a period of five years, subject to necessary approvals. Further, the Board recommended appointment of Mr. K.V.S. Manian (DIN 00031794) & Mr. Gaurang Shah (DIN 00016660) initially as Additional Directors acting as Whole-time Directors of the Bank for a period of three years with effect from the date of approval of the Reserve Bank of India, and subject to necessary approval from the shareholders.

As per Section 10-A(2-A) of the Banking Regulation Act, 1949 (B.R. Act), no director of a banking company, other than its chairman or whole-time director, by whatever name called, shall hold office continuously for a period exceeding eight years. In accordance with Section 10-A(2-A) of the B.R. Act and based on the recommendation of the NRC and the results of the performance evaluation, the Board of Directors of the Bank at its meeting held on 30th April, 2019 re-appointed Ms. Farida Khambata (DIN 06954123) as an Independent Director of the Bank for a second term i.e. the remaining period of three years from 7th September, 2019 to 6th September, 2022, subject to necessary approval from the shareholders.

Accordingly, approval of the shareholders for re-appointment of Mr. Apte & Ms. Khambata through special resolutions and appointment of Mr. Shankar and the Whole-time directors through ordinary resolutions is being sought at the ensuing AGM of the Bank. The details of the Directors being appointed/re-appointed are set out in the Notice of the ensuing AGM of the Bank.

Resignation/Cessation of Directors

Mr. Mark Newman (DIN 03518417), Non-Executive Non-independent Director, resigned from the Board of the Bank with effect from 22nd February, 2019.

Mr. Amit Desai (DIN 00310510), ceased to be a director of the Bank with effect from 17th March, 2019 on completion of his eight years tenure pursuant to the provisions of Section 10-A(2-A)(i) of the Banking Regulation Act, 1949.

Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr. Mark Newman and Mr. Amit Desai, during their tenure as Directors of the Bank.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence and fulfill the conditions as mentioned in Section 149(6) of the Companies Act, 2013 and are independent of the management.

Board Evaluation

The Nomination and Remuneration Committee (NRC) of the Bank's Board has formulated the criteria for performance evaluation of the Directors and the Board as a whole which broadly covers the Board role, Board/Committee membership, practice & procedure and collaboration & style. The performance of the Committees of the Board is evaluated on the criteria viz. composition & quality, process & procedure and the terms of reference.

The NRC of the Bank's Board engaged an external professional services firm to facilitate the self-evaluation process of the Board, its committees, Chairman and individual directors.

A Board effectiveness assessment questionnaire designed for the performance evaluation of the Board, its Committees, Chairman and individual directors (including Independent directors) in accordance with the criteria set and covering various aspects of performance including structure of the board, meetings of the board, functions of the board, role and responsibilities of the board, governance and compliance, evaluation of risks, grievance redressal for investors, conflict of interest, stakeholder value and responsibility, relationship among directors, director competency, board procedures, processes, functioning and effectiveness was circulated to all the directors of the Bank for the annual performance evaluation.

Based on the assessment of the responses received to the questionnaire from the directors on the annual evaluation of the Board, its Committees, the Chairman and the individual directors, the Board Evaluation Report was placed before the meeting of the Independent Directors for consideration. Similarly, the Board at its meeting assessed the performance of the Independent Directors. The Directors noted that the results of the performance evaluation of the Board& its Committees, Chairman and individual directors indicated a high degree of satisfaction amongst the directors. In line with the last year's suggestions of the directors, changing market dynamics & emerging demographic status of the customers, it was felt to actively consider bringing on the Board a director with digital and/or IT expertise to guide the Bank to the next level. Accordingly, the Board has appointed Mr. Uday Shankar, Director who has been driving the digital initiatives of Star India and has expertise in the field especially in understanding the customers' digital needs. Some of the suggestions this year for improving the performance of the Board & Committees were viz. enhanced oversight and opportunities for improvement & functioning of some committees, continuing education of the Board on new developments from governance prospective and Independent directors meeting with the Chairman individually once a year. Accordingly, it is proposed to convene every year a meeting of the Independent Directors with the Chairman individually and also continue to educate the Board on new developments from governance prospective and enhance their understanding of relevant risks, regulatory & industry issues. Further, for improving the functioning of some of the committees, steps have been taken to enhance their scope.

Key Managerial Personnel (KMPs)

The following officials of the Bank continue to be the "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013:

• Mr. Uday Kotak, Managing Director & CEO

• Mr. Dipak Gupta, Joint Managing Director

• Mr. Jaimin Bhatt, President & Group Chief Financial Officer

• Ms. Bina Chandarana, Company Secretary

Appointment & Remuneration of Directors & KMPs

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, 1949. The NRC of the Bank's Board has formulated criteria for appointment of Senior Management personnel and the Directors. Based on the criteria set it recommends to the Board the appointment of Directors and Senior Management personnel.

The NRC reviews the range of skills, experience and expertise on the Board and identify its needs. After a detailed search, a master list of candidates is prepared. The NRC then shortlists the candidates from the master list based on the selection criteria viz. qualifications, knowledge, experience, skills, expertise, fit & proper status, positive attributes as per the suitability of the role, independent status and various regulatory/ statutory requirements as may be required of the candidate. After detailed discussions and deliberations NRC recommends the candidate to the Board. Recognizing the skill set requirement at the Board, NRC went through the aforesaid process for selection of the new director on the Board this year and recommended the appointment of Mr. Uday Shankar who has been driving the digital initiatives of Star India and has expertise in the field especially in understanding the customers' digital needs.

The Reserve Bank of India ('RBI') vide its circular no.DBOD.No.BC.72/29.67.001/2011-12 dated 13th January 2012 has issued the Guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Other Risk Takers of Private Sector Banks on Compensation Policy which inter alia cover the following:

• Proper balance between fixed pay and variable pay;

• Variable pay not to exceed 70% (Seventy Per Cent) of the fixed pay in a year;

In accordance with the aforesaid RBI Circular, the Board of the Bank has adopted a Compensation Policy for its Whole-time Directors, Chief Executive Officer of the Bank and other employees which includes issue of stock appreciation rights as a form of variable pay, linked to the Bank's stock price, payable over a period of time. The salient features of the Compensation Policy are as follows:

• Objective is to maintain fair, consistent and equitable compensation practices in alignment with Kotak's core values and strategic business goals.

• Applicable to all employees of the Bank. Employees classified into 3 groups: o Whole-time Directors/Chief Executive Officer

o Risk Control and Compliance Staff o Other categories of Staff

• Compensation structure broadly divided into Fixed, Variable and ESOPs

o Fixed Pay - Total cost to the Company i.e. Salary, Retirals and Other Benefits

o Variable Pay - Linked to assessment of performance and potential based on Balanced Key Result Areas (KRAs), Standards of Performance and achievement of targets with overall linkage to Bank budgets and business objectives. The main form of incentive compensation includes

Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights.

o ESOPs - Granted on a discretionary basis to employee based on their performance and potential with the objective of retaining the employee.

• Compensation Composition - The ratio of Variable Pay to Fixed Pay and the ratio of Cash v/s Non Cash within Variable pay outlined for each category of employee classification.

• Any variation in the Policy to be with approval of the Nomination & Remuneration Committee.

• Malus and Clawback clauses applicable on Deferred Variable Pay.

• Ensuring no personal hedging strategies by employees which undermine risk alignment effects as part of their remuneration.

The details of the remuneration paid to the Non-Executive Chairman, Executive and Non-Executive Directors of the Bank for the year ended 31st March, 2019 is provided in the Corporate Governance Report annexed to this Report.

The Non-Executive Chairman of the Bank receives a fixed amount of remuneration as recommended by the Board and approved by the shareholders of the Bank and RBI, from time to time. He also receives remuneration by way of sitting fees for attending meetings of the Board or Committees thereof.

RBI vide its circular no. DBR.No.BC.97/29.67.00172014-1 5 dated June 1, 2015 has issued guidelines on payment of compensation to the Non-Executive Directors (NEDs) of private sector banks which inter-alia specifies the following:

• The Board of Directors of the Bank (in consultation with the Nomination& Remuneration Committee) needs to formulate and adopt a comprehensive compensation policy for NEDs (other than part-time non-executive Chairman).

• Maximum amount of profit related commission not to exceed Rs 10 lakh per annum for each director of the Bank.

Accordingly, in line with the aforesaid RBI circular and pursuant to the relevant provisions of the Companies Act, 2013, the Board of the Bank has adopted a compensation policy for the NEDs (excluding the part-time Non-Executive Chairman). The salient features of the Compensation Policy are as follows:

• Compensation structure broadly divided into: o Sitting fees

o Re-imbursement of expenses o Commission (profit based)

• Amount of sitting fees and commission to be decided by the Board from time to time, subject to the regulatory limits.

• Overall cap on commission for each director Rs 10 lakh per annum.

• NEDs not eligible for any stock options of the Bank.

Remuneration paid to the KMPs is in line with the Compensation Policy of the Bank which is based on the RBI Guidelines.

Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 1. Ratio of the remuneration of each director to the median remuneration of the employees for the financial year:

Directors	Title	Ratio
Mr. Uday Kotak	Managing Director & CEO	54.53x
Mr. Dipak Gupta	Joint Managing Director	54.36x
Dr. Shankar Acharya *	Non-Executive Chairman	-
Mr. Prakash Apte *	Non-Executive Chairman	-
* Refer Note 3

2. Percentage increase in remuneration of each director. Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors/KMP	Title	% increase in remuneration	% increase in remuneration excluding SARs
Mr. Uday Kotak	Managing Director & CEO	10.99	10.99
Mr. Dipak Gupta	Joint Managing Director	12.85	12.85
Dr. Shankar Acharya *	Non-Executive Chairman	-	-
Mr. Prakash Apte *	Non-Executive Chairman	Â	-
Mr. Jaimin Bhatt	Group CFO	8.42	7.31
Ms. Bina Chandarana	Company Secretary	1.24	2.90

* Refer Note 3

3. Percentage increase in the median remuneration of employees in the financial year:

For employees who were in employment for the whole of FY 2017-18 and FY 2018-19 increase in the median remuneration is 11.19%.

4. Number of permanent employees on the rolls of Bank at the end of the year: 41,753

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

For employees other than managerial personnel who were in employment for the whole of FY 2017-18 and FY 2018-19 the average increase is 11.16% and 10.61% excluding SARs.

Average increase for managerial personnel is 9.66% and 9.76% excluding SARs.

6. Affirmation that the remuneration is as per the remuneration policy of the Bank:

The Bank is in compliance with its Compensation Policy. Notes:

1) Remuneration includes Fixed pay + Variable paid during the year + perquisite value as calculated under the Income Tax Act, 1961. Remuneration does not include value of Stock Options.

2) Stock Appreciation Rights (SARs) are awarded as variable pay. These are settled in cash and are linked to the average market price/closing market price of the Bank's stock on specified value dates. Cash paid out during the year is included for the purposes of remuneration.

3) Dr. Shankar Acharya retired as a Non-Executive Chairman of the Bank on 19th July, 2018 & Mr. Prakash Apte, a Non-Executive Independent Director of the Bank, was appointed as a Non-Executive Chairman of the Bank with effect from 20* July, 2018. Accordingly, disclosure with respect to their ratio of remuneration/percentage increase in remuneration is not made.

4) The Non-Executive Directors of the Bank, other than the Non-Executive Chairman receive remuneration in the form of sitting fees for attending the Board/ Committee meetings and in the form of an annual profit based commission. The Non-Executive Chairman gets sitting fees for attending meetings and gets a remuneration approved by the shareholders and RBI.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 ('Act'), your Bank has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31st March, 2019 as required under Section 204 of the Act and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report. Your Bank is in compliance with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013 for FY 2018-19.

Kotak Mahindra Life Insurance Company Limited ('KLI'), the Bank's material unlisted subsidiary has got its secretarial audit done and there are no reservations or adverse remarks or disclaimers made in the Secretarial Audit Report for the financial year ended 31st March, 2019. The Secretarial Audit Report of KLI is annexed to this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Bank as on 31st March, 2019 once prepared shall be disclosed on the Bank's website viz. URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

An extract of the Annual Return as on 31st March, 2019 in Form MGT-9 is annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

AUDITORS

Messrs S.R. Batliboi & Co. LLP, Chartered Accountants, statutory auditors of your Bank, retire on the conclusion of the Thirty fourth Annual General Meeting of the Bank. They have been auditors of the Bank for last four financial years. Pursuant to the guidelines issued by the Reserve Bank of India (RBI), an audit firm is allowed to continue as the statutory auditor of a bank for a continuous period of four years only. Accordingly, it is proposed to appoint, subject to the regulatory approvals, Messrs Walker Chandiok & Co. LLP, Chartered Accountants (Registration No. 001076N/N500013), as the statutory auditors of the Bank in place of Messrs S.R. Batliboi & Co. LLP, Chartered Accountants, who have completed four years as the statutory auditors. The necessary application has been made to RBI and approval is awaited. The appointment of auditors along with the relevant details is proposed to the members in the Notice of the current i.e. the Thirty fourth Annual General Meeting for a period of two years from the conclusion of the Thirty fourth Annual General Meeting until the conclusion of the Thirty sixth Annual General Meeting of the Bank, subject to the annual approval of RBI.

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirms that your Bank has laid down set of standards, processes and structure which enables to implement internal financial controls across the organization with reference to financial statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

IMPLEMENTATION OF IND AS

The Ministry of Finance, Government of India has vide its press release dated 18th January, 2016 outlined the roadmap for implementation of International Financial Reporting Standards (IFRS) converged Indian Accounting Standards (Ind AS) for Scheduled commercial bank (excluding RRBs), Non-banking Financial Companies and Insurance companies. RBI has advised Banks vide circular no. RBI/2015-16/315DBR.BPBC. No.76/21.07.001/2015-16 to follow the Ind AS from 1st April, 2018 as notified under the Companies (Indian Accounting Standards) Rules, 201 5 subject to any guideline/direction issued in this regard. Subsequently, RBI through its first monetary policy statement for FY 2018-19 on 5th April, 2018, deferred Ind AS implementation for the Scheduled commercial bank (excluding RRBs) by one year i.e. the implementation of Ind AS will begin from 1st April, 2019 onwards. Further, RBI through vide circular no. DBR.BRBC.No.29/21.07.001/2018-19 dated 22nd March 2019, deferred the implementation of Ind AS for scheduled commercial banks till further notice.

As per Reserve Bank of India (RBI) directions, your Bank has taken following steps so far:

Submitted Standalone Proforma Ind AS financial statements to RBI on a quarterly basis effective FY 2018-19, as required.

Formed Steering Committee for Ind AS implementation. The Steering Committee comprises of representatives from Finance, Risk, Operations and Treasury. The Committee oversees the progress of Ind AS implementation in the Bank, and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely review's progress of Ind AS implementation.

The Bank has identified gaps in IT Systems and the changes required to automate Ind AS. The Bank is in advanced stages for Ind AS implementation.

The Bank will continue to liaise with RBI and industry bodies on various aspects pertaining to Ind AS implementation.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered into during the financial year were on arm's length basis and were in ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no Related Party Transactions to be reported under Section 188(1) of the Companies Act, 2013, in form AOC-2.

All Related Party Transactions are placed before the Audit Committee for its review and approved on a quarterly basis. An omnibus approval of the Audit Committee is obtained for the Related Party Transactions which are repetitive in nature. Further, all Related Party Transactions are reviewed by the statutory auditors of the Bank. Also, during the year, the Bank had engaged the services of an external auditor for verification of the Related Party Transactions, its disclosure and validation of the process followed by the Bank.

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 25 of Schedule 17 - Notes to Accounts of the Consolidated financial statements and Note 7 of Schedule 18B - Notes to Accounts of the Standalone financial statements of your Bank.

The Bank's Policy on dealing with Related Party Transactions is available on the Bank's website viz. URL: https://www.kotak.com/en/investor-relations/governance/policies.html

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, 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 Companies Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Bank is committed to its "Vision Statement" of upholding its Global Indian Financial Services Brand creating an ethos of trust across all constituents, developing a culture of empowerment and a spirit of enterprise thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors highest standards of transparency, probity and accountability. The Kotak Group endeavours to develop a culture where it is safe and acceptable for all employees and directors to raise/voice genuine concerns in good faith, and in a responsible as well as effective manner.

A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or director or vendor, raise genuine concern or report evidence of activity by the Bank or its employee or director or vendor that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank's policies; questionable accounting/audit matters/financial malpractice. The concerns can be reported online on the website viz. URL: https://cwiportal.com/kotak which is managed by independent third party.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exceptional circumstances. Further, the Chairman of the Audit Committee has access rights to the whistle blower portal.

The Policy has been uploaded on the Bank's intranet as well as website viz. URL: https://www.kotak.com/en/investor-relations/governance/ policies.html and regular communication is made for sustained awareness.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Bank has constituted a Board Corporate Social Responsibility Committee (CSR Committee). The CSR Committee presently consists of Prof. S. Mahendra Dev, Mr. C. Jayaram and Mr. Dipak Gupta.

Your Bank's CSR Committee drives the CSR programme of the Bank. Your Bank has a Board approved CSR policy, charting out its CSR approach. This policy articulates the Bank's aim to positively contribute towards economic, environmental and social well-being of communities through its CSR interventions. The core CSR focus areas outlined are:

• Education

• Vocational skills and livelihood

• Preventive healthcare and sanitation

• Reducing inequalities faced by socially and economically backward groups

• Sustainable development

• Relief and rehabilitation

• Clean India

• Sports

The Bank's CSR Policy is available on the Bank's website: https://www.kotak.com/en/about-us/corporate-responsibility.html

Pursuant to the provisions of Section 135, Schedule VII of the Companies Act, 2013 (the Act), read with the Companies (Corporate Social Responsibility) Rules, 2014 the report of the expenditure on CSR by the Bank is as under:

The average net profit u/s 198 of the Bank for the last three financial years preceding 31st March, 2019 is Rs 4,813.64 crore. The prescribed CSR expenditure required u/s 135, of the Act for FY 2018-19 is Rs 9,627 lakh.

The CSR expenditure incurred from 1st April, 2018 to 31st March, 2019 u/s 135 of the Companies Act, 2013 amounts to Rs 3,655 lakh as against Rs 2,640 lakh CSR Expenditure incurred in FY 2017-18. The unspent CSR expenditure amount for FY 2018-19 is Rs 5,972 lakh.

CSR expenditure of Rs 3,655 lakh as a percentage of average net profit u/s 198 of the Bank at Rs 4,813.64 crore is 0.76%.

The Bank's CSR programmes and expenditures are approved by the Board CSR Committee and the Board. The Bank's CSR programmes and expenditure are guided by the vision of creating long-term benefits for the society. The Bank has been building its CSR capabilities on a sustainable basis and is committed to gradually increasing its CSR spending in the coming year for its long-term projects. The Bank identifies suitable NGO partners for carrying out its CSR programmes. It undertakes CSR programmes that are scalable, sustainable and have the potential to be replicated across locations and create a sustainable and measurable impact in communities.

Most of the CSR programmes undertaken are in the area of education, healthcare, livelihood, vocational skill development, sports and other areas such as relief and rehabilitation and environmental sustainability etc. The Bank's CSR footprint has been consistently increasing over the years. The Bank is committed to stepping-up its CSR programmes and expenditure in the years ahead.

The Bank's CSR expenditure in FY 2018-19 of Rs 3,655 lakh, which is over 38% higher than the previous financial year. In FY 2016-17, the Bank's CSR expenditure was Rs 1,733 lakh, which increased to Rs 2,640 lakh in FY 2017-18-an increase of over 52% over the previous financial year.

One of the reasons for Bank CSR expenditure's underspend is the NGOs' inability to utilise large CSR expenditure allocated under the Bank's CSR Programmes.

Your Bank does not consider "administrative overheads" as part of its CSR Expenditure.

The details of CSR Programmes and Expenditure u/s 135 of the Companies Act, 2013, for FY 2018-19, are annexed to this report.

RISK MANAGEMENT POLICY

Your Bank has a Group Enterprise wide Risk Management (ERM) framework supported by appropriate policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. Details of identification, assessment, mitigations, monitoring and the management of these Risks are mentioned in the Management Discussion and Analysis section appended to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank, standalone, was over 41,500 and along with its subsidiaries was over 60,000 as of 31st March, 2019.

146 employees employed throughout the year were in receipt of remuneration of Rs 102 lakh or more per annum and 40 employees employed for part of the year were in receipt of remuneration of Rs 8.5 lakh or more per month.

Culture and values drive have been enhanced through various interactions and employee communication platforms in the organization. Your Bank continued to reiterate this through cross functional meets conducted by senior business leaders for employees at mid management level under the "Meet 5" initiative. It has also enhanced the focus on mental and physical wellbeing of the employees through mobile first platform launched for managing, tracking and facilitative on various health and wellness related requirements of the employees.

Your Bank has continued on the Gender Diversity agenda.

• A differentiated talent acquisition strategy to increase women employee base across various suitable roles has helped us to continue adding 24% women amongst all new hires in the Bank. While continuing with our philosophy of providing equal opportunities, an aggressive push in this area will help us achieve a better balance in gender diversity.

• Prevention of Sexual Harassment (POSH): Bank continues with the belief on zero tolerance towards sexual harassment at workplace and continues to uphold and maintain itself as a safe and non-discriminatory organization. To achieve the same Kotak reinforces the understanding and awareness of Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Bank has formulated Internal Complaints Committee (ICC) at three regions for reporting any untoward instance. Any complaints pertaining to sexual harassment are diligently reviewed and investigated and treated with great sensitivity. The ICC members have been trained in handling and resolving complaints and have also designed an online e-learning POSH Awareness module which covers the larger employee base.

As Bank enters in its next phase of growth and expansion of footprint across urban and rural India, Bank and its subsidiaries continued to carry out several initiatives to attract and retain a pool of highly skilled and motivated employees who are aligned to the firm's vision of becoming the most trusted financial services provider.

In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of the employees are set out in the annexure to the Directors' Report. In terms of the proviso to Section 136(1) of

Following is a summary of sexual harassment complaints received and disposed off during the year 2018-19:

o No. of complaints received	: 27
o No. of complaints disposed off *	: 26

* In respect of one pending case, enquiries were in progress at the close of the year. All the cases pertaining to the previous year which were pending at the beginning have been closed. the Companies Act, 2013, the Directors' Report is being sent to all shareholders excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of your Bank.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confirm in pursuance of Section 134(5) of the Companies Act, 2013, that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31st March, 2019, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank as at 31st March, 2019 and of the profit of your Bank for the financial year ended 31st March, 2019;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNEXURES

Following statements/reports/certificates are set out as Annexures to the Directors' Report:

• Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014.

• Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

• Details of CSR activities and spends under Section 135 of the Companies Act, 2013.

• Certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in para E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the members and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors	Â
Prakash Apte	Place: Mumbai
Chairman	Date: 31st May, 2019

ANNEXURE - A

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN AS ON THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2019

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS

i)	CIN	L65110MH1985PLC038137
ii)	Registration Date	21st November, 1985
iii)	Name of the Company	Kotak Mahindra Bank Ltd.
iv)	Category / Sub-Category of the Company	Banking Company
v)	Address of the Registered office and contact details	27BKC, C 27, G Block,
		Bandra Kurla Complex, Bandra (E),
		Mumbai- 400051
		Tel No. : [phone]
		Fax No.: [phone]
vi)	Whether listed company Yes / No	Yes
vii)	Name, Address and Contact details of Registrar and Transfer Agent, if any	Karvy Fintech Private Limited
		Karvy Selenium Tower B,
		Plot 31-32, Gachibowli Financial District,
		Nanakramguda, Hyderabad - 500032,
		Tel :[phone]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

SI. No.	Name and Description of main products / services	NIC Code of the Product/ service	% to total turnover of the company
1	Monetary intermediation of commercial banks, saving banks, postal savings bank and discount Houses	64191	100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI. No.	Name and Address of the Company	CIN/GLN	Holding / Subsidiary / Associate	% of shares held*	Applicable Section
Domestic Subsidiaries					Â
1	Kotak Mahindra Prime Limited 27BKC, C27, G Block Bandra Kurla Complex, Bandra (E), Mumbai -400051	U67200MH1996PLC097730	Subsidiary	100.00	2(87)
2	Kotak Mahindra Investments Limited 27BKC, C 27, G Block Bandra Kurla Complex, Bandra (E), Mumbai -400051	U65900MH1988PLC047986	Subsidiary	100.00	2(87)
3	Kotak Securities Limited 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai -400051	U99999MH1994PLC134051	Subsidiary	100.00	2(87)
4	Kotak Mahindra Capital Company Limited 27BKC, Plot No. C-27, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051	U67120MH1995PLC134050	Subsidiary	100.00	2(87)
5	Kotak Mahindra Life Insurance Company Limited 2nd Floor, Plot # C- 12, G- Block, BKC, Bandra (E), Mumbai -400051	U66030MH2000PLC128503	Subsidiary	100.00	2(87)
6	Kotak Mahindra General Insurance Company Limited 27 BKC, C27, G Block, Bandra Kurla Complex, Bandra (East), Mumbai -400051	U66000MH2014PLC260291	Subsidiary	100.00	2(87)
7	Kotak Mahindra Asset Management Company Limited 27BKC, C-27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051	U65991MH1994PLC080009	Subsidiary	100.00	2(87)
8	Kotak Mahindra Trustee Company Limited 27BKC, C-27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051	U65990MH1995PLC090279	Subsidiary	100.00	2(87)
9	Kotak Mahindra Pension Fund Limited 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai -400051	U67200MH2009PLC191144	Subsidiary	100.00	2(87)
10	Kotak Investment Advisors Limited 27 BKC, 7th Floor, Plot No. C-27, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051	U65990MH1994PLC077472	Subsidiary	100.00	2(87)
11	Kotak Mahindra Trusteeship Services Limited 27 BKC, 6th Floor, Plot No. C-27, "G" Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051	U65991MH2000PLC125008	Subsidiary	100.00	2(87)
12	Kotak Infrastructure Debt Fund Limited 27BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai -400051	U65910MH1988PLC048450	Subsidiary	100.00	2(87)
13	IVY Product Intermediaries Limited 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (East), Mumbai -400051	U85110MH1987PLC294572	Subsidiary	100.00	2(87)
14	BSS Microfinance Limited No. 11, 2nd Block, 2nd Stage, Outer Ring Road, Near BDA Complex, Nagarabhavi Layout, Bangalore -560072	U74899KA1994PLC049746	Subsidiary	100.00	2(87)
Â	International Subsidiaries	Â	Â	Â	Â
15	Kotak Mahindra (UK) Limited 55 Baker Street, London, W1U7EU, UK	Â	Subsidiary	100.00	2(87)
16	Kotak Mahindra (International) Limited Les Cascades Building, Edith Cavell Street, Port Louis, Mauritius	Â	Subsidiary	100.00	2(87)
17	Kotak Mahindra Inc. 251 Little Falls Drive, New Castle County Wilmington, DE 19808 USA	-	Subsidiary	100.00	2(87)
18	Kotak Mahindra Financial Services Limited 7th Floor, 703, Office Tower - 2, Al Fattan Currency House, Dubai International Financial Centre, PO Box 16498, Dubai	Â	Subsidiary	100.00	2(87)
19	Kotak Mahindra Asset Management (Singapore) Pte. Limited 16, Raffles Quay, #35-02, Hong Leong Building, Singapore - 048581	Â	Subsidiary	100.00	2(87)
Â	Associate Companies	Â	Â	Â	Â
20	Infina Finance Private Limited 7th Floor, Dani Corporate Park, 158, C.S.T. Road, Kalina Santacruz (E), Mumbai - 400098.	U67120MH1996PTC098584	Associate	49.99	2(6)
21	Phoenix ARC Private Limited 5th Floor, Dani Corporate Park, 1 58, CST Road, Kalina, Santacruz (E), Mumbai -400098	U67190MH2007PTC168303	Associate	49.90	2(6)
22	Matrix Business Services India Private Limited ** Shree Mahamadhi Towers, New No 17, Arulambal Street, T Nagar, Chennai - 600017	U74140TN2003PTC051482	Associate	19.77	2(6)
23	ACE Derivatives & Commodity Exchange Limited 1st Floor, Popular House, Ashram Road, Navrangpura, Ahmedabad, Gujarat- 380009.	U67100GJ1956PLC000597	Associate	40.00	2(6)
Â	* Direct and indirect holdings ** Ceased to be an Associate Company w.e.f. 26* April 2019	Â	Â	Â	Â

 

IV SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

(i) Category-wise Share Holding

Category of Shareholders	No. of Equity shares held at the beginning of the year				No. of Equity shares held at the end of the year				% change during the year
	Demat	Physical	Total	% of Total Equity shares	Demat	Physical	Total	% of Total Equity shares
A. Promoters	Â	Â	Â	Â	Â	Â	Â	Â	Â
1) Indian	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Individual /HUF	571,841,408	Â	571,841,408	30.01	571,841,408	Â	571,841,408	29.96	-0.05
b) Central Govt	Â	Â	Â	Â	Â	Â	Â	Â	Â
c) State Govt(s)	Â	Â	-	Â	Â	Â	Â	-	-
d) Bodies Corp	624,556	Â	624,556	0.03	624,556	Â	624,556	0.03	0.00
e) Banks/FI	Â	Â	Â	Â	Â	Â	Â	Â	Â
f) Any Other	Â	Â	-	Â	Â	Â	Â	-	-
Sub total (A) (1)	572,465,964	-	572,465,964	30.04	572,465,964	-	572,465,964	29.99	-0.05
2) Foreign	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) NRIs - Individuals	Â	Â	-	Â	Â	Â	Â	-	-
b) Other- Individuals	Â	Â	Â	Â	Â	Â	Â	Â	Â
c) Bodies Corp.	Â	Â	-	Â	Â	Â	Â	-	-
d) Banks/FI	Â	Â	Â	Â	Â	Â	Â	Â	Â
e) Any Other.	Â	Â	-	Â	Â	Â	Â	-	-
Sub total (A) (2)	-	-	-	-	-	-	-	-	-
Total shareholding of Promoter (A) = (A)(1)+(A)(2)	572,465,964	-	572,465,964	30.04	572,465,964	-	572,465,964	29.99	-0.05
B. Public Shareholding as per classification given by Depository
1. Institutions	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Mutual Funds	134,841,280	28,000	134,869,280	7.08	160,168,020	28,000	160,196,020	8.39	1.31
b) Banks/FI	3,790,240	7,068	3,797,308	0.20	3,421,462	6,634	3,428,096	0.18	-0.02
c) Central Govt	Â	Â	Â	Â	Â	Â	Â	Â	Â
d) State Govt(s)	Â	Â	Â	Â	Â	Â	Â	Â	Â
e) Venture Capital Funds	Â	Â	-	Â	Â	Â	Â	-	-
f) Alternative Investment Funds	2,255,479	Â	2,255,479	0.12	3,846,505	Â	3,846,505	0.20	0.08
g) Insurance Companies	30,173,597	Â	30,173,597	1.58	52,349,181	Â	52,349,181	2.74	1.16
h) Flls	753,862,041	25,600	753,887,641	39.56	768,539,880	25,600	768,565,480	40.27	0.71
i) Foreign Venture Capital Funds	Â	Â	Â	Â	Â	Â	Â	Â	Â
j) Qualified Foreign Investor	Â	Â	Â	Â	Â	Â	Â	Â	Â
Sub-total (B)(1):-	924,922,637	60,668	924,983,305	48.54	988,325,048	60,234	988,385,282	51.78	3.24
2. Non-Institutions	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Bodies Corp.	Â	Â	Â	Â	Â	Â	Â	Â	Â
i) Indian	59,396,957	62,012	59,458,969	3.12	63,869,294	57,952	63,927,246	3.35	0.23
ii) Overseas	Â	Â	Â	Â	Â	Â	Â	Â	Â

 

Category of Shareholders		No. of Equity shares held at the beginning of the year				No. of Equity shares held at the end of the year				% change during the year
		Demat	Physical	Total	% of Total Equity shares	Demat	Physical	Total	% of Total Equity shares
b)	Individuals	Â	Â	Â	Â	Â	Â	Â	Â	Â
i)	Individual shareholders holding nominal share capital upto Rs 1 lakh	67,307,312	6,980,835	74,288,147	3.90	72,394,064	5,780,455	78,174,519	4.10	0.20
ii)	Individual shareholders holding nominal share capital in excess of Rs 1 lakh	109,118,228	331,816	109,450,044	5.74	103,965,192	214,992	104,180,184	5.46	-0.29
c)	Others (specify)	Â	Â	Â	Â	Â	Â	Â	Â	Â
Â	Non Resident Indians	3,014,992	1,215,448	4,230,440	0.22	4,275,735	991,024	5,266,759	0.28	0.06
Â	Non Resident Indians Non- Repatriable	2,757,697	-	2,757,697	0.14	2,935,282	-	2,935,282	0.15	0.01
Â	Overseas Bodies Corporate	8,406,960	-	8,406,960	0.44	8,406,960	-	8,406,960	0.44	0.00
Â	Foreign Bank	32,800,000	-	32,800,000	1.72	32,800,000	-	32,800,000	1.72	0.00
Â	Foreign Bodies	97,166,170	Â	97,166,170	5.10	25,966,992	Â	25,966,992	1.36	-3.74
Â	Foreign Bodies-DR	34,400	-	34,400	0.00	1,744	-	1,744	0.00	0.00
Â	Trust	10,253,369	Â	10,253,369	0.54	13,137,126	Â	13,137,126	0.69	0.15
Â	HUF	1,996,686	14	1,996,700	0.10	1,968,262	14	1,968,276	0.10	0.00
Â	IEPF	2,452,525	-	2,452,525	0.13	3,160,801	-	3,160,801	0.17	0.04
Â	Clearing Members	3,628,987	Â	3,628,987	0.19	6,414,483	Â	6,414,483	0.34	0.15
Â	NBFC	1,273,379	-	1,273,379	0.07	1,561,659	-	1,561,659	0.08	0.01
Â	Foreign National	1,450	-	1,450	0.00	1,550	-	1,550	0.00	0.00
Â	Sub-total(B)(2):-	399,609,112	8,590,125	408,199,237	21.42	340,859,144	7,044,437	347,903,581	18.23	-3.19
Â	Total Public Shareholding (B)=(B)(1)+(B)(2)	1,324,531,749	8,650,793	1,333,182,542	69.96	1,329,184,192	7,104,671	1,336,288,863	70.01	0.05
C.	Shares held by Custodian for GDRs & ADRs	Â	Â	Â	Â	Â	Â	Â	Â	Â
Grand Total (A+B+C)		1,896,997,713	8,650,793	1,905,648,506	100.00	1,901,650,156	7,104,671	1,908,754,827	100.00	Â

Note:

The increase in Equity Share Capital during FY 2018-19 is on account of allotment of equity shares under the various ESOP Schemes of the Bank.

SI no.	Shareholder's Name	Shareholding at the beginning of the year			Shareholding at the end of the year			% change in shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	% of Equity shares pledged / encumbered to total Equity shares	No. of Equity shares	% of total Equity shares of the company	% of Equity shares pledged / encumbered to total Equity shares
1	Uday Suresh Kotak	566,927,100	29.75	0.00	566,927,100	29.70	0.00	-0.05
2	Kotak Trustee Company Pvt. Ltd. Beneficial Owner Mr. Uday S Kotak	624,556	0.03	0.00	624,556	0.03	0.00	0.00
3	Indira Suresh Kotak	2,300,000	0.12	0.00	2,300,000	0.12	0.00	0.00
4	Pallavi Kotak	1,111,580	0.06	0.00	1,111,580	0.06	0.00	0.00
5	Dinkarrai Kalidas Desai	793,508	0.04	0.00	0	0.00	0.00	-0.04
6	Kusum Dinkarrai Desai	298,260	0.02	0.00	0	0.00	0.00	-0.02
7	Suresh Amritlal Kotak	200,000	0.01	0.00	200,000	0.01	0.00	0.00
8	Suresh A Kotak (HUF)	110,000	0.01	0.00	110,000	0.01	0.00	0.00
9	Aarti Neal Chandaria	57,360	0.00	0.00	57,360	0.00	0.00	0.00
10	Janak Dinkarrai Desai	43,600	0.00	0.00	11,35,368	0.06	0.00	0.06
Â	Total	572,465,964	30.04	0.00	572,465,964	29.99	0.00	0.00

(iii) Change in Promoters' Shareholding (please specify, if there is no change)

SI. no.	Â	No. of Equity shares	% of total Equity shares of the company	Cumulative Shareholding during the year
				No. of Equity shares	% of total Equity shares of the company
Â	At the beginning of the year Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc.):	572,465,964	30.04	572,465,964	30.04
1	Dinkarrai Kalidas Desai Gift 19/12/2018	-793,508	-0.04	Â	Â
2	Kusum Dinkarrai Desa Gift 19/12/2018	-298,260	-0.02	Â	Â
3	Janak Dinkarrai Desai Gift 19/12/2018	1,091,768	0.06	572,465,964	29.99
Â	At the End of the year	Â	Â	572,465,964	29.99

(ii) Shareholding of Promoters

(iv) Shareholding Pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)
SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
1	Canada Pension Plan Investment Board	115,163,850	6.04	-	Â	Â	31/03/2018	115,163,850	6.04
		Â	Â	-	Â	Â	31/03/2019	115,163,850	6.03
2	Europacific Growth Fund	94,161,246	4.94	Â	Â	Â	31/03/2018	94,161,246	4.94
		Â	Â	1,378,664	-	Market Sale	21/12/2018	92,782,582	4.86
				321,938	Â	Market Sale	28/12/2018	92,460,644	4.85
				116,862	Â	Market Sale	04/01/2019	92,343,782	4.84
				30,387	-	Market Sale	11/01/2019	92,313,395	4.84
				279,917	Â	Market Sale	18/01/2019	92,033,478	4.82
				Â	2,850,000	Market Purchase	01/03/2019	94,883,478	4.97
				Â	-	Â	31/03/2019	94,883,478	4.97
3	Oppenheimer Developing Markets Fund	57,073,844	2.99	Â	Â	Â	31/03/2018	57,073,844	2.99
		Â	Â	Â	3,422,169	Market Purchase	19/10/2018	60,496,013	3.17
				Â	4,467,879	Market Purchase	26/10/2018	64,963,892	3.41
				Â	1,088,361	Market Purchase	15/02/2019	66,052,253	3.46
Â	Â	Â	Â	Â	Â	Â	31/03/2019	66,052,253	3.46
4	Sumitomo Mitsui Banking Corporation	32,800,000	1.72	Â	Â	Â	31/03/2018	32,800,000	1.72
		Â	Â	Â	-	Â	31/03/2019	32,800,000	1.72
5	SBI Mutual Funds	31,615,462	1.66	Â	Â	Â	31/03/2018	31,615,462	1.66
		Â	Â	Â	128,740	Market Purchase	06/04/2018	31,744,202	1.67
				-	65,355	Market Purchase	13/04/2018	31,809,557	1.67
				-	1,176,481	Market Purchase	20/04/2018	32,986,038	1.73
				Â	58,877	Market Purchase	27/04/2018	33,044,915	1.74
				98,465	Â	Market Sale	04/05/2018	32,946,450	1.73
				-	129,665	Market Purchase	11/05/2018	33,076,115	1.74
				-	209,418	Market Purchase	18/05/2018	33,285,533	1.75
				Â	7,112	Market Purchase	25/05/2018	33,292,645	1.75
				692798	Â	Market sale	01/06/2018	32,599,847	1.71

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
Â	Â	Â	Â	Â	322,221	Market Purchase	08/06/2018	32,922,068	1.73
				Â	187,096	Market Purchase	15/06/2018	33,109,164	1.74
				Â	79,040	Market Purchase	22/06/2018	33,188,204	1.74
				275,750	Â	Market sale	29/06/2018	32,912,454	1.73
				-	601,510	Market Purchase	06/07/2018	33,513,964	1.76
				1,770	-	Market sale	13/07/2018	33,512,194	1.76
				Â	91,766	Market Purchase	20/07/2018	33,603,960	1.76
				21,622	Â	Market sale	27/07/2018	33,582,338	1.76
				-	764,996	Market Purchase	03/08/2018	34,347,334	1.80
				-	145,213	Market Purchase	10/08/2018	34,492,547	1.81
				Â	42,402	Market Purchase	17/08/2018	34,534,949	1.81
				Â	183,403	Market Purchase	24/08/2018	34,718,352	1.82
				Â	156,726	Market Purchase	31/08/2018	34,875,078	1.83
				-	1,361,830	Market Purchase	07/09/2018	36,236,908	1.90
				-	267,513	Market Purchase	14/09/2018	36,504,421	1.91
				Â	126,795	Market Purchase	21/09/2018	36,631,216	1.92
				54,248	Â	Market sale	28/09/2018	36,576,968	1.92
				Â	96,838	Market Purchase	05/10/2018	36,673,806	1.92
				162,494	Â	Market sale	12/10/2018	36,511,312	1.91
				199,645	Â	Market sale	19/10/2018	36,311,667	1.90
				Â	50,966	Market Purchase	26/10/2018	36,362,633	1.91
				Â	259,413	Market Purchase	02/11/2018	36,622,046	1.92
				Â	127,873	Market Purchase	09/11/2018	36,749,919	1.93
				Â	345,604	Market Purchase	16/11/2018	37,095,523	1.95

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
Â	Â	Â	Â	-	115,927	Market Purchase	23/11/2018	37,211,450	1.95
				-	91,452	Market Purchase	30/11/2018	37,302,902	1.96
				Â	240,252	Market Purchase	07/12/2018	37,543,154	1.97
				Â	115,555	Market Purchase	14/12/2018	37,658,709	1.97
				Â	135,498	Market Purchase	21/12/2018	37,794,207	1.98
				Â	20,261	Market Purchase	28/12/2018	37,814,468	1.98
				Â	31,470	Market Purchase	31/12/2018	37,845,938	1.98
				Â	188,929	Market Purchase	04/01/2019	38,034,867	1.99
				Â	202,088	Market Purchase	11/01/2019	38,236,955	2.00
				Â	205,803	Market Purchase	18/01/2019	38,442,758	2.02
				Â	414,556	Market Purchase	25/01/2019	38,857,314	2.04
				Â	224,299	Market Purchase	01/02/2019	39,081,613	2.05
				Â	210,232	Market Purchase	08/02/2019	39,291,845	2.06
				Â	39,364	Market Purchase	15/02/2019	39,331,209	2.06
				Â	106,110	Market Purchase	22/02/2019	39,437,319	2.07
				Â	241,159	Market Purchase	01/03/2019	39,678,478	2.08
				-	82,995	Market Purchase	08/03/2019	39,761,473	2.08
				-	278,883	Market Purchase	15/03/2019	40,040,356	2.10
				-	578,400	Market Purchase	22/03/2019	40,618,756	2.13
				Â	52,530	Market Purchase	29/03/2019	40,671,286	2.13
				Â	Â	Â	31/03/2019	40,671,286	2.13

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
6	Life Insurance Corporation of India	12,226,354	0.64	Â	Â	Â	31/03/2018	12,226,354	0.64
		Â	Â	Â	340,200	Market Purchase	21/09/2018	12,566,554	0.66
				Â	1,594,252	Market Purchase	28/09/2018	14,160,806	0.74
				Â	1,240,025	Market Purchase	05/10/2018	15,400,831	0.81
				Â	1,392,851	Market Purchase	12/10/2018	16,793,682	0.88
				-	690,074	Market Purchase	19/10/2018	17,483,756	0.92
				-	1,545,454	Market Purchase	26/10/2018	19,029,210	1.00
				-	790,684	Market Purchase	02/11/2018	19,819,894	1.04
				Â	839,062	Market Purchase	09/11/2018	20,658,956	1.08
				Â	2,060,690	Market Purchase	16/11/2018	22,719,646	1.19
				Â	245,418	Market Purchase	23/11/2018	22,965,064	1.20
				-	429,472	Market Purchase	30/11/2018	23,394,536	1.23
				-	66,403	Market Purchase	14/12/2018	23,460,939	1.23
				Â	468,032	Market Purchase	21/12/2018	23,928,971	1.25
				Â	435,865	Market Purchase	28/12/2018	24,364,836	1.28
				Â	144,000	Market Purchase	31/12/2018	24,508,836	1.28
				Â	512,090	Market Purchase	04/01/2019	25,020,926	1.31
				Â	638,519	Market Purchase	11/01/2019	25,659,445	1.35
				Â	798,958	Market Purchase	18/01/2019	26,458,403	1.39
				Â	190,463	Market Purchase	25/01/2019	26,648,866	1.40
				Â	498,500	Market Purchase	01/02/2019	27,147,366	1.42

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
Â	Â	Â	Â	-	308,757	Market Purchase	08/02/2019	27,456,123	1.44
				-	500,162	Market Purchase	15/02/2019	27,956,285	1.47
				Â	525,590	Market Purchase	22/02/2019	28,481,875	1.49
				Â	912,503	Market Purchase	01/03/2019	29,394,378	1.54
				Â	646,888	Market Purchase	08/03/2019	30,041,266	1.57
				Â	598,552	Market Purchase	15/03/2019	30,639,818	1.61
				Â	287,000	Market Purchase	22/03/2019	30,926,818	1.62
				Â	Â	Â	31/03/2019	30,926,818	1.62
7	Capital World Growth and Income Fund	28,150,731	1.48	Â	Â	Â	31/03/2018	28,150,731	1.48
		Â	Â	533,452	-	Market Sale	24/08/2018	27,617,279	1.45
				1,030,000	-	Market Sale	28/09/2018	26,587,279	1.39
				Â	2,404,752	Market Purchase	07/12/2018	28,992,031	1.52
				Â	513,176	Market Purchase	14/12/2018	29,505,207	1.55
				Â	622,072	Market Purchase	01/02/2019	30,127,279	1.58
				Â	Â	Â	31/03/2019	30,127,279	1.58
8	Caladium Investment Pte Ltd	25,966,992	1.36	Â	Â	Â	31/03/2018	25,966,992	1.36
		Â	Â	Â	Â	Â	31/03/2019	25,966,992	1.36
9	Axis Mutual Fund	15,710,475	0.82	-	Â	Â	31/03/2018	15,710,475	0.82
		Â	Â	Â	210,351	Market Purchase	06/04/2018	15,920,826	0.84
				-	318,000	Market Purchase	13/04/2018	16,238,826	0.85
				125,200	Â	Market Sale	20/04/2018	16,113,626	0.85
				Â	328,000	Market Purchase	27/04/2018	16,441,626	0.86
				Â	199,830	Market Purchase	11/05/2018	16,641,456	0.87
				206,291	Â	Market Sale	01/06/2018	16,435,165	0.86
				-	95,740	Market Purchase	15/06/2018	16,530,905	0.87

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
Â	Â	Â	Â	Â	74,000	Market Purchase	29/06/2018	16,604,905	0.87
				Â	235,094	Market Purchase	13/07/2018	16,839,999	0.88
				Â	78,500	Market Purchase	20/07/2018	16,918,499	0.89
				Â	373,250	Market Purchase	27/07/2018	17,291,749	0.91
				Â	213,600	Market Purchase	03/08/2018	17,505,349	0.92
				27,000	-	Market Sale	10/08/2018	17,478,349	0.92
				4,800	-	Market Sale	17/08/2018	17,473,549	0.92
				161,800	Â	Market Sale	24/08/2018	17,311,749	0.91
				-	281,847	Market Purchase	31/08/2018	17,593,596	0.92
				125,000	-	Market Sale	14/09/2018	17,468,596	0.92
				Â	149,430	Market Purchase	21/09/2018	17,618,026	0.92
				-	813,000	Market Purchase	28/09/2018	18,431,026	0.97
				-	243,171	Market Purchase	05/10/2018	18,674,197	0.98
				-	356,335	Market Purchase	12/10/2018	19,030,532	1.00
				Â	175,000	Market Purchase	19/10/2018	19,205,532	1.01
				Â	1,398,000	Market Purchase	26/10/2018	20,603,532	1.08
				Â	140,002	Market Purchase	02/11/2018	20,743,534	1.09
				466,400	Â	Market Sale	09/11/2018	20,277,134	1.06
				881,800	Â	Market Sale	16/11/2018	19,395,334	1.02
				102,200	Â	Market Sale	23/11/2018	19,293,134	1.01
				Â	85,000	Market Purchase	30/11/2018	19,378,134	1.02
				356,668	Â	Market Sale	07/12/2018	19,021,466	1.00
				Â	80,638	Market Purchase	14/12/2018	19,102,104	1.00
				Â	215,734	Market Purchase	21/12/2018	19,317,838	1.01
				Â	363,700	Market Purchase	04/01/2019	19,681,538	1.03

 

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
		No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
Â	Â	Â	Â	18,226	Â	Market Sale	11/01/2019	19,663,312	1.03
				Â	109,593	Market Purchase	18/01/2019	19,772,905	1.04
				Â	20,800	Market Purchase	25/01/2019	19,793,705	1.04
				-	69,000	Market Purchase	01/02/2019	19,862,705	1.04
				Â	125,245	Market Purchase	08/02/2019	19,987,950	1.05
				Â	72,000	Market Purchase	15/02/2019	20,059,950	1.05
				Â	650,000	Market Purchase	22/02/2019	20,709,950	1.09
				-	1,565,263	Market Purchase	01/03/2019	22,275,213	1.17
				-	393,600	Market Purchase	08/03/2019	22,668,813	1.19
				Â	68,351	Market Purchase	22/03/2019	22,737,164	1.19
				Â	148,000	Market Purchase	29/03/2019	22,885,164	1.20
				Â	Â	Â	31/03/2019	22,885,164	1.20
10	Caisse De Depot ET Placement DU Quebec	22,344,947	1.17	-	Â	Â	31/03/2018	22,344,947	1.17
		Â	Â	-	16,060	Market Purchase	06/04/2018	22,361,007	1.17
				22,586	Â	Market Sale	29/06/2018	22,338,421	1.17
				88,388	Â	Market Sale	06/07/2018	22,250,033	1.17
				19,724	Â	Market Sale	03/08/2018	22,230,309	1.17
				Â	93,035	Market Purchase	07/09/2018	22,323,344	1.17
				33,625	Â	Market Sale	28/09/2018	22,289,719	1.17
				42,363	Â	Market Sale	05/10/2018	22,247,356	1.17
				138,680	Â	Market Sale	19/10/2018	22,108,676	1.16
				Â	Â	Â	31/03/2019	22,108,676	1.16

Notes:

1) Top ten shareholders (on basis of PAN numbers) of the Bank as on 31st March 2019 has been considered for the above disclosure.

2) Date of change is the date of shareholding statement i.e. the date on which the beneficiary position is downloaded.

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding			Date of change	Cumulative Shareholding during the year
Â	Â	No. of Equity shares	% of total Equity shares of the company	No. of Equity shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the Company
DIRECTORS #
1	Dipak Gupta	1,324,405	0.07	Â	Â	Â	31/03/2018	1,324,405	0.07
		Â	Â	Â	21,764	ESOP Allotment	28/06/2018	1,346,169	0.07
				Â	4,080	ESOP Allotment	17/08/2018	1,350,249	0.07
				78,000	Â	Gift	23/08/2018	1,272,249	0.07
				10,000	Â	Market Sale	09/11/2018	1,262,249	0.07
				Â	11,000	ESOP Allotment	11/12/2018	1,273,249	0.07
				14,442	-	Market Sale	14/12/2018	1,258,807	0.07
				Â	16,429	ESOP Allotment	27/12/2018	1,275,236	0.07
				5,558	-	Market Sale	24/01/2019	1,269,678	0.07
				12,500	Â	Market Sale	28/01/2019	1,257,178	0.07
				15,000	Â	Market Sale	07/02/2019	1,242,178	0.07
				Â	8,571	ESOP Allotment	07/02/2019	1,250,749	0.07
				25,000	-	Gift	20/02/2019	1,225,749	0.07
				Â	19,580	ESOP Allotment	26/03/2019	1,245,329	0.07
				Â	2,500	ESOP Allotment	30/03/2019	1,247,829	0.07
				Â	Â	Â	31/03/2019	1,247,829	0.07
2	C Jayaram	1,108,040	0.06	Â	Â	Â	31/03/2018	1,108,040	0.06
		Â	Â	Â	Â	Â	31/03/2019	1,108,040	0.06
3	Uday Shankar*	-	Â	Â	-	Â	16/03/2019	297	0.00
		Â	Â	Â	Â	Â	31/03/2019	297	0.00
4	Farida Dara Khambata	36,000	0.00	Â	-	Â	31/03/2018	36,000	0.00
		Â	Â	Â	4,000	Market Purchase	29/06/2018	40,000	0.00
				Â	5,000	Market Purchase	17/08/2018	45,000	0.00
				Â	4,000	Market Purchase	24/08/2018	49,000	0.00
				Â	5,000	Market Purchase	05/10/2018	54,000	0.00
				Â	Â	Â	31/03/2019	54,000	0.00
5	Amit K Desai **	1,548,750	0.08	Â	Â	Â	31/03/2018	1,548,750	0.08
		Â	Â	Â	Â	Â	17/03/2019	1,548,750	0.08

# Shareholding details of Mr. Uday Kotak, Managing Director & CEO has been given in the section on 'Shareholding of Promoters'.

* Appointed as an Independent Director w.e.f. 16th March 2019 ** Ceased to be a Director w.e.f. 17th March 2019

(v) Shareholding of Directors and Key Managerial Personnel:

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding			Date of change	Cumulative Shareholding during the year
Â		No. of Equity shares	% of total Equity shares of the company	No. of Equity Shares -Decrease	No. of Equity shares -Increase	Reason		No. of Equity shares	% of total Equity shares of the company
KEY MANAGERIAL PERSONNEL
1	Jaimin Mukund Bhatt	1,287,504	0.07	Â	Â	Â	31/03/2018	1,287,504	0.07
		Â	Â	Â	4,932	ESOP Allotment	17/04/2018	1,292,436	0.07
				Â	6,000	ESOP Allotment	06/06/2018	1,298,436	0.07
				Â	5,052	ESOP Allotment	25/07/2018	1,303,488	0.07
				Â	5,000	ESOP Allotment	17/08/2018	1,308,488	0.07
				Â	3,552	ESOP Allotment	28/09/2018	1,312,040	0.07
				Â	4,000	ESOP Allotment	27/12/2018	1,316,040	0.07
				Â	2,500	ESOP Allotment	16/01/2019	1,318,540	0.07
				Â	11,621	ESOP Allotment	07/02/2019	1,330,161	0.07
				5,000	-	Market Sale	11/02/2019	1,325,161	0.07
				5,000	Â	Market Sale	12/02/2019	1,320,161	0.07
				10,000	-	Market Sale	13/02/2019	1,310,161	0.07
				Â	11,052	ESOP Allotment	26/03/2019	1,321,213	0.07
				Â	2,500	ESOP Allotment	30/03/2019	1,323,713	0.07
				Â	Â	Â	31/03/2019	1,323,713	0.07
2.	Bina Rameshchandra Chandrana	49,669	0.00	Â	-	Â	31/03/2018	49,669	0.00
		Â	Â	Â	716	ESOP Allotment	28/06/2018	50,385	0.00
				Â	448	ESOP Allotment	25/07/2018	50,833	0.00
				Â	720	ESOP Allotment	28/09/2018	51,553	0.00
				Â	Â	Â	31/03/2019	51,553	0.00

IV SHARE HOLDING PATTERN (PREFERENCE SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL PREFERENCE)

(i) Category-wise Share Holding

Category of Shareholders	No. of Preference shares held at the beginning of the year				No. of Preference shares held at the end of the year				% change during the year
	Demat	Physical	Total	% of Total Preference shares	Demat	Physical	Total	% of Total Preference shares
A. Promoters	Â	Â	Â	Â	Â	Â	Â	Â	Â
1) Indian	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Individual /HUF	Â	-	-	-	Â	Â	Â	-	-
b) Central Govt	Â	Â	Â	Â	Â	Â	Â	Â	Â
c) State Govt(s)	Â	-	-	-	Â	Â	Â	-	-
d) Bodies Corp	Â	-	-	-	Â	Â	Â	-	-
e) Banks/FI	Â	Â	Â	Â	Â	Â	Â	Â	Â
f) Any Other	Â	-	-	-	Â	Â	Â	-	-
Sub total (A) (1)	Â	-	-	-	Â	-	-	-	-
2) Foreign	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) NRIs - Individuals	Â	-	-	-	Â	Â	Â	-	-
b) Other- Individuals	Â	Â	Â	Â	Â	Â	Â	Â	Â
c) Bodies Corp.	Â	-	-	-	Â	Â	Â	-	-
d) Banks/FI	Â	Â	Â	Â	Â	Â	Â	Â	Â
e) Any Other....	Â	Â	Â	Â	Â	Â	Â	Â	Â
Sub total (A) (2)	Â	-	-	-	Â	•	-	-	-
Total shareholding of Promoter (A) = (A)(1)+(A) (2)	Â	" "	"	"	Â	"	"	"	"
B. Public Shareholding as per classification given by Depository	Â	Â	Â	Â	Â	Â	Â	Â	Â
1. Institutions	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Mutual Funds	Â	Â	Â	Â	Â	Â	Â	Â	Â
b) Banks/FI	Â	-	-	-	Â	Â	Â	-	-
c) Central Govt	Â	Â	Â	Â	Â	Â	Â	Â	Â
d) State Govt(s)	Â	-	-	-	Â	Â	Â	-	-
e) Venture Capital Funds	Â	Â	Â	Â	Â	Â	Â	Â	Â
f) Alternative Investment Funds	Â	Â	Â	Â	Â	Â	Â	Â	Â
g) Insurance Companies	Â	-	-	-	Â	Â	Â	-	-
h) Flls	Â	-	-	-	Â	Â	Â	-	-
i) Foreign Venture Capital Funds	Â	Â	Â	Â	Â	Â	Â	Â	Â
j) Qualified Foreign Investor	Â	-	-	-	Â	Â	Â	-	-
Sub-total (B)(1):-	Â	-	-	-	Â	•	-	-	-

 

Category of Shareholders	No. of Preference shares held at the beginning of the year				No. of Preference shares held at the end of the year				% change during the year
	Demat	Physical	Total	% of Total Preference shares	Demat	Physical	Total	% of Total Preference shares
2. Non-Institutions	Â	Â	Â	Â	Â	Â	Â	Â	Â
a) Bodies Corp.	Â	Â	Â	Â	Â	Â	Â	Â	Â
i) Indian	898,000,000	Â	898,000,000	89.80	889,735,000	Â	889,735,000	88.97	-0.83
ii) Overseas	-	-	Â	Â	Â	-	-	Â	Â
b) Individuals	Â	Â	Â	Â	Â	Â	Â	Â	Â
i) Individual shareholders holding nominal share capital upto Rs 1 lakh	Â	Â	Â	Â	Â	Â	Â	Â	Â
ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh	102,000,000	Â	102,000,000	10.20	109,065,000	Â	109,065,000	10.91	0.71
c) Others (specify)	Â	Â	Â	Â	Â	Â	Â	Â	Â
HUF	-	-	Â	Â	1,200,000	-	1,200,000	0.12	0.12
Sub-total(B)(2):-	1,000,000,000	-	1,000,000,000	100.00	1,000,000,000	-	1,000,000,000	100.00	0.00
Total Public Shareholding (B)=(B)(1)+(B)(2)	1,000,000,000	-	1,000,000,000	100.00	1,000,000,000	-	1,000,000,000	100.00	0.00
C. Shares held by Custodian for GDRs & ADRs	Â	Â	Â	Â	Â	Â	Â	Â	Â
Grand Total (A+B+C)	1,000,000,000	-	1,000,000,000	100.00	1,000,000,000	-	1,000,000,000	100.00	Â

(ii) Shareholding (Preference Shares) of Promoters - NIL

(iii) Change in Promoters' Shareholding (Preference Shares) (please specify, if there is no change) - NIL

(iv) Shareholding Pattern of top ten shareholders (Preference Shares) (other than Directors, Promoters and Holders of GDRs and ADRs)

SI no	Name of the Shareholder	Shareholding at the beginning of the year		Increase/Decrease in Shareholding during the year			Date of change	Cumulative Shareholding during the year
Â	Â	No. of Preference shares	% of total Preference shares of the company	No. of Preference shares -Decrease	No. of Preference shares -Increase	Reason		No. of Preference shares	% of total Preference shares of the company
1	Signet Chemical Corporation Private Limited	Â	Â	Â	80,000,000	Allotment	02/08/2018	80,000,000	8.00
		Â	Â	Â	Â	Â	31/03/2019	80,000,000	8.00
2	Aditya Birla Finance Limited	Â	Â	Â	70,000,000	Allotment	02/08/2018	70,000,000	7.00
		Â	Â	Â	Â	Â	31/03/2019	70,000,000	7.00
3	Tata Capital Financial Services Ltd.	Â	Â	Â	70,000,000	Allotment	02/08/2018	70,000,000	7.00
		Â	Â	Â	Â	Â	31/03/2019	70,000,000	7.00
4	ICICI Lombard General Insurance Company Ltd.	Â	Â	Â	66,000,000	Allotment	02/08/2018	66,000,000	6.60
		Â	Â	Â	Â	Â	31/03/2019	66,000,000	6.60
5	Bajaj Allianz General Insurance Company Limited-Policyholder Fund	Â	Â	Â	66,000,000	Allotment	02/08/2018	66,000,000	6.60
		Â	Â	Â	Â	Â	31/03/2019	66,000,000	6.60
6	L and T Finance Limited	Â	Â	Â	50,000,000	Allotment	02/08/2018	50,000,000	5.00
		Â	Â	Â	Â	Â	31/03/2019	50,000,000	5.00
7	Denali Finance Private Limited	Â	Â	Â	40,000,000	Allotment	02/08/2018	40,000,000	4.00
		Â	Â	Â	Â	Â	31/03/2019	40,000,000	4.00
8	Famy Care Ltd.	Â	Â	Â	30,000,000	Allotment	02/08/2018	30,000,000	3.00
		Â	Â	Â	Â	Â	31/03/2019	30,000,000	3.00
9	Star Line Leasing Ltd.	Â	Â	Â	30,000,000	Allotment	02/08/2018	30,000,000	3.00
		Â	Â	Â	Â	Â	31/03/2019	30,000,000	3.00
10	Pidilite Industries Limited	Â	Â	Â	30,000,000	Allotment	02/08/2018	30,000,000	3.00
		Â	Â	Â	Â	Â	31/03/2019	30,000,000	3.00

Note:

Top ten shareholders (on basis of PAN numbers) of the Bank as on 31st March 2019 has been considered for the above disclosure.

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

(Rs in crore)

Particulars	Secured Loans excluding deposits	Unsecured Loans @	Deposits @@	Total Indebtedness
Indebtedness at the beginning of the financial year	Â	Â	Â	Â
i) Principal Amount	NIL	25,154.15	1,92,643.27	2,17,797.42
ii) Interest due but not paid	NIL	NIL	NIL	NIL
iii) Interest accrued but not due	NIL	157.17	713.83	871.00
Total (i+ii+iii)	NIL	25,311.32	1,93,357.10	2,18,668.42
Change in Indebtedness during the financial year	Â	Â	Â	Â
Addition	Â	Â	Â	Â
Reduction	Â	Â	Â	Â
Net Change	NIL	7,256.57	33,376.42	40,632.99
Indebtedness at the end of the financial year	Â	Â	Â	Â
i) Principal Amount	NIL	32,248.07	2,25,880.36	2,58,128.44
ii) Interest due but not paid	NIL	NIL	NIL	NIL
iii) Interest accrued but not due	NIL	319.82	853.16	1,172.98
Total (i+ii+iii)	NIL	32,567.89	2,26,733.52	2,59,301.41

& Unsecured Loans represent Borrowings made by the Bank from RBI, banks& other financial institutions (including those raised by way of Infrastructure bonds, Tier II Bonds & Upper Tier II Bonds)

@@ Deposits represent Deposits raised by the Bank under the Banking Regulation Act, 1949.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

(Rs. in lakh)

SI. no.	Particulars of Remuneration	Name of MD/WTD/Manager		Total Amount
		Mr. Uday Kotak (MD)	Mr. Dipak Gupta (WTD designated as Joint MD)
1.	Gross salary *	Â	Â	Â
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	324.55	323.58	648.13
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961®	0.40	633.61	634.01
	(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961	Â	Â	Â
2.	Stock Option	-	Cost included in 1(b) above	Â
3.	Sweat Equity	-	-	-
4.	Commission	Â	-	-
	- as % of profit	Â	Â	Â
	- Others, specify...	Â	Â	Â
5.	Others, please specify	-	-	-
Â	Total (A)	324.95	957.19	1282.14
Â	Ceiling as per the Act **	Â	Â	Â

Notes:

© The perquisite value towards stock options is the difference between exercise price and market price on the date of exercise. The same is not paid by the Bank, amounted to Nil for Mr. Uday Kotak and Rs 633.21 lakh for Mr. Dipak Gupta.

* Gross salary includes Basic salary, Drivers Allowance, Professional Allowance, Reimbursement of Medical expenses, Leave Travel Allowance and Annual Incentives.

** Remuneration of Directors of the Bank is governed by Section 35-B of the Banking Regulation Act, 1949.

B. Remuneration to other directors

(Rs in Lakh)

SI. no.	Particulars of Remuneration	Name of Directors						Total Amount
1	Independent Directors	Mr. Amit Desai @	Prof. S. Mahendra Dev	Mr. Prakash Apte@	Ms. Farida Khambata	Mr. Uday Khanna	Mr. Uday Shankar©	Â
	Fee for attending board/ committee meetings	12.00	18.40	19.40	7.40	13.00	-	70.20
	Commission **	8.00	10.00	10.00	8.00	10.00	-	46.00
	Others - Remuneration @@	Â	Â	17.47	Â	Â	Â	17.47
	Total (1)	20.00	28.40	46.87	15.40	23.00	-	133.67
2	Other Non-Executive Directors	Dr. Shankar Acharya @	Mr. Mark Newman # @	Mr. C. Jayaram @	Â	Â	Â	Â
	Fee for attending board/ committee meetings	4.60	-	11.80	Â	Â	Â	16.40
	Commission **	Â	Â	10.00	Â	Â	Â	10.00
	Others - Remuneration @@	9.03	Â	Â	Â	Â	Â	9.03
	Total (2)	13.63	-	21.80	Â	Â	Â	35.43
	Total(B)=(1+2)	Â	Â	Â	Â	Â	Â	169.10
Â	Total Managerial Remuneration	Â	Â	Â	Â	Â	Â	Â
Â	Overall Ceiling as per the Act *	Â	Â	Â	Â	Â	Â	Â

Notes:

* Remuneration of Directors of the Bank is governed by Section 35-B of the Banking Regulation Act, 1949.

** Commission pertaining to FY2017-18paid during FY2018-19.

# Mr. Mark Newman has waived off the sitting fees & commission payable to him.

@ Dr. Shankar Acharya, Non-Executive Chairman, retired by rotation as a Director at the last Annual General Meeting of the [lank held on 19h July, 2018 and did not seek re-appointment as he completed 70 years of age.

Mr. Prakash Apte appointed as a Non-Executive Chairman w.e.f. 20th July, 2018 & re-appointed as an Independent Director w.e.f. 18th March, 2019. Mr. Mark Newman resigned as a Non-Executive Non-Independent Director w.e.f. 22nd February, 2019. Mr. Uday Shankar appointed as an Independent Director w.e.f. 16th March, 2019. Mr. Amit Desai ceasedto be a Director w.e.f. 17th March, 2019. @@ The Non-Executive Chairman in addition to the sitting fees for attending meetings gets a remuneration approved by the shareholders & Reserve Bank of India.

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

(Rs. in Lakh)

SI. no.	Particulars of Remuneration	Key Managerial Personnel
		Company Secretary	CFO	Total Amount
1.	Gross salary *	Â	Â	Â
	(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961	97.60	424.81	522.41
	(b) Value of perquisites u/s 17(2) Income-tax Act, 1961	12.54	273.72	286.26
	(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961	Â	Â	Â
2.	Stock Option @	Cost included in 1(b) above
3.	Sweat Equity	Â	Â	Â
4.	Commission	-	-	-
Â	as % of profit	Â	Â	Â
Â	others, specify...	Â	Â	Â
5.	Others, please specify	-	-	-
Â	Total	110.14	698.53	808.67

Notes:

& The perquisite value towards stock options is the difference between exercise price and market price on the date of exercise. The same is not paid by the Bank, amounted to Rs12.22 lakh for Company Secretary and Rs 273.44 lakh for CFO.

* Gross salary includes Basic salary, House Rent Allowance, Professional Allowance, Reimbursement of Medical expenses, Leave Travel Allowance, Annual Incentives and cost towards Stock Appreciation Rights.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type	Â	Section of the Companies Act	Brief Description	Details of Penalty / Punishment / Compounding fees imposed	Authority [RD / NCLT / COURT]	Appeal made, if any (give Details)
A.	COMPANY	Â	Â	NIL	Â	Â
	Penalty	Â	Â	Â	Â	Â
	Punishment	Â	Â	Â	Â	Â
	Compounding	Â	Â	Â	Â	Â
B.	DIRECTORS	Â	Â	NIL	Â	Â
	Penalty	Â	Â	Â	Â	Â
	Punishment	Â	Â	Â	Â	Â
	Compounding	Â	Â	Â	Â	Â
C.	OTHER OFFICERS IN DEFAULT	Â	Â	NIL	Â	Â
	Penalty	Â	Â	Â	Â	Â
	Punishment	Â	Â	Â	Â	Â
	Compounding	Â	Â	Â	Â	Â

Secretarial Audit Report

ANNEXURE- B

FORM NO. MR-3

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2019

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

KOTAK MAHINDRA BANK LIMITED.

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by KOTAK MAHINDRA BANK LIMITED (hereinafter called the "Bank").

Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Bank's books, papers, minute books, forms and returns filed and other records maintained by the Bank and also the information provided by the Bank, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Bank has, during the audit period covering the financial year ended on 31st March 2019, complied with the statutory provisions listed hereunder and also that the Bank has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by Bank for the financial year ended on 31st March 2019, according to the provisions of, as may be applicable:

(i) The Companies Act, 2013 (the Act) and the Rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowing;

(v) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(vi) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(vii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 201 5;

(viii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act') to the extent applicable:-

(a) The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993;

(b) The Securities and Exchange Board of India (Bankers to an issue) Regulations, 1994;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992;

(h) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

(i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 and The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018;

(j) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 and SEBI (Depositories and Participants) Regulations, 2018;

(ix) Laws specifically applicable to the industry to which the Company belongs:

(a) The Banking Regulation Act, 1949;

(b) The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (x) Other laws to the extent applicable to the Company as per the representations made by the Company;

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued pursuant to section 118(10) of the Act, by The Institute of Company Secretaries of India.

During the period under review the Bank has complied with the above Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review the Bank has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

I further report that

The Board of Directors of the Bank is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is generally given to all directors to schedule the Board and Committee Meetings, agenda and detailed notes on agenda were sent at least 7 days in advance except in one case of Board Meeting and one case each of Nomination & Remuneration Committee Meeting & Corporate Social Responsibility Committee Meeting which were held at a short notice to transact urgent business, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors of the Bank were carried out unanimously. There were no dissenting views by any member of the Board of Directors during the period under review.

I further report that there are adequate systems and processes in the Bank commensurate with the size and operations of the Bank to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period:

1. A Special Resolution was passed at the Annual General Meeting of the Bank held on 19th July, 2018 by the Members approving appointment of Mr. Prakash Apte as part time Chairman of the Bank.

2. An Ordinary Resolution was passed at the Annual General Meeting of the Bank held on 19th July, 2018 by the Members pursuant to Section 61 of the Companies Act, 2013 for approval of increase in Authorized Share Capital from the present Rs.1 500,00,00,000 (Rupees Fifteen Hundred Crore Only) consisting of 300,00,00,000 (Three Hundred Crore) equity shares of Rs.5 (Rupees Five Only) each to Rs 1900,00,00,000 (Rupees One Thousand Nine Hundred Crore Only) divided into 280,00,00,000 (Two Hundred Eighty Crore) equity shares of Rs 5 (Rupees Five Only) each and 100,00,00,000 (One Hundred Crore) preference shares of Rs 5 (Rupees Five Only) each.

3. A Special Resolution was passed at the Annual General Meeting of the Bank held on 19th July, 2018 to alter Articles of Association of the Bank.

4. A Special Resolution was passed at the Annual General Meeting of the Bank held on 19th July, 2018 by the Members pursuant to Section 42 of the Companies Act, 2013 for approving issue of unsecured non-convertible debentures/bonds, in Indian/foreign currencies in the domestic and/or overseas markets for an amount up to Rs. 5,000 crore (Rupees Five Thousand Crore Only) on a private placement basis in one or more tranches and series.

5. A Special Resolution was passed at the Annual General Meeting of the Bank held on 19th July, 2018 by the members pursuant to Section 42 of the Companies Act,2013 for approving issue of Non-Convertible Preference Shares (hereinafter referred to as "NCPS") upto Rs 500 crore, on a private placement basis in one or more tranches and series.

6. The Bank has filed a writ petition with the Hon'ble Bombay High Court against the Reserve Bank of India (RBI) with respect to their requirement of bringing down the promoter shareholding.

Â	Rupal Dhiren Jhaveri
Â	FCS No.: 5441
Â	Certificate of Practice No.: 4225
Place: Mumbai	Â
Date: 26th April 2019	Â

This report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.

To,

The Members,

KOTAK MAHINDRA BANK LIMITED

My report of even date is to be read along with this letter.

Annexure A

1. Maintenance of secretarial record is the responsibility of the management of the Bank. My responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for our opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Bank.

4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Bank nor of the efficacy or effectiveness with which the management has conducted the affairs of the Bank.

Â	Rupal Dhiren Jhaveri
Â	PCS No.: 5441
Â	Certificate of Practice No.: 4225
Place : Mumbai	Â
Date : 26th April 2019	Â

Secretarial Audit Report

FORM NO. MR-3 FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2019

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

KOTAK MAHINDRA LIFE INSURANCE COMPANY LIMITED

(Formerly known as Kotak Mahindra Old Mutual Life Insurance Limited)

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Kotak Mahindra Life Insurance Company Limited, Formerly known as Kotak Mahindra Old Mutual Life Insurance Limited (hereinafter called the "Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2019 ('Audit period') complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2019 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye- Laws framed there under;

(iv) Foreign Exchange Management Act, 1999 ('FEMA') and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, overseas Direct Investment and External Commercial Borrowings: There was no overseas Direct Investment made or External Commercial Borrowings during the year.

(v) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(vi) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(vii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(viii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 were not applicable to the Company during the Audit Period as the Company is not a listed entity:

(a) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

(b) The Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014;

(c) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(d) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(e) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

(f) The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998 and The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018; and

(ix) The Company, being a Life Insurance Company, has complied with the Insurance Act, 1938 and Regulations, Guidelines and Directions issued by the Insurance Regulatory & Development Authority of India (IRDAI). The company has its own robust compliance system and the Company is also subject to monitoring by and reporting of compliances to IRDAI.

(x) Other laws to the extent applicable to the Company as per the representations made by the Company;

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued pursuant to section 118(10) of the Act, by The Institute of Company Secretaries of India.

During the period under review the Company has generally complied with the above mentioned Secretarial Standards issued by The Institute of Company Secretaries of India.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above.

I further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board and Committee Meetings, agenda and detailed notes on agenda were sent at least 7 days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views, if any, are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period in my opinion, there are no specific events/actions having a major bearing on the Company's affairs in pursuance of the above referred laws, rules regulations, guidelines, standards, etc. referred to above.

Â	Rupal Dhiren Jhaveri
Â	FCS No.: 5441
Â	Certificate of Practice No.: 4225
Place: Mumbai	Â
Date: 16th April 2019	Â

This report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.

To,

The Members,

KOTAK MAHINDRA LIFE INSURANCE COMPANY LIMITED

(Formerly known as Kotak Mahindra Old Mutual Life Insurance Limited)

My report of even date is to be read along with this letter.

Annexure A

1. Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on the audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events, etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

Â	Rupal Dhiren Jhaveri
Â	PCS No.: 5441
Â	Certificate of Practice No.: 4225
Place : Mumbai	Â
Date : 16th April 2019	Â

ANNEXURE-C

Details of CSR activities and expenditure U/S 135 of The Companies Act, 2013

CSR project/ activity identified	Sector in which the project is covered	Area of project implementation (Name of the District/s. State / s where project / programme was undertaken)	Programme / project wise outlay (budgeted) amount (Rs Lakh)	Programme / project wise actual spend during the year - Direct expenditures (Rs Lakh)	Programme / project wise actual spend during the year -Overheads (Rs Lakh)	Cumulative Expenditure upto reporting period (Since FY 2014-15) (Rs Lakh)	Amount spent: Direct or Through implementing agency (Rs Lakh)
Promoting education	Education	Pan India	2,013.29	1,372.69	175.36	7,697.81 (Out of Rs 2,013.29 Lakh, the NGOs did not utilise Rs 465.25 Lakh. This will be utilised for meeting the requirements for FY 2019-20)	Implementing Agencies -2,013.29
Promoting livelihood	Vocational Skills and Livelihood	Pan India	338.70	177.21	13.80	493.70 (Out of Rs. 338.70 Lakh, the NGOs did not utilise Rs 147.69 Lakh. This will be utilised for meeting the requirements for FY 2019-20)	Implementing Agencies -338.70
Promoting healthcare	Healthcare	Pan India	403.57	166.10	15.69	1,265.28 (Out of Rs 403.57 Lakh, the NGOs did not utilise Rs 221.78 Lakh. This will be utilised for meeting the requirements for FY 2019-20)	Implementing Agencies -403.70
Relief and Rehabilitation	Relief and Rehabilitation	Kerala	505.00	504.35	0.65	599.98	Implementing Agencies -505.00
Promoting Sports	Sports	Pan India	115.00	90.94	0.71	270.00 (Out of Rs 115.00 Lakh, the NGOs did not utilise Rs 23.35 Lakh. This will be utilised for meeting the requirements for FY 2019-20)	Implementing Agencies -115.00
Reducing Economic and Gender Inequality	Reducing Inequalities	Assam, Meghalaya, UP, Gujarat	12.00	11.34	0.66	26.25	Implementing Agency- 12.00
Environment Sustainability	Sustainable Development	Pan India	267.00	243.00	NIL	483.52 (Out of Rs 267.00 Lakh the NGO did not utilise Rs 24.00 Lakh. This will be utilised towards meeting the requirements of FY 2019-20)	Implementing Agency- 24.00 Direct Implementation -243.00

TOTAL CSR SPEND U/S 135 OF THE COMPANIES ACT, 2013, DURING FY 2018-19 3,654.56

Though the Bank is eligible to consider upto 5% of the total CSR spend as administrative expenditure towards building its CSR capacities, etc, the Bank has taken a call not to consider it as a part of its CSR spend for FY 2018-19.

NGO Partners for Bank's CSR Programme on Education: Kotak Education Foundation, Om Creations Trust, IT for Change, IIMPACT, DEEDS Public Charitable Trust, SOPAN, Action for Ability Development and Inclusion (AADI), VISHWAS Vision For Health Welfare and Special Needs, National Society for Clean Cities - India, Bandhan Konnagar, Haripada Ghosh Foundation, Blind Welfare Organisation Nashik, Pearl Special Needs Foundation, Dayanand Anglo Vedic College Trust And Management Society, National Centre For Performing Arts (NCPA), Sampark Foundation, Sarva Vidyalaya Kelavani Mandal, The Prabhakar Bantwal Foundation, Samarpan Foundation, Ramkrishna Sarada Mission Matri Bhavan, Dharamsinh Desai Foundation

NGO Partners for Bank's CSR Programme on Vocational Skills and Livelihood: Pratham Education Foundation, Bandhan Konnagar, Youth4Jobs Foundation, Head Held High Foundation, N M Sadguru Water and Development Foundation.

NGO Partners for Bank's CSR Programme on Healthcare: Lata Mangeshkar Medical Foundation, Association of Parents of Mentally Retarded Children (APMRC), KARO Trust, Vision Foundation of India, Cankid Kidscan, Tata Memorial Centre, CanSupport, OCA Foundation, Society for the Rehabilitation of Crippled Children, Dayanand Anglo Vedic College Trust And Management Society, Wockhardt Foundation, The Ganga Trust, Cancer Patients Aids Association (CPAA), The Indian Council For Mental Health (ICMH)

NGO Partners for Bank's CSR Programme on Sports: Foundation of Promotion of Sports and Games (Olympic Gold Quest), JSW Foundation, Pullela Gopichand Badminton Foundation

NGO Partners for Bank's CSR Programme on Reducing Inequalities: Mahila Sewa Trust

NGO Partners for Bank's CSR Programme on Relief and Rehabilitation: The Ganga Trust, Chief Minister's Distress Relief Fund - Kerala

NGO Partners for Bank's CSR Programme on Environmental Sustainability: Gram Gaurav Pratishthan

Details of CSR Programmes with our implementing partners is available in the Bank's Business Responsibility Report FY 2018-19. 

---

Mar 31, 2018

Directors'' Report

To the Members of

KOTAK MAHINDRA BANK LIMITED

The Directors present their Thirty-third Annual Report together with the audited accounts of your Bank for the year ended 31^st March, 2018. FINANCIAL HIGHLIGHTS

(A) Kotak Mahindra Bank Limited - Consolidated financial highlights:

	31st March, 2018	31st March, 2017
	Rs, in crore	Rs, in crore
Total income	38,813.31	33,983.77
Total expenditure, excluding provisions and contingencies	28,630.34	25,702.92
Operating Profit	10,182.97	8,280.85
Provisions and contingencies, excluding provision for tax	1,024.74	948.92
Profit before tax	9,158.23	7,331.93
Provision for taxes	3,011.09	2,382.85
Profit after tax	6,147.14	4,949.08
Less: Share of minority interest	56.68	78.83
Add: Share in profit of Associates	110.51	70.18
Consolidated profit for the Group	6,200.97	4,940.43
Earnings per Equity Share:
Basic (''	32.70	26.89
Diluted (''	32.66	26.86

(B) Kotak Mahindra Bank Limited - Standalone financial highlights:

	31st March, 2018	31st March, 2017
	Rs, in crore	Rs, in crore
Total Income	23,800.70	21,176.09
Total expenditure, excluding provisions and contingencies	16,642.53	15,191.28
Operating Profit	7,158.17	5,984.81
Provisions and contingencies, excluding tax provisions	939.95	836.74
Profit before tax	6,218.22	5,148.07
Provision for taxes	2,133.92	1,736.57
Profit after tax	4,084.30	3,411.50
Add: Surplus brought forward from the previous year	10,756.29	8,214.12
Amount available for appropriation	14,840.59	11,625.62
Appropriations:
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949	1,021.08	852.88
Transfer to / (from) Investment Reserve Account	-	(48.49)
Transfer to Capital Reserve	24.00	10.55
Transfer to Special Reserve	55.00	55.00
Dividend / Proposed Dividend	114.211	0.07*
Corporate Dividend Tax	21.70**	(0.68)*
Surplus carried to Balance Sheet	13,604.60	10,756.29

* 4s per the requirements of pre-revised 45 4 - ''Contingencies and Events Occurring after the balance sheet date'' the Bank used to create a liability for dividend proposed / declared after the balance sheet date if dividend related to periods covered by the financial statements. 4s per 45 4 (Revised), with effect from 4pril 2016, the Bank is not required to provide for dividend proposed / declared after the balance sheet date.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs, 0.70 per equity share (previous year Rs, 0.60 per equity share) for the year ended 31^st March, 2018. This would entail a payout of Rs, 160.07 crore including dividend distribution tax based on the number of shares as at 31^st March, 2018. The dividend would be paid to all the shareholders, whose names appear on the Register of members / beneficial holders list on the book closure date.

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Bank have adopted a Dividend Distribution Policy which is in line with the parameters prescribed by SEBI for distribution of dividend. The Policy is available on the Bank''s website viz. URL:https://www.kotak.com/en/investor-relations/governance/policies.html

CAPITAL

During the year, your Bank has issued and allotted 62,000,000 equity shares of face value of Rs, 5 each at an issue price of Rs, 936 per equity share by way of Qualified Institutions Placement thereby raising Rs, 58,032 million. Your Bank has also allotted 2,750,629 equity shares arising out of the exercise of Employees Stock Options granted to the employees and whole-time directors of your Bank and its subsidiaries.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of the Bank stands at Rs, 9,528,242,530 comprising of 1,905,648,506 equity shares of Rs, 5 each as on 31^st March, 2018.

Your Bank has a Capital Adequacy Ratio (''CAR'') under Basel III as at 31^st March, 2018 of 18.22% with Tier I being 17.56%.

During the year, your Bank has not issued any capital under Tier II. As on 31^st March, 2018, outstanding Unsecured, Redeemable NonConvertible, Subordinated Debt Bonds were Rs, 701.80 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs, 225.10 crore.

The Board of Directors of the Bank at its meeting held on 19^th May, 2018, subject to the approval of the shareholders and any statutory/ regulatory approvals as may be necessary, has approved (i) raising of funds by way of non-convertible debentures/bonds for an amount not exceeding Rs, 5000 crore and by way of non-convertible preference shares for an amount not exceeding Rs, 500 crore and (ii) alteration and increase in the authorized share capital of the Bank and consequent amendment to the Memorandum and Articles of Association of the Bank. Approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

OPERATIONS

Consumer Banking

Your Bank, services a customer base in excess of 13 million customers covering a wide spectrum across domestic individual and households, non-residents, small and medium business segments for a range of products from basic savings & checking accounts to term deposits, credit cards, unsecured and secured loans, working capital and distribution of investment products.

The Bank continued its strategy of calibrated expansion of its branch network. As of 31^st March, 2018 the Bank had 1388 branches and 2199 ATMs, covering 724 locations. Of the 27 new branches commissioned this year, 15 were in metro and 12 were in urban locations. 8 branches related to rural and semi urban locations were closed during the year. Aided partly by 811, your Bank saw fast paced customer acquisition across all core banking products including savings and checking accounts, term deposits, overdrafts and non-resident accounts. Bank has also set up 5 E-Lobbies to enable convenience banking for customers. The Bank also relocated 72 branches across metro and semi urban locations to give easier access and higher convenience to its customers.

Your Bank rolled out several initiatives aimed at offering a superior and differentiated customer experience. Launched in March 2017, the 811 bank account has been a strong savings account acquisition engine for the Bank. The quick, seamless and technology driven on-boarding experience of 811 has been widely appreciated by customers and Industry bodies. In 2018, the Bank launched its Merchant Acquiring business entailing the launch of Point of Sale (POS) terminals and Bharat QR products. Under this business, the Bank has installed 7262 POS terminals and 2160 Bharat QR decals (QR stickers), thereby facilitating 28.4 lakh transactions. Some initiatives around Current Account and Business Banking include launch of a scan based account opening and customer onboarding process which has enabled a sharp reduction in processing time launch of an insta-kit & biometric based Current Account for Individuals. An online instant National Pension System (NPS) account opening for the Bank''s customers was also launched thereby achieving a completely paperless process for NPS account opening for individual & corporate customers.

Under the Bank''s Non Resident Indian (NRI) Business an online outward remittance platform for NRI customers was enabled thereby facilitating NRI customers to remit money abroad to most of the overseas countries completely online. Engagement with the sea farer community was strengthened further with the Bank tying up with the sea farer community app, ''Offing'' and through setting up of exclusive account for the sea farers, which addresses some of their key requirements. The process for providing solutions to NRI customers on their concerns was further simplified. FCNR deposits in Australian Dollar (AUD) was re-introduced to provide NRI clients an additional foreign currency for booking their deposits along with US Dollars, British Pound, EURO & Japanese Yen currencies that the Bank already offered FCNR deposits.

Under the Priority Banking Business, key initiatives includes the launch of a revamped Privy League program (across all 3 tiers viz. Prima, Optima and Insignia) to ensure better customer coverage and service. Now all branches of your Bank can source and manage Privy League customers. Further, to ensure higher levels of customer service, the Bank''s existing Relationship Value (RV) construct was simplified and upgrade process between various tiers was made simpler.

Under the Corporate salary business an Aadhaar assisted, biometric based customer on-boarding platform was introduced to reduce customer on-boarding time and significantly enhance customer experience. This roll out helped in reducing the turnaround time for customer on boarding to under 60 minutes. Last year''s initiative around Premier Acquisition model helped consolidate the Bank''s market share in this segment with 500 new corporate having signed up in this fiscal.

Your Bank has continued to grow the product lines under the Consumer Assets business. It launched ''Superfast Home Loans'' for salaried customers - which enables a sanction within four hours, thereby redefining customer experience. Launched in December 2017, these Superfast Home Loans have resulted in a 150% increase in the number of Salaried Home Loan disbursals in Q4 of FY18 as compared to the same period in FY17. The existing online platform for instant loans for salaried & self-employed customers was further strengthened. Salaried Personal Loans sourced through digital channels contributed 32% by value of the total value of Salaried Personal Loans disbursed in Q4FY18. The value of Salaried Personal Loans sourced through digital channels saw an increase of 168% Y-o-Y. Frictionless payment options for credit cards -Contactless Cards for Signature Cards, Samsung Pay and Bharat QR were launched. The total value of transactions routed through your Bank''s internet banking payment gateway in March 2018 saw a growth of 76% versus the value routed in March 2017. The business also launched Insta Credit for Working Capital Loans up to Rs, 1 crore thereby enabling instant decision basis various underwriting parameters. Such initiatives, launched under the Bank''s overall digital strategy, have facilitated superior growth rates across retail asset product lines.

Your Bank''s Home Loans & Loan Against Property business grew by 24% to Rs, 32,429 crore and the Small business, Personal Loans & Credit Cards business grew by 45% to Rs, 25,189 crore depicting a robust growth rate during the year under review.

Commercial Banking

The Commercial Banking business focuses on meeting the banking and financial needs of various customer segments with deeper coverage beyond metro and urban centers through an expanding network of branches and business correspondents. The business has specialized units which offer financial solutions in the areas of commercial vehicles, construction equipment, tractor, small and medium enterprises (SME), gold loans and agriculture business. It services the priority sector through providing finance for tractor, crop loans, small enterprises and allied agricultural activities thereby helping the Bank meet its financial inclusion goal. In line with growing rural incomes, your Bank''s Commercial Bank branches have experienced robust growth across product lines on both in savings and lending side. Post completion of integration with ING Vysya Bank, these Commercial Bank branches have stabilized and have started contributing towards your Bank''s growth in a significant manner.

Demonetization followed by GST roll-out had a temporary downward impact on the SME industry. However now, with GST stabilizing substantially, we are witnessing green shoots. Growth is returning to the sector. Your Bank''s SME portfolio has not been immune from the industry-wide experienced challenges, manifesting in a muted portfolio growth in FY 2018. There have been challenges with regards to stressed accounts as well. Your Bank continues to work pro-actively with the sector to resolve experienced challenges and be a preferred partner in the expected upcoming growth phase.

The Commercial Vehicle (CV), Construction Equipment (CE) and Tractor Finance businesses reported significant growth and continued to gain market share in their respective businesses. The Government spending in the infrastructure sector has led to a strong demand in the CE and CV industry. Good monsoon gave fillip to demand for tractor finance.

The Agriculture Financing business continued its focus on the agriculture value chain funding for various agro processing activities. It has registered good growth despite volatility and uncertainty in the commodities market.

Wholesale Banking

The Wholesale Banking business caters to the diverse needs of a wide range of corporate customer segments including major Indian corporate, conglomerates, financial institutions, public sector undertakings, multinational companies, mid-market companies and realty businesses. The business offers a comprehensive portfolio of products and services to these customers including working capital finance, medium term finance, trade finance, foreign exchange services, other transaction banking services, custody services, debt capital markets and treasury services.

The year has witnessed significant disruptions in the corporate banking space driven by high NPAs in the industry and tightening regulations. With more capital from banks, mutual funds and NBFCs chasing the high rated end of the corporate space, this space is witnessing high competition which in turn is pushing down yields for banks. The overall credit offtake in the economy has also been muted over the last couple of years. Despite these challenges, the Wholesale Banking business has been able to achieve growth in a healthy and profitable manner. Over the years, the Wholesale Banking business has been able to grow its market share and this has been achieved through higher customer acquisition, improved customer service and product innovations.

Your Bank has been as focused on adding new customers as increasing wallet share with existing customers. The last few years have seen a healthy addition of New-to-Bank customers across customer segments, which in turn sets a strong foundation for future growth in the business.

Robust risk management practices are in place and the Bank has achieved growth over the years without compromising the health of the book. At a time when most corporate banks in the industry are facing huge NPAs, your Bank has kept a tight control on asset slippages. This year, the Wholesale Banking division has had to take accelerated provisioning on a few legacy stressed cases due to regulatory changes and this has impacted profitability for the year. However, except for these few legacy cases, there has been very little addition to Gross NPAs from new cases in the last few years. This has been achieved through proactive rebalancing of the portfolio to reflect economic situations and reduction in exposure to situations with heightened risk. The focus on risk management has helped the business reduce its Risk Weighted Assets (RWA) over the past few years despite an increase in its exposure. The use of Risk Adjusted Return on Capital (RaRoC) pricing models has become ingrained in the way the Wholesale Banking division conducts its business and has helped to optimize pricing, better utilize capital and improve return on equity. Your Bank intends to carry this initiative forward and implement Economic Value Add (EVA) measurement models that will help the Bank monitor the true risk adjusted value being derived from each client. This will ensure greater focus on improving income mix in favour of non-asset income streams.

Integrated Corporate and Investment Banking (CIB) approach of the Bank towards certain top conglomerates and large corporate has helped it to deepen its presence with these clients and gain further market share. The CIB model has ramped up well and it has added more accounts to this CIB model this year. As a testimony to its success under the CIB initiative, it has been awarded the Best Domestic and Investment Bank in India by Asiamoney for the second consecutive year.

The strong momentum in the Integrated Global Transaction Banking Services (GTS) continues across its large suite of products. Current Account & Savings Account balances saw significant growth through innovative solutions and focused marketing efforts and early to launch products such as Smart Collect and Mibor Linked Savings Account. Trade funded book continued to show strong growth and maintained an average of over Rs, 10,000 crore this year. Bank''s Cash Management System (CMS) has won a number of awards this year including the Best Cash Management Bank in India by the Asian Banker and Asia Money. The decisive parameter for Cash Management is client satisfaction and the Bank has India''s highest net Client Satisfaction Rating of 39.8% as per Asiamoney Cash Management Poll - ahead of all its peers in the public and private sector. A separate drive to launch Smart Collect was set up which improved cash flow management and helped grow the Cash Management business significantly. The strong growth in GTS products has helped the Bank to partly compensate for the fall in spreads in its traditional lending business.

The year has also witnessed significant growth in the Custody business. Your Bank is today one of India''s largest domestic Custodians with Assets Under Custody (AUC) upwards of USD 27 billion and is strongly positioned in the India focused offshore funds space. It was earlier the first to extend a Real Time Online Platform for Derivatives Clearing with systems built specifically to cater to Indian capital market needs. This year, the Custody business has also gained significant traction in the Domestic Custody space. The Custody business has won a number of awards this year including being judged as the Category Outperformer - 2017 by the Global Custodian India and Emerging Markets Survey.

The dedicated Service Solutions vertical of the Bank has helped ensure faster customer response and improve customer experience. This vertical is the single point of contact for all service related and documentation issues with personnel present across the country. The Bank has been successful in significantly reducing Turn-Around-Time (TAT) across various processes including account opening and disbursals. Initiatives such as digitization and workflow automation have helped reduce TAT further.

Your Bank continues to target productivity and efficiency improvements by strengthening its organizational platform. This year too, it has implemented a number of initiatives towards this end including a formal exercise of client classification and key account plans. Workflows and Processes were redesigned for Ease of Business. There is greater focus on measuring and improving employee productivity including of its sales force through use of technology and digital tools. Given high focus in this area, costs have been kept well in control further improving profitability of the business.

It has undertaken a series of digital initiatives primarily focused on improving customer experience and positioning oneself as a ''digital-first'' organization. These digital initiatives encompass the entire gamut of transaction banking and include initiatives such as the Corporate Mobility Application, Retail Remittances through Earth port, Smart Collect, Direct Debit Online, Two Factor Authentication, GST Compliance Solution and Co-branded cards, to name a few. Furthermore, a few long term initiatives are in early stages of implementation which include an online trade portal, an integrated corporate portal, incorporation of the block chain based technology in foreign and domestic trade products and multiple digital initiatives being undertaken for various Government bodies.

Wealth Management

Wealth Management, your Bank''s private banking arm, acts as advisor to a number of distinguished Indian families as one of the oldest and the most respected Indian wealth management firms. Its customers range from entrepreneurs to business families and professionals. The business caters to around 40% of India''s top 100 families.

The Family Office service provides a strategic consolidated view on the client''s overall portfolio across multiple advisors, in addition to comprehensive financial solutions that go beyond investments. These include value added services such as assistance with Investment Structuring, Banking and Credit, Consolidated Reporting, Referral for Philanthropy Services and Concierge Services. The Trusteeship Services offers Estate Planning services helping clients with succession planning activities through creation of private trusts.

With an in-depth understanding of client requirements and expertise across various asset classes, the business offers the widest range of financial solutions through transaction-based investment approach and asset-advisory based approaches. It has built a formidable suite of products and services for high net worth individuals and offers the same through its Asset-Advisory model.

In addition, your Bank has also built a large Priority Banking business, assisting mass affluent customers with products and solutions developed to meet their financial requirements. The total relationship value across your Bank''s Wealth & Priority offerings is in excess of Rs, 225,000 crore.

The business has won several accolades & received recognition at various fora. It was awarded as the Best Private Bank, India at Euromoney Private Banking Survey 2018 and has also been consistently adjudged as the Best Private Bank through FinanceAsia for 7 years in a row.

Your Bank''s focus at the Wealth Management in the digital space includes some key initiatives such as the Wealth Smart Solutions app, which allows access to portfolios on the go. This also allows clients to complete their risk profiling, get their ideal asset allocation and also execute investments in Mutual Funds. This initiative of the Bank has the potential to become significantly bigger in the days to come.

International Business

The GIFT City Branch set up by your Bank in May 2016 is its first Branch in an International Financial Services Center Banking Unit (IBU). The Gift City Branch has helped the Bank to participate in syndication of overseas loans, lending to clients in international markets and providing External Commercial Borrowing (ECB) to eligible Indian corporates.

Asset Reconstruction

India faces a significant challenge on stressed loans. The new Insolvency and Bankruptcy Code aims to provide lenders like your Bank strong tools to aid in faster recovery and in retention of maximum value of the underlying assets in stress cases. The young law is continuously evolving and should see stability in the next few years.

During FY 2017-18, resolution of some large NPA''s of the country through the Insolvency and Bankruptcy Code process was seen.

Your Bank is also expecting a sizeable number of resolutions from the earlier acquired portfolios in the coming financial year.

The Division continues to focus on cash flow based last mile financing and acquiring stressed retail assets and expects significant traction. It is geared up to capitalize on any opportunities in the stressed asset space that may arise, as various lenders seek to off-load such stressed assets off their books.

Treasury

Your Bank''s treasury actively contributes to your Bank by way of:

- Proprietary Trading: The various proprietary trading desks actively trade in products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Equity. Primary Dealer Desk - part of the proprietary trading desk, actively participates in the primary auctions of government securities, makes market in government securities and engages in retailing of government securities.

- Customer Transactions:

- Forex & Derivatives: Facilitating access to foreign currency markets through cash & derivatives products and providing fine market rates to clients for remittance and trade transactions.

- Bullion: Under License from Reserve Bank of India (RBI), Bank imports gold and silver to meet needs of customers. The bullion desk provides efficient working capital solutions to domestic Jewellery manufacturers as per prescribed rules of RBI.

- Balance Sheet Management: The Balance Sheet Management Unit (BMU) ensures maintenance of regulatory reserves and adequate liquidity buffers and also manages the Interest rate risk & Liquidity risk within the Risk appetite of the Bank.

Human Resources

FY 2017-18 has been a year of strengthening initiatives in the area of digital initiatives, employee engagement and learning.

With the talent base of the Bank reaching to 35,717 employees more and more millennial being on boarded the average age of the employee base has gone younger by a year at 32 years now. Your Bank has taken various initiatives to engage using digital and technology platforms. It has launched Mobile first app KLAPP for ensuring seamless learning on product and processes for employees. This has helped to ensure learning is not time bound and location bound at the same time employees have access to the information at the time of interaction with customers.

Your Bank has also embarked on the journey to facilitate learning needs for building future skills for mid to senior level employees. With the platform launched for on demand learning and byte size learning has enhanced the horizon for learning from behavioral and functional learning to developing skills for future career needs of the employees.

The focus on performance discussion has been enhanced by bringing in additional rigor on dialogue "Talk2Do" between managers and their teams for constructive performance discussions.

With the objective to identify, build and nurture leaders across levels to deliver superior business results and address individual career aspirations Bank continues to put efforts through various interventions of talent management and succession planning. Robust Talent Management framework has been put in practice for identification of critical roles in the organization and succession planning for these roles.

Technology & Digitization

This year, technologies were leveraged to deliver customer experience and business efficiency

Customer account opening experience was enhanced by the launch of the "digital native, downloadable" 811 account, which can be opened in 5 minutes. The 811 journey was further enriched, with a paperless credit card opening capability. By leveraging biometric technology, the entire process was made paperless and sales productivity was increased by 60%. Biometric account opening was then extended to corporate salary accounts and for onboarding individual current accounts.

Loan account processing was enriched with the launch of Instant personal loans, Superfast home loans and Instant business loans. For customers who prefer non-digital channels, a "Loan on Phone" capability was provided. A new mobile application was launched to facilitate the sales team''s customer interaction for credit card applications.

The Bank''s wealth management customers'' digital experience was enhanced with the initiation of ''Kotak Smart Solutions'' mobile application for portfolio viewing and management. A comprehensive content repository and sharing platform that enables SMS and WhatsApp based information sharing in real time was enabled.

Multiple digital payment methods were introduced for the Bank''s customers including Visa Paywave, Samsung Pay, Bharat QR, UPI, BBPS (Bharat Billpayment System), AEPS (Aadhaar Enabled Payment System) and FasTag - enabling more cashless payments and strong commitment to the country''s Digital India journey.

In addition to innovation in customer account opening and payments, this year saw a number of new technology foundations being laid down to facilitate state of the art capability for the future.

Modern responsive site technology, content management and website analytics have been implemented to facilitate the launch of a new customer centric web portal. Improved customer experience has been evident, in the 30% increased customer traffic on the website.

A foundation for Natural Language Processing (NLP) was laid down and enabled the launch of ''Keya'' the first Artificial Intelligence (AI) powered Voicebot in the banking sector. Developed on a library of millions of phone banking conversations, ''Keya'' services customers in English and Hindi and facilitates the resolution of customer queries in a single interaction. ''Keya'' will also soon be available on the mobile to enrich the 811 and other customer journeys.

Since "data is the new oil", the ability to manage and analyse data becomes key. Hence, strategic technology initiatives this year were the implementation of an upgraded Enterprise Data Warehouse and a Big Data platform. These platforms facilitate the Bank''s ability to use analytics to provide personalized customer experience with improved service and customized offers.

The Bank''s ability to collaborate with external merchants, developers and service providers has been enhanced with the implementation of an ''API Manager''. The technology facilitates rapid time to market for integrating in a secure and simplified manner with all entities outside the Bank. The resulting interface to the customer with information and services from third parties and the Bank, provides a holistic, seamless end user experience.

Employees, the internal customers, were also a focus with the launch of a new ''Redscape'' intranet, and ''Edcast'' a platform to share digital experiences and facilitate employees in their customer interaction. Robotics and biometrics were employed to automate customer service processes to provide faster turnaround times for the customer and improved employee productivity.

As always, cyber security and customer data protection were a priority, keeping pace with increased digital interactions with customers. Your Bank is mindful of client data privacy issues and takes full care in preserving this. New security measures were initiated from the customer interface through step up authentication for device authentication, to server protection through deep security measures.

SUBSIDIARIES & ASSOCIATES

As at 31^st March, 2018, your Bank has nineteen (19) subsidiaries as listed below:

Domestic Subsidiaries

Kotak Mahindra Prime Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Life Insurance Company Limited

(formerly known as ''Kotak Mahindra Old Mutual Life Insurance Limited'')

Kotak Mahindra Investments Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Infrastructure Debt Fund Limited

Kotak Mahindra Pension Fund Limited

Kotak Mahindra General Insurance Company Limited

IVY Product Intermediaries Limited

BSS Microfinance Limited

International Subsidiaries

Kotak Mahindra (International) Limited Kotak Mahindra (UK) Limited Kotak Mahindra Inc,

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Limited

Your Bank in October 2017 completed the acquisition of 26% equity stake of Old Mutual plc in Kotak Mahindra Old Mutual Life Insurance Limited (KLI). Post-acquisition, the Bank along with its subsidiaries holds 100% beneficial interest in KLI. Subsequently, in November 2017, the name of Kotak Mahindra Old Mutual Life Insurance Limited was changed to Kotak Mahindra Life Insurance Company Limited,

Acquisition of BSS Microfinance Private Limited was completed during the year and it is now a wholly owned subsidiary of the Bank, Subsequently, the word ''Private'' was deleted and name of the company changed to BSS Microfinance Limited. It has been appointed as Business Correspondent for sourcing micro finance business for Bank.

The key business segments where the subsidiaries operate include investment banking, stock broking, vehicle finance, advisory services, asset management, life insurance and general insurance.

KLI has recorded a growth of 28.4% on the gross premium, mainly coming from Individual renewal premium. KLI has solvency ratio of 3.05 against requirement of 1.50,

Capital Markets saw a significant uptick in primary market activity; accordingly, Kotak Securities Limited and Kotak Mahindra Capital Company Limited have performed well during the year. Kotak Securities Limited has posted its highest ever profits in FY18,

Kotak Mahindra Asset Management Company (KMAMC), is one of the fastest growing Mutual Fund houses & among the top ten Fund Houses by Quarterly Average Asset Under Management (QAAUM) and continues to be the 7^th largest Fund House in the country in terms of QAAUM, KMAMC has outperformed strong growth in the mutual funds industry

Kotak Mahindra Prime Limited and Kotak Mahindra Investments Limited and international subsidiaries have performed well and continue to add to the shareholders value.

The various activities of the subsidiaries and the performance and financial position of the subsidiaries and associates are outlined in the Management Discussion and Analysis section appended to this Report.

The Bank''s Policy for determining material subsidiaries is available on the Bank''s website viz. URL: ......................................................................... in line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

As at 31^st March, 2018, your Bank has following four (4) Associate companies:

ACE Derivatives & Commodity Exchange Limited Infina Finance Private Limited Matrix Business Services India Private Limited Phoenix ARC Private Limited

The Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31^st March, 2018, has been sent to all the members of your Bank. Web link of the Annual Report has been sent to all members whose email IDs are registered with the Bank/Depository Participant(s). For members who have not registered their email IDs, physical copies of the Annual Report are sent. It does not contain Annual Reports of your Bank''s subsidiary companies. Your Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) either a hard or soft copy depending upon request by any member of your Bank. These Annual Reports will be available on your Bank''s website viz. URL: https://www.kotak.com/en/investor-relat:ions/finandal-results/annual-reports.ht:ml and will also be available for inspection by any member at the Registered Office of your Bank,

EMPLOYEE STOCK OPTION & STOCK APPRECIATION RIGHTS SCHEMES

The stock options and the stock appreciation rights granted to the employees of the Bank and its subsidiaries currently operate under the following Schemes:

- Kotak Mahindra Equity Option Scheme 2007

- Kotak Mahindra Equity Option Scheme 2015

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2007

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2010

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2013

- Kotak Mahindra Stock Appreciation Rights Scheme 2015

The disclosures requirements under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, for the aforesaid ESOP & SARs Schemes, in respect of the year ended 31^st March, 2018, are disclosed on the Bank''s website viz. URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), a separate section entitled ''Report on Corporate Governance'' has been included in this Annual Report. The Report of Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A Business Responsibility Report containing the requisite details under Regulation 34 of the SEBI LODR Regulations is disclosed on the Bank''s website viz. URL: https://www. kotak.com/en/investor-relations/financial-results/annual-reDorts.html

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Dr. Shankar Acharya (DIN 00033242), Non-Executive Chairman of the Bank, aged 72 years, retires by rotation as a Director at the conclusion of this Annual General Meeting and is not offering himself for re-appointment as he has crossed the age of 70 years.

The Bank does not intend to fill this vacancy at the ensuing Annual General Meeting,

Changes in Directors

The Board of Directors of the Bank at its meeting held on 30^th April, 2018, appointed Mr. Prakash Apte, aged 63, as part time Chairman of the Bank post Dr. Acharya''s retirement for a period up to 31^st December, 2020, subject to regulatory approvals. Mr. Apte is a non-executive Independent Director of the Bank since March 2011. Mr. Apte, B.E. (Mechanical) has considerable experience in agricultural sector. In a career spanning over 36 years, he has extensive experience in various areas of management and business leadership. The details of Mr. Apte are set out in the Corporate Governance Report annexed to this Report.

The Board of Directors of the Bank, at the same meeting, re-designated Mr. Uday Kotak as Managing Director & CEO with effect from 1^st May, 2018, in line with good corporate governance practice,

Your Directors place on record their appreciation for the valuable advice and guidance rendered by Dr. Shankar Acharya during his tenure as a Director and part-time Chairman of the Bank. Dr. Acharya has been the director of the Bank since May 2003 and part-time Chairman since July 2006.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Board Evaluation

The Nomination and Remuneration Committee of the Bank''s Board has formulated the criteria for performance evaluation of the Directors and the Board as a whole which broadly covers the Board role, Board/Committee membership, practice & procedure and collaboration & style,

The Nomination and Remuneration Committee of the Bank''s Board further engaged an external professional services firm to facilitate the self-evaluation process of the Board, its committees, Chairman and individual directors.

In line with the SEBI Guidance note on Board Evaluation, a Board effectiveness assessment questionnaire was designed for the performance evaluation of the Board, its Committees, Chairman and individual directors and in accordance with the criteria set and covering various aspects of performance including structure of the board, meetings of the board, functions of the board, role and responsibilities of the board, governance and compliance, evaluation of risks, grievance redressal for investors, conflict of interest, stakeholder value and responsibility, relationship among directors, director competency, board procedures, processes, functioning and effectiveness. The said questionnaire was circulated to all the directors of the Bank for the annual performance evaluation.

Based on the assessment of the responses received to the questionnaire from the directors on the annual evaluation of the Board, its Committees, Chairman and the individual Directors, the Board Evaluation Report was placed before the meeting of the Independent Directors for consideration. Similarly, the Board at its meeting assessed the performance of the Independent Directors. The Directors noted that the results of the performance evaluation of the Board & its Committees, Chairman and individual directors were similar to the results of previous year''s performance evaluation and the Directors were quite satisfied with the same. Like last year, this year too there had been no observations on the areas of governance where the directors had concern. However, there were a few suggestions for improving the performance of the Board viz. apprising the Board of the latest developments in Information Technology from time to time and the continuing education of the Board from governance prospective,

Key Managerial Personnel (KMPs)

The following officials of the Bank continue to be the "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013:

- Mr. Uday Kotak, Managing Director & CEO

- Mr. Dipak Gupta, Joint Managing Director

- Mr. Jaimin Bhatt, President & Group Chief Financial Officer

- Ms. Bina Chandarana, Company Secretary Appointment & Remuneration of Directors & KMPs

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, 1949, The Nomination and Remuneration Committee of the Bank''s Board has formulated criteria for appointment of Senior Management Personnel and the Directors. Based on the criteria set it recommends to the Board the appointment of Directors and Senior Management Personnel. The Committee considers the qualifications, experience, fit & proper status, positive attributes as per the suitability of the role, independent status and various regulatory/statutory requirements as may be required of the candidate before such appointment,

The Reserve Bank of India (''RBI'') vide its circular no.DBOD.No.BC.72/29.67.001/2011-12 dated 13^th January, 2012 has issued the Guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Other Risk Takers of Private Sector Banks on Compensation Policy which inter alia cover the following:

- Proper balance between fixed pay and variable pay;

- Variable pay not to exceed 70% (Seventy Per Cent) of the fixed pay in a year;

In accordance with the aforesaid RBI Circular, the Board of the Bank has adopted a Compensation Policy for its Whole-time Directors, Chief Executive Officer of the Bank and other employees which includes issue of stock appreciation rights as a form of variable pay, linked to the Bank''s stock price, payable over a period of time. The salient features of the Compensation Policy are as follows:

- Objective is to maintain fair, consistent and equitable compensation practices in alignment with Kotak''s core values and strategic business goals.

- Applicable to all employees of the Bank. Employees classified into 3 groups: o Whole-time Directors/Chief Executive Officer

- Risk Control and Compliance Staff o Other categories of Staff

- Compensation structure broadly divided into Fixed, Variable and ESOPs

- Fixed Pay - Total cost to the Company i.e. Salary, Retirals and Other Benefits

- Variable Pay - Linked to assessment of performance and potential based on Balanced Key Result Areas (KRAs), Standards of Performance and achievement of targets with overall linkage to Bank budgets and business objectives. The main form of incentive compensation includes - Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights.

- ESOPs - Granted on a discretionary basis to employee based on their performance and potential with the objective of retaining the employee.

- Compensation Composition - The ratio of Variable Pay to Fixed Pay and the ratio of Cash v/s Non Cash within Variable pay outlined for each category of employee classification.

- Any variation in the Policy to be with approval of the Nomination & Remuneration Committee,

- Malus and Clawback clauses applicable on Deferred Variable Pay

- Ensuring no personal hedging strategies by employees which undermine risk alignment effects as part of their remuneration,

The details of the remuneration paid to the Non-Executive Chairman, Executive and Non-Executive Directors of the Bank for the year ended 31^st March, 2018 is provided in the Corporate Governance Report annexed to this Report,

The Non-Executive Chairman of the Bank receives a fixed amount of remuneration as recommended by the Board and approved by the shareholders of the Bank and RBI, from time to time. He also receives remuneration by way of sitting fees for attending meetings of the Board or Committees thereof.

RBI vide its circular no. DBR.No.BC.97/29.67.001/2014-15 dated 1^st June, 2015 has issued guidelines on payment of compensation to the NonExecutive Directors (NEDs) of private sector banks which inter-alia specifies the following:

- The Board of Directors of the Bank (in consultation with the Nomination & Remuneration Committee) needs to formulate and adopt a comprehensive compensation policy for NEDs (other than part-time non-executive Chairman).

- Maximum amount of profit related commission not to exceed '' 10 lakh per annum for each director of the Bank,

Accordingly, in line with the aforesaid RBI circular and pursuant to the relevant provisions of the Companies Act, 2013, the Board of the Bank has adopted a compensation policy for the NEDs (excluding the part-time Non-Executive Chairman). The salient features of the Compensation Policy are as follows:

- Compensation structure broadly divided into o Sitting fees

- Re-imbursement of expenses o Commission (profit based)

- Amount of sitting fees and commission to be decided by the Board from time to time, subject to the regulatory limits

- Overall cap on commission for each director '' 10 lakh per annum

- NEDs not eligible for any stock options of the Bank

Remuneration paid to the KMPs is in line with the Compensation Policy of the Bank which is based on the RBI Guidelines,

Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. Ratio of the remuneration of each director to the median remuneration of the employees for the financial year:

Directors	Title	Ratio
Mr. Uday Kotak	Managing Director & CEO	48.44x
Mr. Dipak Gupta	Joint Managing Director	47.50x
Dr. Shankar Acharya	Non-Executive Chairman	4.96x

2. Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors/KMP	Title	% increase in remuneration	% increase in remuneration excluding SARs
Mr. Uday Kotak	Managing Director & CEO	11.03	11.03
Mr. Dipak Gupta	Joint Managing Director	10.00	10.00
Dr. Shankar Acharya	Non-Executive Chairman	8.03	8.03
Mr. Jaimin Bhatt	Group CFO	8.11	9.62
Ms. Bina Chandarana	Company Secretary	2.48	3.69

3. Percentage increase in the median remuneration of employees in the financial year:

For employees who were in employment for the whole of FY 2016-17 and FY 2017-18 increase in the median remuneration is 8.53%.

4. Number of permanent employees on the rolls of Bank at the end of the year: 35,717

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

For employees other than managerial personnel who were in employment for the whole of FY 2016-17 and FY 2017-18 the average increase is 6.56% and 5.77% excluding SARs,

Average increase for managerial personnel is 8.86% and 9.57% excluding SARs,

6. Affirmation that the remuneration is as per the remuneration policy of the Bank:

The Bank is in compliance with its Compensation Policy,

Notes:

1) Remuneration includes Fixed pay Variable paid during the year perquisite value as calculated under the Income Tax Act, 1961. Remuneration does not include value of Stock Options.

2) Stock Appreciation Rights (SARs) are awarded as variable pay. These are settled in cash and are linked to the average market price/closing market price of the Bank''s stock on specified value dates. Cash paid out during the year is included for the purposes of remuneration.

3) The Non-Executive Directors of the Bank, other than Non-Executive Chairman receive remuneration in the form of sitting fees for attending the Board/ Committee meetings and in the form of an annual profit based commission. The Non-Executive Chairman gets sitting fees for attending meetings and gets a remuneration approved by the shareholders and RBI.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013, your Bank has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31^st March, 2018 is annexed to this Report. Your Bank is in compliance with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013 for FY 2017-18.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank,

AUDITORS

In terms of Section 139 of the Companies Act, 2013, Messrs S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed as statutory auditors of your Bank for a period of four years from the conclusion of the Thirtieth Annual General Meeting until the conclusion of the Thirty fourth Annual General Meeting of the Bank, subject to the annual approval of RBI and ratification by the members every year. However, pursuant to Section 40 of the Companies (Amendment) Act, 2017 (i.e. Section 139 of the Companies Act, 2013) which was notified with effect from 7^th May, 2018, ratification of the appointment of the statutory auditors by the members at every annual general meeting is no longer required. Accordingly, ratification resolution is not being taken up at the ensuing Annual General Meeting of the Bank. The Bank has already received the approval of the Reserve Bank of India for Messrs S.R. Batliboi & Co. LLP, Chartered Accountants to continue as auditors for the year 2018-19.

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirms that your Bank has laid down set of standards, processes and structure which enables to implement Internal Financial controls across the organization with reference to Financial Statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls,

IMPLEMENTATION OF IND AS

The Ministry of Finance, Government of India has vide its press release dated 18^th January, 2016 outlined the roadmap for implementation of International Financial Reporting Standards (IFRS) converged Indian Accounting Standards (Ind AS) for Scheduled commercial bank (excluding RRBs), Non-banking Financial Companies and Insurance companies. Reserve Bank of India (RBI) has advised Banks vide RBI/2015-16/315DBR. BP.BC.No.76/21.07.001/2015-16 to follow the Ind AS from 1^st April, 2018 as notified under the Companies (Indian Accounting Standards) Rules, 2015 subject to any guideline/direction issued in this regard,

RBI through its first monetary policy statement for FY 2018-19 on 5^th April, 2018, deferred Ind AS implementation for the Scheduled commercial bank (excluding RRBs) by one year i.e. the implementation of Ind AS will begin from 1^st April, 2019 onwards,

As per RBI directions, your Bank has taken following steps so far:

- Submitted Standalone Proforma Ind AS financial statements to the RBI for the half-year ended 30^th September, 2016 in FY 2016-17 and quarter ended 30^th June, 2017 in FY 2017-18, as required.

- Formed Steering Committee for Ind AS implementation. The Steering Committee comprises of representatives from Finance, Risk, Operations and Treasury. The Committee oversees the progress of Ind AS implementation in the Bank, and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely reviews progress of Ind AS implementation,

- The Bank has identified gaps in IT Systems and the changes required to automate Ind AS. The Bank is in advanced stages for Ind AS implementation.

The Bank will continue to liaise with RBI and industry bodies on various aspects pertaining to Ind AS implementation,

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no Related Party Transactions to be reported under Section 188(1) of the Companies Act, 2013, in form AOC-2.

All Related Party Transactions are placed before the Audit Committee for its review and approval on a quarterly basis. Further, an omnibus approval of the Audit Committee is obtained for the Related Party Transactions which are repetitive in nature and the management appraises the Audit Committee of such transactions every quarter

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 25 of Schedule 17 - Notes to Accounts of the Consolidated financial statements and Note 7 of Schedule 18 B - Notes to Accounts of the Standalone financial statements of your Bank.

The Bank''s Policy on dealing with Related Party Transactions is available on the Bank''s website viz,

URL: https://www.kotak.com/en/investor-relations/governance/policies.html

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, 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 Companies Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Bank is committed to its "Vision Statement" of upholding its Global Indian Financial Services Brand creating an ethos of trust across all constituents, developing a culture of empowerment and a spirit of enterprise thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors highest standards of transparency, probity and accountability. The Kotak Group endeavours to develop a culture where it is safe and acceptable for all employees and directors to raise / voice genuine concerns in good faith, and in a responsible as well as effective manner,

A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or director or vendor, raise genuine concern or report evidence of activity by the Bank or its employee or director or vendor that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank''s policies; questionable accounting/audit matters/financial malpractice. The concerns can be reported on the website viz. URL: https://cwiportal.com/kotak.

Currently an online mechanism enabling aforementioned reporting has been implemented over and above other modes of communication like e-mail, or a letter sent by mail, courier or fax to designated persons.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exception circumstances. Further, the Chairman of the Audit Committee has access rights to the whistle blower portal,

The Policy has been uploaded on the Bank''s intranet as well as website viz. URL: https://www.kotak.com/en/investor-relations/aovernance/policies.html and regular communication is made for sustained awareness,

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Bank has constituted a Board Corporate Social Responsibility Committee (CSR Committee). The CSR Committee presently consists of Mr. C. Jayaram, Mr. Dipak Gupta and Prof. S. Mahendra Dev,

Your Bank''s CSR Committee drives the CSR programme of the Bank. Your Bank has a Board approved CSR policy, charting out its CSR approach, This policy articulates the Bank''s aim to positively contribute towards economic, environmental and social well-being of communities through its CSR interventions. The core CSR focus areas outlined are:

- Education

- Vocational skills and livelihood

- Preventive healthcare and sanitation

- Reducing inequalities faced by socially and economically backward groups

- Sustainable development

- Relief and rehabilitation

- Clean India

- Sports

The Bank''s CSR Policy is available on the Bank''s website: https://www.kotak.com/en/about-us/corporate-responsibility.html

Pursuant to the provisions of Section 135, Schedule VII of the Companies Act, 2013 (the Act), read with the Companies (Corporate Social Responsibility) Rules, 2014 the report of the expenditure on CSR by the Bank is as under:

The average net profit U/S 198 of the Bank for the last three financial years preceding 31^st March, 2018 is Rs, 3,698.45 crore,

The prescribed CSR expenditure required U/S 135, of the Act for FY 2017-18 is Rs, 7,397 lakh.

The CSR expenditure incurred from 1^st April, 2017 to 31^st March, 2018 under Section 135 of Companies Act, 2013 amounts to Rs, 2,640 lakh as against Rs, 1,733 lakh CSR expenditure in FY 2016-17. The unspent amount for FY 2017-18 is Rs, 4,757 lakh.

CSR expenditure of Rs, 2,640 lakh in FY 2017-18 as a percentage of average net profit U/S 198 of the Bank at Rs, 3,698.45 crore is 0.71%.

The Bank''s budget in CSR focussed sectors and programmes are approved by the Board CSR Committee and the Board. The bank''s CSR budget is guided by the vision of creating long-term benefits for the society. The Bank has been building its CSR capabilities on a sustainable basis and is committed to gradually increasing its CSR spending in the coming year for its long-term projects. The Bank identifies suitable NGO partners for carrying out its CSR programmes. It undertakes CSR programmes that are scalable, sustainable and have the potential to be replicated across locations and create a sustainable and measurable impact in communities. Most of the CSR programmes undertaken are in education, healthcare, livelihood and environmental sustainability. The Bank''s CSR footprint has been consistently increasing over the years. The Bank is committed to stepping-up its CSR programmes and expenditure in the years ahead. In FY 2016-17, the Bank''s expenditure was Rs, 1,733 lakh and in FY 2015-16 it was Rs, 1,641 lakh. In FY 2017-18, the CSR expenditure was Rs, 2,640 lakh. Your Bank does not consider "administrative overheads" as a part of its CSR spends.

The details of CSR activities and spends under Section 135 of the Companies Act, 2013 for FY 2017-18, are annexed to this report.

RISK MANAGEMENT POLICY

Your Bank has in place a comprehensive Group Enterprise wide Risk Management (ERM) framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. Details of identification, assessment, mitigations, monitoring and the management of these Risks are mentioned in the Management Discussion and Analysis section appended to this Report,

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank, standalone, was over 35,500 and along with its subsidiaries was over 50,000 as of 31^st March, 2018,

121 employees employed throughout the year and 62 employees employed for part of the year were in receipt of remuneration of Rs, 1.02 crore or more per annum.

Culture and values drive have been enhanced through various interactions and employee communication platforms in the organization. Your Bank continued to reiterate this through cross functional meets conducted by senior business leaders for employees at mid management level under the "Meet 5" initiative,

Your Bank has continued on the Gender Diversity agenda,

- A differentiated talent acquisition strategy to increase women employee base across various suitable roles has helped us to continue adding 22% women amongst all new hires in the Bank. While continuing with our philosophy of providing equal opportunities, an aggressive push in this area will help us achieve a better balance in gender diversity,

- Prevention of Sexual Harassment (POSH): Bank continues with the belief on zero tolerance towards sexual harassment at workplace and continues to uphold and maintain itself as a safe and non-discriminatory organization. To achieve the same Kotak reinforces the understanding and awareness of Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Bank has formulated Internal Complaints Committee (ICC) at three regions for reporting any untoward instance. Any complaints pertaining to sexual harassment are diligently reviewed and investigated and treated with great sensitivity. The ICC members have been trained in handling and resolving complaints and have also designed an online e-learning POSH Awareness module which covers the larger employee base,

Following is a summary of sexual harassment complaints received and disposed off during the year 2017-18: o No. of complaints received : 34

o No. of complaints disposed off * : 27

* Includes 7 pending cases pertaining to FY 2016-17. In the case of balance 14 pending cases, enquiries were in progress at the close of the year of which 9 have been closed subsequently.

As Bank enters in its next phase of growth and expansion of footprint across urban and rural India, Bank and its subsidiaries continued to carry out several initiatives to attract and retain a pool of highly skilled and motivated employees who are aligned to the firm''s vision of becoming the most trusted financial services provider.

In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of the employees are set out in the annexure to the Directors'' Report. In terms of the Proviso to Section 136(1) of the Companies Act, 2013, the Directors'' Report is being sent to all shareholders excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of your Bank,

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confirm in pursuance of Section 134(5) of the

Companies Act, 2013, that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31^st March, 2018, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) 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 your Bank as at 31^st March, 2018 and of the profit of your Bank for the financial year ended 31^st March, 2018;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively,

ANNEXURES

Following statements/reports/certificates are set out as Annexure to the Directors'' Report:

- Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014.

- Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013,

- Details of CSR activities and spends under Section 135 of the Companies Act, 2013,

- Certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in para E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies.

Your Directors acknowledge the support of the members and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya

Place: Mumbai Chairman

Date: 19^th May, 2018

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Mar 31, 2017

To the Members of

KOTAK MAHINDRA BANK LIMITED

The Directors present their Thirty-second Annual Report together with the audited accounts of your Bank for the year ended 31^st March 2017. FINANCIAL HIGHLIGHTS

(A) Kotak Mahindra Bank Limited - Consolidated financial highlights:

	31st March 2017 Rs, crore	31st March 2016 Rs, crore
Total income	33,983.77	28,032.36
Total expenditure, excluding provisions and contingencies	25,702.92	22,017.06
Operating Profit	8,280.85	6,015.30
Provisions and contingencies, excluding provision for tax	948.92	991.56
Profit before tax	7,331.93	5,023.74
Provision for taxes	2,382.85	1,592.62
Profit after tax	4,949.08	3,431.12
Less: Share of minority interest	78.83	65.19
Add: Share in profit of Associates	70.18	92.92
Consolidated profit for the Group	4,940.43	3,458.85
Earnings per Equity Share:
Basic (Rs,)	26.89	18.91
Diluted (Rs,)	26.86	18.87

(B) Kotak Mahindra Bank Limited - Standalone financial highlights:

	31st March 2017 Rs, crore	31st March 2016 Rs, crore
Total Income	21,176.09	18,996.42
Total expenditure, excluding provisions and contingencies	15,191.28	14,955.33
Operating Profit	5,984.81	4,041.09
Provisions and contingencies, excluding tax provisions	836.74	917.37
Profit before tax	5,148.07	3,123.72
Provision for taxes	1,736.57	1,033.94
Profit after tax	3,411.50	2,089.78
Add: Surplus brought forward from the previous year	8,214.12	5,095.26
Add: Net Additions on Amalgamation	-	1,674.71
Amount available for appropriation	11,625.62	8,859.75
Appropriations: Statutory Reserve under Section 17 of the Banking Regulation Act, 1949	852.88	522.45
General Reserve	-	-
Transfer to / (from) Investment Reserve Account	(48.49)	(41.52)
Transfer to Capital Reserve	10.55	9.17
Transfer to Special Reserve	55.00	45.00
Dividend / Proposed Dividend	0.071	91.84
Corporate Dividend Tax	(0.68)*	18.69
Surplus carried to Balance Sheet	10,756.29	8,214.12

DIVIDEND

Your Directors are pleased to recommend a dividend of '' 0.60 per equity share (previous year ''0.50 per equity share) for the year ended 31^st March 2017. This would entail a payout of Rs,132.94 crore including dividend distribution tax (previous year Rs, 110.53 crore) based on the number of shares as at 31^st March 2017. The dividend would be paid to all the shareholders, whose names appear on the Register of Members/Beneficial Holders list on the Book Closure date.

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Bank have adopted a Dividend Distribution Policy which is in line with the parameters prescribed by SEBI for distribution of dividend. The Policy is available on the Banks website viz. URL:http://ir. kotak.com/governance/policies.html

CAPITAL

During the year, your Bank has allotted 50,89,746 equity shares arising out of the exercise of Employees Stock Options granted to the employees and whole-time directors of your Bank and its subsidiaries and 14,25,313 equity shares arising out of the exercise of Employee Stock Options under the adopted ESOP Schemes of the erstwhile ING Vysya Bank Ltd. (eIVBL). Further, in November 2016, your Bank allotted 660 equity shares in lieu of the rights entitlement held in abeyance by eIVBL and bonus entitlement thereon.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of the Bank stands at Rs, 9,20,44,89,385 comprising of 1,840,897,877 equity shares of Rs, 5 each as on 31^st March 2017.

Your Bank has a Capital Adequacy Ratio (''CAR'') under Basel III as at 31^st March 2017 of 16.77% with Tier I being 15.90%.

During the year, your Bank has not issued any capital under Tier II. As on 31^st March 2017, outstanding Unsecured, Redeemable Non-Convertible, Subordinated Debt Bonds were Rs, 858.80 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs,348.28 crore.

Pursuant to the approval of the Board of Directors on 30^th March 2017 and approval of the shareholders on 9^th May 2017, your Bank undertook a Qualified Institutions Placement of up to 6.2 crore equity shares of Rs, 5 each of the Bank at an issue price of Rs, 936 per equity share which received an overwhelming response. Allotment of the equity shares pursuant to the issue is pending and are proposed to be allotted on 18^th May 2017.

OPERATIONS Consumer Banking

The Consumer Banking business of your Bank, services a wide spectrum of customers including domestic individual and households, non-residents, small and medium business segments for a range of products from basic savings & checking accounts to term deposits, credit cards, unsecured and secured loans, working capital and distribution of investment products.

Your Bank completed integration of branches and technology of the merged network of the erstwhile ING Vysya Bank during the course of the year. This has enabled your Bank a wider foot print coupled with the Digital push. Bank has engaged in a calibrated network expansion and as of 31^st March 2017 had 1369 branches and 2163 ATMs, covering 689 locations. Of the 36 new branches commissioned this year, 12 were in rural and semi-urban locations. It added about 13.99 lac new customers this year across core banking products of savings and checking accounts, term deposits, overdrafts and non-resident accounts.

Your Bank rolled out several initiatives aimed at offering a superior and differentiated customer experience. Some key ones are:

Products and Services

- Enhanced its suite of products positioned at customer clusters and launched a new offer, Flexi-Balance - a Current Account proposition tailored exclusively for SMEs having common/same family promoters. The proposition gives the benefit of pooling in balances across related SMEs without each SME needing to maintain independent balance in each of the Current Accounts.

- Overall strategy of segmented approach continues to yield benefits. The segmented Savings programs like Silk and Junior continue to show significant growth Y-o-Y.

- Launched a new program, MY FAMILY, focused on acquiring banking relationship of the whole family by giving proposition to pool the balances across multiple savings accounts and get additional benefits. The Investment led Savings Account - Alpha was re-launched in the last quarter on this fiscal based on customer and channel feedback.

- Instituted Customer life cycle management programs, targeting key journeys of the customer. The New to Bank Customer life cycle management program was launched to ensure a smooth and seamless on-boarding of new customers. The other significant journey that was launched was Inactive / Dormant life cycle to manage attrition of the customers.

Business Lines

a) Non Resident Indian Business

Some of the key initiatives taken this year are:

- Extended C2R money transfer mode for UAE. NRI clients can now use this medium to transfer money from UAE to their Kotak Bank account in India.

- Further expanded the network of exchange house relationships and the count now stands at 35, covering the following countries -Australia, Canada, GCC, Hong Kong, Malaysia, New Zealand, Singapore, UK and USA.

- Participated in various international business forums organized by the Indian community in various countries, as a platform to reach out to the overseas Indian community,

- Signed MoU with Ecobank, Nigeria for mutual customer referrals. Ecobank is a leading pan-African bank with operations in 36 countries across the continent.

b) Priority Banking Business

A new tier - "Maxima" was launched across semi urban and rural branches to cater to the aspiring and affluent segment in these locations. A Privy League branded variant of the "Delight" credit card with exclusive benefits, was also launched for the Privy League Prima customers.

c) Corporate Salary Business

Corporate salary business introduced a niche team of Premier Acquisition Managers to tap the every growing boutique and niche smaller firms in finance; technology and start-up segment. With this initiative, the corporate salary business on-boarded over 35 large niche corporates this year.

d) Consumer Assets

Your Bank has continued to grow the product lines under the Consumer Assets business.

Credit Card: Credit card business has issued 9.03 lac cards by March 2017 and is in its eighth year of operations. The credit card business has clocked total spends of Rs,6,696 crore for the year at 47.3% growth Y-o-Y with a book size of Rs,1459 crore.

Home Finance: As on 31^st March 2017, Home Loan disbursement volumes were up 20% Y-o-Y while book growth was at 12% Y-o-Y. The Non Individual LAP book growth was 14% while disbursement volumes in LAP were up 18% Y-o-Y. Your Bank has expanded its home finance business further in Tier II cities.

Cross Sell through Bank Branches, Corporate Salary, Priority Channel, and Wealth Teams contributed to around 44% of total volume.

This year also witnessed very low losses on account of effective recovery and collection processes and policies adopted.

Commercial Banking

The Commercial Banking business focuses on meeting the banking and financial needs of various segments. It partners Small and Medium Enterprises (SMEs) across the country and provides financing in the manufacturing, trading and service industry. The business has specialized units which offer financial solutions in the areas of commercial vehicles, construction equipment, tractor, gold loans and agriculture business. It services the priority sector by providing finance for tractor, crop loans, small enterprises and allied agricultural activities. The business plays a significant role in meeting financial inclusion goals and financing deep into Rs,Bharat'' through an expanding network of branches and associates.

Following the merger with the erstwhile ING Vysya Bank Ltd., the SME/Business Banking portfolio was consolidated during the year, which has resulted in creating efficiency and a wider customer base. While the stress levels in the sector went up in the first half, they have stabilized considerably in the second half.

The Commercial Vehicle (CV), Construction Equipment (CE) and Tractor Finance businesses reported significant growth and gained market share in their respective businesses. The demand for commercial vehicles was primarily led by replacement and regulatory changes such as revised body specifications and transition from BSIII to BSIV. Further, Government spending in the infrastructure sector has led to a strong demand in the CE industry. The growth in the tractor finance portfolio was driven by higher tractor sales following a good monsoon. The overall delinquency percentage of the CV, CE and tractor finance portfolios has reduced.

The Agriculture Financing business continued its focus on the agriculture value chain funding for various agro processing activities. It has registered growth despite volatility and uncertainty in the commodities market. Further, the Bank has expanded its crop loan business, so far concentrated in Punjab and Haryana, to Western and Central India.

Wholesale Banking

The Wholesale Banking business caters to the diverse needs of a wide range of corporate customer segments including major Indian corporate, conglomerates, financial institutions, public sector undertakings, multinational companies, mid-market companies and realty businesses. The business offers a comprehensive portfolio of products and services to these customers including working capital finance, medium term finance, trade finance, foreign exchange services, other transaction banking services, custody services, debt capital markets and treasury services.

Having completed the integration of the erstwhile ING Vysya Bank last year, the Wholesale Banking division has been focused on maximizing the benefits of this transaction through higher growth in a profitable manner.

Given the slow credit off-take in the economy during the year, the Wholesale Banking Business has targeted growth through growth of market share and this has been achieved through higher customer acquisition, improved customer service and product innovations.

Some of the key initiatives to serve customers better are:

- Continue to have equally high focus on adding new customers as increasing its wallet share with the existing customers. The year saw a healthy addition of New-to-Bank customers across customer segments, which in turn sets a strong foundation for future growth in the business.

- Set up a dedicated Service Solutions vertical to ensure faster customer response and improve customer experience. This vertical is the single point of contact for all service related and documentation issues with personnel present across the country. Focus on this area has helped your Bank significantly improve its Turn-Around-Time (TAT) across various processes including account opening and disbursals. Ongoing initiatives such as digitization and Tablet Banking will help reduce TAT further in the coming year,

- Focus on improving its suite of product offerings. During the year, the Wholesale Banking business launched a number of new innovative state of the art, best in class product solutions sets. The Bank witnessed significant addition of assets through higher focus on products such as LCBDs (discounting of Letters of Credit), Factoring, external benchmarked linked loans and discounting of long term lease rentals (LRDs). Your Bank has set up its GIFT City branch this year which has helped it to participate in syndication of overseas loans.

Your Bank has continued to work on ensuring a healthy portfolio through a volatile economic environment and has kept a tight control on asset slippages. This has been achieved through a proactive rebalancing of the portfolio to reflect economic situations and reduction in exposure to situations with heightened risk. Your Bank''s focus on risk management has helped the business reduce its risk weighted assets (RWA) over the past few years despite an increase in its exposure. Bank has also put in place a pricing mechanism based on the Risk Adjusted Return on Capital (RaRoC) model which has helped to optimize pricing and better utilize capital. Coupled with the reduction in RWA, the business has achieved a significant improvement in its return on equity.

It has an integrated Corporate and Investment Banking (CIB) coverage model for some of the top conglomerates and large corporate. The year saw a stabilization of the CIB model with the Bank being able to significantly increase its banking wallet share and also increase its investment banking business with these large corporate. As a testimony to your Bank''s efforts in this area, Asia money has awarded your Bank the Best Corporate and Investment Bank in 2017 in India.

It has continued to focus on institutionalizing and improving practices leading to better efficiencies. A number of tools are being put in place to monitor the productivity and efficiency of the sales force. Given high focus in this area, costs have been kept well in control further improving profitability of the business.

The Integrated Global Transaction Banking Services has had a strong year across its large suite of products. Current Account & Savings Account balances saw significant growth through focused marketing efforts and early to launch products such as ASBA. Trade funded book crossed Rs,10,000 crore this year. Bank''s Cash Management System (CMS) has won a number of awards this year including Best Cash Management Bank in India by the Asian Banker. A separate LCBD desk was set up which reduced TAT and helped grow this business significantly.

Digitization and Automation are key pillars of your Bank''s growth strategy and coupled with ease of doing business and improvisations of our internal processes, have led to efficiency improvements apart from improving TAT compared to competition across products & Services. The year saw a number of digital initiatives by the Wholesale Banking division. The response to the Bank''s Liquidity management product, a state-of-the art integrated treasury management solution for corporate has been encouraging. Your Bank also launched All-Pay, a one-stop shop for all payment needs of e-commerce and m-commerce companies. A number of other Digital initiatives including a corporate mobility solution, an online trade portal and an integrated corporate portal are currently under implementation. The business has also demonstrated proof of concept for transactions using the advanced block chain technology and further implementations are in progress.

Asset Reconstruction

The new bankruptcy code was introduced this year by the government to expedite the turnaround of the stressed assets. One needs to wait and watch the evolution of this new legislation.

The Division continued to focus on last mile turn around financing due to cash flow based recoveries possible in such cases.

The Bank is seeing signs of some green shoots in resolutions and turn around in the stress asset space. More opportunities are expected in the coming year and your Bank is well positioned to play a pivotal role in providing financial and other turnaround solutions.

Treasury

Your Bank''s treasury actively contributes to your Bank by way of:

- Proprietary Trading: The various proprietary trading desks actively trade in products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Bullion. Primary Dealer Desk - part of the proprietary trading desk, actively participates in the primary auctions of government securities, makes market in government securities and engages in retailing of government securities.

- Customer Transactions:

- Facilitating access to foreign currency markets through cash & derivatives products and providing fine market rates to clients for remittance and trade transactions.

- Client solutions - standardized and structured, pertaining to Debt Capital Markets including Syndication of Loans, Bonds, Mezzanine financing, Promoter funding and acquisition financing and Securitization.

- Balance Sheet Management: The Balance Sheet Management Unit (BMU) ensures maintenance of regulatory reserves and adequate liquidity buffers and also manages the Interest rate risk & Liquidity risk within the Risk appetite of the Bank.

Human Resources

FY 2016-17 has been a year with increased focus on assimilation of integrated employees through improved engagement with the organization.

To ensure a seamless alignment, various initiatives were launched to internalize behavioral parameters, transitioning to the expected behaviors and ownership to the cause at the first line of leadership hierarchy in the organization.

Your Bank enhanced the focus to drive customer experience and service quality with interventions in back office functions. Bank has been focused on improving productivity through process simplification, automation and training. The talent base bank has reached to 33013 employees. A proactive approach has been adopted to bring automation on query management and engagement of employees with the aid of technology to manage the distributed workforce.

With an average age of 33 years Bank continues to attract talent across all its businesses and hierarchy and has put in place various processes and systems to ensure alignment of employee behaviors with the organization''s core values. Pre-trained manpower acquisition channels such as Kotak Sales Officer (KSO) and Junior Sales Officer (JSO) programs have been creating a sustainable workforce pipeline.

To enhance engagement and connect with workforce, a dedicated team was institutionalized to focus on employee connect, engagement and communication. Focus of engagement initiatives was driven from the internal model for improved connect. Bank continues its focus on engagement and retention through initiatives that provide a holistic environment where employees get opportunities to realize their potential. Talent management as an integral part of overall performance management process in the Bank aims to provide long term, sustained and meaningful careers to employees across the organization. ''Pulse'' engagement survey, along with other engagement initiatives, provided insights on distinct employee needs that helped developing appropriate interventions.

Your Bank is committed to developing its capabilities as an organization and as individuals to meet current and future business challenges. In the year 2016-17, it has invested significantly in training and professional development - leveraging the latest technologies to deliver highly impactful and relevant training programs to its employees. These learning initiatives are designed around development of individual and team. Leadership Development Programs focused on developing the leadership capabilities of the senior executives, to help them prepare for future roles in the organization.

With the wave of digital, employee touch points are also digitized with the launch of digital portal for all employee HR touch points. The portal facilitates simplifications, access to information and self-service for employees.

Guided by our value system that motivates our attitudes and action, your Bank is focused on forward looking policies, lean processes and nurturing talent.

Technology

The merger of all technology systems of the erstwhile ING Vysya Bank Ltd. with the Bank''s systems was concluded. With this integration, all staff in the merged entity have a standardized technology environment to work in; from call center telephony to desktops and networks. This has enabled seamless communication and collaboration amongst the Bank''s personnel. The merger and rationalization of four data centers down to two datacenters has resulted in streamlined technology operations with financial gains ensuing from the synergies. The Bank''s customers are all now serviced out of a single set of business applications, ensuring a consistent experience to all customers of the merged entity

Digitization

The introduction of Digital products and services was key a focus throughout the Bank. Some of the highlights being:

- The Bank''s retail customers'' mobile experience was enriched with a full range capabilities from online shopping, restaurant payments, movies ticket booking, and magazine subscriptions.

- Keeping up with the digital infrastructure introduced in the country, the Bank''s customers have been provided with a wide variety of payment mechanisms to choose from, ranging from UPI, Mvisa and Bharat QR code. While the traditional payment methods of NEFT and RTGS continued to see growth, the IMPs payment option, available to the customers 24 hours a day, is a much appreciated feature showing constantly increasing adoption throughout the year,

- The Bank''s (salaried) customers can now avail themselves of a pre-approved Personal Loan on mobile app. A pre-qualified customer can apply for a personal loan while logged into the Mobile app and the disbursed amount is instantly credited to customer''s banking account.

- Leveraging the digital infrastructure provided by the Government of India, the Bank''s Net banking now offers access to customers to a ''DigiLocker''. This is a platform that enables a customer to store and verify personal documents online.

- The culmination of the digital offerings in the year has been the Rs,811'' product on the mobile application. Kotak 811 is a mobile based account opening platform using Aadhaar OTP, where customers can open an account with their Aadhaar details. It enables a new customer to simply download an application on his/her mobile phone, and open an account in less than 5 minutes. Customers can set their PINs for the mobile banking app during the process and they also receive a virtual debit card. A first of its kind in the banking industry, the product has already seen much interest.

- On the lending side, the commercial customers'' experience of applying for a loan was enhanced by equipping the sales and relationship personnel, with mobile and tablet applications to accept loan application details and even make immediate initial loan eligibility information available to the customers.

- The wealth management customers got a new mobile app for quick and easy access to investment information. In the digital arena, the corporate banking business focused on online merchant acquisition capability for their customers.

- An Innovation Hub has been established to incubate ideas and develop proof of concepts in emerging technologies such as Artificial Intelligence and Block chain.

Cyber security

As customers get more knowledgeable about security considerations, they have been empowered to directly control the access to their debit cards. The mobile application and net banking provide functions that enable the customer to "turn off" his/her debit card when not in use, and "turn on" the card at the point of usage. Thus putting control, directly in the customers'' hands.

To keep pace with the Bank''s digital initiatives, there is a constant need to raise the bar on information security. Several advanced security monitoring measures that track unrelated transactions and data streams for possible correlation and potential cyber threats were implemented. In accordance with RBI guidelines released in the year, your Bank''s cyber security policies and procedures were enhanced.

SUBSIDIARIES & ASSOCIATES

Your Bank''s subsidiaries are established players in the different areas of financial services, viz. car finance, investment banking, stock broking, asset management and life insurance.

As at 31^st March 2017, your Bank has eighteen (18) subsidiaries as listed below:

Domestic Subsidiaries

Kotak Mahindra Prime Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Investments Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Infrastructure Debt Fund Limited (formerly known as ''Kotak Forex Brokerage Limited'')

Kotak Mahindra Pension Fund Limited

Kotak Mahindra General Insurance Company Limited

IVY Product Intermediaries Limited

International Subsidiaries

Kotak Mahindra (International) Limited Kotak Mahindra (UK) Limited Kotak Mahindra Inc.

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Limited

During the year, Kotak Forex Brokerage Limited changed its name to Kotak Infrastructure Debt Fund Limited, to commence new business activity of an Infrastructure Debt Fund. It has received approval of Reserve Bank of India in April 2017 for commencing the new business.

Your Bank has executed a Share Purchase Agreement in April 2017 for acquisition of the 26% equity stake of Old Mutual plc in Kotak Mahindra Old Mutual Life Insurance Limited (KLI). The transaction is subject to obtaining all necessary regulatory and other approvals. Upon completion of the said acquisition, the Bank along with its subsidiaries will hold 100% beneficial interest in KLI.

The various activities of the subsidiaries and the performance and financial position of the subsidiaries and associates are outlined in the Management Discussion and Analysis section appended to this Report.

The Bank''s Policy for determining material subsidiaries is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html

As at 31^st March 2017, your Bank has following four (4) Associate companies:

ACE Derivatives & Commodity Exchange Limited Infina Finance Private Limited Matrix Business Services India Private Limited Phoenix ARC Private Limited

The Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31^st March 2017, has been sent to all the members of your Bank. Web link of the Annual Report has been sent to all members whose email IDs are registered with the Bank/Depository Participant(s). For members who have not registered their email IDs, physical copies of the Annual Report are sent. It does not contain Annual Reports of your Bank''s subsidiary companies. Your Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) either a hard or soft copy depending upon request by any member of your Bank. These Annual Reports will be available on your Bank''s website viz. URL: http://ir.kotak.com/annual-reports and will also be available for inspection by any member at the Registered Office of your Bank.

EMPLOYEE STOCK OPTION & STOCK APPRECIATION RIGHTS SCHEMES

The stock options and the stock appreciation rights granted to the employees of the Bank and its subsidiaries currently operate under the following Schemes:

- Kotak Mahindra Equity Option Scheme 2007

- Kotak Mahindra Equity Option Scheme 2015

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2007

- Kotak Mahindra Bank Ltd. (IVBL) Employee Stock Option Scheme 2010

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2013

- Kotak Mahindra Stock Appreciation Rights Scheme 2015

The disclosures requirements under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, for the aforesaid ESOP & SARs Schemes, in respect of the year ended 31^st March 2017, are disclosed on the Bank''s website viz. URL: http://ir.kotak.com/annual-reports

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), a separate section entitled ''Report on Corporate Governance'' has been included in this Annual Report. The Report of Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A Business Responsibility Report containing the requisite details under Regulation 34 of the SEBI LODR Regulations is disclosed on the Bank''s website viz. URL: http://ir.kotak.com/annual-reports

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Mr. Mark Newman, retires by rotation as a Director at this Annual General Meeting and is eligible for re-appointment.

Directors appointed during the year

Mr. Uday Khanna (DIN 00079129) was appointed as an Additional Director of the Bank with effect from 16^th September 2016. Mr. Khanna who holds office as a Director up to the date of this Annual General Meeting is proposed to be appointed as an Independent Director, not liable to retire by rotation, for a term of 5 years from the date of his appointment i.e. 16 September 2016, under Section 149 of the Companies Act, 2013, at the ensuing Annual General Meeting. In terms of Section 160 of the Companies Act, 2013, your Bank has received notice in writing from a member along with requisite deposit of Rs,1,00,000 proposing candidature of Mr. Khanna for his appointment as an Independent Director of the Bank.

Prof. S. Mahendra Dev (DIN 06519869) was appointed as an Independent Director of the Bank for a term of 5 years up to 14^th March 2018. Based on the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Bank, at its meeting held on 15^th May 2017 reappointed Prof. Dev as an Independent Director for a further term of 3 years pursuant to the provisions of Section 149, 150(2) & 152 of the Companies Act, 2013 and Section 10-A(2-A) of the Banking Regulation Act, 1949, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Bank.

The Board of Directors of the Bank, at the same meeting, also re-appointed Mr. Uday Kotak as Executive Vice-Chairman and Managing Director for the period from 1^st January 2018 to 31^st December 2020, subject to the approval of the shareholders and of the Reserve Bank of India. Further, Mr. Dipak Gupta has been re-appointed as Whole-time Director of the Bank designated as Joint Managing Director for the period from 1^st January 2018 to 31^st December 2020 subject to the approval of the shareholders and of the Reserve Bank of India. The approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

The details of the Directors appointed/re-appointed are set out in the Corporate Governance Report annexed to this Report.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Board Evaluation

The Nomination and Remuneration Committee of the Bank’s Board under the expert advice of an external agency specialized in human resource and management consultancy, has formulated the criteria for performance evaluation of the Directors and the Board as a whole. The criteria formulated broadly covers the Board role, Board/Committee membership, practice & procedure and collaboration & style.

In line with the SEBI Guidance note on Board Evaluation, a Board effectiveness assessment questionnaire was designed for the performance evaluation of the Board, its Committees, Chairman and individual directors and in accordance with the criteria set and covering various aspects of performance including structure of the board, meetings of the board, functions of the board, role and responsibilities of the board, governance and compliance, evaluation of risks, grievance redressal for investors, conflict of interest, stakeholder value and responsibility, relationship among directors, director competency, board procedures, processes, functioning and effectiveness. The said questionnaire was circulated to all the directors of the Bank for the annual performance evaluation.

Based on the assessment of the responses received to the questionnaire from the directors on the annual evaluation of the Board, its Committees, Chairman and the individual Directors, the Board Evaluation Report was placed before the meeting of the Independent Directors for consideration. Similarly, the Board at its meeting assessed the performance of the Independent Directors. The Directors were quite satisfied with the results of the performance evaluation of the Board & its Committees, Chairman and individual directors.

Key Managerial Personnel (KMPs)

The following officials of the Bank continue to be the "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013:

- Mr. Uday Kotak, Executive Vice Chairman and Managing Director

- Mr. Dipak Gupta, Joint Managing Director

- Mr. Jaimin Bhatt, President & Group Chief Financial Officer

- Ms. Bina Chandarana, Company Secretary

Appointment & Remuneration of Directors & KMPs

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, 1949. The Nomination and Remuneration Committee of the Bank''s Board has formulated criteria for appointment of Senior Management personnel and the Directors. Based on the criteria set it recommends to the Board the appointment of Directors and Senior Management personnel. The Committee considers the qualifications, experience, fit & proper status, positive attributes as per the suitability of the role, independent status and various regulatory/ statutory requirements as may be required of the candidate before such appointment.

The Reserve Bank of India (''RBI'') vide its circular no.DBOD.No.BC.72/29.67.001/201 1-12 dated 13^th January 2012 has issued the Guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Other Risk Takers of Private Sector Banks on Compensation Policy which inter alia cover the following:

- Proper balance between fixed pay and variable pay;

- Variable pay not to exceed 70% (Seventy Per Cent) of the fixed pay in a year;

In accordance with the aforesaid RBI Circular, the Board of the Bank has adopted a Compensation Policy for its Whole-time Directors, Chief Executive Officer of the Bank and other employees which includes issue of stock appreciation rights as a form of variable pay, linked to the Bank''s stock price, payable over a period of time. The salient features of the Compensation Policy are as follows:

- Objective is to maintain fair, consistent and equitable compensation practices in alignment with Kotak''s core values and strategic business goals.

- Applicable to all employees of the Bank. Employees classified into 3 groups: o Whole-time Directors/Chief Executive Officer

- Risk Control and Compliance Staff o Other categories of Staff

- Compensation structure broadly divided into Fixed, Variable and ESOPs

- Fixed Pay - Total cost to the Company i.e. Salary, Retrials and Other Benefits

- Variable Pay - Linked to assessment of performance and potential based on Balanced Key Result Areas (KRAs), Standards of Performance and achievement of targets with overall linkage to Bank budgets and business objectives. The main form of incentive compensation includes - Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights.

- ESOPs - Granted on a discretionary basis to employee based on their performance and potential with the objective of retaining the employee.

- Compensation Composition - The ratio of Variable Pay to Fixed Pay and the ratio of Cash v/s Non Cash within Variable pay outlined for each category of employee classification.

- Any variation in the Policy to be with approval of the Nomination & Remuneration Committee.

- Malus and Clawback clauses applicable on Deferred Variable Pay.

- Ensuring no personal hedging strategies by employees which undermine risk alignment effects as part of their remuneration.

The details of the remuneration paid to the Non-Executive Chairman, Executive and Non-Executive Directors of the Bank for the year ended 31^st March 2017 is provided in the Corporate Governance Report annexed to this Report.

The Non-Executive Chairman of the Bank receives a fixed amount of remuneration as recommended by the Board and approved by the shareholders of the Bank and RBI, from time to time. He also receives remuneration by way of sitting fees for attending meetings of the Board or Committees thereof.

RBI vide its circular no. DBR.No.BC.97/29.67.001/2014-15 dated June 1, 2015 has issued guidelines on payment of compensation to the Non-Executive Directors (NEDs) of private sector banks which inter-alia specifies the following:

- Compensation structure broadly divided into o Sitting fees

- Re-imbursement of expenses o Commission (profit based)

- Amount of sitting fees and commission to be decided by the Board from time to time, subject to the regulatory limits.

- Overall cap on commission for each director Rs,10 lac per annum.

- NEDs not eligible for any stock options of the Bank.

At the Annual General Meeting of the Bank held on 22^nd July 2016, the shareholders have approved the payment of commission to the NEDs of the Bank with effect from the financial year 2015-16.

Remuneration paid to the KMPs is in line with the Compensation Policy of the Bank which is based on the RBI Guidelines.

Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. Ratio of the remuneration of each director to the median remuneration of the employees for the financial year:

Directors	Title	Ratio
Mr Uday Kotak	Vice Chairman & Managing Director	46.86x
Mr Dipak Gupta	Joint Managing Director	46.38x
Dr Shankar Acharya	Non-Executive Chairman	5.33x

2. Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors/KMP	Title	% increase in remuneration	% increase in remuneration excluding SARs
Mr Uday Kotak	Vice Chairman & Managing Director	6.55	6.55
Mr Dipak Gupta	Joint Managing Director	6.85	6.85
Dr Shankar Acharya	Non-Executive Chairman	11.11	11.11
Mr Jaimin Bhatt	Group CFO	1.18	5.84
Ms Bina Chandarana	Company Secretary	5.48	13.08

3. Percentage increase in the median remuneration of employees in the financial year:

For employees who were in employment for the whole of FY 2015-16 and FY 2016-17 increase in the median remuneration is 10.26%.

4. Number of permanent employees on the rolls of Bank at the end of the year: 33,013

5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

For employees other than managerial personnel who were in employment for the whole of FY 2015-16 and FY 2016-17 the average increase is 10.34% and 11.95% excluding SARs.

Average increase for managerial personnel is 4.48% and 7.07% excluding SARs.

6. Affirmation that the remuneration is as per the remuneration policy of the Bank:

The Bank is in compliance with its Compensation Policy Notes:

1) Remuneration includes Fixed pay Variable paid during the year perquisite value as calculated under the Income Tax Act, 1961. Remuneration does not include value of Stock Options.

2) Stock Appreciation Rights (SARs) are awarded as variable pay. These are settled in cash and are linked to the average market price/closing market price of the Bank''s stock on specified value dates. Cash paid out during the year is included for the purposes of remuneration.

3) The Non-Executive Directors of the Bank (other than the Non-Executive Chairman) receive remuneration in the form of sitting fees for attending the Board/Committee meetings and in the form of an annual profit based commission. Such annual profit based commission was paid for the first time for FY 2015-16 during FY 2016-17.

4) Increase in remuneration of Mr. C. Jayaram who retired as Joint Managing Director on 30^th April 2016, but continues as non-executive director w.e.f. 1^st May 2016, has not been provided.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013, your Bank has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31^st March 2017 is annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

AUDITORS

In terms of Section 139 of the Companies Act, 2013, Messrs S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed as statutory auditors of your Bank for a period of four years from the conclusion of the Thirtieth Annual General Meeting until the conclusion of the Thirty fourth Annual General Meeting of the Bank, subject to the annual approval of RBI and ratification by the members every year. Accordingly, requisite resolution forms part of the Notice convening the Annual General Meeting.

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirms that your Bank has laid down set of standards, processes and structure which enables to implement Internal Financial controls across the organization with reference to Financial Statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

IMPLEMENTATION OF IND AS

The Ministry of Finance, Government of India has vide its press release dated January 18, 2016 outlined the roadmap for implementation of International Financial Reporting Standards (IFRS) converged Indian Accounting Standards (Ind AS) for Banks, Non-banking Financial Companies and Insurance companies. RBI has advised Banks vide RBI/2015-16/315DBR.BP.BC.No.76/21.07.001/2015-16 to follow the Ind AS as notified under the Companies (Indian Accounting Standards) Rules, 2015 subject to any guideline/direction issued in this regard. For Banking companies, the implementation of Ind AS will begin from April 1, 2018 onwards, with comparatives for the year beginning April 1, 2017. The Ind AS quarterly financials of FY 2017-18 will need to be published as Y-o-Y comparison from June 2018 onwards.

As per Reserve Bank of India (RBI) directions, your Bank has taken following steps so far:

- Submitted Standalone Performa Ind AS financial statements to the RBI for the half-year ended September 30, 2016, as required.

- Formed Steering Committee for Ind AS implementation. The Steering Committee comprises of representatives from Finance, Risk, Operations and Treasury. The Committee oversees the progress of Ind AS implementation in the Bank, and provides guidance on critical aspects of the implementation such as Ind AS technical requirements, systems and processes, business impact, people and project management. The Committee closely reviews progress of Ind AS implementation.

- Evaluating various IT solutions to automate Ind AS especially Expected Credit Losses (ECL) computation and other accounting changes in order to improve the robustness of the process.

The Bank will continue to liaise with RBI and industry bodies on various aspects pertaining to Ind AS implementation.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no related party transactions to be reported under Section 188(1) of the Companies Act, 2013, in form AOC-2.

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 23 of Schedule 17 - Notes to Accounts of the Consolidated financial statements and Note 7 of Schedule 18 - Notes to Accounts of the Standalone financial statements of your Bank.

The Bank''s Policy on dealing with Related Party Transactions is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, 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 Companies Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Bank is committed to its "Vision Statement" of upholding its Global Indian Financial Services Brand creating an ethos of trust across all constituents, developing a culture of empowerment and a spirit of enterprise thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors highest standards of transparency, probity and accountability. The Kotak Group endeavors to develop a culture where it is safe and acceptable for all employees and directors to raise / voice genuine concerns in good faith, and in a responsible as well as effective manner,

A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or director, raise genuine concern or report evidence of activity by the Bank or its employee or director that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank''s policies; questionable accounting/audit matters/financial malpractice. The same option has now been extended to the vendors of the Bank also. The concerns can be reported on the website viz. URL: https://cwiportal.com/kotak.

Currently an online mechanism enabling aforementioned reporting has been implemented over and above other modes of communication like e-mail, or a letter sent by mail, courier or fax to designated persons.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exception circumstances.

The Policy has been uploaded on the Bank''s intranet as well as website viz. URL: http://ir.kotak.com/governance/policies.html and regular communication is made for sustained awareness.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Bank has constituted a Board Corporate Social Responsibility Committee (CSR Committee). The CSR Committee presently consists of Mr. C. Jayaram, Mr. Dipak Gupta and Prof. S. Mahendra Dev.

Your Bank''s CSR Committee drives the CSR programme of the Bank. Your Bank has a Board approved CSR policy, charting out its CSR approach. This policy articulates the Bank''s aim to positively contribute towards economic, environmental and social well-being of communities through its Corporate Social Responsibility agenda. The Bank''s CSR agenda is driven by its key focus areas:

a. Promoting education - primary focus area

b. Enhancing vocational skills and livelihood

c. Promoting preventive healthcare and sanitation

d. Reducing inequalities faced by socially and economically backward groups

e. Sustainable development

f. Relief and rehabilitation

g. Clean India

h. Sports

The Bank''s CSR policy is available on the Bank''s website viz. URL : http://www.kotak.com/corporate-responsibility.html

Pursuant to the provisions of Section 135, schedule VII of the Companies Act 2013 (the Act), read with the Companies (Corporate Social Responsibility) Rules, 2014 the report of the expenditure on CSR by the Company is as under:

The average net profit u/s 198 of the Bank standalone for the last three financial years preceding 31^st March 2017 is Rs, 2,746.24 crore.

The prescribed CSR expenditure required u/s 135, of the Act for FY 2016-17 is Rs, 5,492 lac.

The CSR expenditure incurred for the period 1^st April 2016 to 31^st March 2017 under Section 135 of Companies Act, 2013 amounts to Rs, 1,733 lac as against Rs, 1,641 lac CSR spend in the financial year 2015-16. The unspent amount for FY 2016-17 is Rs,3,759 crore.

CSR expenditure of Rs, 1,733 lac in FY 2016-17 as a percentage of average net profit u/s 198 of the Bank standalone at Rs, 2,746.24 crore is 0.63%.

The Bank has been spending on CSR focused themes and programmes, which have been approved by the Board CSR Committee and the Board. The CSR spending is guided by the vision of creating long-term benefit to the society. The Bank is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years The Bank’s commitment to achieve the mandated spend can be seen from the increasing CSR spends over the years. In FY 2014-15, Bank''s CSR spend was Rs,1,197 lac, in FY 2015-16 it was Rs,1,641 lac. In the reporting period, FY 2016-17, the CSR expenditure has been further increased to Rs,1,733 lac.

Though the Bank is eligible to consider up to 5% of total CSR spend as administrative expenditure towards building its CSR capacities, etc., the Bank has taken a call not to consider it as a part of CSR spend for the year FY 2016-17.

The details of CSR activities and report under Section 135 of the Companies Act, 2013 for FY 2016-17, are annexed to this Report.

RISK MANAGEMENT POLICY

Your Bank has in place a comprehensive Group Enterprise wide Risk Management (ERM) framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. During the year, the Group ERM Policy was revised, keeping in mind the advances in Risk Management over the past few years and emerging / evolving guidelines. Details of identification, assessment, mitigations, monitoring and the management of these Risks are mentioned in the Management Discussion and Analysis section appended to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank, standalone, was over 33,000 and along with its subsidiaries was over 44,000 as of 31^st March 2017.

114 employees employed throughout the year and 56 employees employed for part of the year were in receipt of remuneration of Rs, 1.02 crore or more per annum.

Organizational culture aspects like trust & inclusiveness were also reiterated through cross functional meets conducted by senior business leaders for employees at mid management level under the "Meet 5" initiative.

In a very short span, your Bank has crossed several milestones in its Gender Diversity agenda.

- A differentiated talent acquisition strategy to increase women employee base across various suitable roles has helped us to continue adding 21% women amongst all new hires in the Bank. While continuing with our philosophy of providing equal opportunities, an aggressive push in this area will help us achieve a better balance in gender diversity,

- Prevention of Sexual Harassment (POSH): Bank continues with the belief on zero tolerance towards sexual harassment at workplace and continues to uphold and maintain itself as a safe and non-discriminatory organization. To achieve the same Kotak reinforces the understanding and awareness of Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Bank has formulated Internal Complaints Committee (ICC) at three regions for reporting any untoward instance. Any complaints pertaining to sexual harassment are diligently reviewed and investigated and treated with great sensitivity. The ICC members have been trained in handling and resolving complaints and have also designed an online e-learning POSH Awareness module which covers the larger employee base.

Following is a summary of sexual harassment complaints received and disposed off during the year 2016-17:

- No. of complaints received : 19

- No. of complaints disposed off : 12

In the case of 7 pending cases, enquiries were in progress at the close of the year.

With our objective to identify, build and nurture leaders across levels to deliver superior business results and address individual career aspirations bank continues to put efforts through various interventions.

As Bank enters in its next phase of growth and expansion of footprint across urban and rural India, Bank and its subsidiaries continued to carry out several initiatives to attract and retain a pool of highly skilled and motivated employees who are aligned to the firm’s vision of becoming the most trusted financial services provider.

In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of the employees are set out in the annexure to the Directors'' Report. In terms of the Proviso to Section 136(1) of the Companies Act, 2013, the Directors'' Report is being sent to all shareholders excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confirm in pursuance of Section 134(5) of the Companies Act, 2013, that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31^st March 2017, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) 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 your Bank as at 31^st March 2017 and of the profit of your Bank for the financial year ended 31^st March 2017;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

ANNEXURES

Following statements/reports/certificates are set out as Annexure to the Directors'' Report:

- Extract Of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014.

- Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013.

- Certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in para E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the members and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya

Place: Delhi

Chairman

Date: 16^th May 2017

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Mar 31, 2016

The Directors present their Thirty-first Annual Report together with the audited accounts of your Bank for the year ended 31st March 2016.

FINANCIAL HIGHLIGHTS

Pursuant to the approval of the Reserve Bank of India to the Scheme of Amalgamation of ING Vysya Bank Ltd. (IVBL) with Kotak Mahindra Bank Ltd. (the Bank), IVBL merged with the Bank effective from 1st April 2015. The current year consolidated and standalone figures include operations of the erstwhile IVBL. Hence, the previous year figures are not comparable.

The financial highlights are summarized below:

(A) Kotak Mahindra Bank Limited – Consolidated financial highlights:

31st March 2016 31st March 2015 Rs, crore Rs, crore

Total income 28,032.36 21,471.08

Total expenditure, excluding provisions and contingencies 22,017.06 16,715.37

Operating Profit 6,015.30 4,755.71

Provisions and contingencies, excluding provision for tax 991.56 205.73

Profit before tax 5,023.74 4,549.98

Provision for taxes 1,592.62 1,484.90

Profit after tax 3,431.12 3,065.08

Less: Share of minority interest 65.19 59.51

Add: Share in Profit of Associates 92.92 39.88

Consolidated Profit for the Group 3,458.85 3,045.45 Earnings per Equity Share:

Basic (Rs,) 18.91 19.75

Diluted (Rs,) 18.87 19.70

(B) Kotak Mahindra Bank Limited – Standalone financial highlights:

31st March 2016 31st March 2015 Rs, crore Rs, crore

Total Income 18,996.42 11,748.32

Total expenditure, excluding provisions and contingencies 14,955.33 8,750.86

Operating Profit 4,041.09 2,997.46

Provisions and contingencies, excluding tax provisions 917.37 164.50

Profit before tax 3,123.72 2,832.96

Provision for taxes 1,033.94 966.98

Profit after tax 2,089.78 1,865.98

Add: Surplus brought forward from the previous year 5,095.26 4,005.29

Add: Net Additions on Amalgamation 1,674.71 -

Amount available for appropriation 8,859.75 5,871.27 Appropriations:

Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 522.45 466.50

General Reserve - 93.30

Transfer to / (from) Investment Reserve Account (41.52) 86.65

Transfer to Capital Reserve 9.17 5.91

Transfer to Special Reserve 45.00 28.00

Proposed Dividend 91.84 82.07

Corporate Dividend Tax 18.69 13.58

Surplus carried to Balance Sheet 8,214.12 5,095.26

BONUS ISSUE OF SHARES

During the year, pursuant to approval of the shareholders of the Bank at the Annual General meeting held on 29th June 2015, your Bank issued 91,28,41,920 Bonus shares in the ratio of 1:1 i.e. one equity share for every one equity share held on the Record Date, to the Members on 10th July 2015.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs, 0.50 per equity share entailing a payout of Rs, 110.53 crore including dividend distribution tax. The dividend would be paid to all the shareholders, whose names appear on the Register of Members/Beneficial Holders list on the Book Closure date.

CAPITAL

During the year, your Bank has allotted 99,91,715 equity shares (adjusted for bonus) arising out of the exercise of Employees Stock Options granted to the employees and whole-time directors of your Bank and its subsidiaries. As per the ESOP Schemes of erstwhile ING Vysya Bank Ltd. (eIVBL), the stock options granted to the employees vested on an accelerated basis upon the merger. Consequently, the number of stock options on which vesting was accelerated was 1,04,91,900 (on a post swap basis, adjusted for bonus shares).

Post allotment of equity shares as aforesaid and the bonus allotment, the issued, subscribed and paid-up share capital of your Bank stands at Rs, 9,17,19,10,790 comprising of 1,83,43,82,158 equity shares of Rs, 5 each as on 31st March 2016.

Your Bank is well capitalized and has a Capital Adequacy Ratio (''CAR'') under Basel III as at 31st March 2016 of 16.34% with Tier I being 15.28%.

During the year, your Bank has not issued any capital under Tier II. As on 31st March 2016, outstanding Unsecured, Redeemable Non-Convertible, Subordinated Debt Bonds were Rs, 969.7 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs, 806.31 crore.

TERMINATION OF GDS PROGRAM

The Global Depository Shares (GDS) of the Bank were listed on Luxembourg Stock Exchange. Consequent to the issuance of notice of termination of the GDS program by the Bank to the Custodian and the Depository, the Depository Agreement entered into between the Bank and the Depository was terminated. Subsequently, the GDS program has been terminated with effect from 4th September 2015.

OPERATIONS Consumer Banking

The merger of ING Vysya Bank (IVBL) with your Bank brought in 577 branches and 657 ATMs from the erstwhile IVBL.

Your Bank consolidated its network presence through a measured expansion of its footprint across the country and as of 31st March 2016 had 1333 branches and 2032 ATMs, covering 706 locations. Of the 74 new branches commissioned this year, 32 were in rural and semi-urban locations. Your Bank added about 10.96 lac new customers this year across core banking products of savings and checking accounts, term deposits, overdrafts and non-resident accounts.

Your Bank rolled out several initiatives aimed at offering a superior and differentiated customer experience. Some key ones are:

Products and Services

l Launched its first E-Lobby at Andheri Metro Station, Mumbai. The e-lobby offers a host of self service capabilities such as ATM, Banking Kiosk, Tablets, Surface Table, etc. which can be used by both customers and non-customers.

- Enhanced its suite of products positioned at specific customer segments and launched two new propositions, MY FAMILY - a savings bank proposition tailored exclusively for the entire family. The proposition gives the benefit of pooling in balances across family members & also gives them the benefit of a dedicated relationship manager for the family, and, ALPHA - a savings bank proposition linked to investments. The customer gets the benefit of a NMC waived savings account when they choose an RD (or) MF SIP (or) NPS along-with a term insurance premium of Rs, 300 per month (which offers a cover of Rs,20 lac) linked to their savings account. The proposition also offers Cash Back on Debit Card spends & is targeted for the age group of 18-55.

- Tied up with Thomas Cook and Kuoni Travels to offer a Holiday Savings Account linked to a Recurring Deposit. Customers get benefit of various schemes & offers launched by these travel companies and the banking linkage enables them to save on a monthly basis to facilitate the holiday expense.

- Appointed as Authorised Collection Centre (ACC) by Stock Holding Corporation of India Ltd (SHCIL) for providing E-stamping facility in the states of Punjab and Rajasthan.

- Appointed as one of the collecting Banks for Government of India''s Sovereign Gold Bonds and was actively involved in raising subscriptions across all three tranches.

- Launched three new Current Account products - Kotak Pro Plus, Kotak Elite Plus and Kotak Ace Plus offering more efficient cash management in select locations.

- Introduced Kotak Cheque Protect, a calibrated credit oriented program for offering cheque protection facility to existing customers for honouring cheques in the event of shortfall in the bank account, based on certain pre-approved parameters.

- Implemented Foreign Account Tax Compliance Act (FATCA) / Common Reporting Standard (CRS) which requires the Bank to carry out due diligence of its customers to identify the individuals and entities which fulfill the indices as prescribed by the regulatory bodies and reporting to the Indian tax authorities for onward submission of information to foreign authorities as appropriate.

Business Lines

a) Non Resident Indian Business

Some of the key initiatives taken this year are:

- Extended C2R money transfer mode for Canada. Your Bank''s NRI clients can now use this medium to transfer money from Canada to their Kotak Bank account in India.

- Further expanded the network of exchange house relationships and the count now stands at 26.

- As a platform to reach out to the overseas Indian community, your Bank has participated in various international business forums organized by the Indian community in various countries.

- In order to work closely with the mariner community & shipping companies your Bank has participated in various mariner events nationally.

b) Priority Banking Business

Privy League program, positioned to cater to the affluent segment, now services 3.4 lac customers. A new tier-"Insignia" was launched at select locations to cater to customers with group relationship value of at least Rs, 1 crore. A Corporate Credit card with exclusive benefits for Privy League Business banking customers was introduced to increase the segmental focus in the program. To address customers'' need for legacy planning, Smart Will, an automated online will writing solution was launched in association with Kotak Securities.

c) Corporate Salary Business

Salary2Wealth – Your Bank''s corporate salary business now caters to over 17 lac customers across 13,700 corporate. The Salary2Wealth book grew by 33% Y-o-Y to close the year at Rs, 3,988 crore and acquired 4.90 lac new customers with more than 1,700 new corporate sign-up''s.

d) Consumer Assets

Your Bank has continued to grow the product lines under the Consumer Assets business.

Credit Card: Credit card business has issued 6.34 lac cards by March 2016 and is in its seventh year of operations. The premium range of our products – VISA Signature and VISA Platinum have driven the spends growth in the portfolio and it contributes to 42% of spends. The credit card business has clocked total spends of Rs, 4,543 crore for the year at 42% growth Y-o-Y with a book size of Rs,942 crore.

Salaried Personal Loan: Salaried personal loan business offers salaried individuals personal loans with a tenure of upto 60 months. This year the business has grown by 70% with outstanding loans of Rs, 1,416 crore as of March 2016. The total customer base stands at 47,500 customers.

Home Finance: Home finance business clocked growth of 19% in disbursements with loan book growth of 19%. Your Bank has expanded its home finance business further in Tier II cities. Cross Sell through Bank Branches, Corporate Salary, Privy, and Wealth Teams contributed to around 38% of total volume. This year also witnessed very low losses on account of effective recovery and collection processes and policies adopted.

e) Business Banking Assets (BBA)

Your Bank through its BBA division offers secured and unsecured Business loans, Loans against Property & Working Capital Finance to self- employed professionals / non-professionals and Small & Medium Enterprises. This has been a landmark year for your Bank''s BBA business with its book growing by 30%. It continues to maintain its best in class portfolio quality through it effective and efficient risk management and recovery policies and practices. Capitalizing on the growing retail branch network, your Bank managed to expand its BBA product offering in over 450 branches.

Wholesale Banking

Your Bank through its consolidated franchise has focused on serving customers'' requirements across segments with its wide array of customized financial products and services that are driven through best-in-class technology platforms. Your Bank is a trusted banking franchise consistently delivering right and customized solutions to high quality customers through a passionate and entrepreneurial team.

Focused approach on client selection and constant portfolio monitoring has ensured a healthy portfolio through both volatile economic situation and tough credit environment in the last financial year. In order to give more focus to our client activities, your Bank created a separate Corporate, Institutional & Investment Banking vertical which covers selected large Indian corporate houses with a view to provide a single platform to service both their corporate banking and investment banking needs. Consequent to the merger of ING Vysya Bank Limited with your Bank, we now have a strong presence in the multinational segment i.e. as a banker to various multinational companies present in India.

The Integrated Global Transaction Banking with enhanced suite of products and solutions is steered by innovation, technology & "Kona Kona Kotak". The merger has opened up new opportunities to cater to needs of customer segments such as Insurance, Corresponding Banking and Multinational Companies. In addition to serving existing customers as well as being bankers'' Bank on Global Transaction Banking, your Bank has led from the front in offering services to new age segments viz. E-com and M-com. Your Bank recognizes the dynamic landscape in Transaction Banking and the evolving Banking space and has suitably invested in fetch initiatives. It is your Bank''s Endeavour to continue to provide simple, secure, reliable solutions leading to superior customer experience.

Your Bank has been in the limelight for its people, products and services. It has been adjudged Best Cash Management Bank across business categories – Small, Medium and Large Corporate. The Global Custodian magazine has conferred a dual recognition for the Custody Business in the India Domestic Survey and later in the Survey of Agent Banks in Emerging Markets.

Your Bank has introduced the following key initiatives to serve customers better:

- Service Support: To ensure a faster customer response, a Service Solutions vertical was set up during the year. This vertical is the single point of contact for all service related and documentation issues for wholesale customers with personnel present across all key major 9 locations across the country.

- Secure Internet Banking: Given the growing online frauds, the security of the net banking platform has been further strengthened by offering secured token for logging in. Customers can use the dynamic number on the token along with the password to access the account online and transact thereafter.

- KashPay: Offers "walkin" cash and cheque collection services through branch network thereby enhancing the reach and convenience for the customer. The product is capable of validating the collection data pre-fed by customer to ensure only valid requests are processed. The transaction processing is supported by comprehensive MIS for ease of reconciliation and instant status of collection.

- Operation SAHAJ: In order to gain increased efficiencies, your Bank has started Operation SAHAJ. This focuses on improving existing client facing or back-end process in order to deliver superior service to the client with a lower turnaround time without compromising on credit / operational risk. One of our client facing Endeavour''s has been able to open any account in one day post receiving the complete documentation. As of today, courtesy Operation SAHAJ, accounts are being opened within the target of one day. Further, various products are implementing monitoring and control systems to measure and improve service parameters.

- Trade: Tie up with multiple offshore banks for facilitating client transactions like offshore guarantees, ECA financing, ECB funding, offshore subsidiary funding etc. Your Bank is preferred trade partner for top banks for Europe and US region for their India centric business. Financial/ Performance Guarantees, Letter of Credit and remittances of these banks now are handled at your Bank counters.

Commercial Banking

The Commercial Banking business has registered a reasonable growth in FY 2015-16 despite subdued market sentiments and erratic monsoon.

Commercial Vehicles (CV) and Construction Equipment (CE) sectors, which have been witnessing slowdown since 2011, showed strong signs of recovery. The CV situation has improved significantly over the previous year, especially in the case of Medium Commercial Vehicle (MCV) & Heavy Commercial Vehicle (HCV) sales across segments, which was driven by replacement demand. Your Bank has increased exposure significantly to this sector in FY 2015-16. Light Commercial Vehicle (LCV) segment has also grown over the previous year. Further, decrease in energy prices and all round improvement of load factors have improved viability for transport operations and also reduced levels of delinquency. Small Commercial Vehicles (SCV) segment is also showing signs of recovery with marginal growth in the last quarter.

Despite a second back to back dry spell last year, the agri business (including the tractor finance business) managed to grow last year with the loans outstanding of Rs,17,993 crore. The agri business increased its focus on financial inclusion activities by directly financing the micro loans segment for women''s Joint Liability Groups. Close to 56,000 women borrowers were added with loan sizes of around Rs,20,000 each to women in the states of UP and Bihar.

Your Bank has maintained its market share in the tractor finance business. While the delinquencies in this segment have increased, it is under control.

Activities in focus were loans for construction of ware houses & cold storages, warehouse receipt funding under pledge, micro loans and loans for purchase of pumps etc. These loans qualified for small and marginal farmer categorizations and direct individual farmer funding. Other Agri loans included loans for food and Agro processing units.

The agri division (including tractor finance) continued to manage its delinquency though incremental stress was observed across locations due to monsoon shortfall.

The growth of the Emerging Corporate Group''s (ECG) portfolio has been modest in FY 2015-16. There has been an increase in delinquencies in this segment, mainly on account of volatile commodity prices and uncertainty in the economy.

Asset Reconstruction

It was challenging to sell large assets under possession as the market was sluggish for real estate sales. The legal judicial system continues to languish in terms of passing timely orders which cause significant delay in timely and effective recoveries.

The division continued to focus on last mile financing to companies which are on the turnaround path with clear focus on cash fow based recoveries.

The recoveries from NPA purchase of retail portfolio continues to be robust.

Your Bank believes that banks and NBFCs in the next few years will continue to sell their retail NPA portfolios, which will help the division to acquire more portfolios.

Treasury

Your Bank''s treasury actively contributes to your Bank by way of:

- Proprietary Trading: The various proprietary trading desks actively trade in products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Bullion. Primary Dealer Desk – part of the proprietary trading desk, actively participates in the primary auctions of government securities, makes market in government securities and engages in retailing of government securities.

- Customer Transactions:

- Facilitating access to foreign currency markets through cash & derivatives products and providing fine market rates to clients for remittance and trade transactions.

- Client solutions - standardized and structured, pertaining to Debt Capital Markets including Syndication of Loans, Bonds, Mezzanine financing, Promoter funding and acquisition financing and Securitization.

- Balance Sheet Management: The Balance Sheet Management Unit (BMU) manages the Asset Liability mismatches, Interest rate & Liquidity gaps and implementation of Funds Transfer Pricing between various business units. The Correspondent Banking Division within treasury actively builds on relationships with offshore banks towards improving quality and international reach for its customers.

Human Resources

The year 2015-16 has been a year of continued focus on employee well-being and investment in human capital stayed significant.

Your Bank undertook substantial work to drive the ''core'' values and culture of the Bank in the last year that strengthened the merger of erstwhile ING Vysya Bank with Kotak Mahindra Bank. To ensure a seamless cultural integration, various initiatives were launched to internalize behavioral parameters and the values across the organization. Further thrust was laid on employee engagement through its linkage to behavioral parameters.

Your Bank has taken strides in the past year and continues to grow with a talent base of over 31,000 employees. A proactive approach to adopting the best of human resource practices, efficient systems, processes and continuous investments in technology has helped manage the scale and complexity of a large and distributed workforce.

With an average age of 33 years your Bank continues to attract talent across all its businesses and hierarchy. Pre-trained manpower acquisition channels such as Kotak Sales Officer (KSO) and Junior Sales Officer (JSO) programs have been further strengthened to create a sustainable workforce pipeline. To enhance ability to deliver on strategic work-force planning and hiring goals, a dedicated team was institutionalized to focus on end to end talent acquisition process – maximizing channel efficiencies, optimizing costs, simplifying and standardizing hiring process and creating a seamless hiring experience to potential employees.

With 19% of the workforce being women, your Bank realizes that achieving progressive gender representation requires addressing mindsets and developing a more inclusive, holistic diversity agenda. Your Bank continues to strive to provide opportunities for a diverse and competent workforce.

Your Bank is committed to developing its capabilities as an organization and as individuals to meet current and future business challenges. In the year 2015-16, we have invested significantly in training and professional development – leveraging the latest technologies to deliver highly impactful and relevant training programs to our employees. These learning initiatives are designed around development of individual and team competencies in partnership with top academic institutions and renowned industry professionals. Leadership Development Programs focused on developing the leadership capabilities of our senior executives, to help them prepare for future roles in the organization.

Your Bank continues its focus on engagement and retention through initiatives that provides a holistic environment where employees get opportunities to realize their potential. Talent management as an integral part of overall performance management process in the Bank aims to provide long term, sustained and meaningful careers to employees across the organization. ''Pulse'' engagement survey, along with other engagement initiatives, provided insights on distinct employee needs that helped developing appropriate interventions.

We are entering a new age where digital is default and this technological change is shaping the sociological change impacting every facet of life and work. Anticipating digital being a significant transformation opportunity, we are on the journey to leverage digital technology to enable greater engagement, interaction and flexibility.

Guided by our value system that motivates our attitudes and action, your Bank is focused on forward looking policies, lean processes and nurturing talent.

Technology

With the announcement of the merger with ING Vysya Bank, your Bank took up the initiative of merging the technology systems and data of the two banks. The merger provided an opportunity to leverage the "best of breed" systems from both banks. As the technology integration progressed across business verticals, your Bank identified synergies in systems and capabilities to optimize costs across the technology operations of the two banks. The merged systems will provide a standard customer experience across all channels to all customers of the merged entities.

Customer data security and risk management need to keep pace with digital offerings. With this in mind, the Distributed Denial of Service was augmented with an in-premise solution. A fraud management solution to track customer transactions across channels was implemented. On the regulatory side, a new Enterprise Risk System was implemented for the Value at Risk calculation of the treasury products.

Digitization

Focus on creating more and more digitally enabled services across channels remained a key priority for your Bank in this year. Some of the highlights being:

- Launched a comprehensive micro site for New Pension System with various calculators and educative content to demystify the concept of pension and also enable people to get started with opening their pension account online.

- Launched a real time customer acquisition platform for personal loan, where a customer PAN, Adhaar & CIBIL are checked real time & decision about the loan amount and interest rate can be given instantly.

- Launched Pre-approved Personal Loan on Net Banking for salaried customers. This enables a pre-qualified customer to apply for personal loan while logged into the net-banking account and the disbursed amount is instantly credited to customer''s banking account.

- Launched tab based account opening process for Saving Account. This is an end-to-end digitized workflow, from lead capture to account set up, thereby reducing the processing time and enhancing customer experience.

- Hashtag banking was given further fillip by creating capability to order a book or special promotional movies by just a single tweet.

- Launched Kotak Bharat Banking - India''s first internet-free app. This app does not need internet to transact. Customer can do 25 different transactions including mobile recharge and small value fund transfer. The app is available in 6 languages (Hindi, Gujarati, Marathi, Tamil, Kannada and English). Response messages within the app will also be in regional language.

- Rolled out e-store on Net Banking after successful roll out of m-store on banking app. This includes travel categories like fight tickets, bus tickets and hotel booking.

- Introduced new features in the iPhone version of mobile app. iPhone customers can now book a Recurring Deposit (RD), Add a new biller and set Auto Pay amongst various new services introduced.

- Turn-around times for lending to commercial customers significantly improved by digitizing the process by introducing a tablet based lead management system for use by sales people in the field.

- Corporate customers got an upgraded FX trading portal.

- Digitization for wealth management customers was also strengthened with the launch of a portal providing a single view of all their investments.

Investment in Airtel M Commerce Services Ltd.

Airtel M Commerce Services Ltd. Company (AMSL), 100% subsidiary of Bharti Airtel Ltd. (BAL), had been granted in-principle approval for setting up a Payments Bank by the Reserve Bank of India (RBI) in August 2015. Basic but critical services such as small savings account, remittances etc. will bring a large number of low income households and small businesses under formal banking network. Your Bank in February 2016 has signed a Share Subscription and Shareholders Agreement with AMSL and BAL for acquisition of 19.90% equity stake in AMSL. Subsequently, your Bank has invested in AMSL. AMSL has received final license from RBI in April 2016.

SUBSIDIARIES & ASSOCIATES

Your Bank''s subsidiaries are established players in the different areas of financial services, viz. car finance, investment banking, stock broking, asset management and life insurance.

As at 31st March 2016, your Bank has eighteen (18) subsidiaries as listed below:

Domestic Subsidiaries

Kotak Mahindra Prime Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Investments Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Forex Brokerage Limited

Kotak Mahindra Pension Fund Limited

Kotak Mahindra General Insurance Company Limited

IVY Product Intermediaries Limited (formerly known as ''ING Vysya Financial Services Limited'')

International Subsidiaries

Kotak Mahindra (International) Limited

Kotak Mahindra (UK) Limited

Kotak Mahindra Inc.

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Limited

Kotak Mahindra General Insurance Company Limited, which was incorporated in December 2014 with principal objective of carrying on business of general insurance, received approval from Insurance Regulatory and Development Authority of India (IRDAI) to commence the business of general insurance in November 2015 and subsequently commenced its operations in December 2015.

The various activities of the subsidiaries and the performance and financial position of the subsidiaries and associates are outlined in the Management Discussion and Analysis section appended to this Report.

The Bank''s Policy for determining material subsidiaries is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html

As at 31st March 2016, your Bank has following four (4) Associate companies:

ACE Derivatives & Commodity Exchange Limited Infna Finance Private Limited Matrix Business Services India Private Limited Phoenix ARC Private Limited

The Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31st March 2016, is sent to all the members of your Bank. Web link of the Annual Report is sent to all members whose email IDs are registered with the Bank/Depository Participant(s). For members who have not registered their email IDs, physical copies of the Annual Report are sent. It does not contain Annual Reports of your Bank''s subsidiary companies. Your Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) either a hard or soft copy depending upon request by any member of your Bank. These Annual Reports will be available on your Bank''s website viz. URL: http://ir.kotak.com/annual-reports and will also be available for inspection by any member at the Registered Office of your Bank.

EMPLOYEE STOCK OPTION & STOCK APPRECIATION RIGHTS SCHEMES

The shareholders of the Bank at its Annual General Meeting held on 29th June 2015 approved a new Scheme under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, for the purposes of granting options and stock appreciation rights to the employees of the Bank, its subsidiaries and its associate companies, as applicable, viz. Kotak Mahindra Share Based Employee Benefit Scheme 2015 comprising of:

- Kotak Mahindra Equity Option Scheme 2015 and

- Kotak Mahindra Stock Appreciation Rights Scheme 2015

Further, pursuant to the Scheme of Amalgamation of ING Vysya Bank (IVBL) with the Bank, the ESOP Schemes of the erstwhile IVBL have been renamed and adopted by the Bank, as given below:

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2005

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2007

- Kotak Mahindra Bank Ltd. (IVBL) Employee Stock Option Scheme 2010

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2013

The stock options granted to the employees currently operate under the following Schemes:

- Kotak Mahindra Equity Option Scheme 2007

- Kotak Mahindra Equity Option Scheme 2015

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2007

- Kotak Mahindra Bank Ltd. (IVBL) Employee Stock Option Scheme 2010

- Kotak Mahindra Bank Ltd. (IVBL) Employees Stock Option Scheme 2013

The disclosure requirements under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, for the aforesaid ESOP & SARs Schemes, in respect of the year ended 31st March 2016, are disclosed on the Bank''s website viz. URL: http://ir.kotak.com/annual-reports

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR Regulations), a separate section entitled ''Report on Corporate Governance'' has been included in this Annual Report. The Report of Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A Business Responsibility Report containing the requisite details under Regulation 34 of the SEBI LODR Regulations is disclosed on the Bank''s website viz. URL: http://ir.kotak.com/annual-reports

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Mr. N.P. Sarda (DIN 03480129), Non-Executive & Non-Independent Director of the Bank, retires by rotation as a Director at this Annual General Meeting but having crossed 70 years of age is not offering himself for re-appointment in line with Reserve Bank of India policy and directions.

The Bank does not intend to fll this vacancy at this Annual General Meeting.

Changes in Directors

Mr. C. Jayaram (DIN 00012214), retired as Joint Managing Director of the Bank on 30th April 2016, on attaining the age of superannuation. However, Mr. Jayaram continues as a Non-Executive Non-Independent Director of the Bank with effect from 1st May 2016 up to the date of this Annual General Meeting. Approval of shareholders is being sought at this Annual General Meeting for his appointment as a Non-executive Non-Independent Director of the Bank who would be liable to retire by rotation.

Mr. Asim Ghosh (DIN 00116139), retired as a Director of the Bank with effect from 9th May 2016 due to completion of his eight years tenure pursuant to the provisions of Section 10A(2A)(i) of the Banking Regulation Act, 1949.

Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr. N.P. Sarda and Mr. Asim Ghosh during their tenure as Directors of the Bank.

The details of the Directors appointed are set out in the Corporate Governance Report annexed to this Report.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Board Evaluation

The Nomination and Remuneration Committee of the Bank''s Board under the expert advice of an external agency specialized in Human Resource and management consultancy, has formulated the criteria for performance evaluation of the Directors and the Board as a whole. The Criteria formulated broadly covers the Board role, Board/Committee membership, practice & procedure and collaboration & style.

A Board effectiveness assessment questionnaire was designed for the performance evaluation of the Board, its Committees, Chairman and individual directors in accordance with the criteria set and covering various aspects of performance including composition, relationship among directors, director competency, contribution to risk management compliance, roles and responsibility, board procedures, processes, functioning and effectiveness. The said questionnaire was circulated to all the directors of the Bank for the annual performance evaluation.

Based on the assessment of the responses received to the questionnaire from the directors on the annual evaluation of the Board, its Committees, Chairman and the individual Directors, the Board Evaluation Report was placed before the meeting of the Independent Directors for consideration. Similarly, the Board at its meeting assessed the performance of the Independent Directors. The Directors were satisfied with the results of the performance evaluation of the Board & its Committees, Chairman and individual directors.

Key Managerial Personnel (KMPs)

Mr. C. Jayaram ceased to be a ''Key Managerial Personnel'' with effect from 1st May 2016 upon his retirement as a Joint Managing Director of the Bank.

The following offcials of the Bank continue to be the "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013:

- Mr. Uday Kotak, Executive Vice Chairman and Managing Director

- Mr. Dipak Gupta, Joint Managing Director

- Mr. Jaimin Bhatt, President & Group Chief Financial Officer

- Ms. Bina Chandarana, Company Secretary

Appointment & Remuneration of Directors & KMPs

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, 1949. The Nomination and Remuneration Committee of the Bank''s Board has formulated criteria for appointment of Senior Management personnel and the Directors. Based on the criteria set it recommends to the Board the appointment of Directors and Senior Management personnel. The Committee considers the qualifications, experience, ft & proper status, positive attributes as per the suitability of the role, independent status and various regulatory/statutory requirements as may be required of the candidate before such appointment.

The Reserve Bank of India (''RBI'') vide its circular no.DBOD.No.BC.72/29.67.001/2011-12 dated 13th January 2012 has issued the Guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Other Risk Takers of Private Sector Banks on Compensation Policy which inter alia cover the following:

- Proper balance between fixed pay and variable pay;

- Variable pay not to exceed 70% (Seventy Per Cent) of the fixed pay in a year;

In accordance with the aforesaid RBI Circular, the Board of the Bank has adopted a Compensation Policy for its Whole-time Directors, Chief Executive Officer of the Bank and other employees which includes issue of stock appreciation rights as a form of variable pay, linked to the Bank''s stock price, payable over a period of time. The salient features of the Compensation Policy are as follows:

- Objective is to maintain fair, consistent and equitable compensation practices in alignment with Kotak''s core values and strategic business goals.

- Applicable to all employees of the Bank. Employees classified into 3 groups:

- Whole-time Directors/Chief Executive Officer

- Risk Control and Compliance Staff

- Other categories of Staff l Compensation structure broadly divided into Fixed, Variable and ESOPs

- Fixed Pay – Total cost to the Company i.e. Salary, Retirals and Other Benefits

- Variable Pay – Linked to assessment of performance and potential based on Balanced Key Result Areas (KRAs), Standards of Performance and achievement of targets with overall linkage to Bank budgets and business objectives. The main form of incentive compensation includes – Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights.

- ESOPs – Granted on a discretionary basis to employee based on their performance and potential with the objective of retaining the employee.

- Compensation Composition – The ratio of Variable Pay to Fixed Pay and the ratio of Cash v/s Non Cash within Variable pay outlined for each category of employee classification.

- Any variation in the Policy to be with approval of the Nomination & Remuneration Committee.

- Malus and Clawback clauses applicable on Deferred Variable Pay.

- Ensuring no personal hedging strategies by employees which undermine risk alignment effects as part of their remuneration.

The details of the remuneration paid to the Non-Executive Chairman, Executive and Non-Executive Directors of the Bank for the year ended 31st March 2016 is provided in the Corporate Governance Report annexed to this Report.

The Non-Executive Chairman of the Bank receives a fixed amount of remuneration as recommended by the Board and approved by the shareholders of the Bank and RBI, from time to time. He also receives remuneration by way of sitting fees for attending meetings of the Board or Committees thereof.

RBI vide its circular no. DBR.No.BC.97/29.67.001/2014-15 dated June 1, 2015 has issued guidelines on payment of compensation to the NEDs of private sector banks which inter-alia specifies the following:

- The Board of Directors of the Bank (in consultation with the Nomination & Remuneration Committee) needs to formulate and adopt a comprehensive compensation policy for NEDs (other than part-time non-executive Chairman).

- Maximum amount of Profit related commission not to exceed Rs,10 lac per annum for each director of the Bank.

Accordingly, in line with the RBI circular and pursuant to the relevant provisions of the Companies Act, 2013, and the recommendation of the Nomination and Remuneration Committee of the Bank, the Board of Directors have adopted a compensation policy for the NEDs (excluding the part- time Non-Executive Chairman). The salient features of the Compensation Policy are as follows:

- Compensation structure broadly divided into

- Sitting fees

- Re-imbursement of expenses

- Commission (Profit based)

- Amount of sitting fees and commission to be decided by the Board from time to time, subject to the regulatory limits.

- Overall cap on commission for each director Rs,10 lac per annum.

- NEDs not eligible for any stock options of the Bank.

Approval of shareholders for the payment of commission to the NEDs of the Bank is being sought at the ensuing Annual General Meeting of the Bank.

Sr. Disclosure Requirement Disclosure Details No.

4 Number of permanent employees on the rolls of Bank at the 31,410 end of the year

5 Explanation on the relationship between average increase in Recommendation for increase in remuneration is based on the following remuneration and Bank performance factors:

- Compensation trends based on industry benchmarking

- Compensation positioning vis-à-vis market trend

- Alignment between risks and remuneration

- Applicable regulatory guidelines

Increase in remuneration for FY 15-16 vis-à-vis FY 14-15 not comparable on account of merger (Please refer note 4 below)

6 Comparison of the remuneration of the Key Managerial For the FY 2015-16, KMPs were paid approximately 0.38% in aggregate Personnel against the performance of the Bank of the Profit Before Tax of the Bank on standalone basis and 0.24% on consolidated basis.

7 Variations in the market capitalization of the Bank, price The market capitalization of the Bank has increased from Rs, 101,429 crore earnings ratio as at the closing date of the current financial as of 31st March 2015 to Rs, 124,857 crore as of 31st March 2016. Over the year and previous financial year and percentage increase or same period, the price earnings ratio on consolidated Profits moved up from decrease in the market quotations of the shares of the Bank 33.33 to 36.08. Kotak Bank stock price as at 31st March 2016 has increased in comparison to the rate at which the company came out by 18,051% to Rs, 680.65 over the last public offering i.e. IPO in March 1993 at with the last public offer the price of Rs,150 per share (post bonuses & subdivision adjusted price Rs, 3.75).

8 Average percentile increase already made in the salaries of Average percentile increase in remuneration for employees other than employees other than the managerial personnel in the last managerial personnel for FY 15-16 vis-à-vis FY 14-15 not comparable on financial year and its comparison with the percentile increase account of merger (Please refer note 4 below)

in the managerial remuneration and justification thereof

and point out if there are any exceptional circumstances for Average increase for managerial personnel is 7.04% and 9.20% excluding

increase in the managerial remuneration SARs

10 Key parameters for any variable component of remuneration The key parameters for variable component of remuneration availed by the availed by the directors directors are:

- Overall Performance

- Achievement of budgets

- Various risks

- Variable pay will not exceed 70% of the fixed pay.

- Cash component of the variable pay will not exceed 50% of the Fixed Pay.

- If variable pay is higher than 50% of fixed pay, at least 40% of the variable pay will be deferred over a period of 3 years or longer on a pro- rata basis.

- ESOPs are not considered as variable pay for this purpose

Sr. Disclosure Requirement Disclosure Details No.

11 Ratio of the remuneration of the highest paid director to There are 11 employees who are not directors but received remuneration in that of the employees who are not directors but receive excess of the highest paid director during the year.

remuneration in excess of the highest paid director during

Considering the average remuneration of these employees, the ratio works the year

out to 1:1.36

12 Affirmation that the remuneration is as per the remuneration The Bank is in compliance with its Compensation Policy policy of the Bank

Notes:

1) Remuneration includes Fixed pay Variable paid during the year perquisite value as calculated under the Income Tax Act, 1961. Remuneration does not include value of Stock Options.

2) Stock Appreciation Rights (SARs) are awarded as variable pay. These are settled in cash and are linked to the average market price of the Bank''s stock on specified value dates. Cash paid out during the year is included for the purposes of remuneration.

3) * Mr. C. Jayaram retired as Joint Managing Director of the Bank on 30th April 2016, on attaining the age of superannuation. He continues as a non-executive non-independent director of the Bank w.e.f. 1st May 2016.

4) The merger of ING Vysya Bank (''IVBL'') with Kotak Mahindra Bank (''Bank'') was effective from 1st April 2015. Accordingly, there has been integration of the erstwhile IVBL with the Bank and a consequent increase in the employee base for the FY 2015-16. Hence, the numbers for FY 2015-16 are not comparable with that of FY 2014-15.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013, your Bank has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31st March 2016 is annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

AUDITORS

In terms of Section 139 of the Companies Act, 2013, Messrs S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed as statutory auditors of your Bank for a period of four years from the conclusion of the Thirtieth Annual General Meeting until the conclusion of the Thirty fourth Annual General Meeting of the Bank, subject to the annual approval of RBI and ratification by the members every year. Accordingly, requisite resolution forms part of the Notice convening the Annual General Meeting.

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirms that your Bank has laid down set of standards, processes and structure which enables to implement Internal Financial controls across the organization with reference to Financial Statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Companies Act, 2013, in form AOC-2.

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 24 of Schedule 17 - Notes to Accounts of the Consolidated financial statements and Note 7 of Schedule 18 C - Notes to Accounts of the Standalone financial statements of your Bank.

The Bank''s Policy on dealing with Related Party Transactions is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, 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 Companies Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Bank is committed to its "Vision Statement" of upholding its Global Indian Financial Services Brand creating an ethos of trust across all constituents, developing a culture of empowerment and a spirit of enterprise thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors highest standards of transparency, probity and accountability. The Kotak Group Endeavour''s to develop a culture where it is safe and acceptable for all employees and directors to raise / voice genuine concerns in good faith, and in a responsible as well as effective manner.

A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or director, raise genuine concern or report evidence of activity by the Bank or its employee or director that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank''s policies; questionable accounting/audit matters/financial malpractice. The same option has now been extended to the vendors of the Bank also. The concerns can be reported on the website viz. URL: https://cwiportal.com/kotak.

Currently an online mechanism enabling aforementioned reporting has been implemented over and above other modes of communication like e-mail, or a letter sent by mail, courier or fax to designated persons.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exception circumstances.

The Policy has been uploaded on the Bank''s intranet as well as website viz. URL: http://ir.kotak.com/governance/policies.html and regular communication is made for sustained awareness.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Bank has constituted a Board Corporate Social Responsibility Committee (CSR Committee) and consists of the following Directors:

- Mr. C Jayaram, Non-Executive Non-Independent Director & Chairman of the CSR Committee

- Mr. Dipak Gupta, Joint Managing Director

- Prof S. Mahendra Dev, Independent Director

Your Bank''s CSR Committee drives the CSR programme of the Bank. Your Bank has a Board approved CSR policy, charting out its CSR approach. This policy articulates the Bank''s aim to positively contribute towards economic, environmental and social well-being of communities through its Corporate Social Responsibility agenda. The Bank''s CSR agenda is driven by its key focus areas:

a. Promoting education – primary focus area

b. Enhancing vocational skills and livelihood

c. Promoting preventive healthcare and sanitation

d. Reducing inequalities faced by socially and economically backward groups

e. Sustainable development

f. Relief and rehabilitation

g. Clean India h. Sports

The Bank''s CSR policy is available on the Bank''s website viz. URL : http://www.kotak.com/corporate-responsibility.html

Pursuant to the provisions of Section 135, schedule VII of the Companies Act 2013 (the Act), read with the Companies (Corporate Social Responsibility) Rules, 2014 the report of the expenditure on CSR by the Company is as under:

The average net Profit U/S 198 of the Bank standalone for the last three financial years preceding 31st March, 2016 is Rs, 2,366.37 crore.

The prescribed CSR expenditure required U/S 135, of the Act for FY 2015-16 is Rs, 4,733 lac.

The CSR expenditure incurred for the period 1st April 2015 to 31st March 2016 under Section 135 of Companies Act, 2013 amounts to Rs, 1,641 lac as against Rs, 1,197 lac CSR spend in the financial year 2014-15.

CSR expenditure of Rs, 1,641 lac in FY 2015-16 as a percentage of average net Profit U/S 198 of the Bank standalone at Rs, 2,366.37 crore is 0.69%.

Your Bank is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

The details of CSR activities and spends under Section 135 of the Companies Act, 2013 for FY 2015-16, are annexed to this Report.

RISK MANAGEMENT POLICY

Your Bank has in place a comprehensive Enterprise wide Risk Management (ERM) framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. Details of identification, assessment, mitigations, monitoring and the management of these Risks are mentioned in the Management Discussion and Analysis section appended to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank, standalone, was over 31,000 and along with its subsidiaries was over 46,000 as of 31st March 2016.

312 employees employed throughout the year and 132 employees employed for part of the year were in receipt of remuneration of Rs, 60 lac or more per annum.

With an average age of 33 years your Bank continues to attract talent across all its businesses and hierarchy and has put in place various processes and systems to ensure alignment of employee behaviors with the organization''s core values.

Organizational culture aspects like trust & inclusiveness were also reiterated through 90 cross functional meets conducted by senior business leaders for employees at mid management level under the "Meet 5" initiative.

In a very short span, your Bank has crossed several milestones in its Gender Diversity agenda.

- A differentiated talent acquisition strategy to increase women employee base across various suitable roles has helped us to continue adding 20% women amongst all new hires in the Bank. While continuing with our philosophy of providing equal opportunities, an aggressive push in this area will help us achieve a better balance in gender diversity.

- Your Bank''s top senior women professionals (around forty women across Kotak) have been brought together under our diversity initiative "Astra" and these women leaders now play a pivotal role in guiding and mentoring other mid-level women employees to sustain and grow in the careers.

- Prevention of Sexual Harassment (POSH): Your Bank continues with the belief on zero tolerance towards sexual harassment at workplace and continues to uphold and maintain itself as a safe and non-discriminatory organization. To achieve the same Kotak reinforces the understanding and awareness of Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Bank has formulated Internal Complaints Committee (ICC) at three regions for reporting any untoward instance. Any complaints pertaining to sexual harassment are diligently reviewed and investigated and treated with great sensitivity. The ICC members have been trained in handling and resolving complaints and have also designed an online e-learning POSH Awareness module which covers the larger employee base.

Following is a summary of sexual harassment complaints received and disposed of during the year 2015-16: o No. of complaints received : 8

- No. of complaints disposed of : 4

In the case of 4 pending cases, enquiries were in progress at the close of the year.

With our objective to identify, build and nurture leaders across levels to deliver superior business results and address individual career aspirations, this year your Bank introduced a new contemporary approach to assess and diagnose leadership competency gaps followed by a development plan.

As your Bank enters in its next phase of growth and expansion of footprint across urban and rural India, your Bank and its subsidiaries continued to carry out several initiatives to attract and retain a pool of highly skilled and motivated employees who are aligned to the firm''s vision of becoming the most trusted financial services provider.

In accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the annexure to the Directors'' Report. In terms of the Proviso to Section 136(1) of the Companies Act, 2013, the Directors'' Report is being sent to all shareholders excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confrm in pursuance of Section 134(5) of the Companies Act, 2013, that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31st March 2016, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) 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 your Bank as at 31st March 2016 and of the Profit of your Bank for the financial year ended 31st March 2016;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNEXURES

Following statements/reports/certificates are set out as Annexure to the Directors'' Report:

- Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014 (Annexure - A).

- Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013 (Annexure - B).

- Details of CSR Activities and Spends (Annexure - C).

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the members and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya Uday Kotak Place: Mumbai, Chairman Executive Vice Chairman and Managing Director Date: 11th May 2016

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Mar 31, 2015

To the Members of

KOTAK MAHINDRA BANK LIMITED

The Directors present their Thirtieth Annual Report together with the audited accounts of your Bank for the year ended 31st March 2015.

FINANCIAL HIGHLIGHTS

(A) Kotak Mahindra Bank Limited - Consolidated financial highlights:

31st March 2015 31st March 2014 Rs.crore Rs. crore

Total income 21,471.08 17,268.29

Total expenditure, excluding provisions and contingencies 16,715.37 13,263.82

Operating Profit 4,755.71 4,004.47

Provisions and contingencies, excluding provision for tax 205.73 308.97

Profit before tax 4,549.98 3,695.50

Provision for taxes 1,484.90 1,183.96

Profit after tax 3,065.08 2,511.54

Less: Share of minority interest 59.51 62.17

Add: Share in profit of Associates 39.88 15.62

Consolidated profit for the Group 3,045.45 2,464.99

Earnings per Equity Share:

Basic (Rs.) 39.49 32.19

Diluted (Rs.) 39.40 32.14

(B) Kotak Mahindra Bank Limited - Standalone financial highlights:

31st March 2015 31st March 2014 Rs. crore Rs. crore

Total Income 11,748.32 10,166.83

Total expenditure, excluding provisions and contingencies 8,750.86 7,589.68

Operating Profit 2,997.46 2,577.15

Provisions and contingencies, excluding tax provisions 164.50 304.70

Profit before tax 2,832.96 2,272.45

Provision for taxes 966.98 769.93

Profit after tax 1,865.98 1,502.52

Add: Surplus brought forward from the previous year 4,005.29 3,016.60

Amount available for appropriation 5,871.27 4,519.12

Appropriations:

Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 466.50 375.63

General Reserve 93.30 75.13

Transfer to / (from) Investment Reserve Account 86.65 (41.10)

Transfer to Capital Reserve 5.91 0.40

Transfer to Special Reserve 28.00 32.00

Proposed Dividend 82.07 63.08

Corporate Dividend Tax 13.58 8.69

Surplus carried to Balance Sheet 5,095.26 4,005.29

INTERNAL FINANCIAL CONTROLS

The Board of Directors confirms that there are internal controls in place with reference to the Financial Statements and that such controls are operating effectively.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.90 per equity share (previous year Rs. 0.80 per equity share), entailing a payout of Rs. 95.65 crore including dividend distribution tax (previous year Rs. 71.77 crore). The dividend would be paid to all the shareholders (including the shareholders of the erstwhile ING Vysya Bank Ltd.), whose names appear on the Register of Members/Beneficial Holders list on the Book Closure date.

BONUS ISSUE OF SHARES

Your Directors recommend an issue of bonus shares, subject to the approval of the members at the Annual General Meeting to be held on 29th June 2015, in the ratio of 1:1 i.e. one additional equity share for every one equity share held by the members on a date to be fixed by the Board, by capitalizing a part of the reserves.

AMALGAMATION OF ING VYSYA BANK WITH THE BANK

The Board of Directors of your Bank and the Board of Directors of ING Vysya Bank Ltd. (''IVBL'') at their respective meetings held on 20th November 2014, had approved a Scheme of Amalgamation of IVBL with the Bank under Section 44A(4) of the Banking Regulation Act, 1949, subject to approval of the shareholders of both the Banks, Reserve Bank of India (RBI) and other regulatory authorities. On 7th January 2015, the shareholders of the Bank accorded their consent to the Scheme of Amalgamation of IVBL with the Bank. Further, RBI approved the Scheme of Amalgamation of IVBL with the Bank effective 1st April 2015. Consequently, on 21st April 2015, the shareholders of the erstwhile IVBL were allotted 13,92,05,159 equity shares of Rs.5/- each fully paid up of the Bank, as on the record date of 17th April 2015, in the ratio of 725 equity shares of face value of Rs.5/- each of the Bank for every 1000 equity shares of Rs.10/- each held by the shareholders of IVBL.

CAPITAL

During the year, your Bank has allotted 10,77,480 equity shares arising out of the exercise of Employees Stock Options granted to the employees and whole-time directors of your Bank and its subsidiaries.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of your Bank stands at Rs. 3,86,17,63,320 comprising of 77,23,52,664 equity shares of Rs. 5 each as on 31st March 2015.

Further, upon allotment of 13,92,05,159 equity shares to the shareholders of erstwhile ING Vysya Bank Ltd. pursuant to the scheme of amalgamation in April 2015, the issued, subscribed and paid-up share capital of your Bank stands at Rs. 4,55,77,42,615 comprising of 91,15,48,523 equity shares of Rs. 5 each. On account of cross holding 9300 equity shares of Rs.5 each have been cancelled.

Your Bank is well capitalised and has a Capital Adequacy Ratio (''CAR'') under Basel III as at 31st March 2015 of 17.17% with Tier I being 16.18%. At a consolidated level the CAR was 17.56% under Basel III.

During the year, your Bank has not issued any capital under Tier II. As on 31st March 2015, outstanding Unsecured, Redeemable Non-Convertible, Subordinated Debt Bonds were Rs.482 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs. 417.25 crore.

In August 2014, your Bank had sought approval of its shareholders through Postal Ballot for issuance of securities in the nature of non-convertible debentures, in Indian/foreign currencies in the domestic and/or overseas market for an amount upto Rs. 5000 crore on private placement basis. Accordingly, your Bank raised around Rs.962 crore in the financial year under review through issuance of infrastructure bonds.

TERMINATION OF GDS PROGRAM

In April 2006, your Bank had issued and allotted 1,50,00,000 equity shares of Rs. 10 each (post subdivision 3,00,00,000 equity shares of Rs. 5 each) to The Bank of New York, in its capacity as Depository for registered Global Depository Receipts (GDR) holders. The GDRs were listed on Luxembourg Stock Exchange.

The average daily trading volume was 2,449 and the number of outstanding Depository Receipts as on 31st March 2015 was 10,37,075. Due to low trading/conversion volume in GDR, the Board of Directors of the Bank at its meeting held on 5th May 2015 has decided to terminate the GDS program. The requisite notice of termination is being issued to the Custodian and the Depository.

OPERATIONS

Consumer Banking

Your Bank consolidated its network presence through a measured expansion of its footprint across the country and as of 31st March 2015 had 684 branches and 1273 ATMs, covering 379 locations. Of the 79 new branches commissioned this year, 21 were in rural and semi-urban locations. Your Bank added about eight hundred thousand new customers this year across core banking products of savings and checking accounts, term deposits, overdrafts and non-resident accounts.

Your Bank rolled out several initiatives aimed at offering a superior and differentiated customer experience. Some key ones are:

Digital Initiatives

Enabling availing products and services through digital channels was a key focus area for your Bank in this year. Some of the highlights being:

- Building onto the new digital account JIFI, launched last year, your Bank introduced its interest bearing variant, JIFI Saver, this year in January 2015. The account offers up to 6% interest and has a slew of distinguishing features like Hashtag Banking, Loyalty Rewards, Credit Bureau Score and Money Watch to appeal the tech savvy Gen Y segment.

- Marked by the rise of e-commerce in the country and with a view to staying ahead of competition, your Bank introduced a loyalty rewards platform, Kotakrewards.com in January, 2015. The platform is powered by 100 ecommerce partners and 7000 hotels completely funding the points earned by Kotak customers while shopping on their portals. The platform offers extra points to JIFI & JIFI Saver customers.

- In sync with the lifestyle of today''s social media savvy generation, with the launch of Hashtag banking in January 2015, your Bank took banking to a new high. With Hashtag banking, for the JIFI and JIFI Saver account holders, now Mobile & DTH recharge, account updates, cheque book request and many more account activities are just a tweet away.

- Your Bank ventured into the burgeoning digital payments arena with the launch of Kaypay in October 2014. It''s a bank agnostic person-to-person payments application which allows funds transfer to about 250 million customers of 28 banks in the country. Kaypay is a web based application optimized for use on mobile and allows funds transfer in real time 24X7 for free.

- Your Bank also launched an easy and hassle free person-to-person payment feature in Net Banking and Mobile Banking called Mail Money & Message Money. Mail Money, launched in September 2014, allows the Net Banking users to send money to anyone just by using their email addresses. On the same lines, for all Mobile Banking users, Message Money was launched in December 2014, to enable money transfer to any mobile number without the hassle of knowing the recipient''s account details.

- Your Bank introduced Kotak Money Watch, a 360 degree personal finance management tool within Net banking, in March 2015. It enables all the Net Banking users to track expenses, set budgets and track cash out from ATM.

Products & Services

- Your Bank launched Grand, a new savings bank proposition tailored exclusively for customers above 55 years, deriving features & benefits from their needs of healthcare, convenience and personalized attention. Under the proposition, customers are provided with priority service for their transactions at the branch & a first aid card, which details a customer''s health status and emergency contacts for easy reference. Further, Grand customers are offered a health card from Indian Health Organization (IHO), offering discount on treatments, consultation and procedures. Also, available are services like customized cash delivery, courtesy call back, etc.

- Your Bank launched SANMAN savings bank account in unbanked rural locations. The product is customized to cater to the banking needs of rural/ unbanked India such as farmers, small time traders, self-employed, low income group individuals, works etc. It offers key features like reduced Average Quarterly Balance (AQB) requirement and enhanced cash deposit limits to suit the seasonality of rural India apart from standard features.

- Your Bank launched on-line PIN (for debit and credit card) generation feature through net-banking, mobile banking and IVR. On one end, this feature has provided a huge convenience to customers and on the other end, significant cost saving to the bank.

- Your Bank has introduced differentiated cards with additional features. These include the RuPay Debit Card, for customers opening accounts under PMJDY scheme. Associate Card for representatives of customers whereby non-financial transactions can be made through ATMs within Kotak network.

- Your Bank introduced electronic platform for KYC. Customers can walk in to the branch only with Aadhar number and with the help of biometric impression of customer or OTP, the KYC details can be downloaded from UIDAI database through eKYC application. This has enabled faster on boarding of new customers.

Business Lines

a) Non Resident Business

Your Bank continues to deliver innovative products and services in its endeavor to become a preferred banker amongst the NRI community globally. Some of the key initiatives taken this year are:

1. Extended C2R money transfer mode for Australia. Your Bank''s NRI clients can now use this medium to transfer money from Australia to their Kotak Bank account in India.

2. Your Bank has further expanded the network of exchange house relationships and the count now stands at 20.

3. Launched a unique proposition for Indian IT professionals deputed to overseas assignments.

4. Your Bank has signed an MOU with NED Bank South Africa. This alliance would address the needs of the Indians migrating to South Africa and those already present there. South Africa has one of the strongest Indian diaspora which include both the NRI and PIO.

5. As a platform to reach out to the overseas Indian community, your Bank participated in various international business forums such as Pravasi Bhartiya Diwas (PBD)-2015 and Vibrant Gujarat, the annual convention of AAPI-2014 (American Association of Physicians of Indian origin) at San Antonio (Houston.), AIA (Association of Indian Americans)-Annual Convention at New York, 2014.

b) Priority Banking Business

Privy League, the premium banking program of the Bank, now services more than 2.75 lakh customers. The segmental offering in Privy League was re-enforced with the launch of Trader current accounts and Grand savings accounts for senior citizens, under the Privy League program umbrella. An exclusive Privy League branch was launched in Hauz Khas, Delhi to create a differentiated service experience for the HNI customers with amenities like valet parking, private meetings rooms with video conference facility and a coffee lounge.

c) Consumer Assets Business

Your Bank has continued to grow the product lines under the Consumer Assets business.

Credit Card: Your Bank''s credit card business has issued 4.80 lac cards by March 2015 and is in its seventh year of operations. The premium range of our products - VISA Signature and VISA Platinum have driven the spends growth in the portfolio and it contributes to 47% of spends, while accounting for 27% of customer base. The Credit card business has clocked total spends of Rs.3204 crore for the year at 31% growth Y-o-Y with a book size of Rs.643.5 crore. As per RBI data on electronic payments released for November 2014, total credit card spends for the industry has grown by 23% for April to November 2014 period over last year.

Salaried Personal Loan: Your Bank''s Salaried Personal Loan business offers salaried individuals personal loans with a tenure of upto 60 months. This year the business has grown by 68% with a SOH of Rs. 840 crore as of March 2015. The total customer base stands at 34000 customers.

Home Finance: Home Finance business clocked high growth of 37% in disbursements with loan book growth of 20% during the year with strong demand from both Tier I and Tier II Cities. Your Bank has expanded its home finance business further in Tier II Cities. Cross Sell through Bank Branches, Corporate Salary, Privy, and Wealth Teams contributed to around 30% of total volume. This year also witnessed very low losses on account of efficient and effective recovery and collection processes and policies adopted and we were able to resolve NPA cases.

d) Business Banking Assets (BBA): Your Bank through its BBA division offers secured and unsecured Business loans, Loans against Property & Working Capital Finance to self-employed professionals / non-professionals and Small & Medium Enterprises. This has been a landmark year for your Bank''s BBA business with its book growing by 27%. Your Bank continues to maintain its best in class portfolio quality through it effective and efficient risk management and recovery policies and practices. Capitalizing on the growing retail branch network, your Bank managed to expand its BBA product offering in over 400 branches.

Wholesale Banking

Your Bank through its consolidated franchise has focussed on serving customers'' requirements across segments with its wide array of customized financial products and services that are driven through best-in-class technology platforms.

Your Bank has also ensured a healthy portfolio with its continuous efforts through both volatile economic situation and tough credit environment in the last financial year. This has led to a stable credit growth.

The Transaction Banking Group has focussed on reinforcing your Bank as the Best Domestic Bank during the past year. Your Bank has been able to consistently add value to clients across Cash Management & Trade Services through its specialized product solutions that are steered by innovation and robust technology. This has helped clients optimize working capital & liquidity management. Proactive competition benchmarking, advanced processes and product parameters, continuous client feedback and customized solutions have helped the bank in catering to needs of this ever changing challenging industry. Your Bank has introduced the following key initiatives to serve customers better:

- Service Support: To serve diverse financial needs your Bank has nine dedicated commercial branches & 135 CSM teams including cluster heads across 47 locations.

- Tax Payment: Your Bank offers a ''Comprehensive Statutory Payment Solution'' to its customers via direct integration with Tax authorities, payment aggregators and various partner banks. Your Bank has developed a Government Business Module (GBM) for its customers to process payment of Direct (CBDT)/ Indirect Taxes (CBEC) through Net Banking and Branch channel. Currently, your Bank has been empanelled as Agency Bank for

collecting tax for a) Delhi VAT & CST, Gujarat Commercial Tax, b) Andhra Pradesh Commercials Taxes, c) Punjab VAT & CST, Telengana Commercial Taxes d) an aggregator bank for Bihar VAT & CST and e) Odisha VAT & CST.

- Online EPF Payment: Employees'' Provident Fund Organization has enabled online EPF payment for employers through payment aggregator with SBI as their primary banker. Your Bank has successfully integrated GBM module with concerned solution provider to enable all Kotak account holders to make EPF payment online using maker-checker workflow.

- IFC: Your Bank has signed an agreement with International Finance Corporation (IFC) under Global Trade Finance Programme (GTFP) as a confirming bank. Under this arrangement IFC will issue us payment guarantees/ SBLC for letter of credit favouring Kotak Mahindra Bank Ltd., thereby mitigating the payment risk on the underlying banks.

- Kotak Sarvartha Prepaid Card: Your Bank has initiated a comprehensive Prepaid Card program that will enable corporate clients to make payments to their employees, customers, affiliates, and vendors etc. and address their diverse payout needs like incentive payments, petty cash reimbursements, contract staff payouts, FI payouts etc.

- Kotak Bill Pay: To ensure convenient & secure way of managing bill payments, your Bank introduced Kotak BillPay that offers customers the flexibility of making regular payments by one time registration.

Your Bank''s in-depth understanding of clients'' requirement and ability to deliver tailored solutions in both Trade & Cash Management businesses has been acknowledged by industry''s leading agencies. Your Bank has been adjudged the "Best Domestic Trade Bank in India" by Trade & Forfaiting Review and "Best Local Cash Management Bank in India" 6th year in a row by Asiamoney. The Asiamoney awards are based on scores formed from a corporate survey conducted by Asiamoney (turnover less than or equal to USD 100mn). Your Bank won the Best Prepaid Card Programme at Financial Inclusion & Payments Systems Award 2014 for Amul Samriddhi. Your Bank has also received the Special Award for Innovation at the National Payments Excellence Award 2014 and was also recognised by NPCI for its role in launch of the RuPay Prepaid Card. Your Bank also received an award from the Honorable President of India Shri. Pranab Mukherjee at Rashtrapati Bhawan for its role in the launch of RuPay prepaid card leading to automation of the payout process for milk procurement by milk unions. These awards stand testimony to your Bank''s focussed approach towards Transaction Banking and client centric solutions.

Commercial Banking

The Commercial Banking business has registered a reasonable growth in FY 2014-15 despite subdued market sentiments and erratic monsoon.

Commercial Vehicles (CV) and Construction Equipment (CE) sectors, which have been witnessing slowdown since 2011, showed signs of recovery. The CV situation seems to have improved slightly in the last two quarters of the previous year, especially in the case of Medium Commercial Vehicle (MCV) & Heavy Commercial Vehicle (HCV) sales across segments, which was driven by replacement demand. Decrease in energy prices and all around improvement of load factors have improved viability for transport operations and also reduced levels of delinquency. However, the recovery of Light Commercial Vehicle (LCV) segment is still weak. Further, de-growth is seen in the Small Commercial Vehicles (SCV) segment. Your Bank has started increasing exposure to this sector in the second half of FY 2014.

At a macro level, GDP growth in FY 2015-16 is expected to be better than the previous year. MCV and HCV sectors are expected to grow in the next fiscal year, whereas the LCV segment could grow with a lag of 6 months towards the latter half of FY 2015-16. Further, project clearances should pave the way for action in infrastructure, which in turn will lead to revival in the CE sector. Your Bank is well positioned to accelerate growth in these segments should a sustainable turnaround be seen.

After continuous growth in the last four years, the tractor industry was in the negative by 13.5% during FY 2014-15 as a result of late and deficit monsoon in the first half of the last fiscal year followed by unseasonal rain fall. Losses in Kharif and Rabi crops, drop in prices of major commodities and reduction in yields have led to more than 25% percent fall in tractor industry growth post January 2015. Your Bank''s fresh disbursement for tractors in FY 2014-15 was marginally lower than previous year but better than the industry de-growth. However, the slowdown in rural economy has led to marginal deterioration of portfolio quality.

Although the monsoon also had an impact on the agri business industry, your Bank inched closer to the RBI target of 18% of the Bank''s advances in the agri loan portfolio. Your Bank has set up new branches in the tier two to tier six towns and villages. This is in keeping with the Banks philosophy of borrowing (deposits) from India (metro/urban cities) and lending (light on liabilities, heavy on assets) to Bharat (rural and semi-urban). Even though the portfolio quality of agri loans continues to remain satisfactory, there could be incremental stress in the next fiscal year, given the unpredictable weather patterns.

The total agri portfolio of your Bank crossed Rs. 12,000 crore in the last fiscal. The Agri business is now offering new non-urban small ticket loan products in smaller towns and rural pockets. Under the micro loan segment, your Bank commenced direct lending in the state of Uttar Pradesh, specifically in and around Varanasi. Close to 4,000 women customers were added through this initiative. Further, your Bank has acquired by assignment a large portfolio of micro loans given to women borrowers under the Joint Liability Group setup in the states of West Bengal, Bihar and Tripura.

Emerging Corporate Group''s (ECG) strategy continues to focus on balanced growth and maintain asset quality. Further, its growth has been driven by new customer acquisition along with increasing product penetration to existing customers. In the last financial year, the ECG business expanded its operations to 19 locations across 13 states. While the portfolio has witnessed stress due to slow down in the economy majority of them are in advanced stage of resolution.

Your Bank also diversified its gold loans and rural housing finance operations. Gold loan products are now available across 150 bank branches and Rural Housing finance is now offered at 50 locations.

Asset Reconstruction

This year your Bank received and invested in several proposals of special situation and last mile financing. This scenario is expected to continue for the next few years as well. However, recoveries from sale of large assets continues to be challenging.

The retail recoveries of the assets purchased from other banks and NBFC''s continues to be robust. The retail portfolio sale from other banks and NBFC''s is expected to increase in the coming few years.

Treasury

Your Bank''s treasury actively contributes to your Bank by way of:

- Proprietary Trading: The various proprietary trading desks actively trade in products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Bullion. Primary Dealer Desk - part of the proprietary trading desk, actively participates in the primary auctions of government securities, makes market in government securities and engages in retailing of government securities.

- Customer Transactions:

o Facilitating access to foreign currency markets through cash & derivatives products and providing fine market rates to clients for remittance and trade transactions.

o Client solutions - standardised and structured, pertaining to Debt Capital Markets including Syndication of Loans, Bonds, Mezzanine financing, Promoter funding and acquisition financing and Securitisation.

- Balance Sheet Management: The Balance Sheet Management Unit (BMU) manages the Asset Liability mismatches, Interest rate & Liquidity gaps and implementation of Funds Transfer Pricing between various business units. The Correspondent Banking Division within treasury actively builds on relationships with offshore banks towards improving quality and international reach for its customers.

Human Resources

Investment in Human Capital continues to be significant as in earlier years. Programs related to Talent Attraction, Talent Development and Talent Management have been institutionalized basis our architectural framework of Value creation and Best employment Experience.

Pre-trained manpower acquisition channels such as Kotak Probationary Officer (KPO) and Junior Probationary Officer (JPO) programs have been further strengthened to create a sustainable pipeline of quality and timely manpower who become specialist bankers with requisite managerial skills.

Talent management continues to be an integral part of overall performance management process in the Bank. Your Bank believes in driving businesses through its core values and our talent management process aims to provide long term, sustained and meaningful career to employees across the organization.

Cultural integration of people is a very key focus area and in this context our organizational learning initiatives are designed around assimilation and development of individuals and team competencies, on aspects such as people management, productivity and service quality. Your Bank has partnered with top academic institutions as well as renowned industry experts for the same

Your Bank recognises that functional training is key to equip employees with strong domain knowledge and it continues the commitment of developing strong functional competencies in its employees through its robust e-learning platform as well as classroom trainings. The organization learning team runs around 350 plus unique functional and developmental programs in the above context.

Specialized certifications for specific roles continue to be run as mandatory programs to ensure employee awareness of various regulatory norms in this dynamic external environment.

Technology

This year, your Bank increased emphasis on digital products. Three major upgrades on the mobile banking application saw a large increase in adoption of usage. Several new "native digital" products were launched including Kaypay, Message Money and Hashtag Banking. On the loans management side, mobility has been introduced for collections on personal loans and credit card payments.

Customer connect was improved by leveraging the Unica platform launched the previous year. Further automation of the marketing operations enabled your Bank to increase its ability to increase scale in offers to customers, tailored to their needs.

A new system was introduced for the Bank''s Wealth Management customers, enabling them to get a consolidated, single view of all their investments. This will serve as the foundation for portal and mobile access to customer dashboards and alerts in the coming year.

To ensure customer data security, technology programs in the area of information security kept pace with the digital innovation. Customers are now given an option to login using digital certificates. New technology to prevent leakage of customer data has been implemented across the Bank and a new initiative for fraud detection on channels has been started.

Governance and control continued to be an area of concentration, with new systems being deployed for internal audit automation, anti-money laundering, asset-liability management and compliance management.

SUBSIDIARIES & ASSOCIATES

Your Bank''s subsidiaries are established players in the different areas of financial services, viz. car finance, investment banking, stock broking, asset management and life insurance.

As at 31st March 2015, your Bank has seventeen (17) subsidiaries as listed below:

Domestic Subsidiaries

Kotak Mahindra Prime Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Investments Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Forex Brokerage Limited

Kotak Mahindra Pension Fund Limited

Kotak Mahindra General Insurance Limited

International Subsidiaries

Kotak Mahindra (International) Limited Kotak Mahindra (UK) Limited Kotak Mahindra Inc.

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Limited

During the year, Global Investment Opportunities Fund Limited, ceased to be a subsidiary of your Bank with effect from 13th May 2014.

Further, a new subsidiary of the Bank viz. Kotak Mahindra General Insurance Limited was incorporated in December 2014, with principal objective of carrying on business of general insurance. It is awaiting approval from Insurance Regulatory and Development Authority of India (IRDAI) to commence the business of general insurance.

The various activities of the subsidiaries and the performance and financial position of the subsidiaries and associates are outlined in the Management Discussion and Analysis section appended to this Report.

The Bank''s Policy for determining material subsidiaries is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html

As at 31st March 2015, your Bank has following four (4) Associate companies:

ACE Derivatives & Commodity Exchange Limited Infina Finance Private Limited Matrix Business Services India Private Limited Phoenix ARC Private Limited

The Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31st March 2015, has been sent to all the members of your Bank. It does not contain Annual Reports of your Bank''s subsidiary companies. Your Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) upon request by any member of your Bank.

These Annual Reports will be available on your Bank''s website viz. URL : http://ir.kotak.com/annual-reports and will also be available for inspection by any member at the Registered Office of your Bank.

The Bank has received in-principle approvals from the Stock Exchanges for the above schemes.

Further, the Board of Directors of the Bank at its meeting held on 5th May 2015 has approved and adopted, subject to the shareholders approval and other necessary approvals, a new Scheme under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 for the purposes of granting options and stock appreciation rights to the employees of the Bank, its subsidiaries and its associate companies, as applicable. viz. Kotak Mahindra Share Based Employee Benefit Scheme 2015 comprising of:

- Part A - Kotak Mahindra Equity Option Scheme 2015

- Part B - Kotak Mahindra Stock Appreciation Rights Scheme 2015

Approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

Pursuant to Clause 49 and 55 of the Listing Agreement with the Stock Exchanges, separate sections entitled ''Report on Corporate Governance'' and ''Business Responsibility Report'' have been included in this Annual Report. The Report of Corporate Governance also contains certain disclosures required under the Companies Act, 2013.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Dr. Shankar Acharya, Chairman - Non-Independent Director of the Bank, retires by rotation at the Thirtieth Annual General Meeting and is eligible for re-appointment.

Directors appointed during the year

The Board of Directors of the Bank, at its meeting held on 7th September 2014 had appointed Ms. Farida Khambata as an Additional Director of the Bank.

The shareholders of the Bank at their Extraordinary General Meeting held on 7th January 2015 pursuant to Section 149, 150 (2) & 152 of the Companies Act, 2013 and Section 10-A(2-A) of the Banking Regulation Act, 1949, appointed the following directors as Independent Directors, not liable to retire by rotation:

- Mr. Asim Ghosh (DIN : 00116139) for a term upto 8th May 2016

- Mr. Amit Desai (DIN : 00310510) for a term upto 17th March 2019

- Prof. S. Mahendra Dev (DIN : 06519869) for a term upto 14th March 2018

- Mr. Prakash Apte (DIN : 00196106) for a term upto 17th March 2019

- Ms. Farida Khambata (DIN : 06954123) for a term upto 6th September 2019

Further, the shareholders at the same meeting re-appointed Mr. C. Jayaram (DIN : 00012214) as Whole-time Director of the Bank designated as Joint Managing Director for the period from 1st January 2015 to 30th April 2016, subject to the approval of the Reserve Bank of India.

The Board of Directors of the Bank, at its meeting held on 5th May 2015, has re-appointed Dr. Shankar Acharya (DIN : 00033242) as the Chairman of the Bank subject to the approval of the shareholders and of the Reserve Bank of India. The approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

Mr. Mark Newman (DIN : 03518417) was appointed as an Additional Director of the Bank with effect from 5th May 2015. Mr. Newman holds office as a Director up to the date of this Annual General Meeting and is eligible to be appointed as a Director. In terms of Section 160 of the Companies Act, 2013, your Bank has received notice in writing from a member along with requisite deposit of Rs. 1,00,000/- proposing candidature of Mr. Newman for his appointment as a Director.

The details of the Directors appointed are set out in the Corporate Governance Report annexed to this Report.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Board Evaluation

The Independent Directors of the Bank at their meeting held on 6th September 2014, had advised the management to appoint an external agency specialized in HR and management consultancy to finalise the criteria for performance evaluation of Non-Executive directors, Whole-time Directors and the Chairperson. Accordingly, the management has identified and shortlisted one external agency for finalizing the criteria for the performance evaluation of the Directors and would be presenting the proposal to the Independent Directors at their next meeting for their consideration and approval.

Key Managerial Personnel (KMPs)

The Board of Directors of the Bank at its meeting held on 30th April 2014 confirmed and approved the appointment of the following officials of the Bank as "Key Managerial Personnel" pursuant to the provisions of Section 203 of the Companies Act, 2013:

- Mr. Uday Kotak, Executive Vice Chairman and Managing Director

- Mr. C. Jayaram, Joint Managing Director

- Mr. Dipak Gupta, Joint Managing Director

- Mr. Jaimin Bhatt, President & Group Chief Financial Officer

- Ms. Bina Chandarana, Company Secretary

Appointment & Remuneration of Directors & KMPs

The appointment and remuneration of Directors of the Bank is governed by the provisions of Section 35B of the Banking Regulation Act, 1949. The Nomination and Remuneration Committee recommends to the Board the appointment of Directors. The Committee considers the qualifications, fit & proper status, positive attributes as per the suitability of the role and independent status as may be required of the candidate before such appointment.

The Reserve Bank of India (''RBI'') vide its circular no.DBOD.No.BC.72/29.67.001/201 1-12 dated 13th January 2012 has issued the Guidelines on

Compensation of Whole Time Directors / Chief Executive Officers / Other Risk Takers of Private Sector Banks on Compensation Policy which inter alia cover the following:

- Proper balance between fixed pay and variable pay;

- Variable pay not to exceed 70% (Seventy Per Cent) of the fixed pay in a year.

In accordance with the aforesaid RBI Circular, the Board of the Bank has adopted a Compensation Policy for its Whole-time Directors, Chief Executive

Officer of the Bank and other employees which includes issue of stock appreciation rights as a form of variable pay, linked to the Bank''s stock price, payable over a period of time. The salient features of the Compensation Policy are as follows:

- Objective is to maintain fair, consistent and equitable compensation practices in alignment with Kotak''s core values and strategic business goals.

- Applicable to all employees of the Bank. Employees classified into 3 groups:

o Whole-time Directors/Chief Executive Officer

o Risk Control and Compliance Staff

o Other categories of Staff

- Compensation structure broadly divided into Fixed, Variable and ESOPs

o Fixed Pay - Total cost to the Company i.e. Salary, Retirals and Other Benefits

o Variable Pay - Linked to assessment of performance and potential based on Balanced Key Result Areas (KRAs), Standards of Performance and achievement of targets with overall linkage to Bank budgets and business objectives. The main form of incentive compensation includes - Cash, Deferred Cash/Incentive Plan and Stock Appreciation Rights.

o ESOPs - Granted on a discretionary basis to employee based on their performance and potential with the objective of retaining the employee.

- Compensation Composition - The ratio of Variable Pay to Fixed Pay and the ratio of Cash v/s Non Cash within Variable pay outlined for each category of employee classification.

- Any variation in the Policy to be with approval of the Nomination & Remuneration Committee.

- Malus and Clawback clauses applicable on Deferred Variable Pay.

- Ensuring no personal hedging strategies by employees which undermine risk alignment effects as part of their remuneration.

The details of the remuneration paid to the Non-Executive Chairman, Executive and Non-Executive Directors of the Bank for the year ended 31st March 2015 is provided in the Corporate Governance Report annexed to this Report.

The Non-Executive Directors of the Bank receive remuneration only by way of sitting fees for attending meetings of the Board or Committees thereof. Remuneration paid to the KMPs is in line with the Compensation Policy of the Bank which is based on the RBI Guidelines.

AUDITORS

Messrs S. B. Billimoria & Co., Chartered Accountants, auditors of your Bank, retire on the conclusion of the Thirtieth Annual General Meeting.

In terms of Section 139 of the Companies Act, 2013, every Company is required to appoint auditors for a term of five years subject to their appointment being ratified at every Annual General Meeting. However, pursuant to the guidelines issued by the Reserve Bank of India (RBI), an audit firm is allowed to continue as the statutory auditor of a bank for a continuous period of four years only.

Accordingly, it is proposed to appoint, subject to the regulatory approvals, Messrs S. R. Batliboi & Co. LLP, Chartered Accountants, as the statutory auditors of the Bank in place of Messrs S. B. Billimoria & Co., Chartered Accountants, who have completed four years as the statutory auditors. The appointment of Auditors is proposed to the members in the Notice of the current i.e. the Thirtieth Annual General Meeting for a period of four years from the conclusion of the Thirtieth Annual General Meeting until the conclusion of the Thirty fourth Annual General Meeting of the Bank, subject to the annual approval of RBI and ratification by the members every year.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013, your Bank has appointed Ms. Rupal D. Jhaveri, a Company Secretary in Practice, as its Secretarial Auditor. The Secretarial Audit Report for the financial year ended 31st March 2015 is annexed to this Report.

DEPOSITS

Being a banking company, the disclosures required as per Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Section 73 and 74 of the Companies Act, 2013 are not applicable to your Bank.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Companies Act, 2013.

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 21 of Schedule 17 - Notes to Accounts of the Consolidated financial statements and Note 8 of Schedule 17 - Notes to Accounts of the Standalone financial statements of your Bank.

The Bank''s Policy on dealing with Related Party Transactions is available on the Bank''s website viz. URL: http://ir.kotak.com/governance/policies.html PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186(11) of the Companies Act, 2013, 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 Companies Act, 2013.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Bank is committed to its "Vision Statement" of upholding its Global Indian Financial Services Brand creating an ethos of trust across all constituents, developing a culture of empowerment and a spirit of enterprise thereby becoming the most preferred employer in the financial services sector.

Consistent with the Vision Statement, your Bank is committed to maintain and provide to all its employees and directors highest standards of transparency, probity and accountability. The Kotak Group endeavours to develop a culture where it is safe and acceptable for all employees and directors to raise / voice genuine concerns in good faith, and in a responsible as well as effective manner.

A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or director, raise genuine concern or report evidence of activity by the Bank or its employee or director that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities; impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Bank''s policies; questionable accounting / audit matters / financial malpractice. The same option has now been extended to the vendors of the Bank also. The concerns can be reported on the website viz. URL: https://cwiportal.com/kotak.

Currently an online mechanism enabling aforementioned reporting has been implemented over and above other modes of communication like e-mail, or a letter sent by mail, courier or fax to designated persons.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and directors have access to the Chairman of the Audit Committee in appropriate and exception circumstances.

The Policy has been uploaded on the Bank''s intranet as well as website viz. URL: http://ir.kotak.com/governance/policies.html and regular communication is made for sustained awareness.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Bank has constituted a Corporate Social Responsibility (CSR) Committee consisting of the following Directors:

- Mr. C Jayaram Joint Managing Director and Chairman of CSR Committee

- Mr. Dipak Gupta, Joint Managing Director

- Prof S. Mahendra Dev, Independent Director

Your Bank''s CSR Committee drives the CSR programme of the Bank. Your Bank has a Board approved CSR policy, charting out its CSR approach, and is available on the Bank''s website viz. URL: http://www.kotak.com/corporate-responsibility.html.

The CSR expenditure incurred for the period 1st April 2014 to 31st March 2015 under Section 135 of Companies Act, 2013 in the financial year 2014-15 amounts to Rs. 1,197 lac as against Rs. 363 lac CSR spent in the financial year 2013-14.

Your Bank is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

The details of CSR activities and report under Section 135 of the Companies Act, 2013, are provided on pages 145-146 and 152-161 of the annual report FY 2014-15.

RISK MANAGEMENT POLICY

Your Bank has in place a comprehensive Enterprise wide Risk Management (ERM) framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. Details of identification, assessment, mitigations, monitoring and the management of these Risks are mentioned in the Management Discussion and Analysis section appended to this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to your Bank. However, your Bank has been increasingly using information technology in its operations.

EMPLOYEES

The employee strength of your Bank, standalone, was 18,335 and along with its subsidiaries was 31,432 as of 31st March 2015. Upon the merger, 10,314 employees have been added up in the Bank and 514 employees in the subsidiaries.

191 employees employed throughout the year and 30 employees employed for part of the year were in receipt of remuneration of Rs. 60 lacs or more per annum.

With an average age of 31 years your Bank continues to attract talent across all its businesses and hierarchy and has put in place various processes and systems to ensure alignment of employee behaviors with the organization''s core values.

Organizational culture aspects like trust & inclusiveness were also reiterated through 113 cross functional meets conducted by senior business leaders for employees at mid management level under the "Meet 5" initiative.

In a very short span of two years, your Bank has crossed several milestones in its Gender Diversity agenda.

- A differentiated talent acquisition strategy to increase women employee base across various suitable roles has helped us to continue adding 20% women amongst all new hires in the Bank.

- Your Bank''s top senior women professionals (around forty women across Kotak) have been brought together under our diversity initiative "Astra" and these women leaders now play a pivotal role in guiding and mentoring other mid-level women employees to sustain and grow in the careers.

- Your Bank''s internal women''s cell Strisangini continues to address women issues at workplace and facilitates mass-mentoring programs with senior women leaders.

- POSH: Prevention Of Sexual Harassment (POSH) Policy has been formally instituted with 3 Regional Internal Complaints Committees (ICC). The ICC members have been trained in handling and resolving complaints and have also designed an online e-learning POSH Awareness module which covers the larger employee base.

Following is a summary of sexual harassment complaints received and disposed off during the year 2014-15: o No. of complaints received : 5

o No. of complaints disposed off : 4

As part of the Leadership Transformation program, new promotes are now put through an intensive two day intervention to orient them on expected skill-sets and competencies and create a leadership mindset apart from other managerial and leadership development program.

As your Bank enters in its next phase of growth and expansion of footprint across urban and rural India, your Bank and its subsidiaries continued to carry out several initiatives to attract and retain a pool of highly skilled and motivated employees who are aligned to the firm''s vision of becoming the most trusted financial services provider.

I n accordance with the provisions of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the annexure to the Directors'' Report. In terms of the Proviso to Section 136(1) of the Companies Act, 2013, the Directors'' Report is being sent to all shareholders excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of your Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of your Bank.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confirm in pursuance of Section 134(5) of the Companies Act, 2013, that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31st March 2015, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank as at 31st March 2015 and of the profit of your Bank for the financial year ended 31st March 2015;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities;

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

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

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNEXURES

Following statements/reports are set out as Annexures to the Directors'' Report:

- Extract Of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014 (Annexure-A).

- Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013 (Annexure-B).

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the members and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya Place: Mumbai,

Chairman Date: 5th May 2015

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Mar 31, 2011

The Directors present their Twenty Sixth Annual Report together with the audited accounts of your Bank for the year ended 31st March 2011.

FINANCIAL HIGHLIGHTS

(A) Kotak Mahindra Bank Limited – Consolidated financial highlights:

31st March 2011 31st March 2010 Rs. crore Rs. crore

Total income 11,029.27 10,053.30

Total expenditure, excluding provisions and contingencies 8,634.27 7,639.71

Operating Profit 2,395.00 2,413.59

Provisions and contingencies, excluding provision for tax 147.60 510.73

Profit before tax 2,247.40 1,902.86

Provision for taxes 678.16 575.50

Profit after tax 1,569.24 1,327.36

Less: Share of minority interest 26.36 18.00

Add: Share in profit of Associates 23.86 (2.36)

Consolidated profit for the Group 1,566.74 1,307.00

Earnings per Equity Share Basic (Rs.) 21.73 18.84

Diluted (Rs.) 21.60 18.64

(B) Kotak Mahindra Bank Limited – Standalone financial highlights:

31st March 2011 31st March 2010 Rs. crore Rs. crore

Total Income 4,936.60 3,883.86

Total expenditure, excluding provisions and contingencies 3,611.81 2,586.86

Operating Profit 1,324.79 1,297.00

Provisions and contingencies, excluding tax provisions 137.09 485.89

Profit before tax 1,187.70 811.11

Provision for taxes 369.52 250.00

Profit after tax 818.18 561.11

Add: Surplus brought forward from the previous year 965.91 648.94

Amount available for appropriation 1,784.09 1,210.05

Appropriations:

Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 204.55 140.28

General Reserve 40.91 28.06

Transfer to / (from) Investment Reserve Account (26.83) 1.19

Transfer to Capital Reserve 0.69 6.96

Transfer to Special Reserve 29.00 40.00

Proposed Dividend 36.88 29.66

Corporate Dividend Tax 4.37 (2.01)

Surplus carried to Balance Sheet 1,494.52 965.91

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.50 per equity share of the face value of Rs. 5 each (previous year Rs. 0.85 per equity share of the face value of Rs.10 each), entailing a payout of Rs. 41.25 crore including dividend distribution tax (previous year Rs. 27.65 crore). The dividend would be paid to all the shareholders, whose names appear on the Register of Members/Beneficial Holders list on the Book Closure date.

CAPITAL

Pursuant to the approval granted by the Members at an Extraordinary General Meeting held on 27th July 2010 and receipt of other necessary approvals, in August 2010 your Bank allotted 1,64,00,000 equity shares of face value of Rs.10/- each to Sumitomo Mitsui Banking Corporation, a public company registered under the laws of Japan on a preferential basis at a price per equity share of Rs. 833/- for a total consideration of Rs. 1366.12 crore.

In September 2010, each equity share of your Bank having a face value of Rs. 10 was subdivided into two equity shares of the face value of Rs. 5 each.

During the year, your Bank has also allotted 77,88,550 equity shares (adjusted for stock split number) arising out of the exercise of Employee Stock Options granted to the employees and Executive Directors of the Bank and its subsidiaries.

Post allotment of equity shares and sub-division of equity shares as aforesaid, the issued, subscribed and paid-up Share Capital of the Bank stands at Rs. 368.44 crore comprising of 73,68,71,504 equity shares of Rs. 5 each.

The Bank has a Capital Adequacy Ratio (CAR) under Basel II as at 31st March 2011 of 19.92% with Tier I being 17.98%. At a consolidated level the CAR was 19.46% under Basel II.

During the year, your Bank has not issued any Capital under Tier II. As on 31st March 2011, outstanding Unsecured, Redeemable Non- Convertible, Subordinated Debt Bonds was Rs. 465.70 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs. 336.68 crore.

OPERATIONS

Your Bank worked on a very balanced expansion plan of the network and added 72 branches and 246 ATMs and ended the year with 321 Branches and 710 ATMs, and thereby increasing the presence to 183 locations. Your Bank added over half a million new customers this year across core banking products of savings and checking account, term deposits, overdrafts and non resident accounts.

The robustness of the network manifested in the healthy growth in demand and time liabilities. The momentum gained last year in terms of distribution of asset products from the network continued in the current year. The initiatives launched last year on higher end segment of customers through a branded programme titled "Privy League" continued to show encouraging results. Your Bank maintained its ambition of becoming a bank of choice for the small and mid segment business enterprises and doubled the base of customers engaging in trade and foreign currency transactions. The increased network of ATMs benefitted your Bank by bringing in much higher usage from non customers and growing the interchange income manifold.

Your Bank continued to put significant focus in reaching out to the NRI community last year. Lot of path breaking initiatives were rolled out. Many alliances were signed with leading exchange houses across Gulf countries to provide channels for attracting inward remittances. Through the strategic partnership with OIFC (Overseas India Facilitation Centre) your Bank participated in 3 global meets in Dubai, London and Birmingham which has firmly established your Bank as a key service provider with the NRI community. This alliance further helped your Bank to engage another 30 sub-alliances enabling the growth in business thru NRIs. Your Bank also reached out to a larger canvass of NRI customers by launching a variant to savings account targeted for the mid-income segment, P.O. Box facility in USA & UK. Your Bank launched a new remittance solution under the brand name Click2Remit. This is a multi currency platform and customers can send money into India from anywhere in the world in 8 different currencies. Your Bank also launched a credit card for the NRI customers and started the Home Loan product for NRIs in select markets. To provide higher convenience to the NRI customer your Bank launched a unique service called Click2Call & SMS2Call wherein the Bank calls back the customer within 30 minutes of receiving the intimation. Your Bank focussed on the online space including social media engagement through a partner portal called NRIMatters.com; NRI Power Podium campaign which got 13000 NRI signups in one month and found its way into India Book of Records. The number of hits on the NRI website today stands at 150000 per month, up from 2000 per month last year.

Your Bank implemented several initiatives aimed towards enhancing customer service and widening the product/ services bouquet. Some of the key ones being:

- Annual Combined Statement on Net Banking - Customers can now view and download their Annual Combined Statement for Savings and Current account, Investment and Demat holdings for the previous financial year. This will help customers to file Tax Returns, apply for loan etc.

- Card Protection Plan – Your Bank in association with CPP Assistance Service Pvt. Ltd. offers card protection to protect all Kotak customers cards (Credit, Debit, ATM etc) against loss and resultant fraud.

- Multilingual ATMs - Multilingual (English, Hindi and Marathi) on all ATMs in Maharashtra has gone live. Other regional languages will get covered during the course of next fiscal year.

- Recharge Services - This enables customers to recharge their pre-paid mobile and DTH services through Kotak Net Banking using Kotak Bill Pay.

- Statement Registration on Net Banking - Customers now have the option to register for their preferred statement frequency and mode option on Net Banking.

- Your Bank has also taken steps to participate in the eco drive. An E-Statement campaign was run through the year aiming to convert the customers who have registered for monthly physical statements & quarterly physical statements to register for monthly E-Statements with the theme of Save Trees, Save the Environment! Say no to Physical Statements.

- Interbank Mobile Payment Service – This feature allows customers to transfer money instantly through mobile phone within own accounts & third party accounts within the IMPS member banks.

- Kotak Stock Ace - This is loan (overdraft) against securities product. Under this product your Bank provides an overdraft to customers against equity shares and mutual funds.

The last year saw several regulatory changes in the third party investment and insurance products space. While these regulatory interventions put a significant amount of revenue pressure your Bank recognises the opportunity to create a well differentiated business if it is able to create a more robust platform to advise its customers. Hence significant focus was put to creating processes with an objective to bring maximum transparency in the Banks sales process of these products and to bring more internal accountability to ensure appropriateness of sale as per customer suitability and risk profile. Your Bank believes that its customers will benefit from such stringent internal standards and in the long run it will be able to build a sustainable and robust business model around these processes.

Your Bank has always focussed on its employees as the key to building a sustainable franchise and has in the past won several awards as one of the best employers. Continuing with this emphasis your Bank launched an E-Learning platform for employees which again won accolades in the IBA Technology Awards. This platform enabled your Bank to introduce courses in real time. It also has features of individual learning plans, chat facilities to enable trainers and trainees to interact online, video streaming facility, online completion status tracking, etc. Your Bank believes this will improve the quality of training inputs and will result in raising the service standards.

Your Bank took definitive steps towards risk control. These include set up of - N Vigil (Internal Cameras) in all the ATMs. This will ensure that the Bank has images of the customers who did the transactions at all times and can also facilitate during fraud investigations or customer complaints. A dedicated Risk Containment Unit has been put in place to do pre-on-boarding checks and transaction level checks to ensure conformity to AML guidelines and fraud prevention etc.

Your Bank continued its in-depth coverage and servicing of large and mid market corporate clients during the year. Your Bank was able to build significant franchise with many well known, reputed large corporate groups during this year while focusing on deepening existing clients through an array of customized and regular product offerings.

The year saw a strong trend in credit demand from the corporate and mid market business segments both for working capital and term facilities. This is in keeping with the strong underlying economic growth. Your Bank was able to tap this opportunity and increase its share of business by offering a variety of products and services.

Your Bank added 160 new cash management service customers during the year by offering them technology driven working capital cycle enhancement & efficiency solutions to effectively enrich and optimize their cash flows and liquidity through an entire suite of CMS products and services. This has been made possible through constant innovation, continuous feedback sessions and a high degree of customization to cater to the dynamic and evolving industry scenario.

Your Banks dedicated team of product solution experts strives to provide systemic structured solutions to suit to the customers needs. The in- depth understanding of the customers business and the superior delivery models has helped in achieving high levels of customer satisfaction. The Commercial Vehicle and Infrastructure sectors continued the growth momentum through the year aided by the positive IIP (Index of Industrial Production) and Agriculture growth numbers. Commercial Vehicle operator margins improved as a result of higher freight realisations, which offset the increase in diesel cost. The growth in the core sector and focus on infrastructure led to a healthy growth in the order book position of contractors in the Infrastructure space. As a result, disbursement numbers touched record levels as did the bottom line. The year also saw good growth in bank lines in both the sectors.

The monsoon has been more than adequate this year. However the impact of the growing economy and increasing purchasing power of the rural population has meant a steep rise in prices of all agro commodities. Riding this boom the Agri Business of your Bank has shown a robust growth with the total portfolio slated to cross Rs. 4300 crore this year, up from last years portfolio of Rs. 3200 crore. This is a growth of 35% year-on-year. Your Bank also ensured to reach the targeted norms for lending to the Agri sector as laid out by the regulator for the second year running.

The Agri business rode on an impressive growth in the tractor loans, commodity funding which doubled in portfolio size and an impressive growth in the working capital facilities to agro-processing sector. Delinquency levels in this portfolio have also been at all time lows and are even better than some of the other urban oriented advances indicating the financial strength of clients associated with agriculture who are riding the commodity price boom.

The Agri business has also become the corner stone for your Banks targets for meeting financial inclusion and lending to the weaker sections of the society such as small and marginal farmers, village artisans and other socially deprived sectors identified by the government. These advances now have crossed a level of 8% of your Banks total advances. Your Bank is in the process of identifying more target segments in this sector to reach out to.

In the Home Finance business while there was strong growth in the first half of the year, the second half of the year saw stabilisation and slight drop in demand from customers. Your Bank introduced innovative new products during the year such as part tenure fixed home loans and loan against property. Your Bank branches continued to play an important part and evolved into a stable contributor month on month. There was an increased focus on existing Bank customers and their contribution among the secured asset products went up.

The Personal Finance business saw good growth and established your Bank as one of the leading lenders of unsecured loans in the market. High-ticket products continued to be the focus and were the biggest contributor to the overall volumes. The Personal Finance business also added new products to their existing bouquet of financial services for businessmen. Working capital products in Rs. 50 lacs to Rs. 1.5 crore range (both fund based as well as non-fund based) were some of the new offerings.

Your Bank resolved several NPA accounts pertaining to stressed assets acquisition. Supreme Court upheld the NPA assignment between banks and other financial institutions. This landmark judgment will further help in resolving several NPA accounts, which were litigated in several courts for the past few years. The NPA portfolio sale by banks continued to be sluggish and the serious pricing mismatch between the buyers and sellers continued, this year as well.

Your Bank continued to invest in large single asset transactions, with good prospects of turnaround in stressed companies. Further, your Bank has diversified in buying large retail NPA loans from other banks.

During the year, your Bank saw a robust growth in its overall advances portfolio. This was primarily driven by the overall growth of the corporate sector, spurred by strong domestic consumption demand for their products post the recessionary period. A robust NPA management practice and strong internal controls, aided by a strong economic growth, has led to a reduction in your Banks gross/net NPAs.

On Treasury side, your Bank has an active proprietary desk trading in all products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Bullion. The Treasury plays an important role in balance sheet management and implementation of Funds Transfer Price between various business units. In the area of Debt Capital Markets (DCM) your Bank offered the following products: syndication of loans, bonds, mezzanine financing, promoter funding and acquisition financing and securitisation. During the year, your Banks Treasury started Correspondent Banking Division to build and leverage on relationships with offshore banks for improving quality and international reach for its customers.

Your Banks credit card business has issued 1.5 lac cards and is in its third year of operations. The card design and product benefits have received overwhelming response from customers. The customer spends across all variants of cards have been amongst the top three in industry. The premium range of our products – VISA Platinum and VISA Signature have driven the spends growth in the portfolio and it contributes to 34% of the spends while accounting for 12% of customer base. This has reaffirmed the customer acceptability of the product. Credit card business clocked Rs. 600 crore of total spends in the year with a book size of Rs. 300 crore. Industry credit cards spends has shown sign of growth after last years recessionary economic conditions.

Your Bank entered into a strategic arrangement with PVR Cinemas, one of the elite name in entertainment industry, to distribute credit card products aimed at upmarket customers. This partnership opens up the opportunity to tap new customer segment hitherto untapped by your Bank.

Your Banks technology team concentrated on innovation to provide new products and conveniences to the customers. This ranged from mobile to mobile payments (IMPs) to providing ATMs at remote locations on an "air card".

System upgrades for continuous improvement in customer experience were a focus. The excellence of the CRM and Call Center which were rolled out across the Kotak Group, were recognized by awards from the Indian Banking Association and Asian Bankers Technology Summit respectively.

In preparation of the planned Core Banking upgrade, the technology foundation has been enhanced. Service Oriented Architecture was introduced with the use of a world class product for system integration. Standard frameworks for digitization and internal development expedite deployment of new systems.

SUBSIDIARIES

Your Banks subsidiaries are established players in the different areas of financial services, viz. car finance, investment banking, stock broking, asset management and life insurance.

While the Indian economy continued its growth path the businesses in which the subsidiaries operate had its own share of challenges on account of market fragmentation, change in market mix, dramatic regulatory changes and the like.

Kotak Mahindra Prime Limited, the car finance company continues to have robust growth in lending coupled with fall in delinquencies. Kotak Securities Limited, the stock broking company continued to face adverse effects of changes in mix in market volumes shifting to the low-yield equity derivative segment. The company also continues to face competition in the market place due to continuous entry of new players. Kotak Mahindra Capital Company Limited had a relatively better year, thanks to handling primary issues. But nevertheless, the investment banking industry continues to face pressure. Kotak Mahindra Asset Management Company Limited faced an outflow of a large portion of liquid funds. Coupled with changes in regulations in the mutual fund industry it had to tweak its business strategy. Kotak Mahindra Old Mutual Life Insurance Limited had to deal with regulatory changes that changed the direction of the industry. Business strategy, product mix and management of costs had to be continuously worked upon to stay on course. Due to range bound secondary equity markets and net outflows in many India dedicated International funds, the International subsidiaries reported drop in profits.

The various activities of the subsidiaries are outlined in the Management Discussion and Analysis section appended to this Report.

In terms of the general exemption granted by the Central Government vide their General Circular No.2/2011 dated 8th February 2011 under Section 212(8) of the Companies Act, 1956, abridged Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31st March 2011, have been sent to all the members of the Bank. It does not contain Annual Reports of the Banks subsidiary companies. The Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) upon request by any member of the Bank. These Annual Reports will be available on the Banks website viz. URL : http://ir.kotak.com/annual-reports and will also be available for inspection by any member at the Registered Office of the Bank.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section entitled Corporate Governance has been included in this Annual Report. The Bank has implemented number of recommendations given in the "Corporate Governance Voluntary Guidelines 2009" by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS

Mr. Asim Ghosh retires by rotation at the Twenty Sixth Annual General Meeting and is eligible for re-appointment.

Mr. Prakash Apte and Mr. Amit Desai were appointed with effect from 18th March 2011 and Mr. N.P. Sarda with effect from 1st April 2011 as Additional Directors of the Bank. Pursuant to the proviso to Section 260 of the Companies Act, 1956, they hold office as Directors up to the date of this Annual General Meeting but are eligible to be appointed as Directors. In terms of Section 257 of the Companies Act, 1956 the Bank has received notice in writing from members along with a requisite deposit of Rs. 500/- each proposing the candidature of Mr. Prakash Apte, Mr. Amit Desai and Mr. N. P. Sarda for their appointment as Directors.

Mr. Prakash Apte is presently the Non-Executive Chairman of Syngenta India Limited with considerable experience in agricultural sector. Mr. Amit Desai is an eminent professional with 30 years experience. Mr. N.P. Sarda is a Chartered Accountant for more than 40 years and past President of ICAI.

Mr. Anand Mahindra, Mr. Cyril Shroff and Mr. Shivaji Dam have retired as Directors of the Bank effective 21st March 2011 due to completion of their eight years tenure pursuant to the provisions of Section 10A(2A)(i) of the Banking Regulation Act, 1949. Your Directors place on record their appreciation for the valuable advice and guidance rendered by each one of them during their tenure as Directors of the Bank.

The Board of Directors of the Bank, at its meeting held on 5th May 2011, has re-appointed Mr. Uday Kotak as Whole-time Director of the Bank designated as Executive Vice-Chairman and Managing Director for a period from 22nd March 2012 to 31st December 2014, subject to the approval of the shareholders and of the Reserve Bank of India. Mr. Dipak Gupta and Mr. C. Jayaram have been re-appointed as Whole- time Directors of the Bank designated as Joint Managing Directors for a period from 1st January 2012 to 31st December 2014, subject to the approval of the shareholders and of the Reserve Bank of India. The approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

AUDITORS

Messrs S. R. Batliboi & Co., Chartered Accountants, auditors of your Bank, retire on the conclusion of Twenty Sixth Annual General Meeting.

Pursuant to the guidelines issued by the Reserve Bank of India, an audit firm is allowed to continue as the Statutory Central Auditor of a bank for a continuous period of four years only. Accordingly, it is proposed to appoint, subject to regulatory approvals, Messrs S. B. Billimoria & Co., Chartered Accountants as the statutory auditors of the Bank for the current financial year in place of Messrs S. R. Batliboi & Co. who have completed four years as the statutory auditors. The approval of the shareholders in this regard is being sought at the ensuing Annual General Meeting of the Bank.

STATUTORY INFORMATION

The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1998, are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank along with its subsidiaries as of 31st March 2011 was around 20,500 as compared to around 20,000 employees a year ago.

The Bank standalone had around 11,000 employees as of 31st March 2011. 102 employees employed throughout the year and 23 employees employed for part of the year were in receipt of remuneration of Rs. 60 lacs or more per annum.

Your Bank was adjudged amongst Top 25 in Indias Best Companies to Work For in 2010 by The Great Places to Work Institute and continues to be amongst Top 25 Best Employers in India consistently from 2007 till date as adjudged by the AON Hewitt Best Employers Survey.

While your Bank and its subsidiaries continued to focus on various initiatives to provide the best employment experience to the employees, new and innovative products and processes were introduced to further enhance both quality and productivity of our human capital. Substantial investments were made in training and developing employees across levels to improve productivity, service quality, personal effectiveness and supervisory capability. Structured leadership development programs and customized courses in association with leading academic institutions were also rolled out to groom future leaders and build a talent pool that has depth in knowledge and competence.

The best in class Talent Management practices and HR processes have enabled the organization to build a cadre of highly committed and engaged employees who consistently excel in delivering our customer value proposition.

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders of the Bank excluding the aforesaid annexure. The annexure is available for inspection at the Registered Office of the Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Bank.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confirm in pursuance of Section 217 (2AA) of the Companies Act, 1956 that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31st March 2011, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements 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 at 31st March 2011 and of the profit of your Bank for the financial year ended 31st March 2011;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the shareholders and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya Place: Mumbai,

Chairman Date : 5th May 2011

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Mar 31, 2010

The Directors present their Twenty Fifth Annual Report together with the audited accounts of your Bank for the year ended 31st March 2010.

FINANCIAL HIGHLIGHTS

(A) Kotak Mahindra Bank Limited - Consolidated financial highlights:

31st March 2010 31st March 2009 Rs. crore Rs. crore

Total income 10,053.30 7,218.27

Total expenditure, excluding provisions and contingencies 7,639.71 5,940.90

Operating Profit 2,413.59 1,277.37

Provisions and contingencies, excluding provision for tax 510.73 261.16

Profit before tax 1,902.86 1,016.21

Provision for taxes 575.50 363.53

Profit after tax 1,327.36 652.68

Less: Share of minority interest 18.00 3.73

Add: Share in Profit of Associates (2.36) 3.44

Consolidated Profit for the Group 1,307.00 652.39

Earnings per Equity Share

Basic (Rs.) 37.68 18.90

Diluted (Rs.) 37.28 18.87

(B) Kotak Mahindra Bank Limited - Standalone financial highlights:

31st March 2010 31st March 2009

Rs. crore Rs. crore

Total Income 3,883.86 3,338.77

Total expenditure, excluding provisions and contingencies 2,586.86 2,743.02

Operating Profit 1,297.00 595.75

Provisions and contingencies, excluding tax provisions 485.89 169.69

Profit before tax 811.11 426.06

Provision for taxes 250.00 149.96

Profit after tax 561.11 276.10

Add: Surplus brought forward from the previous year 648.94 528.17

Amount available for appropriation 1,210.05 804.27

Appropriations:

Statutory Reserve under Section 17 of the Banking Regulation Act, 1949 140.28 69.03

General Reserve 28.06 13.81

Transfer to Investment Reserve Account 1.19 41.70

Transfer to Capital Reserve 6.96 2.97

Transfer to Special Reserve 40.00 -

Proposed Dividend 29.66 25.96

Corporate Dividend Tax (2.01) 1.86

Surplus carried to Balance Sheet 965.91 648.94

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.85 per share (previous year Rs. 0.75 per share), entailing a payout of Rs. 27.65 crore including dividend distribution tax (previous year Rs. 27.82 crore). The dividend would be paid to all the shareholders, whose names appear on the Register of Members/Benefcial Holders list on the Book Closure date.

CAPITAL

The Bank has a high Capital Adequacy Ratio (‘CAR). The CAR (under Basel II) as at 31st March 2010 was 18.35% with Tier I being 15.42%. At a consolidated level the CAR was 19.3% under Basel II.

During the year, your Bank has not issued any Capital under Tier II. As on 31st March 2010, outstanding Unsecured, Redeemable Non-Convertible, Subordinated Debt Bonds was Rs. 465.70 crore and outstanding Unsecured, Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs. 338.05 crore.

SUB-DIVISION OF EQUITY SHARES

In order to facilitate more liquidity of your Banks Equity Shares in the stock markets and to make it affordable for the small investors to invest in the Equity Shares of your Bank, on the occasion of the 25th year of the organization, the Board of Directors of your Bank at its meeting held on 11th May 2010, has approved sub-division (stock-split) of each Equity Share having a face value of Rs.10 into two Equity Shares of face value of Rs. 5 each, subject to the approval of the shareholders at the forthcoming Annual General Meeting of your Bank and approval of all concerned regulatory/statutory authority(ies).

OPERATIONS

India has bounced back strongly on the backdrop of strong domestic demand and growth in almost all sectors of the economy. As the clouds of uncertainty moved away your Bank re-assessed its expansion plans on the Branch Banking Business and added 32 branches and 105 ATMs and ended the year with 249 Branches and 492 ATMs. The regulatory changes offering limited free usage of ATMs to customers across all ATMs of banks has helped, as your Bank has benefted by higher usage of the network. Your Bank is now present in 145 locations across the country. Your Bank added over half a million new customers this year.

The advantage of a growing network was clearly visible in the CASA growth rates, Asset Distribution, Mutual Fund & other equity products and Insurance penetration. Your Bank also saw a robust growth in transaction income which grew by over 100% compared to last financial year.

The strategy of your Bank of leveraging the Bank branches for distribution of asset products continued to improve quality of earnings by reducing acquisition costs and improving credit quality. The results in this area have been very heartening. The growth was spread across all products ranging from Home Loans, Personal Loans, Commercial Loans, Credit Cards, loans to small business and referrals for Car Loans.

A holistic proposition on Trade Services coupled with Credit facilities helped your Bank create a Profitable segment of customers. Your Bank also launched 2 commercial branches aimed at servicing the specifc needs of its trade customers.

In the Retail Institutional business your Bank received empanelment from some states and was able to add many reputed Trusts, Associations, Educational Institutions and Societies to its list of clients. The Corporate Salary Accounts business continued to add to its marquee clients across the country and has shown a steady growth in deposits.

Your Bank developed and launched customer centric product programs specifcally aimed at HNIs and NRIs. These product programs with its enhanced and enriched features make its unique offerings in the respective customer segments. Your Bank has also put in signifcant investment in technology to provide world class experience to these specifc customer segments. Your Bank successfully launched best in class, Private Banking System for its Privy League customers. A new micro site was created for this segment of customers. It has also successfully re-launched its upgraded site for Non Resident Indians. This website provides a compendium of information required by NRIs across banking and investment and loan products. Non Resident segment continues to be a major thrust area for the business. There has been a growth of 46% on the NRI deposits. Your Bank was also selected as a strategic partner to Overseas Indians Facilitation Centre an initiative of Ministry of Overseas Indian Affairs. Your Bank also operationalised its Representative Offce in Dubai.

On Investment Advisory side, this year saw the market volumes going through huge gyrations. The uncertainty among customers impacted distribution volumes for Mutual Fund and Insurance products. In spite of all these changes in the environment your Bank succeeded in growing its third party distribution volumes for Mutual Funds and Insurance. Your Bank continues to offer a best in class bouquet of investment products to its customers.

Several new products, features and services were added during the year. A lower variant current account product for the micro and small business enterprise was launched. Priority banking was extended to NRIs. All branches of your Bank were ASBA (Application Supported by Blocked Account) enabled. Your Bank was chosen as one of the few banks to accept applications under the New Pension Schemes. Your Bank now accepts NPS applications across 150 branches. Customized "One View page" and customized Net offers were launched based on each individual customers relationship with your Bank. In Phone Banking a new state of the art IP based call centre solution was installed this has helped in faster response rates to customer calls and optimizing call centre resources across multiple locations.

This year saw your Bank embarking on a journey to use "Service" as a differentiator in the highly competitive banking space. In line with this philosophy your Bank took big strides in improving Customer Satisfaction levels by raising its Service Quality standards. Implementation of world class CRM platform which began last year was successfully completed during the year. The benefts from such robust sales and service oriented Customer Relationship Program enables your Bank to strive for best in class sales productivity and high service standards. Coupled with this technology driven platform, your Bank also launched process driven program titled "SPIRIT" which focuses on quality and consistency for service delivery across all channels.

Focus on "transaction security" has always been at the centre while designing and implementing business solutions which encourages customer to use alternate channels like Net banking, ATMs, Mobile/SMS banking, Home banking etc. During the year, several improvements to existing features like, On line password generation, two factor authentication, improved features for security of fund transfers, PIN based IVR were introduced. A very fne balancing act between security and process controls vis-à-vis customer service is a critical aspect of this business and requires continuous evaluation of processes and features keeping in mind customer feedback.

As we move ahead, the primary focus for your Bank would be to ensure enhanced Customer Profitability by achieving better Cross Sales through well defned Customer Engagement Programs and Higher Service Quality Standards. Having emerged as the most critical distributor for the entire groups products across Liabilities, Assets and Investment products the business will continue to expand by adding more branches and drive productivity, effciency and through put across products, locations, channels and act as the one stop shop for all customers of the Group.

Your Bank continued its in depth coverage of large corporate and mid market corporate clients during the year. Your Bank was able to build signifcant franchise with many well known, reputed large corporate groups during this year while focusing on deepening existing clients through an array of customized offerings.

The year saw mixed trend in credit demand from the corporate and mid market business segments both for working capital and term facilities. The last quarter saw a surge in credit demand as compared to the earlier quarters. This is in keeping with the economic and corporate investment cycle. Your Bank was able to tap this opportunity and increase its share of business by offering a variety of products and services.

Trade Finance volumes grew by over 80% vis-à-vis last year. The fund based trade assets nearly doubled this year as compared to last year and the non fund based trade assets grew by around 60%. Your Banks dedicated team of trade fnance experts strives to provide structured solutions to suit to the customers needs. The in-depth understanding of the customers business and the superior delivery models has helped in achieving high levels of customer satisfaction.

Your Bank added 225 new cash management service customers during the year by offering them technology driven solutions to effectively enhance and optimize their cash fows and liquidity through an entire suite of CMS products and services. This has been made possible through constant innovation and a high degree of customization to cater to the dynamic and evolving industry scenario.

The Commercial Vehicle and Infrastructure sectors showed remarkable resilience to get back into the growth mode all through the year, picking up momentum on the way. This has resulted in higher than budgeted disbursement numbers and bottom line in the Commercial Vehicle and Infrastructure divisions. Freight rates and order book size have increased which has improved realisations consequent to better operator and contractor margins. GDP numbers and the emphasis on infrastructure as a policy measure should spur the growth in both these sectors, going forward. The businesses have been realigned to meet the growth demands both on the retail and strategic customer segments.

Despite the fear of a bad monsoon and a rising food prices infation, the Agri sector continued to show resilience in repayments. In this backdrop, the Agri business continued to show growth and crossed Rs. 3150 crores this year, up from Rs. 2365 crores in the last year, in the process crossing the required 18% of the Net Bank Credit stipulated by Reserve Bank of India for the frst time.

The focus of the Agri business continued in activities like Tractor loans, crop loans, agriculture project fnancing, working capital facilities to agriculture and agro processing facilities where it consolidated its presence in its existing markets. The Agri business also built up business volumes in fresh segments like gold loans and microfnance loans in the rural sector as part of the financial inclusion initiatives of your Bank.

The year started cautiously with declining demand in the Home Finance business, as the customer adopted a policy of wait and watch. However, post the stable election results the market received a boost. Your Bank has taken great strides in achieving robust sales and Profit numbers. Competitive pricing resulted in an upsurge in disbursements as compared to previous years. There was a major focus on Bank branches as a channel for sourcing Home Finance business.

In the Personal Finance business, there was an opportunity for lenders to capitalize on the latent loan demand in the market and focus on high-ticket products, with most lenders still being wary of the low-ticket unsecured segments. Collection effciencies showed an improved trend. Your Bank continued its stress on quality based underwriting for fresh bookings.

It has been a roller coaster year for the Asset Reconstruction business. The frst half of the financial year was challenging one in terms of resolution. However in the second half, with markets easing and several of the assets having been sold, substantial amount of recoveries were made. If the buoyancy in the market continues, your Bank hopes to recover substantial amount in the coming financial year, as well. Acquisition of new portfolio continued to be lukewarm, but the same is expected to improve in the coming financial year.

On Treasury side, your Bank has an active proprietary desk trading in all products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and Bullion. The Treasury plays an important role in balance sheet management and implementation of Funds Transfer Price between various business units. In the area of Debt Capital Markets (DCM) your Bank offered the following products: syndication of loans, bonds, mezzanine fnancing, promoter funding and acquisition fnancing and securitisation.

Your Bank launched credit card business and reached the milestone of 1 lac cards in the frst year of operations. The card design and product benefts have received overwhelming response from customers. The customer spends across all variants of cards have been amongst the top three in industry. This has reaffrmed the customer acceptability of the product. Credit Card business clocked Rs. 511 crore of total spends in the year with a book size of Rs. 281 crore. Industry credit cards spends growth rate has witnessed slowdown owing to current market conditions.

Your Bank entered into a Strategic arrangement with Bharti Group for their foray into the retail business along with Walmart to distribute Credit Card products in their retail outlets, targeting both individual and business users. This partnership opens up the opportunity to tap new markets and new customer segment hitherto untapped by your Bank. The card aimed at business users offers one of its kind 14-day credit free cycle that starts afresh on every purchase.

After consolidation of the data centers last year, the primary focus this year has been on facilitating "green energy" initiatives. As a part of this strategy a transformational project of "virtualizing" a majority of the servers in the data center, was executed. Thereby saving on power consumption and enabling redeployment of the existing servers for future expansion. There was continued focus on enhancement of customer experience across all channels. Interactions with Corporate customer applications were also enhanced. Innovative technology solutions were introduced to support new product offerings. As in the previous years, your Banks technology continued to be recognized for its excellence. Your Bank received awards for storage virtualization and e-Governance.

SUBSIDIARIES

Your Bank along with its subsidiaries offers complete financial solutions to its customers. The key business segments where the subsidiaries operate include investment banking, stock broking, car fnance, asset management and life insurance.

Due to improved business environment, the lending businesses have reported good Profits compared to last year. The life insurance subsidiary, Kotak Mahindra Old Mutual Life Insurance Limited has continued to report Profit. Kotak Mahindra Capital Company Limited, Kotak Mahindra Asset Management Company Limited, Kotak Securities Limited and the international subsidiaries posted higher Profits due to strong capital markets and the good domestic economic growth.

The various activities of the subsidiaries are outlined in the Management Discussion and Analysis section appended to this Report. In terms of the approval granted by the Central Government vide their letter dated 16th February 2010 under Section 212(8) of the Companies Act, 1956, abridged Annual Report which consists of the financial statements of your Bank on standalone basis as well as consolidated financial statements of the group for the year ended 31st March 2010, have been sent to all the members of the Bank. It does not contain Annual Reports of the Banks subsidiary companies. The Bank will make available full Annual Report (including the Annual Reports of all subsidiaries) upon request by any member of the Bank. These Annual Reports will be available on the Banks website and will also be available for inspection by any member at the Registered Offce of the Bank.

EMPLOYEE STOCK OPTION SCHEME

The stock options granted to the employees currently operate under two schemes, namely Kotak Mahindra Equity Option Scheme 2005 ("Scheme 2005") and Kotak Mahindra Equity Option Scheme 2007 (Scheme 2007). The disclosures below are in respect of the year ended 31st March 2010.

Options granted during the year Scheme 2005 - Nil

Scheme 2007 - 1,53,020 options

Pricing Formula ESOP Scheme 2005 & 2007 - The Exercise Price shall be a price, as may be determined by the Board/ESOP/ Compensation Committee, equivalent to or discounted up to 50% of the Average Market Price. The Average Market Price for this purpose would mean the average of the closing price of Equity Shares of the Bank, during two weeks period prior to the date of the meeting of Board/ESOP/Compen sation Committee at which Plan Series under the Scheme is approved, on the Stock Exchange, where there was highest trading volume during the said two week period, on which the Equity Shares of the Bank are listed.

Plan Series means a documented plan framed by Board/ESOP/Compensation Committee for each tranche of grant of Options, to all Eligible Employees, at a specifc Exercise Price (which is determined by the Board/ESOP/Compensation Committee for the purpose of that particular Plan Series) and other terms and conditions as mentioned in that Plan Series.

The Board/ESOP/Compensation Committee under special circumstances decides that the Exercise Price shall be Rs. 10/- per share. In such cases, the immediately succeeding Directors Report/Corporate Governance Report shall carry details of the same.

Options in force at the beginning of the year Scheme 2005 - 33,79,670 options

Scheme 2007 - 84,77,297 options

Options Vested during the year Scheme 2005 - 5,77,320 options

Scheme 2007 - 20,66,136 options

Options exercised during the year Scheme 2005 - 7,19,750 options

Scheme 2007 - 17,52,868 options

Total number of shares arising as a result of exercise Scheme 2005 - 7,19,750 equity shares of Rs. 10/- each

of options Scheme 2007 - 17,52,868 equity shares of Rs. 10/- each

Options lapsed Scheme 2005 - 1,65,620 options

Scheme 2007 - 4,70,324 options

Variation of terms of options No variations made in the terms of the options granted except in respect of Scheme 2005 with respect to recovery from the relevant eligible employees, the Fringe Beneft Tax on exercise of options as permitted by regulations.

Money realized by exercise of options Exercise amount received:

Scheme 2005 - Rs. 13,20,87,500/-

Scheme 2007 - Rs. 60,66,21,265/-

Total number of options in force Scheme 2005 - Outstanding options - 24,94,300

Scheme 2007 - Outstanding options - 64,07,125

Details of options granted during the year to Nil

(i) Senior management personnel

(ii) Any other employee who receives a grant in any Nil one year of options amounting to 5% or more of options granted during that year

(iii) Identifed emplo yees who were granted option, Nil during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conver sions) of the Company at the time of grant

Diluted Earnings Per Share (EPS) pursuant to issue of *The diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of shares on exercise of options calculated in accordance options calculated in accordance with AS20 is Rs. 37.28 (Consolidated) and with AS-20 Earnings Per Share Rs. 16.00 (Standalone).

Where the company has calculated the employee *Had the Bank (Consolidated) followed the fair value method for accounting the

compensation cost using the intrinsic value of stock stock option compensation expense would have been higher by Rs. 43.41 crore

options, the difference between the employee with consequent lower Consolidated Profits. On account of the same the diluted

compensation cost so computed and the employee EPS of the Bank (Consolidated) would have been less by Rs. 0.82 per share.

compensation cost that shall have been recogn ized if it had used the fair value of the opti ons, shall be disclosed. The impact of this difference on Profits and on EPS of the Company shall also be disclosed.

Weighted - average exercise prices and weighted *The weighted average price of the stock options exercised is Rs. 298.75 and the

- average fair values of options shall be disclosed weighted average fair value is Rs. 262.29.

separately for options whose exercise price either equals or exc eeds or is less than the market price of the stock.

*Note: Above fgures are derived by considering the options granted and exercised by employees of the Bank and its subsidiaries.

A description of the method and signifcant assumptions used during the year to estimate the fair values of options, including the following weighted – average information:

A. Stock price

It is the closing market price on the National Stock Exchange of India Limited prior to the meeting of the Board in which the options are granted.

B. Volatility

Volatility is a measure of the amount by which a price has fuctuated or is expected to fuctuate during a period. The measure of volatility used in the Black-Scholes option-pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time.

Accordingly, daily volatility of the Banks stock price on the NSE for the period corresponding to the respective expected live of the different vests, prior to the grant date has been considered.

C. Risk free interest rate

The risk-free interest rate being considered for the calculation is the interest rate applicable for maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities as on the date of the respective grant.

D. Time to Maturity/Expected Life of options

The minimum life of a stock option is the vesting period and the maximum life is vesting period plus the exercise period. The Expected life of the options has been calculated as the average of the two extremes – the minimum life and the maximum life. Since each vest has been considered as a separate grant, the expected life has been calculated for each vest separately.

E. Dividend yield

The dividend yield for each grant has been derived by dividing the dividend per share by the market price per share.

Weighted average information in respect of above assumptions has been provided in note 12 of Schedule 17 of the notes to accounts to the consolidated financial statement of the Bank.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section entitled ‘Corporate Governance has been included in this Annual Report. The Bank has implemented number of recommendations given in the "Corporate Governance Voluntary Guidelines 2009" by the Ministry of Corporate Affairs and is examining the possibility of implementing the remaining recommendations.

DIRECTORS

Mr. Shishir Bajaj resigned as a Director of the Bank with effect from 26th October 2009. Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr. Bajaj during his tenure as a Director of the Bank.

Mr. Anand Mahindra and Mr. Cyril Shroff, Directors of the Bank retire by rotation at the Twenty Fifth Annual General Meeting and are eligible for re-appointment.

Dr. Sudipto Mundle was appointed as an Additional Director of the Bank with effect from 27th October 2009 and, pursuant to the proviso to Section 260 of the Companies Act, 1956, holds offce as a Director up to the date of this Annual General Meeting but is eligible to be appointed as a Director. In terms of Section 257 of the Companies Act, 1956 the Bank has received notice in writing from a member along with a requisite deposit of Rs. 500/- proposing the candidature of Dr. Sudipto Mundle for his appointment as a Director.

Dr. Sudipto Mundle, a Ph. D in Economics was a Director in the Strategy & Policy Department, Asian Development Bank. He is an Emeritus Professor (Hon.) at National Institute of Public Finance and Policy, a Member of the National Statistical Commission, and President of PREETI Foundation. In his earlier career, Dr. Mundle was Reserve Bank of India Chair Professor at the National Institute of Public Finance and Policy, New Delhi and served in other academic institutions including the Indian Institute of Management, Ahmedabad and Centre for Development Studies, Trivandrum. He was also an Economic Adviser in the Ministry of Finance. Dr. Mundle has extensive experience in economic work and provision of development assistance, including projects and policy loans for agriculture, infrastructure, including irrigation, fnance, education and health, technical assistance, and regional cooperation assistance in many countries in Asia.

AUDITORS

Messrs S. R. Batliboi & Co., Chartered Accountants, auditors of your Bank, retire on the conclusion of Twenty Fifth Annual General Meeting and are eligible for re-appointment. You are requested to appoint auditors for the current financial year and to fx their remuneration.

STATUTORY INFORMATION

The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1998, are not applicable to your Bank.

EMPLOYEES

The employee strength of your Bank along with its subsidiaries as of 31st March 2010 was around 20,000 as compared to around 18,000 employees a year ago.

The Bank standalone had around 8,800 employees as of 31st March 2010. 224 employees employed throughout the year and 36 employees employed for part of the year were in receipt of remuneration of Rs. 24 lacs or more per annum.

Your Bank has in place policies relating to employee service conditions, welfare and training which are reviewed on an ongoing basis by your Banks Management Committee.

Your Bank continues to focus on training its employees on a continuing basis by deputation to reputed training institutions by holding workshops on various areas including Regulatory Compliance, Risk Management, Customer Care and Communication, Trade Finance, Foreign Exchange Rules and Treasury.

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders of the Bank excluding the aforesaid annexure. The annexure is available for inspection at the Registered Offce of the Bank. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Offce of the Bank.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the operational management, confrm in pursuance of Section 217 (2AA) of the Companies Act, 1956 that:

(i) your Bank has, in the preparation of the annual accounts for the year ended 31st March 2010, followed the applicable accounting standards along with proper explanations relating to material departures, if any;

(ii) they have selected such accounting policies and applied them consistently and made judgements 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 at 31st March 2010 and of the Profit of your Bank for the financial year ended 31st March 2010;

(iii) they have taken proper and suffcient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority and other Government and Regulatory agencies. Your Directors acknowledge the support of the shareholders and also wish to place on record their appreciation of employees for their commendable efforts, teamwork and professionalism.

For and on behalf of the Board of Directors

Dr. Shankar Acharya

Place : Mumbai,

Chairman Date : 11th May 2010