94

Consolidated Financial Highlights 2023-2024

(` in crore)

FINANCIAL HIGHLIGHTS FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Advances 249,859 252,170 304,474 359,107 430,352

Investments* 81,334 116,565 115,907 139,359 175,302

Total Assets 443,153 478,854 546,498 620,430 767,667

Net Profit 8,593 9,990 12,089 14,925 18,213

KEY FINANCIAL INDICATORS

Net Interest Margin (NIM)^ 4.6% 4.5% 4.7% 5.4% 5.3%

Return on Average Assets (RoAA) 2.1% 2.2% 2.4% 2.6% 2.7%

Book Value Per Share (`) 348 426 487 563 653

Basic Earnings Per Share (EPS) Face Value ` 5 per share 44.7 50.5 60.8 75.0 91.5

Return on Equity (RoE) 13.7% 12.8% 13.4% 14.4% 15.1%

Capital Adequacy Ratio 19.8% 23.4% 23.7% 23.3% 21.8%

Gross NPA (` crore) 5,488 8,276 7,334 6,419 6,003

Net NPA (` crore) 1,745 3,106 2,149 1,479 1,567

Gross NPA Ratio 2.2% 3.2% 2.4% 1.8% 1.4%

Net NPA Ratio 0.7% 1.2% 0.7% 0.4% 0.4%

* Excludes Policyholders' investments
^ Excluding dividend and interest on income tax refunds.

MARKET RELATED RATIOS FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24

Market Price (`) 1,296 1,753 1,754 1,733 1,786

Market Capitalisation (` crore) 247,939 347,416 348,080 344,240 354,943

Price to Book Ratio 3.7 4.1 3.6 3.1 2.7

Price to Earnings Ratio 29.0 34.7 28.9 23.1 19.5

Integrated Annual Report 2023-24

 96

Consolidation at a Glance
(` in crore)

March 31, March 31,

2023-24 2022-2023
2024 2023
Profit Profit Profit Profit Capital & Capital &
before Tax after Tax before Tax after Tax Reserves Reserves
and Surplus and
Surplus*

Kotak Mahindra Bank Limited 18,013.72 13,781.58 14,390.99 10,939.30 96,639.46 83,459.95
Subsidiaries
Kotak Mahindra Prime Limited 1,188.36 888.06 1,110.06 828.96 9,176.48 8,305.90
Kotak Securities Limited 1,635.18 1,226.17 1,150.19 865.22 8,286.15 7,107.98
Kotak Mahindra Capital Company Limited 276.69 215.01 192.48 149.28 1,181.03 1,000.38
Kotak Mahindra Life Insurance Company Limited 1,041.24 688.62 1,462.72 1,053.31 5,863.23 5,327.70
Kotak Mahindra General Insurance Company Limited (88.95) (88.95) (117.28) (117.28) 447.12 341.07
Kotak Mahindra Investments Limited 690.51 514.21 439.32 326.26 3,329.02 2,814.81
Kotak Mahindra Asset Management Company Limited 570.64 424.41 605.85 474.77 1,995.62 1,682.96
Kotak Mahindra Trustee Company Limited 135.20 100.77 107.48 79.99 525.32 424.55
Kotak Mahindra (International) Limited 65.82 64.28 13.36 12.41 1,001.34 922.93
Kotak Mahindra (UK) Limited 55.24 38.63 21.52 15.07 495.19 449.79
Kotak Mahindra, Inc. 13.95 11.08 15.03 13.25 98.79 86.33
Kotak Alternate Asset Managers Limited (formerly 76.87 58.84 51.95 42.27 864.58 805.72
known as Kotak Investment Advisors Limited)
Kotak Mahindra Trusteeship Services Limited 7.68 5.87 3.52 2.63 35.00 29.13
Kotak Infrastructure Debt Fund Limited 43.40 43.40 27.83 27.83 519.61 476.20
Kotak Mahindra Pension Fund Limited (0.21) (0.21) (3.49) (3.49) 52.40 52.61
Kotak Mahindra Financial Services Limited (0.59) (0.59) (3.08) (3.08) 3.05 3.59
Kotak Mahindra Asset Management (Singapore) Pte. 85.32 75.32 43.49 38.66 363.99 283.85
Limited
IVY Product Intermediaries Limited 0.44 0.33 0.24 0.16 6.69 6.36
BSS Microfinance Limited 509.04 383.22 396.29 297.21 1,009.85 626.63
Sonata Finance Private Limited (w.e.f 28th March, 2024) (16.64) (13.71) NA NA 389.41 NA
Total 24,302.91 18,416.34 19,908.47 15,042.73 132,283.33 114,208.44
Add: Associates 236.38 144.57 1,587.34 1,350.96
Less: Dividend, Inter company and other adjustment 439.51 262.29 3,978.28 3,305.31
Consolidated Profit After Tax / Capital & Reserves and 18,213.21 14,925.01 129,892.39 112,254.09
Surplus
Consolidated Earnings per Share (₹) 91.45 74.94
Consolidated Book Value per Share (₹) 653.41 562.55
* Capital & Reserves and Surplus includes Preference Share Capital

On 26thJune, 2023, the Bank has incorporated "Kotak Karma Foundation" (“the Foundation”) under Section 8 of the Companies Act, 2013, as a wholly owned
subsidiary for setting up a Centre of Excellence (CoE) of the Bank for furtherance of part of its Corporate Social Responsibility (CSR) Initiatives. Being a
Section 8 Company and as per terms of articles, the Foundation would operate with restrictions to transfer funds to the parent, hence in accordance with
the requirements of Accounting Standard 21 on “Consolidated Financial Statements”, the Company shall be excluded from consolidation.

Integrated Annual Report 2023-24

 97 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

Independent Auditor’s Report

To the Members of Kotak Mahindra Bank Limited

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

OPINION
1. We have audited the accompanying consolidated financial statements of Kotak Mahindra Bank Limited (‘the Bank’ or ‘the Holding Company’), its
subsidiaries (the Bank and its subsidiaries together referred to as ‘the Group’), and its associates, which comprise the Consolidated Balance Sheet
as at 31 March 2024, the Consolidated Profit and Loss account, the Consolidated Cash Flow Statement for the year then ended and notes to the
consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to
as ‘the Consolidated Financial Statements’).

2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of
the other auditors on separate financial statements and the other financial information of subsidiaries and associates, the aforesaid Consolidated
Financial Statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013 (‘ the Act’), and circulars
and guidelines issued by Reserve Bank of India (‘the RBI’), in the manner so required for banking companies and give a true and fair view, in conformity
with the Accounting Standards prescribed under section 133 of the Act, read with the Companies (Accounting Standards) Rules, 2021 and other
accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its associates as at 31 March 2024, and their
consolidated profit, and their consolidated cash flows for the year then ended.

BASIS FOR OPINION

3. We conducted our audit in accordance with the Standards on Auditing (‘SAs’) specified under section 143(10) of the Act. Our responsibilities under
those SAs are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group and its associates in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’)
together with the ethical requirements that are relevant to our audit of the Consolidated Financial Statements under the provisions of the Act, and
the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained along with the consideration of audit reports of the other auditors referred to in the “Other Matters” section
below is sufficient and appropriate to provide a basis for our opinion on the Consolidated Financial Statements.

KEY AUDIT MATTERS

4. Key audit matters are those matters that, in our professional judgement, and based on the consideration of the reports of the other auditors on
separate financial statements and other financial information of the subsidiaries and its associates were of most significance in our audit of the
consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Identification of and Provisioning against Non-performing Assets (‘NPAs’):

Total Loans and Advances (Net of Provision) as at 31 March 2024: Rs. 376,075.27 Crores
Provision for NPAs as at 31 March 2024: Rs. 4,004.21 Crores
Refer Schedule 9, Schedule 17(C)(2) and Schedule 18(A), note 9 and note 11 of Standalone Financial Statements

Key Audit Matter How our audit addressed the key audit matter

The Bank is required to comply with the Master Circular issued by Our audit procedures included the following:
the Reserve Bank of India (‘RBI’) on ‘Prudential Norms for Income
Recognition, Asset Classification and Provisioning pertaining to  Understood the process and controls, and tested the design and
Advances’ (the’ IRAC norms’) and amendments thereto which prescribes operating effectiveness of key controls, including Information
the guidelines for identification and classification of Non-performing Technology based controls, and focused on the following:
Assets (‘NPAs’) and the minimum provision required for such assets.
¡ Approval of new lending facilities in accordance with the
The Bank is also required to apply its judgement to determine the
Bank’s credit policies.
identification and provision required against NPAs considering various
quantitative as well as qualitative factors. ¡ Performance of annual review/renewal of loan accounts.

The identification of NPAs is also affected by factors like stress and

liquidity concerns in certain sectors.
 98

Key Audit Matter How our audit addressed the key audit matter

The provision for identified NPAs is estimated based on ageing and ¡ Monitoring of credit quality which amongst other things
classification of NPAs, value of security, recovery estimates etc. and includes the monitoring of overdue loan accounts, drawing
is also subject to the minimum provisioning norms specified by RBI. power limit and pending security creation; and

As the identification of and provisioning against NPAs requires ¡ Identification and classification of NPAs in accordance with
considerable level of management estimation, application of various IRAC norms, other regulatory guidelines issued by the RBI
regulatory requirements and its significance to the overall audit, we and consideration of qualitative aspects.
have identified this as a key audit matter.
 Tested the Bank’s process for identification of loans with default
events and/ or breach of other qualitative factors, and for a
sample of performing loans, independently assessed as to
whether there was a need to classify such loans as NPAs.

 On a test check basis, verified the accounts classified by the Bank

as Special Mention Accounts (‘SMA’) in RBI’s Central Repository
of Information on Large Credits (‘CRILC’).

 With respect to provisions recognised towards NPAs, we

reperformed the provision calculations on a sample basis
taking into consideration the value of security, where applicable,
the IRAC norms and NPA policy of the Bank, and compared
our outcome to that prepared by the management and tested
relevant assumptions and judgements which were used by the
management.

Information Technology (‘IT’) Systems and Controls impacting Financial Reporting

Key Audit Matter How our audit addressed the key audit matter

The IT environment of the Bank is complex and involves many Our audit procedures with respect to this matter included the following:
independent and interdependent IT systems used in the operations of
the Bank for processing and recording a large volume of transactions. In assessing the controls over the IT systems of the Bank, we involved
As a result, there is a high degree of reliance and dependency on such our technology specialists to understand the IT environment, IT
IT systems for the financial reporting process of the Bank. infrastructure and IT systems.

Appropriate IT general controls and IT application controls are required We evaluated and tested relevant IT general controls and IT application
to ensure that such IT systems can process the data as required, controls of the ‘in-scope’ IT systems identified as relevant for our audit
completely, accurately, and consistently for reliable financial reporting. of the standalone financial statements and financial reporting process
of the Bank.
We identified certain key IT systems (‘in-scope’ IT systems) which have
an impact on the financial reporting process, and the related control On such ‘in-scope’ IT systems, we have tested key IT general controls
testing as a key audit matter because of the high level of automation, and evaluated the same with respect to the following domains:
significant number of systems being used by the Bank for processing
 Program change management, which includes that program
financial transactions, and the complexity of the IT architecture.
changes are moved to the production environment as per defined
As described in Note 21 of Schedule 18B to the Standalone Financial approvals and relevant segregation of environment is ensured.
Statements, a supervisory action was undertaken against the Bank
 User access management, which includes user access
under Section 35A of the Banking Regulation Act, 1949 by the Reserve
provisioning, de-provisioning, access review, password
Bank of India (RBI) subsequent to the year end on 24 April 2024 arising
management, sensitive access rights and segregation of duties
from an IT examination conducted by the RBI, and the related reports
to ensure that privilege access to applications and its related
containing its observations was issued by the RBI.
operating system and databases in the production environment
were granted only to authorized personnel.

 Other areas under the IT control environment which includes

backup management, business continuity, disaster recovery
drill in-line with the bank’s disaster recovery plan, incident
management, batch processing and monitoring.

Integrated Annual Report 2023-24

 99 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

Key Audit Matter How our audit addressed the key audit matter

We also evaluated the design and tested the operating effectiveness

of key IT application controls within key business processes, which
included testing automated calculations, automated accounting
processes, system interfaces, system reconciliation controls and key
system generated reports, as applicable.

Where control deficiencies were identified related to internal controls

over financial reporting, we tested compensating controls or performed
alternative audit procedures, where necessary.

We evaluated the management’s assessment of the observations noted

by the RBI arising in their IT examination report and the impact of those
observations on the standalone financial statements and on internal
controls with reference to financial statements and also communicated
with those charged with governance and sought their assessment of
the impact of the observations.

5. The following Key Audit Matter was included in the audit report dated 27 April 2024 containing an unmodified audit opinion on the special purpose
financial statements of Kotak Mahindra Investments Limited, a subsidiary of the Holding Company issued by Kalyaniwalla & Mistry LLP, an independent
firm of Chartered Accountants reproduced by us as under:

Provision for Non-performing assets (NPA) in respect of Loans and Advance (including credit substitutes)

Key Audit Matter How our audit addressed the key audit matter

Gross Non- Performing Assets aggregating to Rs. 2,704.57 lakhs and The key audit procedures performed:
associated provision for non- performing assets (‘NPA Provision’)
aggregating to Rs. 1,776.64 lakhs are significant to the financial  We understood and evaluated the design effectiveness and
statements and involves judgement around the calculation of the NPA tested the operating effectiveness of the key controls over the
provision. identification of NPAs and computation of NPA provision.

The Reserve Bank of India’s (‘RBI’) guidelines prescribe the prudential  We independently assessed the appropriateness of NPA
norms for identification and classification of NPAs and the minimum provisioning methodologies and policies followed by the
provision required for such assets. The Company is also required Management and verified the compliance of the same vis a vis
to apply its judgement to determine the identification and provision RBI norms.
required against NPAs by applying quantitative as well as qualitative
 Performing other procedures including substantive audit
factors. The provisioning for identified NPAs is estimated based on
procedures covering the identification of NPAs by the Company.
ageing and classification of NPAs, recovery estimates, value of security
These procedures included: Reviewing borrower accounts and
and other qualitative factors and is subject to the minimum provisioning
other related information on a sample basis, selected based on
norms specified by RBI.
quantitative and qualitative risk factors.
The Company has detailed its accounting policy in this regard in
 Review of the security pledged to the Company for a selected
Significant accounting policies disclosed in the financial statements.
sample by verifying the valuation reports etc. for the collateral.
Since the identification of NPAs and provisioning for advances require
significant level of estimation and given its significance to the overall  With respect to provisioning of advances, we recomputed the
audit, we have ascertained identification and provisioning for NPAs as NPA provision to ensure arithmetical accuracy and compliance
a key audit matter. with RBI guidelines.
100

6. The following Key Audit Matter was included in the audit report dated 26 April 2024 containing an unmodified audit opinion on the special purpose
financial statements of Kotak Securities Limited, a subsidiary of the Holding Company issued by Deloitte Haskins & Sells LLP, an independent firm of
Chartered Accountants reproduced by us as under:

Key Information technology {IT} systems used in financial reporting process

Key Audit Matter Auditor's Response

The Company’s operational and financial processes are dependent on Principal Audit procedures:
IT systems due to large volume of transactions that are processed daily.
We involved our IT specialists to obtain an understanding of the
The Company uses Oracle system as the General Ledger for overall entity’s IT related control environment. Furthermore, we conducted a
financial reporting which is interfaced with other systems that process risk assessment identified IT applications, databases and operating
transactions, which impacts significant account balances. systems that are relevant to our audit.

The Company relies on automated processes and controls for For the key IT systems relevant to financial reporting, our areas of audit
recordings of its transactions and accordingly our audit was focused focus included Access Security (including controls over privileged
on Key IT systems and controls due to pervasive impact on the financial access), Program Change controls and network operations. In
statements. Particulars:

 we obtained an understanding of the entity’s IT environment and

key changes if any during the audit period that may be relevant to
the audit;

 we tested the design, implementation and operative effectiveness

of the general IT control over the key IT systems that are critical
to the financial reporting. This included evaluation of entity’s
controls to ensure segregation of duties and access rights being
provisioned / modified based on duly approved requests, access
for exit cases being revoked in a timely manner and access of
all users being re-certified during the period of audit. Further,
controls related to program change were evaluated to verify
whether the changes were approved, tested in an environment
that was segregated from production and moved to production
by appropriate users;

 we tested key automated business cycle controls, related

interfaces and logics for system generated reports relevant to
the audit for evaluating completeness and accuracy;

 we also tested the controls over network segmentation, restriction

of remote access to the entity’s network, controls over firewall
configurations and mechanisms implemented by the entity to
prevent, detect and respond to network security incidents; and we
tested compensating controls or performed alternate procedures
to assess whether there were any unaddressed Significant IT
risks that would materially impact the financial statements.

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101 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

7. The following Key Audit Matters were included in the audit report dated 25 April 2024 containing an unmodified audit opinion on the special purpose
financial statements of Kotak Mahindra Prime Limited, a subsidiary of the Holding Company, issued by joint auditors M M Nissim & Co LLP and
Mukund M. Chitale & Co., an independent firm of Chartered Accountants reproduced by us as under:

Assessment of Provision for Non-Performing Assets (NPA) in respect of Loans and Advances

Key Audit Matter How our audit addressed the key audit matter

(Refer Notes 14, 19 and 25 of the special purpose financial Our audit procedures on the NPA provision included the following –
statements)
i) We performed end to end process walkthroughs to identify
The loan balances (including credit substitutes) towards Vehicle the key systems, applications and controls used in the NPA
Finance, Loans against Securities / Collaterals, Structured Loans, provisioning processes.
Personal and other Loans aggregates to Rs. 3,456,715 lakhs, which also
include Gross Non-Performing Assets Rs.67,319 lakhs. These balances ii) We understood and evaluated the design effectiveness and
are significant to the special purpose financial statements and involves tested the operating effectiveness of the key controls over the
judgement around the calculation of the NPA provision of Rs. 39,412 assessment and computation of NPA provision.
lakhs.
iii) We independently assessed the appropriateness of NPA
NPA provision represents management’s estimate of losses incurred provisioning policies and methodologies followed by the
within the loan portfolios at the balance sheet date and are inherently Management.
judgmental.
iv) For sample of loans across the portfolio, we recomputed the NPA
NPA provision is calculated in accordance with the NPA policy which provision to ensure arithmetical accuracy and compliance with
is in compliance with the Reserve Bank of India (RBI) guidelines read the NPA policy as referred to in the Component’s special purpose
with the notifications issued by the RBI. Qualitative factors like nature financial statements.
of loan, deterioration in credit quality, reduction in the value of collateral,
v) We evaluated the adequacy of presentation and disclosures
uncertainty over realisability of collateral, erosion over time and other
in relation to NPA provisions in the special purpose financial
related factors are taken into consideration to assess need and extent
statements.
of NPA provision.

Given the significant judgement and the complexity of audit procedures

involved, we determined this to be a key audit matter.

8. The following Key Audit Matter was reported to us by the auditor Price Waterhouse Chartered Accountants LLP, an independent firm of Chartered
Accountants of Kotak Mahindra Asset Management Company Limited, a subsidiary of the Holding Company vide their communication dated 29 April
2024 which are reproduced by us as under:

Revenue Recognition – Management fees and portfolio management services

Key Audit Matter How our audit addressed the key audit matter

The Company recognizes revenue from management fees from Our audit procedures included:
mutual fund schemes and Portfolio Management Services rendered to
customers, the amounts of which are material to the special purpose  Obtained understanding of the revenue recognition in respect of
standalone financial statements. Management fees and portfolio management services

There are inherent risks of material misstatement since management  Evaluated the design effectiveness and tested the operating
fee / portfolio management services fee depending upon contractual effectiveness of relevant controls in place in relation to revenue
terms. Accordingly, recognition of revenue is considered to be a key recognition of Management fees and Portfolio Management
audit matter. Services.

 Reviewed the terms of the contracts for Management fees and

Portfolio Management Services.

 Obtained the computation details of Management fees and

portfolio management services from the Management and
recomputed the same on a test check basis.

 Verified invoices raised by the Company and traced collection to

the bank statements on a test check basis.
102

Key Audit Matter How our audit addressed the key audit matter

 Verified that changes in the rate structure of the management

fee and portfolio management services with the approvals of the
authorised personnel to ensure that the invoices are raised at the
correct amounts.

 Verified the management fees on scheme level with the certificate

issued by the statutory auditors of scheme mutual fund.

 In respect of management fees and portfolio management

fee receivable at the end of the year tested, the subsequent
realisation on a test check basis.

Basis the above procedures performed, we did not note any exceptions
with respect to the management fees and portfolio management
services.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON
9. The Holding Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the
Basel III – Pillar 3 disclosures and Bank’s Annual Report but does not include the consolidated financial statements and our auditor’s report thereon.
The other information included is expected to be made available to us after the date of this auditor’s report except Basel III – Pillar 3 disclosures which
was made available prior to the date of our auditor’s report.

Our opinion on the Consolidated Financial Statements does not cover the other information and we will not express any form of assurance conclusion
thereon.

In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information identified above when it
becomes available and, in doing so, consider whether the other information is materially inconsistent with the Consolidated Financial Statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those
charged with governance and take appropriate action as applicable under the relevant laws and regulations.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE CONSOLIDATED FINANCIAL STATEMENTS
10. The accompanying Consolidated Financial Statements have been approved by the Bank’s Board of Directors. The Bank’s Board of Directors are
responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these Consolidated Financial
Statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows
of the Group including its associates, in accordance with the accounting principles generally accepted in India, including the Accounting Standards
specified under section 133 of the Act read with the Companies (Accounting Standard) Rules, 2021, provisions of section 29 of the Banking Regulation
Act, 1949 and circulars and guidelines issued by the Reserve Bank of India from time to time (‘the RBI Guidelines’). The respective Board of Directors
of the Holding Company and the subsidiary companies included in the Group and its associate companies are responsible for maintenance of
adequate accounting records in accordance with the provisions of the Act and the RBI guidelines for safeguarding of the assets of the Group and of
its associates and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
Consolidated Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have
been used for the purpose of preparation of the Consolidated Financial Statements by the Management and Directors of the Holding Company, as
aforesaid.

11. In preparing the Consolidated Financial Statements, the respective Board of Directors of the companies included in the Group and of its associates
are responsible for assessing the ability of the respective companies included in the Group and of its associates, to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors
either intends to liquidate the companies included in the Group and its associates or to cease operations, or has no realistic alternative but to do so.

12. The respective Board of Directors are also responsible for overseeing the financial reporting process of the subsidiary companies included in the
Group and of its associates.

Integrated Annual Report 2023-24

103 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

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

14. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

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

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has adequate internal
financial controls with reference to Consolidated Financial Statements and the operating effectiveness of such controls;

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management;

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

 Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities within the Group and its associates, to express an
opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the audit of financial
statement of such entities included in the Consolidated Financial Statements, of which we are the independent auditors. For the other entities
included in the Consolidated Financial Statements, which have been audited by the other auditors, such other auditors remain responsible for
the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

15. We communicate with those charged with governance of the Holding Company and such other entities included in the Consolidated Financial
Statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.

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

17. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of
the Consolidated Financial Statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

OTHER MATTER
18. We did not audit the financial statements of 18 subsidiaries, whose financial statements reflect total assets of ₹ 91,263.13 crores (before consolidation
adjustments) and net assets of ₹ 28,916.06 crores (before consolidation adjustments) as at 31 March 2024, total revenues of ₹ 13,913.47 crores
(before consolidation adjustments) and net cash flows amounting to ₹ 4,156.67 crores for the year ended on that date, as considered in the
Consolidated Financial Statements. The Consolidated Financial Statements also include the Group’s share of net profit of ₹ 236.38 crores for the
year ended 31 March 2024 in respect of 2 associates whose financial statements have not been audited by us. These financial statements have been
audited by other auditors whose reports have been furnished to us by the management and our opinion on the Consolidated Financial Statements,
in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and associates, and our report in terms of sub-section
(3) of section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, and associates, is based solely on the reports of the other auditors.
104

Further, of these subsidiaries, 5 subsidiaries are located outside India, whose annual financial statements have been prepared in accordance with
accounting principles generally accepted in their respective countries, and which have been audited by other auditors under the respective auditing
standards used by the component auditors, as applicable in their respective countries. The Holding Company’s management has converted the
financial statements of such subsidiaries from accounting principles generally accepted in their respective countries to accounting principles generally
accepted in India. An Independent firm of Chartered Accountants appointed by the Holding Company’s management in India have audited these
conversion adjustments made by the Holding Company’s management. Our opinion, in so far as it relates to the amounts and disclosures included
in respect of these subsidiaries, is based on the audit reports of other auditors and the conversion adjustments prepared by the management of the
Holding Company and audited by the Independent firm of Chartered Accountants appointed by the Holding Company’s management in India.

Our opinion above on the Consolidated Financial Statements, and our report on Other Legal and Regulatory Requirements below, is not modified in
respect of the above matters with respect to our reliance on the work done by and the reports of the other auditors.

19. Further, one of the subsidiary company whose financial statement reflects total assets of ₹ 81,649.97 crores (before consolidation adjustments) and
net assets of ₹ 5,863.23 crores (before consolidation adjustments) as at 31 March 2024, total revenues of ₹ 26,867.39 crores (before consolidation
adjustments) and net cash flows of ₹ (70.98) crores for the year ended 31 March 2024, as considered in the Consolidated Financial Statements, which
have been audited by Price Waterhouse LLP, one of the joint auditors of the Bank, along with other joint auditors of the subsidiary company, whose
reports have been furnished to us by the management and our opinion on the Consolidated Financial Statements, in so far as it relates to the amounts
and disclosures included in respect of these subsidiaries and associates, and our report in terms of sub-section (3) of section 143 of the Act, in so far
as it relates to the aforesaid subsidiary, is based solely on the reports of the joint auditors of subsidiary company.

Our opinion above on Consolidated Financial Statements is not modified in respect of this matter.

20. Further, one of the subsidiary company whose financial statement reflects total assets of ₹ 1,428.74 crores (before consolidation adjustments)
and net assets of ₹ 864.58 crores (before consolidation adjustments) as at 31 March 2024, total revenues of ₹ 407.70 crores (before consolidation
adjustments) and net cash flows of ₹ (129.31) crores for the year ended 31 March 2024, as considered in the Consolidated Financial Statements,
which have been audited by Price Waterhouse LLP, one of the joint auditors of the Bank, whose reports have been furnished to us by the management
and our opinion on the Consolidated Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these
subsidiaries and associates, and our report in terms of sub-section (3) of section 143 of the Act, in so far as it relates to the aforesaid subsidiary, is
based solely on the reports of the auditor of subsidiary company.

Our opinion above on Consolidated Financial Statements is not modified in respect of this matter.

21. The following other matter paragraph has been included in the audit report of Kotak Mahindra Life Insurance Company Limited (‘KLIFE’) the subsidiary
of the Bank, issued by the joint auditors of KLIFE vide their report dated 26 April 2024:

“The actuarial valuation of liabilities for policies in force and for policies in respect of which premium has been discontinued but liability exists as at
March 31, 2024 is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”), which has been certified by the Appointed Actuary
in accordance with regulations, as mentioned in the paragraph 10 below. Accordingly, we have relied upon Appointed Actuary’s certificate for forming
our opinion on the financial statements of the Company. Our opinion is not modified in respect of this matter.”

The following paragraph ‘paragraph 10’ was included in the audit report of Kotak Mahindra Life Insurance Company Limited, reproduced by us as
under:

“The actuarial valuation of liabilities for policies in force and for policies in respect of which premium has been discontinued but liability exists as at
March 31, 2024 is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”). The actuarial valuation of these liabilities as at
March 31, 2024 has been duly certified by the Appointed Actuary and in his opinion, the actuarial liabilities have been calculated in accordance with
generally accepted actuarial principles, the requirements of the Insurance Act, 1938, Insurance Act (as amended from time to time), relevant IRDA
regulations and the Actuarial Practice Standards and Guidance Notes issued by the Institute of Actuaries of India in concurrence with the IRDAI.”

Our opinion is not modified in respect of this matter.

22. The following other matter paragraph has been included in the audit report of Kotak Mahindra General Insurance Company Limited (‘KMGICL’), the
subsidiary of the Bank, issued by the joint auditors of KMGICL vide their report dated 24 April 2024:

“Pursuant to IRDAI (Appointed Actuary) Regulations 2017, the actuarial valuation of liabilities in respect of claims Incurred But Not Reported (“IBNR”),
claims Incurred But Not Enough Reported (“IBNER”) and Premium Deficiency Reserve (“PDR”) as at March 31, 2024, has been duly certified by the
Appointed Actuary. They have also certified that assumptions used for such valuation are appropriate and in accordance with the guidelines and
norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. Accordingly, we have relied upon the aforesaid
certificate from the Appointed Actuary while forming our opinion on the financial statements of the Company.”

Our opinion is not modified in respect of this matter.

Integrated Annual Report 2023-24

105 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

24. In our opinion and to the best of our information and according to the explanations given to us, the provisions of Section 197 of the Act are not
applicable to the Bank by virtue of Section 35B(2A) of the Banking Regulation Act, 1949. Accordingly, the reporting under Section 197(16) of the Act
regarding payment/ provision for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197
read with Schedule V to the Act, is not applicable.

Based on the consideration of audit report of the statutory auditors of Kotak Mahindra Life Insurance Company Limited and Kotak Mahindra General
Insurance Company Limited, the subsidiary companies, the remuneration paid to their directors during the year ended 31 March 2024 was in
accordance with the provisions of section 197 of the Act, read with section 34A of the Insurance Act, 1938. Further, based on the consideration of
audit reports of the statutory auditors of twelve subsidiaries reported to us namely, Kotak Securities Limited, Kotak Mahindra Trusteeship Services
Limited, Kotak Mahindra Capital Company Limited, Kotak Mahindra Trustee Company Limited, Kotak Mahindra Prime Limited and Kotak Mahindra
Pension Fund Limited, BSS Microfinance Limited, Kotak Mahindra Asset Management Company Limited, Kotak Mahindra Investments Limited, Kotak
Infrastructure Debt Fund Limited, Sonata Finance Private Limited, Kotak Alternate Asset Managers Limited, the remuneration paid to their directors
during the year ended 31 March 2024 was in accordance with the provisions of section 197 of the Act.

Based on the consideration of audit report of the statutory auditors of IVY Products Intermediaries Limited, subsidiary company, Phoenix ARC Private
Limited and Infina Finance Private Limited, the associate companies, the provisions of section 197 read with Schedule V of the Act, are not applicable
to it for the year ended 31 March 2024.

25. Further, as required by section 143 (3) of the Act, based on our audit, we report, to the extent applicable, that:

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

b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid Consolidated Financial Statements have been
kept so far as it appears from our examination of those books and the reports of the other auditors; except for the matters stated in paragraph
25(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);

c) The Consolidated Balance Sheet, the Consolidated Profit and Loss Account, and the Consolidated Cash Flow Statement dealt with by this
report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;

d) In our opinion, the aforesaid Consolidated Financial Statements comply with the Accounting Standards specified under section 133 of the Act
read with the Companies (Accounting Standard) Rules, 2021, to the extent they are not inconsistent with the accounting policies prescribed by
RBI;

e) On the basis of the written representations received from the directors of the Holding Company and taken on record by the Board of Directors
of the Holding Company and the reports of the statutory auditors of its subsidiary companies and associate companies incorporated in India,
none of the directors of the Group companies and its associate companies incorporated in India, are disqualified as on 31 March 2024 from
being appointed as a director in terms of section 164(2) of the Act;

f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 25(b)
above on reporting under Section 143(3)(b) and paragraph 25(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 (as amended);.

g) With respect to the adequacy of the internal financial controls with reference to the Consolidated Financial Statements of the Holding Company,
its subsidiary and its associate companies incorporated in India and the operating effectiveness of such controls, refer to our separate report
in ‘Annexure A’ wherein we have expressed an unmodified opinion; and

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us and based on the
consideration of audit reports of other auditors on separate financial statements of such subsidiaries, associates, as noted in the “Other
Matters” paragraph:

i. The Consolidated Financial Statements disclose the impact of pending litigations as at 31 March 2024 on the consolidated financial
position of the Group, and its associates as detailed in Refer - Schedule 12.I, Schedule 17 - Note 2(X) and Schedule 17 - Note 9 to the
Consolidated Financial Statements;
106

ii. Provision has been made in the Consolidated Financial Statements as at 31 March 2024, as required under the applicable law or the
Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts as at 31March 2024
as detailed in Refer (a) - Schedule 12.II, 12.V(i), 12.V(ii), Schedule 17 – Note 2(G), Schedule 17 – Note 2(X) and Schedule 17 – Note 7
and Note 9 to the Consolidated Financial Statements and in respect of such items as it relates to the Schedule 17 – Note 19 to the
Consolidated Financial Statements in respect of the Group’s share of net profit of its associates;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding
Company, and its subsidiary companies, and associate companies incorporated in India, as applicable, during the year ended 31 March
2024.

iv. a. The respective Managements of the Bank, subsidiaries and its associates which are companies incorporated in India whose
financial statements have been audited under the Act have represented to us, and the other auditors of such subsidiaries and
associates respectively that, to the best of their knowledge and belief, other than as disclosed in Schedule 17 – Note 24, no funds
(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Bank or any of such subsidiaries and associates to or in any other
person(s) or entity(ies), including foreign entities (‘Intermediaries’), with the understanding, whether recorded in writing or otherwise,
that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Bank or any of such subsidiaries and associates (‘Ultimate Beneficiaries’) or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries;

b. The respective Managements of the Bank, its subsidiaries and associate which are companies incorporated in India whose
financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries and
associates respectively that, to the best of their knowledge and belief, other than as disclosed in Schedule 17 – Note 24, no funds
(which are material either individually or in the aggregate) have been received by the Company or any of such subsidiaries and
associates from any person(s) or entity(ies), including foreign entities (‘Funding Parties’), with the understanding, whether recorded
in writing or otherwise, that the Bank or any of such subsidiaries and associates shall, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c. Based on the audit procedures, that which we have has been considered reasonable and appropriate in the circumstances,
performed by us and those performed by the auditors of the subsidiaries and associates which are companies incorporated in
India whose financial statements have been audited under the Act, nothing has come to our or other auditor’s notice that has
caused us or the other auditors to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material
misstatement.

v. The dividend declared and paid during the year by the Bank and its subsidiaries and associates is in compliance with Section 123 of the
Act.

vi. Based on our examination, which included test checks, and that performed by respective auditors of the subsidiaries and associates,
which are the companies incorporated in India whose financial statements have been audited under the Act, except for the instances
mentioned below in respect of the Bank and its subsidiaries and associates, the Bank, its subsidiaries and associates have used
accounting software for maintaining books of account which have a feature of recording audit trail (edit log) and that has operated
throughout the year for all relevant transactions recorded in the software.

Description of Instances Number of instances

Instances of inability of the auditor to comment on certain One instance of Bank, twelve instances of twelve subsidiaries and
software in the absence of service organization controls auditors’ one instance of one associate
report covering the audit trail requirement for the period 01 April
2023 to 31 March 2024.
Instances where the audit trail feature is either not enabled, or Three instances of two subsidiaries and one instance of one
feature is enabled but not operated for some applications used associate
for maintaining records relating to certain transactions for part
of the year.
Instances where audit trail has not been enabled at the database Six instances of Bank, six instances of three subsidiaries and
level to log any direct data changes for certain accounting certain instances of one subsidiary
software.

Integrated Annual Report 2023-24

107 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

During the course of performing our procedures, for the accounting software other than the aforesaid software/ databases where the
question of our commenting does not arise, we and respective auditors of the above referred subsidiaries and associates did not notice
any instance of the audit trail feature being tampered with.

For Price Waterhouse LLP For KKC & Associates LLP

Chartered Accountants Chartered Accountants
(formerly Khimji Kunverji & Co LLP)
Firm Registration Number: 301112E/ E300264 Firm Registration Number: 105146W/W100621

Russell I Parera Gautam Shah

Partner Partner
Membership Number: 042190 Membership Number: 117348
UDIN: 24042190BKFFOR5344 UDIN: 24117348BKBZWL1408

Place : Mumbai Place : Mumbai

Date : 04 May 2024 Date : 04 May 2024
108

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS OF KOTAK
MAHINDRA BANK LIMITED FOR THE YEAR ENDED 31 MARCH 2024
REFERRED TO IN PARAGRAPH 25(g) UNDER ‘REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS’ SECTION OF OUR REPORT OF
EVEN DATE
Independent Auditor’s Report on the Internal Financial Controls with reference to the aforesaid Consolidated Financial Statements under
Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)
1. In conjunction with our audit of the consolidated financial statements of Kotak Mahindra Bank Limited (‘the Holding Company’) and its subsidiaries
(the Holding Company and its subsidiaries together referred to as ‘the Group’), and its associates as at and for the year ended 31 March 2024, we have
audited the internal financial controls with reference to consolidated financial statements of the Holding Company, its subsidiary companies and its
associate companies, which are companies covered under the Act, as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls
2. The respective Board of Directors of the Holding Company, its subsidiary companies and its associate companies, to whom reporting under clause (i)
of sub-section 143 of the Act in respect of adequacy of the internal control with reference to financial statements is applicable, which are companies
incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting
criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting (‘the Guidance Note’) issued by the Institute of Chartered Accountants of India (‘ICAI’). These
responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable
financial information, as required under the Act.

Auditor’s Responsibility for the Audit of the Internal Financial Controls with Reference to Consolidated Financial Statements
3. Our responsibility is to express an opinion on the internal financial controls with reference to Consolidated financial statements of the Holding
Company, its subsidiary companies and its associate companies, as aforesaid, based on our audit. We conducted our audit in accordance with
the Guidance Note issued by the ICAI and the Standards on Auditing (‘SAs’) issued by the ICAI and prescribed under Section 143(10) of the Act, to
the extent applicable to an audit of internal financial controls. Those SAs and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Consolidated
Financial Statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Consolidated
Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Consolidated Financial Statements
includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the
“Other Matters” paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference
to the Consolidated Financial Statements.

Meaning of Internal Financial Controls with Reference to the Consolidated Financial Statements
6. A Bank’s internal financial controls with reference to the Consolidated Financial Statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A Bank’s internal financial controls with reference to Consolidated Financial Statements include those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the Bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the Bank are being made only in accordance with authorisations
of management and directors of the Bank; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition,
use, or disposition of the Bank’s assets that could have a material effect on the Consolidated Financial Statements.

Inherent Limitations of Internal Financial Controls with Reference to the Consolidated Financial Statements
7. Because of the inherent limitations of internal financial controls with reference to Consolidated Financial Statements, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections
of any evaluation of the internal financial controls with reference to Consolidated Financial Statements to future periods are subject to the risk that
the internal financial controls with reference to consolidated financial statements may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

Integrated Annual Report 2023-24

109 Financial Statements
Independent Auditor’s Report on Consolidated Financial Statements

Opinion
8. In our opinion and based on the consideration of the reports of the other auditors on internal financial controls with reference to Consolidated
Financial Statements of the subsidiary companies and associate companies, which are companies covered under the Act, have in all material
respects, adequate internal financial controls with reference to Consolidated Financial Statements and such controls were operating effectively
as at 31 March 2024, based on the internal control over financial reporting criteria established by the Group considering the essential components
of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered
Accountants of India.

Other Matters
9. Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference
to the Consolidated Financial Statements in so far as it relates to fifteen subsidiary companies and two associate companies, which are companies
incorporated in India, is based on the corresponding reports of the auditors of such companies incorporated in India.

Our opinion is not modified in respect of this matter.

10. The following other matter paragraph has been included in the Annexure ‘A’ to the audit report of Kotak Mahindra Life Insurance Company Limited
(‘KLIFE’) the subsidiary of the Bank, issued by the joint auditors of KLIFE vide their report dated 26 April 2024:

“The actuarial valuation of liabilities for policies in force and for policies in respect of which premium has been discontinued but liability exists as at
31st March 2024 is required to be certified by Appointed Actuary as per the regulations and has been relied upon by us, as mentioned in para 4 and
10 of our audit report on the financial statements for the year ended March 31, 2024.Accordingly, our opinion on the internal financial control over
financial reporting does not include reporting on the operating effectiveness of the management’s internal controls over the valuation and accuracy
of the aforesaid actuarial valaution.”

The following paragraph ‘paragraph 4’ was included in the audit report of Kotak Mahindra Life Insurance Company Limited, reproduced by us as under:

“The actuarial valuation of liabilities for policies in force and for policies in respect of which premium has been discontinued but liability exists as
at 31st March 2024 is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”), which has been certified by the Appointed
Actuary in accordance with regulations, as mentioned in the paragraph 10 below. Accordingly, we have relied upon Appointed Actuary’s certificate for
forming our opinion on the financial statements of the Company. Our opinion is not modified in respect of this matter.”

The following paragraph ‘paragraph 10’ was included in the audit report of Kotak Mahindra Life Insurance Company Limited, reproduced by us as under:

“The actuarial valuation of liabilities for policies in force and for policies in respect of which premium has been discontinued but liability exists as at
31st March 2024 is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”). The actuarial valuation of these liabilities as at
March 31, 2024 has been duly certified by the Appointed Actuary and in his opinion, the actuarial liabilities have been calculated in accordance with
generally accepted actuarial principles, the requirements of the Insurance Act, 1938, Insurance Act (as amended from time to time), relevant IRDA
regulations and the Actuarial Practice Standards and Guidance Notes issued by the Institute of Actuaries of India in concurrence with the IRDAI.”

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

11. The following other matter paragraph has been included in the Annexure ‘A’ to the audit report of Kotak Mahindra General Insurance Company Limited,
(‘KMGICL’) the subsidiary of the Bank, issued by the joint auditors of KMGICL vide their report dated 24 April 2024:

“Pursuant to IRDAI (Appointed Actuary) Regulations 2017, the actuarial valuation of liabilities in respect of claims Incurred But Not Reported (“IBNR”),
claims Incurred But Not Enough Reported (“IBNER”) and Premium Deficiency Reserve (“PDR”) as at March 31, 2024, has been duly certified by the
Appointed Actuary. They have also certified that assumptions used for such valuation are appropriate and in accordance with the guidelines and
norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. We have relied upon the aforesaid certificate from the
Appointed Actuary while forming our opinion on the financial statements of the Company as mentioned in Other Matter paragraph in our audit report
on the financial statements for the year ended March 31, 2024. Accordingly, our opinion on the internal financial controls with reference to financial
statements does not include reporting on the adequacy and operating effectiveness of the internal control over the valuation and accuracy of the
aforesaid actuarial liabilities.”

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

For Price Waterhouse LLP For KKC & Associates LLP

Chartered Accountants Chartered Accountants
(formerly Khimji Kunverji & Co LLP)
Firm Registration Number: 301112E/ E300264 Firm Registration Number: 105146W/W100621

Russell I Parera Gautam Shah

Partner Partner
Membership Number: 042190 Membership Number: 117348
UDIN: 24042190BKFFOR5344 UDIN: 24117348BKBZWL1408

Place : Mumbai Place : Mumbai

Date : 04 May 2024 Date : 04 May 2024
110

Consolidated Balance Sheet

as at 31st March, 2024

(₹ in thousands)

As at As at
Schedule
31st March, 2024 31st March, 2023

CAPITAL AND LIABILITIES

Capital 1 9,939,604 14,932,783
Employees' Stock Options (Grants) Outstanding 792,938 603,058
Reserves and Surplus 2 1,288,984,358 1,107,608,142
Deposits 3 4,452,687,613 3,612,726,221
Borrowings 4 751,056,062 570,339,234
Policyholders' Funds 733,755,969 579,794,726
Other Liabilities and Provisions 5 439,453,046 318,293,184
Total 7,676,669,590 6,204,297,348
ASSETS
Cash and Balances with Reserve Bank of India 6 362,867,354 199,852,047
Balances with Banks and Money at Call and Short Notice 7 289,196,520 229,401,424
Investments 8 2,464,457,213 1,953,379,702
Advances 9 4,303,515,813 3,591,074,627
Fixed Assets 10 25,625,078 22,612,045
Other Assets 11 221,530,045 199,839,973
Goodwill on Consolidation 9,477,567 8,137,530
Total 7,676,669,590 6,204,297,348
Contingent Liabilities 12 7,340,573,761 4,676,403,766
Bills for Collection 474,677,060 446,552,442
Significant Accounting Policies and Notes to Accounts forming part of the Consolidated 17
Financial Statements
The schedules referred to above form an integral part of this Consolidated Balance Sheet

As per our report of even date attached. For and on behalf of the Board of Directors

For KKC & Associates LLP C S Rajan Ashok Vaswani

Chartered Accountants Chairman Managing Director and
(formerly Khimji Kunverji & Co LLP) DIN: 00126063 Chief Executive Officer
Firm Registration No. 105146W/W100621 DIN: 10227550

Gautam Shah Shanti Ekambaram Uday Khanna

Partner Deputy Managing Director Director
Membership No. 117348 DIN: 00004889 DIN: 00079129

For Price Waterhouse LLP Devang Gheewalla Avan Doomasia

Chartered Accountants President and Senior Executive Vice President and
Firm Registration No. 301112E/E300264 Group Chief Financial Officer Company Secretary
Membership No. 045993 FCS. No. 3430
Russell I Parera
Partner
Membership No. 042190

Mumbai
4th May, 2024

Integrated Annual Report 2023-24

 111 Financial Statements
Consolidated Balance Sheet & Profit and Loss Account

Consolidated Profit and Loss Account1

for the year ended 31st March, 2024

(₹ in thousands)
For the year ended For the year ended
Schedule
31st March, 2024 31st March, 2023

I. INCOME
Interest Earned 13 562,366,323 421,510,612
Other Income 14 380,372,782 259,909,660
Total 942,739,105 681,420,272
II. EXPENDITURE
Interest Expended 15 225,672,371 144,111,322
Operating Expenses 16 458,708,240 336,450,287
Provisions and Contingencies (Refer Note 7.A - Schedule 17) 78,590,241 53,054,242
Total 762,970,852 533,615,851
III. PROFIT
Net Profit for the year 179,768,253 147,804,421
Add: Share in profit / (loss) of Associates 2,363,822 1,445,675
Consolidated Profit for the year attributable to the Group 182,132,075 149,250,096
Add : Balance in Profit and Loss Account brought forward from previous year 635,331,703 524,804,324
Total 817,463,778 674,054,420
IV. APPROPRIATIONS
Transfer to Statutory Reserve 34,454,000 27,348,300
Transfer to Special Reserve u/s 45 IC of RBI Act, 1934 2,959,203 2,211,161
Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 1,250,000 1,150,000
Transfer to Debenture Redemption Reserve 75,000 161,000
Transfer to Capital Redemption Reserve 5,000,000 -
Transfer to Capital Reserve - 9,900
Transfer to / (from) Investment Reserve Account 8,316,321 -
Transfer to Investment Fluctuation Reserve Account 12,000,000 5,253,150
Dividend 3,366,210 2,589,206
Balance carried over to Balance Sheet 750,043,044 635,331,703
Total 817,463,778 674,054,420
V. EARNINGS PER SHARE (Refer Note 10 - Schedule 17)
Basic (₹) 91.45 74.96
Diluted (₹) 91.45 74.94
Face value per share (₹) 5.00 5.00
Significant Accounting Policies and Notes to Accounts forming part of the Consolidated Financial Statements 17
The schedules referred to above form an integral part of this Consolidated Profit and Loss Account

As per our report of even date attached. For and on behalf of the Board of Directors

For KKC & Associates LLP C S Rajan Ashok Vaswani

Chartered Accountants Chairman Managing Director and
(formerly Khimji Kunverji & Co LLP) DIN: 00126063 Chief Executive Officer
Firm Registration No. 105146W/W100621 DIN: 10227550

Gautam Shah Shanti Ekambaram Uday Khanna

Partner Deputy Managing Director Director
Membership No. 117348 DIN: 00004889 DIN: 00079129

For Price Waterhouse LLP Devang Gheewalla Avan Doomasia

Chartered Accountants President and Senior Executive Vice President and
Firm Registration No. 301112E/E300264 Group Chief Financial Officer Company Secretary
Membership No. 045993 FCS. No. 3430
Russell I Parera
Partner
Membership No. 042190

Mumbai
4th May, 2024
1
GRI 201-1
112

Consolidated Cash Flow Statement

for the year ended 31st March, 2024

(₹ in thousands)

Year Ended Year Ended

31st March, 2024 31st March, 2023

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before share in profit / (loss) of Associates 179,768,253 147,804,421
Add: Provision for tax 58,865,554 48,657,419
Net Profit before taxes 238,633,807 196,461,840

Adjustments for :-
Employee Stock Options Expense 449,476 456,424
Depreciation on Group's property 7,917,534 5,992,592
Provision for Diminution / (Write back) in the value of Investments 742,296 (181,638)
(Profit) / Loss on revaluation of Investments (net) (46,437,867) 14,077,645
(Profit) / Loss on sale of Investments (net) (27,735,517) (9,068,640)
Amortisation of Premium on Investments 2,714,066 5,776,307
Provision for Non Performing Assets, Standard Assets and Other Provisions 18,982,391 4,578,461
Profit on sale of Fixed assets (71,379) (107,784)
195,194,807 217,985,207
Adjustments for :-
(Increase) / Decrease in Investments - Available for Sale, Held for Trading and Stock-in-Trade (363,267,540) (221,348,255)
(Increase) in Advances (708,186,386) (551,423,212)
(Increase) / Decrease in Other Assets (18,755,386) 22,496,950
Increase in Deposits 839,961,392 511,857,293
Increase in Policyholders' Funds 153,961,243 73,126,825
Increase / (Decrease) in Other Liabilities and Provisions 118,317,766 (17,465,333)
Sub-total 22,031,089 (182,755,732)
Direct Taxes Paid (60,375,926) (47,653,776)
NET CASH FLOW FROM/ (USED IN) OPERATING ACTIVITIES (A) 156,849,970 (12,424,301)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed assets (11,266,882) (9,867,647)
Sale of Fixed assets 346,136 261,269
Acquisition of equity shares in subsidiary (5,319,411) -
(Increase) in Other Investments (including investments in HTM securities) (74,729,127) (95,895,379)
NET CASH FLOW FROM/ (USED IN) INVESTING ACTIVITIES (B) (90,969,284) (105,501,757)

Integrated Annual Report 2023-24

113 Financial Statements
Consolidated Cash Flow Statement

Consolidated Cash Flow Statement

for the year ended 31st March, 2024

(₹ in thousands)

Year Ended Year Ended

31st March, 2024 31st March, 2023

CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (3,366,210) (2,589,206)
Money received on issue of Equity Shares / exercise of stock options 1,992,348 2,678,633
Redemption of Perpetual Non-Cumulative Preference Shares (5,000,000) -
Increase in borrowings 161,524,930 18,740,583
NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES (C) 155,151,068 18,830,010
Increase in Foreign Currency Translation Reserve (D) 365,228 1,694,676
Net Cash and Cash Equivalent on Acquisition of Subsidiary (E) 1,413,421 -
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A + B + C + D + E) 222,810,403 (97,401,372)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (REFER NOTE BELOW) 429,253,471 526,654,843
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (REFER NOTE BELOW) 652,063,874 429,253,471
Note:
Balance with banks in India in Other Deposit Accounts (As per Schedule 7 I (i) (b)) 103,217,847 78,897,269
Balance with banks in India in Current Account (As per Schedule 7 I (i) (a)) 5,151,790 4,546,355
Money at call and short notice in India with Banks (As per Schedule 7 I (ii) (a)) 15,727,551 98,035,628
Money at call and short notice in India with Other Agencies (As per Schedule 7 I (ii) (b)) 114,806,704 1,500,000
Cash in hand (As per Schedule 6 I) 20,257,279 19,020,194
Balance with RBI in Current Account (As per Schedule 6 II (i)) 192,100,075 180,831,853
Balance with RBI in Other Account (As per Schedule 6 II (ii)) 150,510,000 -
Balance with banks Outside India:
(i) In Current Account (As per Schedule 7 II (i)) 28,511,274 24,488,381
(ii) In Other Deposit Accounts (As per Schedule 7 II (ii)) 21,781,354 21,933,791
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 652,063,874 429,253,471

As per our report of even date attached. For and on behalf of the Board of Directors

For KKC & Associates LLP C S Rajan Ashok Vaswani

Chartered Accountants Chairman Managing Director and
(formerly Khimji Kunverji & Co LLP) DIN: 00126063 Chief Executive Officer
Firm Registration No. 105146W/W100621 DIN: 10227550

Gautam Shah Shanti Ekambaram Uday Khanna

Partner Deputy Managing Director Director
Membership No. 117348 DIN: 00004889 DIN: 00079129

For Price Waterhouse LLP Devang Gheewalla Avan Doomasia

Chartered Accountants President and Senior Executive Vice President and
Firm Registration No. 301112E/E300264 Group Chief Financial Officer Company Secretary
Membership No. 045993 FCS. No. 3430
Russell I Parera
Partner
Membership No. 042190

Mumbai
4th May, 2024
114

Schedules
forming part of Consolidated Balance Sheet as at 31st March, 2024

SCHEDULE 1 - CAPITAL
(₹ in thousands)

As at As at
31st March, 2024 31st March, 2023

Authorised Capital
2,800,000,000 Equity Shares of ₹ 5/- each 14,000,000 14,000,000
2,800,000,000 (31st March, 2023: 2,800,000,000 Equity Shares of ` 5/- each)
1,000,000,000 (31st March, 2023: 1,000,000,000) Perpetual Non Cumulative Preference Shares of ` 5/- each 5,000,000 5,000,000
19,000,000 19,000,000
Issued, Subscribed and Paid-up Capital
1,987,920,898 (31st March, 2023: 1,986,556,582) Equity Shares of ` 5/- each fully paid-up 9,939,604 9,932,783

Nil (31 March, 2023: 1,000,000,000) Perpetual Non Cumulative Preference Shares of ` 5/- each fully
st - 5,000,000
paid-up
Total 9,939,604 14,932,783

SCHEDULE 2 - RESERVES AND SURPLUS

(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. Statutory Reserve
Opening Balance 148,317,983 120,969,683
Add: Transfer from Profit and Loss Account 34,454,000 27,348,300
Total 182,771,983 148,317,983
II. Capital Reserve
Opening Balance 3,531,886 3,521,986
Add: Transfer from Profit and Loss Account - 9,900
Total 3,531,886 3,531,886
III. General Reserve
Opening Balance 6,561,992 6,540,937
Add: Amount transferred on Employee's Stock Options (Grants) Outstanding lapsed 69,716 21,055
Add: Transfer from Debenture Redemption Reserve 118,000 -
Total 6,749,708 6,561,992
IV. Securities Premium Account
Opening Balance 253,154,188 250,339,655
Add: Received during the year 2,175,407 2,814,533
Total 255,329,595 253,154,188
V. Special Reserve under Section 45 IC of the RBI Act, 1934
Opening Balance 20,513,408 18,302,247
Add: Transfer from Profit and Loss Account 2,959,203 2,211,161
Total 23,472,611 20,513,408
VI. Capital Reserve on Consolidation
Opening Balance 1,475,671 1,475,671
Total 1,475,671 1,475,671
VII. Foreign Currency Translation Reserve (Refer Note 2(G)(viii) and (xii)- Schedule 17)
Opening Balance 5,074,965 3,380,289
Increase / (Decrease) during the year 365,228 1,694,676
Total 5,440,193 5,074,965

Integrated Annual Report 2023-24

115 Financial Statements
Consolidated Schedules

(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

VIII. Investment Reserve Account

Opening Balance - -
Add: Transfer from Profit and Loss Account 8,316,321 -
Total 8,316,321 -
IX. Special Reserve under Section 36(1)(viii) of the Income Tax Act, 1961
Opening Balance 8,942,000 7,792,000
Add: Transfer from Profit and Loss Account 1,250,000 1,150,000
Total 10,192,000 8,942,000
X. Investment Fluctuation Reserve
Opening Balance 23,000,000 17,746,850
Add: Transfer from Profit and Loss Account 12,000,000 5,253,150
Total 35,000,000 23,000,000
XI. Capital Redemption Reserve
Opening Balance 101,800 101,800
Add: Transfer from Profit and Loss Account 5,000,000 -
Total 5,101,800 101,800
XII. Amalgamation Reserve
Opening Balance 1,224,046 1,224,046
Total 1,224,046 1,224,046
XIII. Investment Allowance (Utilised) Reserve
Opening Balance 500 500
Total 500 500
XIV. Debenture Redemption Reserve
Opening Balance 378,000 217,000
Add: Transfer from Profit and Loss Account 75,000 161,000
Less: Transfer to General Reserve (118,000) -
Total 335,000 378,000
XV. Balance in the Profit and Loss Account 750,043,044 635,331,703
Total (I to XV) 1,288,984,358 1,107,608,142

SCHEDULE 3 - DEPOSITS
(₹ in thousands)

As at As at
31st March, 2024 31st March, 2023

A.
I. Demand Deposits
i. From Banks 3,068,958 2,435,164
ii. From Others 731,268,682 686,434,025
Total 734,337,640 688,869,189
II. Savings Bank Deposits 1,290,951,628 1,217,850,232
III. Term Deposits
i. From Banks 96,581,087 26,074,227
ii. From Others 2,330,817,258 1,679,932,573
Total 2,427,398,345 1,706,006,800
Total Deposits (I to III) 4,452,687,613 3,612,726,221
B.
I. Deposits of Branches in India 4,424,292,712 3,594,616,365
II. Deposits of Branches Outside India 28,394,901 18,109,856
Total Deposits (I + II) 4,452,687,613 3,612,726,221
116

SCHEDULE 4 - BORROWINGS
(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. Borrowings in India
(i) Reserve Bank of India - 47,000,000
(ii) Other Banks 193,774,035 167,075,151
(iii) Other Institutions and Agencies (Refer Note 12 - Schedule 17) 483,302,871 311,361,791
Total 677,076,906 525,436,942
II. Borrowings outside India
Banks and Other Institutions 73,979,156 44,902,292
Total 73,979,156 44,902,292
Total Borrowings (I + II) 751,056,062 570,339,234
Secured Borrowings (other than CBLO and Repo Borrowings included in I above) 326,521,665 235,428,305

SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. Bills Payable 36,051,339 30,880,205

II. Interest Accrued 30,324,751 15,559,185
III. Provision for tax (net of advance tax and tax deducted at source) 8,784,143 8,458,029
IV. Standard Asset provision 20,029,538 17,157,419
V. Others (including provisions) (Refer Note 3, 6 and 23 (a) - Schedule 17) 344,263,275 246,238,346
Total 439,453,046 318,293,184

SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA

(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. Cash in hand (including foreign currency notes) 20,257,279 19,020,194

II. Balances with RBI
(i) in Current Account 192,100,075 180,831,853
(ii) in Other Account 150,510,000 -
Total 362,867,354 199,852,047

SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. In India
(i) Balances with Banks
(a) In Current Accounts 5,151,790 4,546,355
(b) In Other Deposit Accounts (Refer Note 4 - Schedule 17) 103,217,847 78,897,269
Total 108,369,637 83,443,624
(ii) Money at Call and Short Notice
(a) With Banks 15,727,551 98,035,628
(b) With Other Agencies 114,806,704 1,500,000
Total 130,534,255 99,535,628
Total (i + ii) 238,903,892 182,979,252
II. Outside India
(i) In Current Accounts 28,511,274 24,488,381
(ii) In Other Deposit Accounts 21,781,354 21,933,791
Total (i + ii) 50,292,628 46,422,172
Total (I + II) 289,196,520 229,401,424

Integrated Annual Report 2023-24

117 Financial Statements
Consolidated Schedules

SCHEDULE 8 - INVESTMENTS
(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

I. Investments in India in (Refer Note 5 - Schedule 17)

i. Government Securities 1,562,220,211 1,239,635,493
ii. Other approved Securities - -
iii. Shares 246,082,121 180,795,864
iv. Debentures and Bonds 367,256,537 359,616,543
v. Subsidiaries and Joint Ventures (Refer Note 25 - Schedule 17) 10,000 -
vi. Associates * 16,884,672 14,520,850
vii. Others [Units, Certificate of Deposits (CD), Commercial Paper (CP), Security Receipts, 254,721,020 146,347,053
Pass Through Certificates (PTC), Alternate Asset and Other similar funds]
Total 2,447,174,561 1,940,915,803
II. Investments Outside India in
i. Government Securities 2,892,369 1,464,844
ii. Shares 18,052 12,472
iii. Debentures and Bonds 14,011,382 10,335,499
iv. Others [Venture, Private Equity and other similar funds] 360,849 651,084
Total 17,282,652 12,463,899
Total Investments (I + II) 2,464,457,213 1,953,379,702
* Investment in Associates
Equity Investment in Associates 1,012,900 1,012,900
Less: Capital reserve on Consolidation (Share of pre-acquisition profits) 1,651 1,651
Cost of Investment in Associates 1,011,249 1,011,249
Add: Post-acquisition profit / (loss) and Reserve of Associates (Equity method) 15,873,423 13,509,601
Total 16,884,672 14,520,850

SCHEDULE 9 - ADVANCES
(₹ in thousands)
As at As at
31st March, 2024 31st March, 2023

A. (i) Bills purchased and discounted # 75,847,475 55,508,802

(ii) Cash Credits, Overdrafts and Loans repayable on demand^ 1,204,741,113 980,676,164
(iii) Term Loans@ 3,022,927,225 2,554,889,661
Total 4,303,515,813 3,591,074,627
#
Bills purchased and discounted is net of bills rediscounted H 2,723.66 crore (previous year H 1,475.84 crore)
^ net of borrowings under Inter Bank Participatory certificates of H 2.54 crore (Previous Year H 220.00 crore)
@
net of borrowings under Inter Bank Participatory certificates of H 12,787.26 crore (Previous Year H 3,986.26 crore)
B. (i) Secured by tangible assets * 3,362,281,542 2,825,103,083
(ii) Covered by Bank / Government guarantees 33,710,160 69,720,473
(iii) Unsecured 907,524,111 696,251,071
Total 4,303,515,813 3,591,074,627
* including advances secured against book debts
C. I Advances in India
(i) Priority Sector 1,677,430,941 1,471,534,973
(ii) Public Sector 23,509,188 4,093,487
(iii) Banks 13,650,218 2,077
(iv) Others 2,528,418,889 2,066,902,228
Total 4,243,009,236 3,542,532,765
C. II Advances outside India
(i) Due from banks - -
(ii) Due from others
a) Bills purchased and discounted - -
b) Syndicated and term loans 60,506,577 48,541,862
c) Others - -
Total 60,506,577 48,541,862
Grand Total (C.I and C.II) 4,303,515,813 3,591,074,627
118

SCHEDULE 10 - FIXED ASSETS

(₹ in thousands)

As at As at
31st March, 2024 31st March, 2023

A. Premises (Including Land)

Gross Block
At cost on 31st March of the preceding year 11,324,469 11,318,275
Add: Additions/Exchange Gain/(Loss) during the year 2,240 11,563
Less: Deductions during the year 13 5,369
Total 11,326,696 11,324,469
Depreciation
As at 31st March of the preceding year 2,546,441 2,360,672
Add: Charge/Exchange Gain/(Loss) for the year 187,192 186,963
Less: Deductions during the year - 1,194
Depreciation to date 2,733,633 2,546,441
Net Block 8,593,063 8,778,028
B. Other Fixed Assets (including furniture and fixtures)
Gross Block
At cost on 31st March of the preceding year 42,967,959 37,742,550
Add: Additions/Exchange Gain/(Loss) during the year (including on acquisitions) 11,203,084 9,650,804
Less: Deductions during the year 1,481,891 4,425,395
Total 52,689,152 42,967,959
Depreciation
As at 31st March of the preceding year 29,290,926 27,760,823
Add: Charge/Exchange Gain/(Loss) for the year 7,730,342 5,805,629
Less: Deductions during the year 1,364,131 4,275,526
Depreciation to date 35,657,137 29,290,926
Net Block (Refer Note 21 - Schedule 17) 17,032,015 13,677,033
C. Leased Fixed Assets
Gross Block
At cost on 31st March of the preceding year 1,540,585 1,540,585
Add: Additions/Exchange Gain/(Loss) during the year - -
Less: Deductions during the year 1,540,585 -
Total - 1,540,585
Depreciation
As at 31st March of the preceding year 1,383,601 1,383,601
Add: Charge/Exchange Gain/(Loss) for the year - -
Less: Deductions during the year 1,383,601 -
Depreciation to date - 1,383,601
Net Block - 156,984
Total (A) + (B) + (C) 25,625,078 22,612,045

SCHEDULE 11 - OTHER ASSETS

(₹ in thousands)

As at As at
31st March, 2024 31st March, 2023

I. Interest accrued 62,252,623 53,859,399

II. Advance tax (net of provision for tax) 2,634,973 1,066,886
III. Stationery and stamps 102,605 114,152
IV. Others* (Refer Note 3, 20 and 23 (b) - Schedule 17) 156,539,844 144,799,536
Total 221,530,045 199,839,973
* Includes Deposits placed with NABARD/ SIDBI H 3,253.85 crore (Previous year H 4,544.48 crore)

Integrated Annual Report 2023-24

119 Financial Statements
Consolidated Schedules

SCHEDULE 12 - CONTINGENT LIABILITIES

(₹ in thousands)

As at As at
31st March, 2024 31st March, 2023

I. Claims not acknowledged as debts 9,881,398 8,699,391

II. Liability on account of outstanding forward exchange contracts 5,019,201,824 2,991,383,200
III. Guarantees on behalf of constituents
i) In India 321,157,013 279,634,388
ii) Outside India 124,606 124,704
IV. Acceptances, Endorsements and Other Obligations 262,663,257 244,573,710
V. Other items for which the Group is contingently liable:
i) Liability in respect of interest rate, currency swaps and forward rate agreements 1,565,132,212 1,067,674,426
ii) Liability in respect of other derivative contracts 118,435,081 38,378,490
iii) Capital commitments not provided 39,858,367 42,371,214
iv) Unclaimed customer balances * 4,120,003 3,564,243
Total 7,340,573,761 4,676,403,766
* includes amount transferred to RBI DEA Fund Scheme

SCHEDULE 13 - INTEREST EARNED

(₹ in thousands)

For the Year Ended For the Year Ended

31st March, 2024 31st March, 2023

I. Interest / discount on advances / bills 408,661,623 307,350,622

II. Income on investments 132,966,020 98,944,138
III. Interest on balances with RBI and other inter-bank funds 15,423,610 10,293,531
IV. Others 5,315,070 4,922,321
Total 562,366,323 421,510,612

SCHEDULE 14 - OTHER INCOME

(₹ in thousands)

For the Year Ended For the Year Ended

31st March, 2024 31st March, 2023

I. Commission, exchange and brokerage 103,827,061 82,368,296

II. Profit on sale of Investments (net) 27,735,517 9,068,640
III. Profit / (Loss) on revaluation of investments (net) 46,437,867 (14,077,645)
IV. Profit on sale of building and other assets (net) 71,379 107,784
V. Profit on exchange on transactions (net) (including derivatives) 12,687,959 17,038,445
VI. Premium on Insurance business 184,253,086 157,998,624
VII. Profit on recoveries of non-performing assets acquired 3,217,957 3,651,752
VIII. Miscellaneous Income (Refer Note 23 (c) - Schedule 17) 2,141,956 3,753,764
Total 380,372,782 259,909,660

SCHEDULE 15 - INTEREST EXPENDED

(₹ in thousands)

For the Year Ended For the Year Ended

31st March, 2024 31st March, 2023

I. Interest on Deposits 182,285,015 117,657,645

II. Interest on RBI / Inter-Bank Borrowings 15,815,528 9,951,319
III. Others (Refer Note 13 - Schedule 17) 27,571,828 16,502,358
Total 225,672,371 144,111,322
120

SCHEDULE 16 - OPERATING EXPENSES

(₹ in thousands)

For the Year Ended For the Year Ended

31st March, 2024 31st March, 2023

I. Payments to and provision for employees (Refer Note 3 and 11 - Schedule 17) 103,473,126 84,790,295
II. Rent, taxes and lighting (Refer Note 15 - Schedule 17) 9,687,465 9,357,718
III. Printing and Stationery 2,232,761 1,988,796
IV. Advertisement, Publicity and Promotion 15,563,775 11,976,963
V. Depreciation on Group's property 7,917,534 5,992,592
VI. Directors' fees, allowances and expenses 146,585 82,953
VII. Auditors' fees and expenses
Statutory Audit fees 122,850 115,043
Other Matters 11,004 8,910
VIII. Law Charges 461,806 553,947
IX. Postage, telephones etc. 5,317,349 4,585,880
X. Repairs and maintenance 14,393,747 12,071,736
XI. Insurance 4,739,689 3,943,982
XII. Policyholders' reserve cost 152,734,888 74,378,486
XIII. Claims and benefits paid pertaining to insurance business 78,320,590 68,350,041
XIV. Other Expenditure (Refer Note 23 (d) - Schedule 17) 63,585,071 58,252,945
Total 458,708,240 336,450,287

Integrated Annual Report 2023-24

121 Financial Statements
Consolidated Schedules

SCHEDULE 17 – SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL:
Overview
Kotak Mahindra Bank Limited (‘the Bank’ or ‘KMBL’), together with its subsidiaries (collectively, ‘the Group’), is a diversified financial services group
providing a wide range of banking and financial services including Consumer Banking, Commercial Banking, Treasury and Corporate Banking,
Investment Banking, Stock Broking, Vehicle Finance, Advisory Services, Asset Management, Life Insurance and General Insurance. The Bank set up
and commenced operations in May 2016, at its International Financial Services Center Banking Unit (‘IBU’) in Gujarat International Finance Tec (‘GIFT’)
City, Gujarat. The Bank has commenced operations in October 2019 at its first overseas branch at the Dubai International Financial Centre (‘DIFC’),
Dubai, UAE.

Basis of Consolidation
The consolidated financial statements of the Group are prepared in accordance with Accounting Standard 21 (AS-21), “Consolidated Financial
Statements”. Investment in Associates are accounted by the Group under the equity method in accordance with Accounting Standard 23 (AS-23),
“Accounting for Investments in Associates in Consolidated Financial Statements” specified under Section 133 and the relevant provisions of the
Companies Act, 2013 read with the Companies (Accounting Standards) Rules, 2021 in so far as they apply to the Group as amended from time
to time. The Bank consolidates entities in which it holds, directly or indirectly through subsidiaries, more than 50% of the voting rights or where
it exercises control, on a line by line basis by adding together like items of assets, liabilities, income and expenses in accordance with AS-21. The
Goodwill or Capital Reserve on consolidation represents the difference between the Group’s share in the networth of the subsidiary and the cost of
acquisition at the time of making investment in the subsidiary. Intragroup balances, intragroup transactions and resulting unrealised profits, if any,
are eliminated in full. Unrealised losses resulting from intragroup transactions are also eliminated unless cost cannot be recovered. Goodwill on
consolidation is not amortised. Assessment is done at each balance sheet date as to whether there is any indication that goodwill may be impaired.

Minority interest representing the part of net results of operations and of the net assets of subsidiary attributable to interests not owned directly or
indirectly through subsidiaries is presented separately from liabilities and the equity. Further, the Group accounts for investments in entities where it
holds 20% to 50% of the voting rights or exercises significant influence by the equity method of accounting in accordance with AS-23. The financial
statements of the subsidiaries and associates used in consolidation are drawn up to the same reporting date as that of the holding Company i.e. 31st
March, 2024.

a. The list of subsidiaries is as under:

% Shareholding % Shareholding
Name of the Subsidiary Country of Origin of Group of Group
(31st March, 2024) (31st March, 2023)

Kotak Mahindra Prime Limited India 100.00 100.00

Kotak Securities Limited India 100.00 100.00
Kotak Mahindra Capital Company Limited India 100.00 100.00
Kotak Mahindra Life Insurance Company Limited India 100.00 100.00
Kotak Mahindra Investments Limited India 100.00 100.00
Kotak Mahindra Asset Management Company Limited India 100.00 100.00
Kotak Mahindra Trustee Company Limited India 100.00 100.00
Kotak Mahindra (International) Limited Mauritius 100.00 100.00
Kotak Mahindra (UK) Limited UK 100.00 100.00
Kotak Mahindra, Inc. USA 100.00 100.00
Kotak Alternate Asset Managers Limited (formerly known as Kotak India 100.00 100.00
Investment Advisors Limited)
Kotak Mahindra Trusteeship Services Limited India 100.00 100.00
Kotak Infrastructure Debt Fund Limited India 100.00 100.00
Kotak Mahindra Pension Fund Limited India 100.00 100.00
Kotak Mahindra Financial Services Limited UAE 100.00 100.00
Kotak Mahindra Asset Management (Singapore) PTE. Limited Singapore 100.00 100.00
Kotak Mahindra General Insurance Company Limited India 100.00 100.00
IVY Product Intermediaries Limited India 100.00 100.00
BSS Microfinance Limited India 100.00 100.00
Sonata Finance Private Limited (w.e.f 28th March, 2024) (Refer Note 25 India 100.00 -
of Schedule 17)
122

On 26th June, 2023, the Bank has incorporated “Kotak Karma Foundation” (“the Foundation”) under Section 8 of the Companies Act, 2013, as a
wholly owned subsidiary for setting up a Centre of Excellence (CoE) of the Bank for furtherance of part of its Corporate Social Responsibility
(CSR) Initiatives. Being a Section 8 Company and as per terms of articles, the Foundation would operate with restrictions to transfer funds to
the parent, hence in accordance with the requirements of Accounting Standard 21 on “Consolidated Financial Statements”, the Company shall
be excluded from consolidation.

b. As per AS-23, the Consolidated Financial Statements incorporate the audited results of the following associates except as indicated.

% Shareholding % Shareholding
Name of the Associate Country of Origin of Group of Group
(31st March, 2024) (31st March, 2023)

Infina Finance Private Limited India 49.99 49.99

Phoenix ARC Private Limited India 49.90 49.90

2. ACCOUNTING METHODOLOGY AND SIGNIFICANT ACCOUNTING POLICIES:

A. Accounting Methodology
The Consolidated Financial Statements have been prepared on historical cost basis of accounting. The Group adopts the accrual method of
accounting and historical cost convention unless stated otherwise. The Group has prepared these consolidated financial statements to comply
in all material respects with the Accounting Standards notified under Section 133 and the relevant provisions of the Companies Act, 2013 read
with the Companies (Accounting Standards) Rules, 2021 in so far as they apply to the Group and the guidelines issued by the Reserve Bank
of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI) from time to time as applicable and the generally accepted
accounting principles prevailing in India. The financial statements of Indian subsidiaries (excluding insurance companies) and associates are
prepared as per Indian Accounting Standards in accordance with the Companies (Indian Accounting Standards) Rules, 2015. The financial
statements of subsidiaries located outside India are prepared in accordance with accounting principles generally accepted in their respective
countries. However, for the purpose of preparation of the consolidated financial results, the results of subsidiaries and associates are prepared
in accordance with Generally Accepted Accounting Principles in India (‘GAAP’) specified under Section 133 and relevant provision of Companies
Act, 2013 read with Companies Accounting Standard Rules, 2021. In case the accounting policies followed by consolidating entities are
different from those followed by Bank, the same have been disclosed separately.

B. Use of Estimates
The preparation of financial statements requires the management to make estimates and assumptions in the reported amounts of assets and
liabilities (including contingent liabilities) as at the date of the financial statements and the reported income and expenses during the reporting
period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results
could differ from these estimates. Any revision in the accounting estimates is recognised prospectively in the current and future periods.

C. Revenue Recognition
a. Lending / Investing:

i. Interest income is recognised on accrual basis.

ii. Interest income in respect of retail advances is accounted for by using the internal rate of return method to provide a constant
periodic rate of return.

iii. Interest income on investments in Pass-Through-Certificates (PTCs) and loans bought out through the direct assignment route is
recognised at their effective interest rate.

iv. Service charges, fees and commission income are recognised when due. The guarantee commission and letter of credit
commission is recognised over the period of the guarantee and letter of credit respectively. Syndication / arranger fee is recognised
as income as per the terms of engagement.

v. Interest income on discounted instruments is recognised over the tenure of the instruments so as to provide a constant periodic
rate of return.

vi. Upon an asset becoming non-performing assets (NPAs) the income accrued gets reversed, and is recognised only on realisation, as
per the RBI guidelines. Penal interest is recognised as income on realisation other than on running accounts where it is recognised
when due.

vii. Gain on account of securitisation of assets is amortised over the life of the securities issued in accordance with the guidelines
issued by the RBI. Loss on account of securitisation of assets is recognised immediately in profit and loss account.

viii. Gain on account of assignment of assets on bilateral basis is recognised based on the difference between the book value of the
assigned assets and sale consideration received.

ix. Dividend income is accounted on an accrual basis when the right to receive the dividend is established.

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123 Financial Statements
Consolidated Schedules

x. In respect of non-performing assets acquired from other Banks / FIs and NBFCs, collections in excess of the consideration paid at
each asset level or portfolio level is treated as income in accordance with the RBI guidelines and clarifications.

xi. Fees received on sale of Priority Sector Lending Certificates is considered as Miscellaneous Income, while fees paid for purchase
is recognised as expense under other expenses in accordance with the guidelines issued by the RBI.

xii. Other fees are recognised when due, where it is reasonably certain of ultimate collection.

b. Investment Banking:

i. Issue management fees and placement fees, underwriting commission, referral fees and financial advisory fees are accounted on
completion of milestones specified in the contract.

c. Life Insurance:

i. Premium including rider (net of GST) is recognised as income when it is due from policyholders except on unit linked policies,
where the premium is recognised when associated units are created.

ii. In accordance with the terms of insurance policies, uncollected premium on lapsed policies is not recognised as income until
revived.

iii. Top Up / Lump sum contributions are accounted as a part of the single premium.

iv. Income from unit linked policies, which include fund management fees, policy administration charges, mortality charges and other
charges, if any, are recovered from the linked fund in accordance with the terms and conditions of the insurance contracts and is
accounted for as income when due.

v. Reinsurance premium ceded is accounted on due basis at the time when related premium income is accounted in accordance
with the terms and conditions of the relevant treaties with the reinsurer. Profit commission on reinsurance ceded is accounted as
income in the year of final determination of profit. Profit commission on reinsurance ceded is netted off against premium ceded on
reinsurance.

d. General Insurance:

i. Interest income is recognised on accrual basis. Accretion of discount and amortisation of premium relating to debt securities is
recognised over the maturity period of such securities on a constant yield.

ii. Premium net of indirect tax (including reinsurance accepted) is recognised on commencement of the risk.In case of policies
where payments are received in installment, the revenue is recognized at the time of receipt of installment. Premium earnings are
recognised over the period of the policy or period of risk. Any revisions in premium amount are recognised in the year in which they
occur and over the remaining period of the policy. Any subsequent cancellations of policies are recognised in the period in which
they occur.

iii. Commission on reinsurance ceded is recognised as income on ceding of reinsurance premium. Profit commission under
reinsurance treaties, wherever applicable, is recognised in the year of final determination of the profits and as intimated by the
reinsurer.

iv. Proportional Reinsurance premium ceded is accounted on due basis at the time when related premium income is accounted
for. Non-proportional reinsurance cost is accounted as per terms of the reinsurance arrangements. Any revisions in reinsurance
premium ceded are recognised in the period in which it occur. On cancellation of policies, related reinsurance premium ceded are
recognised in the same period in which it occur. Reinsurance inward acceptances are accounted for on the basis of reinsurance
slips, accepted from the reinsurer.

v. In respect of policies booked where risk inception date is subsequent to the balance sheet date, the premium collected is presented
in balance sheet as premium received in advance.

vi. Premium deficiency is recognised when sum of expected claim cost, related expenses and maintenance cost (related to claims
handling) exceed related reserve for unexpired risk. It is recognised on an annual basis and at segment level for the insurance
company viz., fire, marine and miscellaneous. Premium deficiency reserve is estimated and certified by the appointed actuary.

e. Broking:

i. Placement and other fee based income are accounted for on the basis of the progress of the assignment.

ii. Brokerage Income (net of indirect tax):

¡ On primary market subscription / mobilisation is accounted on receipt of intimation of allotment.

¡ On secondary market transaction is recognised upon completion of brokerage services to customers.

124

iii. Depository Fees (net of indirect tax), is recognised on accrual basis and as per terms agreed with the customers. Other charges
recovered from secondary broking customers are recognised upon completion of services.

iv. Securities lending or borrowing fees are recognised on pro-rata basis over the tenure of the contract.

f. Asset Management and Advisory Services:

i. Investment management fees are recognised on rendering of services and are dependent on the net asset value and expenses as
recorded by the schemes of the funds.

ii. Management fee (net of indirect tax) from venture funds, private equity funds and other similar funds is recognised on accrual
basis at the rates specified in the investment management agreement from the date of initial closing of funds under management.
Advisory fees (net of indirect tax) is recognised on accrual basis as per the terms of contract.

iii. Revenue from rendering of investment advisory business is recognised on a straight line basis over the period when services
are rendered, which is in accordance with the terms of the mandate letters entered between the company and the high networth
individual client.

iv. Portfolio advisory service fees are recognised on accrual basis in accordance with the terms of agreement.

v. Portfolio management service fees are recognised on accrual basis in accordance with the terms of agreement between the
Company and the respective clients.

vi. Income on account of distribution from venture capital funds/ alternate investment fund is recognised on the receipt of the
distribution letter or when right to receive is established.

vii. The Group receives fees for providing research to clients and records the income at the time services are provided.

D. Fixed Assets (Property, Plant and Equipment and Intangible Assets)

Property, Plant and Equipment and Intangible assets have been stated at cost less accumulated depreciation and amortisation and adjusted
for impairment, if any. Cost includes cost of purchase inclusive of freight, duties and other incidental expenses and all expenditure like site
preparation, installation costs and professional fees incurred on the asset before it is ready to put to use. Subsequent expenditure incurred on
assets put to use is capitalised only when it increases the future benefit / functioning capability from / of such assets. Gain or loss arising from
the retirement or disposal of a Property, Plant and Equipment and Intangible asset are determined as the difference between the net disposal
proceeds and the carrying amount of assets and recognised as income or expense in the profit and loss account. Profit on sale of premises of
the Bank, net of taxes and transfer to statutory reserve is appropriated to capital reserve as per the RBI guidelines.

Depreciation / Amortisation

Depreciation / amortisation is provided on a pro-rata basis on a straight line method over the estimated useful life of the assets at rates which
are equal to or higher than the rates prescribed under Schedule II of the Companies Act, 2013 in order to reflect the actual usage of the assets.
The estimated useful lives of assets based on technical evaluation by management are as follows:

Asset Type Useful life in years

Premises 58
Leasehold land Over the lease period
Improvement to leasehold premises Over the period of lease subject to a maximum of 6 years
Office equipments (High capacity chillers, Transformers, UPS, 10
DG set, Fire Suppression, HVAC, PAC & Elevators)
Office equipments (other than above) 5
Computers 3
Furniture and Fixtures 6
Motor Vehicles 4
ATMs 5
Software (including development) expenditure 3
Goodwill (Other than on consolidation) 5
Membership Card of the Bombay Stock Exchange Limited 20
Asset Management Rights 5

Used assets purchased are depreciated over the residual useful life from the date of purchase.
Assets costing less than ₹ 5,000 are fully depreciated in the year of purchase.

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125 Financial Statements
Consolidated Schedules

E. Employee Benefits
i. Defined Benefit Plans:

Gratuity:

The Group provides for gratuity covering employees in accordance with the Payment of Gratuity Act, 1972, service regulations and
service awards as the case may be. The Group’s liability is actuarially determined using projected unit credit method at the balance
sheet date. The Bank and seven of its subsidiaries make contributions to a gratuity fund administered by trustees and managed by Life
Insurance companies. In other subsidiaries gratuity obligation is wholly unfunded. The contribution made to the trusts is recognised as
planned assets.

Pension:

In respect of pension payable to certain employees of erstwhile ING Vysya Bank Limited (eIVBL) under Indian Banks’ Association (IBA)
structure, the Bank contributes 10% of basic salary to a pension fund and the difference between the contribution and the amount
actuarially determined by an independent actuary is trued up based on actuarial valuation conducted as at the balance sheet date. The
pension fund is managed by a Life Insurance company. The present value of the Bank’s defined pension obligation is determined using
the projected unit credit method as at the balance sheet date.

Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan.

The contribution made to the pension fund is recognised as planned assets.

The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced
by the fair value of the plan assets.

Actuarial gains or losses in respect of all defined benefit plans are recognised immediately in the profit and loss account in the year in
which they are incurred.

ii. Defined Contribution Plans:

Provident Fund:

Contribution as required by the statute made to the government provident fund or to a fund set up by the Bank and administered by
a board of trustees is debited to the profit and loss account when an employee renders the related service. The Group has no further
obligations.

Superannuation Fund:

The Group makes contributions in respect of eligible employees, subject to a maximum of ₹ 0.01 crore per employee per annum to a fund
administered by trustees and managed by Life Insurance companies. The Group recognises such contributions as an expense in the year
when an employee renders the related service. The Group has no further obligations.

New Pension Scheme:

The Group contributes upto 10% of eligible employees’ salary per annum, to the New Pension Fund administered by a Pension Fund
Regulatory and Development Authority (PFRDA) appointed pension fund manager. The Group recognises such contributions as an
expense in the year when an employee renders the related service.

DIFC Employee Workplace Savings Scheme (DEWS):

The Bank’s branch in DIFC contributes up to 8.33% of eligible branch employees’ salary per annum to the DIFC Employee Workplace
Savings Scheme (DEWS). The Bank recognises such contributions as an expense in the year when an employee renders the related
service. The Bank has no further obligation.

iii. Compensated Absences: Other Long-Term Employee Benefits:

The Group accrues the liability for compensated absences based on the actuarial valuation as at the balance sheet date conducted by
an independent actuary, which includes assumptions about demographics, early retirement, salary increases, interest rates and leave
utilisation. The net present value of the Group’s obligation is determined using the projected unit credit method as at the balance sheet
date. Actuarial gains or losses are recognised in the profit and loss account in the year in which they arise.

iv. Other Employee Benefits:

As per the Group policy, employees are eligible for an award after completion of a specified number of years of service with the Group.
The obligation is measured at the balance sheet date on the basis of an actuarial valuation using the projected unit credit method.

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is
recognised during the period when the employee renders the service. These benefits include performance incentives.
126

F. Investments
For the Bank:
1. Classification:

In accordance with the RBI guidelines on investment classification and valuation, investments are classified on the date of purchase
into Held for Trading (HFT), Available for Sale (AFS) and Held to Maturity (HTM) categories (hereinafter called “categories”). Subsequent
shifting amongst the categories is done in accordance with the RBI guidelines at the lower of the acquisition cost or carrying value and
market value on the date of the transfer and depreciation, if any, on such transfer is fully provided.

Under each of these categories, investments are further classified under six groups (hereinafter called “group/ groups”) - government
securities, other approved securities, shares, debentures and bonds, investments in associates and other investments for the purposes
of disclosure in the balance sheet.

The Bank follows ‘Settlement Date’ accounting for recording purchase and sale transactions in securities, except in the case of equity
shares where ‘Trade Date’ accounting is followed.

Basis of classification:

Investments that are held principally for resale within 90 days from the date of purchase are classified under HFT category. As per the RBI
guidelines, HFT securities, which remain unsold for a period of 90 days are reclassified as AFS securities as on that date. Investments
which the Bank intends to hold till maturity are classified as HTM securities in accordance with the RBI regulations. Investments which
are not classified in either of the above two categories are classified under AFS category.

2. Acquisition Cost:

The cost of investments is determined on a weighted average basis. Broken period interest on debt instruments and government
securities are considered as a revenue item. The transaction costs including brokerage, commission etc. paid at the time of acquisition
of investments are recognised in profit and loss account.

3. Disposal of investments:

 Investments classified as HFT or AFS - Profit or loss on sale or redemption is recognised in the profit and loss account.

 Investments classified as HTM - Profit on sale or redemption of investments is recognised in the profit and loss account and is
appropriated to capital reserve after adjustments for tax and transfer to statutory reserve. Loss on sale or redemption is recognised
in the profit and loss account.

4. Short Sale:

The Bank undertakes short sale transactions in central government dated securities in accordance with the RBI guidelines. The short
position is categorised under HFT category and netted off from investments in the balance sheet. The short position is marked to market
and loss, if any, is charged to the profit and loss account while gain, if any, is ignored. Gain or loss on settlement of the short position is
recognised in the profit and loss account.

5. Valuation:

The valuation of investments is performed in accordance with the RBI guidelines as follows:

a. Investments classified as HTM – These are carried at their acquisition cost. Any premium on acquisition of debt instruments /
government securities is amortised over the balance maturity of the security on a straight line basis. Any diminution, other than
temporary, in the value of such securities is provided.

b. Investments classified as HFT or AFS – Investments in these categories are marked to market and the net depreciation, if any,
within each group is recognised in the profit and loss account. Net appreciation, if any, is ignored. Further, provision for other than
temporary diminution is made at the individual security level. Except in cases where provision for other than temporary diminution
is made, the book value of the individual securities is not changed as a result of periodic valuations.

c. The market or fair value of quoted investments included in the ‘AFS’ and ‘HFT’ categories is measured with respect to the market
price of the scrip as available from the trades or quotes on the stock exchanges, SGL account transactions, price list of RBI or
prices declared on Fixed Income Money Market and Derivatives Association of India (FIMMDA) website by Financial Benchmark
India Private Limited (FBIL) as at the year end.

d. Treasury bills, exchange funded bills, commercial paper and certificate of deposits being discounted instruments, are valued at
carrying cost.

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127 Financial Statements
Consolidated Schedules

e. Market value of units of mutual funds is based on the latest net asset value declared by the mutual fund.

f. Market value of investments where current quotations are not available are determined as per the norms prescribed by the RBI as
under:

 In case of unquoted bonds, debentures and preference shares where interest/dividend is received regularly (i.e. not overdue
beyond 90 days), the market price is derived based on the Yield to maturity for Government Securities as published by
FIMMDA/ FBIL and suitably marked up for credit risk applicable to the credit rating of the instrument. The matrix for credit
risk mark-up for each categories and credit ratings along with residual maturity issued by FIMMDA/ FBIL is adopted for this
purpose;

 In case of bonds and debentures (including PTCs) where interest is not received regularly (i.e. overdue beyond 90 days), the
valuation is in accordance with prudential norms for provisioning as prescribed by the RBI. Interest on such securities is not
recognised in the profit and loss account until received;

 Equity shares, for which current quotations are not available or where the shares are not quoted on the stock exchanges, are
valued at break-up value (without considering revaluation reserves, if any) which is ascertained from the company’s latest
balance sheet. In case the latest balance sheet is not available, the shares are valued at ₹1 per investee company;

 Units of Venture Capital Funds (VCF) held under AFS category where current valuations are not available are marked to
market based on the Net Asset Value (NAV) shown by VCF as per the latest audited financials of the fund. In case the audited
financials are not available for a period beyond 18 months, the investments are valued at ₹1 per VCF. Investment in unquoted
VCF made after 23rd August, 2006 are categorised under HTM category for an initial period of three years and valued at cost
as per the RBI guidelines. Such investments are required to be transferred to AFS thereafter;

 Security receipts are valued as per the NAV obtained from the issuing Asset Reconstruction Company or Securitisation
Company or estimated recoverable value, whichever is lower. The Bank has classified Security Receipts whose tenure has
exceeded 8 years, as “Non Performing investments”

 The Bank provides for investments in Alternate Investments Funds (AIF) in in accordance with RBI circular dated 19th
December, 2023 and 27th March 2024.

g. Non-performing investments are identified and provision is made thereon based on the RBI guidelines. The provision on such
non-performing investments are not set off against the appreciation in respect of other performing securities. Interest on non-
performing investments is not recognized in the profit and loss account until realised.

h. Repurchase and reverse repurchase transactions – Securities sold under agreements to repurchase (Repos) and securities
purchased under agreements to resell (Reverse Repos) are accounted as collateralised borrowing and lending transactions
respectively. The difference between the consideration amount of the first leg and the second leg of the repo is recognised as
interest income or interest expense over the period of the transaction.

For the Life Insurance Company:

a. Investments are recorded at cost on trade date which includes brokerage, transfer charges, transaction taxes as applicable, etc. but
excludes pre-acquisition interest, if any and indirect tax on brokerage where input tax credit is being claimed.

b. Bonus entitlements are recognised as investments on the ‘ex-bonus date’. Rights entitlements are recognised as investments on the ‘ex-
rights date’.

c. Gain / Loss on transfer or sale of securities is the difference between the transfer or sale price and the net amortised cost / carrying value
which is computed on a weighted average basis as on the date of transfer or sale. Sale consideration for the purpose of realised gain /
loss is net of brokerage and taxes, if any.

Valuation – Shareholders’ Investments and non-linked policy-holders’ investments

d. All debt securities are classified as “HTM” for the purpose of valuation and are accordingly recorded at historical cost (excluding interest
paid, if any). Debt securities including government securities are stated at net amortised cost. Money market instruments are valued at
historical cost subject to accretion of discount. The premium or discount, if any, on purchase of debt securities is amortised or accreted
over the period to maturity on an internal rate of return basis.

e. Listed equity shares as at the balance sheet dates are stated at fair value being the quoted closing price on National Stock Exchange
Limited (NSE). If an equity share is not listed or traded on NSE, then closing share price on BSE (formerly known as Bombay Stock
Exchange) is used. Unlisted shares or shares awaiting listing are stated at historical cost subject to provision for diminution, if any. In
case of Infrastructure Investment Trusts (InvIT), where market quote is not available for the last 30 days, the units shall be valued as per
the latest NAV (not more than 6 months old) of the units published by the trust. All redeemable unlisted preference shares are classified
as held to maturity and stated at historical cost.
128

In case of diminution in the value of investment as at the balance sheet date which is other than temporary, the amount of such diminution
is recognised as an expense in the profit and loss account to the extent of difference between the remeasured fair value of the investment
and its acquisition cost as reduced by any previous impairment loss recognised in profit and loss account. Any reversal of impairment
loss is recognised in the profit and loss account.

f. Investments in mutual funds are valued at the latest NAV of the funds in which they are invested. Investments in Alternative Investment
Funds are valued at the latest NAV.

The investment in Additional Tier 1 Bonds are valued at an applicable market yield rates provided by Credit Rating Information Services
of India Limited (CRISIL) on the basis of CRISIL Bond Valuer.

g. Unrealised gains due to change in the fair value of the investments is taken to a fair value change account and is adjusted in the
carrying value of investment. The unrealised loss due to change in the fair value of investments, other than due to reversal of the gains
recognised in fair value change account, is recognised in the profit and loss account. The gain or loss on sale of investments includes the
accumulated changes in the fair value change account.

h. Real estate investment property represents building held for investment purpose to earn rental income or for capital appreciation and
is not occupied. Such investment property is initially valued at cost including any direct attributable cost. Investment in the real estate
investment property is valued at historical cost plus revaluation, if any. Revaluation of the investment property is done at least once in
three years. Any change in the carrying amount of the investment property is accounted to revaluation reserve forming part of “Reserves
and Surplus”. Impairment loss, if any, exceeding revaluation reserve is recognised as expense in the profit and loss account

Unlisted units of Real Estate Investment Trusts (REIT) awaiting listing are stated at historical cost subject to provision for diminution, if
any. Investment in units of REIT are valued at market value (last quoted price should not be later than 30 days). Where market quote is not
available for the last 30 days, the units shall be valued as per the latest NAV (not more than 6 months old) of the units published by the trust.

i. Certain guaranteed products offered by the Life Insurance subsidiary assure the policy holders a fixed rate of return for premiums to be
received in the future and the Life Insurance subsidiary is exposed to interest rate risk on account of re-investment of interest & principal
maturities at future date & guarantee risk on premiums from already written policies. The Life Insurance subsidiary is following hedge
accounting for all derivative transactions.

For derivatives which are designated as a cash flow hedge in a hedging relationship, hedge effectiveness is ascertained at the time of
inception of the hedge and periodically.

 The portion of fair value gain / loss on interest rate derivative that is determined to be an effective hedge is recognized directly in
policyholders’ funds.

 The ineffective portion of the change in fair value of such instruments is recognized in profit and loss account in the period in which
they arise.

 If the hedging relationship ceases to be effective or it becomes probable that the expected forecasted transaction will no longer
occur, hedge accounting is discontinued and the cumulative gains or losses that were recognized earlier in balance sheet shall be
reclassified to the profit and loss account in the same period or periods during which the hedged forecasted cash flows affect the
profit and loss account.

Recognition of Derivatives in Balance Sheet

 Initial Recognition: All derivatives are initially recognized in the Balance sheet at their fair value, which usually represents their cost.

 Subsequent Recognition: All derivatives are subsequently re-measured at their fair value, with change in fair value is recognized as
per hedge accounting principles. All derivatives are carried as assets when the fair values are positive and as liabilities when the
fair values are negative.

j. All assets where the interest and/or instalment of principal repayment remain overdue for more than 90 days at the balance sheet date
are classified as NPA and provided for in the manner required by the IRDAI regulations in this regard.

Valuation – Unit linked Business

k. All Government securities, except treasury bills, held in linked business are valued at prices obtained from CRISIL. Debt securities other
than government securities are valued on the basis of CRISIL bond valuer. The discount on purchase of treasury bills, certificate of
deposit, commercial papers and triparty repo is accreted over the period to maturity on an internal rate of return basis. Listed shares and
Exchange Traded Funds (ETF) are valued at fair value, being the last quoted closing price on the NSE (In case of securities not listed on
NSE, the last quoted closing price on the BSE is used). Equity shares awaiting listing are stated at historical cost subject to provision for
diminution, if any, in the value of such investments. Such diminution is determined separately for each individual investment. Unrealised
gains and losses are recognised in the profit and loss account.

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129 Financial Statements
Consolidated Schedules

l. Mutual fund units are valued at the latest NAV of the fund in which they are invested.

m. All unlisted redeemable preference shares are considered as held to maturity and stated at historical cost.

n. Transfer of investments (other than debt securities) from Shareholders’ fund to the Policyholders’ fund is at book value or market price,
whichever is lower. Transfer of debt securities from Shareholders’ to Policyholders’ fund is transacted at the lower of net amortised cost
or market value. Transfers of investments between unit-linked funds are done at prevailing market price.

For General Insurance Company:

a. Investments are recorded at cost and include brokerage, transfer charges, stamps etc., and exclude pre acquisition interest, if any.

b. Debt securities and non-convertible preference shares are considered as ‘HTM’ and stated at historical cost adjusted for amortisation of
premium or accretion of discount determined on constant yield to maturity basis over the holding / maturity period.

c. Mutual fund units are stated at their NAV as at the balance sheet date. Any unrealised gain / loss is accounted for under fair value change
account and is included in the carrying value of investment. In case of any net mark to market loss, the additional provision to the extent
of the loss in fair value change account on the balance sheet date is recognised in profit and loss account.

d. Gain / loss on transfer or sale of securities is the difference between the transfer or sale price and the net amortised cost / carrying value
which is computed on a Weighted average cost basis as on the date of transfer or sale. Sale consideration for the purpose of realised
gain / loss is net of brokerage and taxes, if any.

e. The realised gain or loss on mutual funds is the difference between sale consideration and carrying cost as on the date of sale, determined
on a weighted average cost basis. Any unrealised gain or loss in respect of mutual funds are recognised in ‘fair value change account’ in
balance sheet and are included in the carrying value of investment.

For other entities:

Investments, other than stock-in-trade are classified into long term investments and current investments in accordance with Accounting
Standard 13 (AS-13) “Accounting for Investments”. Investments, which are intended to be held for more than one year from the date, on which
the investments are made, are classified as long term investments and investments, which are intended to be held for less than one year from
the date, on which the investments are made, are classified as current investments. Long term investments are carried at cost and provision
for diminution in value is made to recognise a decline other than temporary in the value of investment, such reduction being determined and
made for each investment individually.

Current investments are valued at cost (calculated by applying weighted average cost method) or market/ fair value whichever is lower. In case
of investments in units of a mutual fund, the NAV of units is considered as market or fair value. The fair value of PTC is determined based on
the yield to maturity for government securities as published by FIMMDA and suitably marked up for credit risk applicable to the credit rating of
the instrument. The securities acquired with the intention to trade are classified as Stock-in-Trade. Investments classified as “Stock-in-Trade”
by some of the subsidiaries are valued at cost (calculated by applying weighted average cost method) or market price, whichever is lower
determined by the category of investments. Brokerage, stamping and additional charges paid are included in the cost of investments. The profit
or loss on sale of investments (including Stock-in-trade) is recognised on trade date in the profit and loss account.

NBFCs provides for investments in Alternate Investments Funds (AIF) in accordance with RBI circular dated 19th December, 2023 and 27th
March 2024.

G. Foreign Currency and Derivative Transactions

For the Bank:
i. Foreign currency monetary assets and liabilities are translated as at the balance sheet date at rates notified by the Foreign Exchange
Dealers’ Association of India (FEDAI) and the resultant gain or loss is accounted in the profit and loss account.

ii. Income and expenditure items are translated at the rates of exchange prevailing on the date of the transaction except for representative
office (which are integral in nature) expenses, which are translated at the monthly average rate of exchange.

iii. Outstanding forward (other than deposit and placement swaps) and spot foreign exchange contracts outstanding at the balance sheet
date are revalued at rates notified by FEDAI for specified maturities and at the interpolated rates of interim maturities. In case of forward
contracts of greater maturities where exchange rates are not notified by FEDAI are revalued at the forward exchange rates implied by the
swap curves in respective currencies. The forward profits or losses on the forward contracts are discounted using discount rates and the
resulting profits or losses are recognised in the profit and loss account as per the regulations stipulated by the RBI.
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iv. Foreign exchange swaps “linked” to foreign currency deposits and placements are translated at the prevailing spot rate at the time of
swap. The premium or discount on the swap arising out of the difference in the exchange rate of the swap date and the maturity date of
the underlying forward contract is amortised over the period of the swap and the same is recognised in the profit and loss account.

v. Contingent liabilities on account of letters of credit, bank guarantees and acceptances and endorsements outstanding as at the balance
sheet date denominated in foreign currencies and other foreign exchange contracts are translated at year-end rates notified by FEDAI.

vi. Notional amounts of derivative transactions comprising of swaps, futures and options are disclosed as off balance sheet exposures.
The Bank recognises all derivative contracts (other than those designated as hedges) at fair value, on the date on which the derivative
contracts are entered into and are re-measured at fair value as at the balance sheet date. Derivatives are classified as assets when the
fair value is positive (positive marked to market) or as liabilities when the fair value is negative (negative marked to market). Changes in
the fair value of derivatives other than those designated as hedges are recognised in the profit and loss account.

vii. Outstanding derivative transactions designated as “Hedges” are accounted in accordance with hedging instrument on an accrual basis
over the life of the underlying instrument. Option premium paid or received is recognised in the profit and loss account on expiry of the
option. Option contracts are marked to market on every reporting date.

viii. The financial statements of IBU and DIFC branch which are in the nature of non-integral overseas operations are translated on the
following basis: (a) Income and expenses are converted at the average rate of exchange during the year and (b) All assets and liabilities
are translated at closing rate as at Balance sheet date. The exchange difference arising out of year end translation is debited or credited
as “Foreign Currency Translation Reserve” forming part of “Reserves and Surplus”.

For other entities:

ix. On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount exchange rate between
the reporting currency and the foreign currency at the date of the transaction.

x. Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate of exchange as at the balance sheet
date.

xi. Exchange differences arising on settlement of the transaction and on account of restatement of monetary assets and liabilities are
recognised in the profit and loss account. In case of items which are covered by forward exchange contracts entered to hedge the foreign
currency risk, the difference between the year-end rate and the rate on the date of the contract is recognised as exchange difference in
the profit and loss account and the premium paid or received on forward exchange contracts is amortised as expense or income over the
life of the contract. Any profit or loss on cancellation or renewal of such a forward exchange contract is recognised in the profit and loss
account.

xii. The financial statements of all subsidiaries incorporated outside India which are in the nature of non-integral foreign operations are
translated on the following basis: (a) Income and expenses are converted at the average rate of exchange applicable for the year and (b)
All assets and liabilities are translated at the closing rate as at the balance sheet date. The exchange difference arising out of year end
translation is debited or credited as “Foreign Currency Translation Reserve” forming part of “Reserves and Surplus”.

On the disposal / partial disposal of a non-integral foreign operation, the cumulative / proportionate amount of the exchange differences
which has been accumulated in the foreign currency translation reserve and which relates to that operation are recognised as income or
expenses in the same period in which gain or loss on disposal is recognised.

Currency / Interest rate derivatives / Equity index / equity futures, equity index / equity options, embedded derivatives / other
derivatives (Not designated as hedges):
xiii. Outstanding derivative contracts, including embedded derivatives, are measured at fair value as at each balance sheet date. Fair value
of derivatives is determined using quoted market prices in an actively traded market, for the instrument, wherever available, as the best
evidence of fair value. In the absence of quoted market prices in an actively traded market, a valuation technique is used to determine the
fair value. In most cases the valuation techniques use observable market data as input parameters in order to ensure reliability of the fair
value measure.

xiv. Initial Margin - Derivative Instrument representing the initial margin paid and / or additional margin paid over and above the initial margin,
for entering into contracts for equity index / stock futures and equity index / stock options / other derivatives, which are released on final
settlement / squaring-up of the underlying contracts, are disclosed under Other Assets. “Deposit for Marked to Market Margin - Derivative
Instrument” representing the deposit paid in respect of marked to market margin is disclosed under other assets.

xv. On final settlement or squaring up of contracts for equity index / stock futures / other derivatives, the realised profit or loss after adjusting
the unrealised loss already accounted, if any, is recognised in the profit and loss account and shown as profit on exchange transactions
(net) (including derivatives).

xvi. On settlement or squaring up of equity index / stock options / other derivatives before expiry, the premium prevailing in option contracts
on that date is recognised in the profit and loss account.

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131 Financial Statements
Consolidated Schedules

xvii. When more than one contract in respect of the relevant series of equity index / stock futures or equity index / stock options / other derivatives
contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the
contract so squared-up is determined using the weighted average cost method for calculating the profit or loss on squaring-up.

H. Advances
Classification:
i. Advances are classified as performing and non-performing advances (NPAs) based on the RBI guidelines and are stated net of bills
rediscounted, inter-bank participation with risk, specific provisions, interest in suspense and claims received from Export Credit
Guarantee Corporation and Emergency Credit Line Guarantee Scheme (ECLGS) with respect to non-performing advances, provisions
for funded interest term loan and provisions in lieu of diminution in the fair value of restructured assets. Also, NPAs are classified into
sub-standard, doubtful and loss as required by the RBI guidelines. Interest on NPAs remaining uncollected is transferred to an interest
suspense account and not recognised in the profit and loss account until received.

ii. Amounts paid for acquiring non-performing assets from other Banks and NBFCs are considered as advances. Actual collections received
on such non-performing assets are compared with the cash flows estimated while purchasing the asset to ascertain over dues. If such
over dues are in excess of 90 days, the Group classifies such assets into sub-standard, doubtful or loss as required by the RBI guidelines
on purchase of non-performing assets.

iii. The Bank transfers advances through inter-bank participation with and without risk. In accordance with the RBI guidelines, in the case
of participation with risk, the aggregate amount of the participation issued by the Bank is reduced from advances and where the Bank
is participating, the aggregate amount of the participation is classified under advances. In the case of participation without risk, the
aggregate amount of participation issued by the Bank is classified under borrowings and where the Bank is participating, the aggregate
amount of participation is shown as due from banks under advances

For Bank and NBFC subsidiaries- Provisioning:

iv. Provision for non-performing assets comprising sub-standard, doubtful and loss assets is made in accordance with the RBI guidelines.
In addition, the Bank and its NBFC subsidiaries consider accelerated specific provisioning that is based on past experience, evaluation of
security and other related factors. Specific loan loss provisions in respect of non-performing advances are charged to the profit and loss
account. Any recoveries made in case of NPAs written off are recognised in the profit and loss account.

v. The Bank and its NBFC subsidiaries consider a restructured account as one where the Bank, for economic or legal reasons relating to the
borrower’s financial difficulty, grants to the borrower concessions that they would not otherwise consider. Restructuring would normally
involve modification of terms of the advance / securities, which would generally include, among others, alteration of repayment period /
repayable amount / the amount of installments / rate of interest (due to reasons other than competitive reasons). Restructured accounts
are classified as such only upon approval and implementation of the restructuring package. Necessary provision for diminution in the fair
value of a restructured account is made.

In accordance with the RBI guidelines, the Bank and its NBFC subsidiaries create general provision on standard assets including credit
exposures computed as per the current marked to market values of interest rate and foreign exchange derivative contracts, and gold
at levels stipulated by the RBI from time to time. The Bank also creates additional standard asset provision for overseas step down
subsidiaries of Indian corporates and standard provision at higher than the prescribed rates in respect of advances to stressed sectors
as per the framework approved by Board of Directors. In case of frauds, the Bank and its NBFC subsidiaries makes provision for amounts
it is liable for in accordance with the guidelines issued by the RBI.

vi. Further to provisions required as per the asset classification status, provisions are held by Bank for individual country exposure (except for
home country) as per the RBI guidelines. Exposure is classified in the seven risk categories as mentioned in the Export Credit Guarantee
Corporation of India Limited (ECGC) guidelines and provisioning is done for that country if the net funded exposure is one percent or more
of the Bank’s total assets based on the rates laid down by the RBI.

vii. Provisions for Unhedged Foreign Currency Exposure of borrowers are made by the Bank as per the RBI guidelines.

viii. In accordance with the RBI guidelines relating to COVID-19 Regulatory Package dated 27th March, 2020, 17th April, 2020 and 23rd May,
2020 and clarification issued by the RBI through Indian Bankers Association dated 6th May, 2020, the Bank and its NBFC subsidiaries have
granted a moratorium on the payment of instalments and / or interest, as applicable, falling due between 1st March, 2020 and 31st August,
2020 (‘moratorium period’) to eligible borrowers classified as Standard, even if overdue, as on 29th February, 2020. In accordance with
the RBI guidelines, the moratorium period, wherever granted, is excluded by the Bank and its NBFC subsidiaries from the number of days
past-due for the purpose of asset classification under RBI’s Income Recognition and Asset Classification norms. A general provision on
the entire amount outstanding from borrowers who had an overdue on 29th February, 2020 and to whom moratorium was given is made
by Bank and its NBFC subsidiaries. In accordance with the said guidelines, such accounts where moratorium has been granted are not
considered as restructured.
132

ix. In respect of borrowers restructured under the Resolution Framework – 1.0 and Resolution Framework 2.0 for COVID-19 related stress,
the Bank and its NBFC subsidiaries holds provisions higher than the provisions as required by the RBI guidelines.The Bank classifies
its advances, investments and overdues from crystallised derivatives including those at overseas branches into performing and non
performing in accordance with guidelines issued by the RBI

For other entities:

x. Receivables / Sundry Debtors (included in Schedule 11-Other assets) are stated at original invoice amount less provision for any
uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are
written off when there is no possibility of recovery.

I. Structured Liabilities
The Group has issued structured liabilities wherein the return on these liabilities is linked to non-interest benchmarks. Such structured liabilities
have an embedded derivative which is the non-interest related return component. The embedded derivative is separated from the host contract
and accounted separately {Refer Note 2 (G)(xiii)}.

The resultant debt component of such structured liabilities is recognised in the balance sheet under borrowings and is measured at amortised
cost on a yield to maturity basis.

J. Liability For Policies

i Provision is made for policy liabilities in respect of all “in force” policies and “lapsed policies” that are likely to be revived in future based on
actuarial valuation done by the appointed actuary in accordance with generally accepted actuarial practices, requirements of IRDAI and
the Institute of Actuaries of India.

ii Liabilities in respect of funds arising from discontinued policies are shown as ‘Policyholders’ Funds’.

iii Linked liabilities comprise of unit liability representing fund value of policies and are shown as ‘Policyholders’ Funds’.

K. Actuarial Method – Life Insurance

i Actuarial method and assumptions: The actuarial liabilities have been calculated by the appointed actuary in accordance with generally
accepted actuarial principles, the requirements of the Insurance Act 1938 as amended by the Insurance Laws (Amendment) Act, 2015,
the Insurance Regulatory and Development Authority Act, 1999 and the regulations framed thereunder, the Insurance Regulatory and
Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, the
Insurance Regulatory and Development Authority of India (Assets, Liabilities and Solvency Margin of Life Insurance Business) Regulations,
2016, and other relevant regulations, orders / directions issued by IRDAI in this regard and the prescribed guidance notes issued by the
Institute of Actuaries of India. In respect of unit linked policies, a unit reserve equal to the value of units as at the balance sheet date
and an additional non-unit reserve calculated on gross premium prospective valuation method is created. The method adopted for par
policies (accumulation contracts) is the value of the accumulated fund and an additional non-unit reserve calculated on gross premium
prospective valuation method. In respect of individual conventional business / Group business where premiums are guaranteed for more
than one year, gross premium prospective method is used. Additional reserve on lapsed unit-linked policies is created and shown as
‘Policyholders’ Funds’.

ii The assumptions used in the gross premium valuation are based on best estimates together with appropriate margins for adverse
deviations from experience. The principal assumptions are interest, inflation, return to policyholders’ accounts, lapses, expenses,
mortality and morbidity.

iii Reserves for group life one year renewable policies are calculated as the risk premium for the unexpired term with an allowance for
expenses and a margin for adverse deviations. The actuarial liability for Group fund based is equal to account value as at valuation date
plus a non-unit reserve to provide for expenses and mortality benefits.

iv Reserve for freelook cancellation is held to meet any premium refunds from policy freelook cancellations. The reserve held is equal to
assumed probability of freelook cancellations.

v The Life Insurance subsidiary reinsures mortality with an optimum level of retention on guaranteed premiums bases, with financially
strong reinsurers. They also carry out resilience test on balance sheet and its impact on solvency margin.

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133 Financial Statements
Consolidated Schedules

L. Reserve for Unexpired Risk – General Insurance

Reserve for unexpired risk is recognised net of reinsurance ceded and represents premium written that is attributable and to be allocated to
succeeding accounting periods for risks to be borne by the Group under contractual obligations over a contract period basis or period of risk,
whichever is applicable. As per circular vide IRDA/F&A/CIR/CPM/056/03/2016 dated 4th April, 2016 such reserves are calculated on a pro-rata
basis under 1/365 basis subject to 100% for marine hull business, on all unexpired policies at balance sheet date.

M. Discounted Instruments
The liability is recognised at face value at the time of issuance of discounted instruments, less unexpired discount. The discount on the issue
is amortised over the tenure of the instrument.

N. Acquisition Costs of Insurance Contracts

Acquisition costs such as commission and medical fees are costs that vary with and are primarily related to the acquisition of new and renewal
insurance contracts. Such costs are recognised in the year in which they are incurred.

O. Securities Lending and Borrowing

The broking subsidiary enters into security lending and borrowing transaction which is accounted as below:

a. Initial margin and / or additional margin paid over and above the initial margin, for entering into contracts for equity shares which are
released on final settlement / squaring – up of the underlying contracts, are disclosed under other assets.

b. On final settlement or squaring up of contracts for equity shares the realised profit or loss after adjusting the unrealised profit or loss
already accounted, if any, is recognised in the profit and loss account.

P. Bullion
The Bank imports bullion including precious metal bars on a consignment basis for selling to its wholesale customers. The difference between
the sale price to customers and actual price quoted by supplier is reflected under other income.

The Bank also borrows and lends gold, which is treated as borrowings or lending as the case may be in accordance with the RBI guidelines and
the interest paid or received is classified as interest expense or income and is accounted on an accrual basis.

Q. Taxes on Income
The income tax expense comprises current tax and deferred tax. Current tax is measured at the amount expected to be paid in India in respect
of taxable income for the year in accordance with the Income Tax Act, 1961 enacted in India. Tax expenses relating to overseas subsidiaries
are determined in accordance with the tax laws applicable in countries where such subsidiaries are domiciled.

Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences being the difference between the taxable
income and the accounting income that originate in one period and are capable of reversal in one or more subsequent period.

Deferred tax assets on account of timing differences are recognised only to the extent there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be realised. In case of carry forward losses and unabsorbed depreciation,
under tax laws, all the deferred tax assets are recognised only to the extent there is virtual certainty supported by convincing evidence that
sufficient future taxable income will be available against which such deferred tax assets can be realised.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance
sheet date. Changes in deferred tax assets / liabilities on account of changes in enacted tax rates are given effect to in the profit and loss
account in the period of the change. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Group writes-
down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available against which deferred tax asset can be realised.

Deferred tax assets and deferred tax liabilities are off set when there is legally enforceable right to set-off assets against liabilities representing
current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
Deferred tax assets and deferred tax liabilities across various entities are not set off against each other as the Group does not have a legal right
to do so.
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R. Segment Reporting
In accordance with guidelines issued by the RBI and Accounting Standard 17 (AS-17) on “Segment Reporting”; the Group’s business has been
segregated into the following segments whose principal activities are as under:

Segment Principal activity

Corporate / Wholesale Wholesale borrowings and lending and other related services to the corporate sector which are not included
Banking in Retail Banking.

Retail Banking Comprises of:

Digital Banking Business involving digital banking products acquired by Digital Banking Unit including existing digital
banking products as identified by the Management in accordance with the instructions of the RBI vide its
circular dated 7th April, 2022.

Other Retail Banking Includes (other than covered under Digital Banking above):
1. Lending
Commercial vehicle finance, personal loans, home loans, agriculture finance, other loans / services
and exposures which fulfill the four criteria for retail exposures laid down in Basel Committee on
Banking Supervision document “International Convergence of Capital Measurement and Capital
Standards: A Revised Framework”.
2. Branch Banking
Retail borrowings covering savings, current and term deposit accounts and Branch Banking network
and services including distribution of financial products.
3. Credit Cards
Receivables / loans relating to credit card business.

Treasury, BMU and Money market, forex market, derivatives and investments and primary dealership of Government securities
Corporate centre and Balance Sheet Management unit (BMU) responsible for Asset Liability Management and Corporate
Centre which primarily comprises of support functions.

Vehicle Financing Retail vehicle finance and wholesale trade finance to auto dealers from its Subsidiary Company.

Other Lending Activities Securitisation and other loans / services not included under Retail Banking and Corporate / Wholesale
Banking from its Subsidiary Companies.

Broking Brokerage income on market transactions done on behalf of clients, interest on delayed payments,
distribution of financial products from its Subsidiary Company.

Advisory and Transactional Providing financial advisory and transactional services such as mergers and acquisition advice, equity / debt
Services issue management services and Business Correspondent services from its Subsidiary Companies.

Asset Management Management of funds and investments on behalf of clients and investment distribution (Cherry) from its
Subsidiary Companies.

Insurance Life and General Insurance business of its Subsidiary Companies.

A transfer pricing mechanism between segments has been established by Asset Liability Committee (ALCO) for allocation of interest cost to
its segments based on borrowing costs, maturity profile of assets / liabilities etc. and which is disclosed as part of segment revenue.

Segment revenues consist of earnings from external customers and inter-segment revenue as stated above. Segment expenses consist of
interest expenses including those allocated, operating expenses and provisions.

Segment results are net of segment revenue and segment expenses including interdivisional items.

Segment assets include assets related to segments and exclude tax related assets. Segment liabilities include liabilities related to the segment
excluding net worth, minority interest and employees’ stock option (grants outstanding).

Since the business operations of the Group are primarily concentrated in India, the Group is considered to operate only in the domestic segment.

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135 Financial Statements
Consolidated Schedules

S. Employee Share Based Payments

Equity-settled:

The Employee Stock Option Schemes (ESOSs) of the Bank are in accordance with SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021. The schemes provide for grant of options to employees of the Group to acquire the equity shares of the Bank that vest in
cliff vesting or in a graded manner and that are to be exercised within a specified period.

RBI, vide its clarification dated 30th August, 2021 on Guidelines on Compensation of Whole Time Directors / Chief Executive Officers / Material
Risk Takers and Control Function Staff, advised Banks that the fair value of share-linked instruments on the date of grant should be recognised
as an expense for all instruments granted after the accounting period ending 31st March, 2021.

In accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the Guidance Note on “Accounting
for Employee Share-based payments” issued by The Institute of Chartered Accountants of India, the cost of equity-settled transactions is
measured using the intrinsic value method for all options granted on or before 31st March, 2021. The intrinsic value being the excess, if any, of
the fair market price of the share under ESOSs over the exercise price of the option is recognised as deferred employee compensation with a
credit to Employee’s Stock Option (Grant) Outstanding account.

In accordance with the RBI guidance, for all options granted after 31st March, 2021 the fair value of the option is estimated on the date of
grant using Black-Scholes model and is recognised as deferred employee compensation with a credit to Employee’s Stock Option (Grant)
Outstanding account.

The deferred employee compensation cost is amortised on a straight-line basis over the vesting period of the option. The cumulative expense
recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the number of equity instruments that are outstanding.

The options that do not vest because of failure to satisfy vesting condition are reversed by a credit to employee compensation expense
in “Payment to and provision for employee”, equal to the amortised portion of the cost of lapsed option and credit to deferred employee
compensation equal to the unamortised portion. In respect of the options which expire unexercised the balance standing to the credit of
Employee’s Stock Option (Grant) Outstanding account is transferred to General Reserve. The fair market price is the latest available closing
price, preceding the date of grant of the option, on the stock exchange on which the shares of the Bank are listed.

Where the terms of an equity–settled award are modified, the minimum expense recognised in ‘Payments to and provision for employees’ is
the expense as if the terms had not been modified. An additional expense is recognised for any modification which increases the total intrinsic/
fair value of the share–based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

Cash-settled:

The cost of cash-settled transactions, stock appreciation rights (SARs) having grant date on or before 31st March 2021 is measured initially
using intrinsic value method at the grant date taking into account the terms and conditions upon which the instruments were granted. Similar
to Equity settled options, SARs granted after 31st March, 2021 are measured on fair value basis.

The intrinsic / fair value is amortised on a straight-line basis over the vesting period with a recognition of corresponding liability. This liability
is remeasured at each balance sheet date up to and including the vesting date with changes in intrinsic / fair value recognised in the profit
and loss account in ‘Payments to and provision for employees’.The SARs that do not vest because of failure to satisfy vesting conditions are
reversed by a credit to employee compensation expense, equal to the amortised cost in respect of the lapsed portion.

T. Claims / Benefits
In respect of Life Insurance subsidiary, benefits paid comprise of policy death benefit, maturity, surrenders, survival benefits, discontinuance
and other policy related claims and change in the outstanding provision for claims at the year end. Claims by death and surrender are accounted
when intimated. Survival benefits are accounted when due. Maturity claims are accounted on the date of maturity. Amounts recoverable from
reinsurers are accounted for in the same period as the related claim. Repudiated claims disputed before judicial authorities are provided for,
based on the best judgement of the management considering the facts and evidence in respect of each such claim. Withdrawals under unit-
linked policies are accounted in respective schemes when the associated units are cancelled. Death claim benefit includes specific claim
settlement costs wherever applicable.

In respect of General Insurance subsidiary, claims incurred includes claims paid net of reinsurance recovery and salvage value retained by
the insured, change in loss reserve during the period, change in claims incurred but not reported (IBNR) & change in claims incurred but not
enough reported (IBNER). Claims incurred also include survey fees, legal fees and other expenses directly attributable to claim cost. Claims are
recognised as and when intimation of it is received and provision is determined (net of reinsurance recovery) by the management on the best
estimate of claims likely to be paid based on survey reports, based on information received from various sources and from past experience.

Any subsequent information may result in revision of likely amount of final claim payment and accordingly provision for outstanding claims
gets restated.

Estimated liability for IBNR and IBNER has been estimated by the appointed actuary in compliance with the relevant regulations and guidelines
issued by IRDAI and the same is duly certified by the appointed actuary.
136

U. Loss on Sale of Advances to Asset Reconstruction Company

Loss on sale of Advances sold to Asset Reconstruction Company is recognised immediately in the profit and loss account.

V. Securitisation
The Group enters into purchase / sale of corporate and retail loans through direct assignment / Special Purpose Vehicles (SPVs). In most
cases, post securitisation, the Group continues to service the loans transferred to the SPV. The Group also provides credit enhancement in the
form of cash collaterals and / or by subordination of cash flows to senior PTCs holders. In respect of credit enhancements provided or recourse
obligations (projected delinquencies, future servicing etc.) accepted by the Group, appropriate provision / disclosure is made at the time of sale
in accordance with Accounting Standard 29, (AS-29) “Provisions, Contingent Liabilities and Contingent Assets”.

In accordance with the RBI guidelines on Securitisation of Standard Assets dated 24th September 2021, the profit, loss or premium on account
of securitisation of assets at the time of sale is computed as the difference between the sale consideration and the book value of the securitised
asset. Any resultant profit, loss or premium realised on account of securitisation is recognised to the Profit and Loss Account in the period in
which the sale is completed.

W. Leases
As Lessee:

Leases where all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Operating lease payments are
recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

As Lessor:

Leases where the Group has substantially retained all the risks and rewards of ownership are classified as operating leases and included in
fixed assets. Lease income is recognised in the profit and loss account on a straight-line basis over the lease term.

Initial direct costs in respect of operating leases such as legal costs, brokerage costs, etc. are recognised as expense immediately in the profit
and loss account.

In respect of leases of tangible assets where the Group has substantially transferred all the risks and rewards incidental to legal ownership,
such leases are classified as finance leases. Such assets are recognised as a receivable at an amount equal to the net investment in the lease.
The lease payment is apportioned between finance income and the repayment of principle i.e. the net investment in the lease.

X. Accounting for Provisions, Contingent Liabilities and Contingent Assets

The Group has assessed its obligations arising in the normal course of business, including pending litigations, proceedings pending with tax
authorities and other contracts including derivative and long term contracts. In accordance with Accounting Standard - 29 on ‘Provisions,
Contingent Liabilities and Contingent Assets’, the Group recognises a provision for material foreseeable losses when it has a present obligation
as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are not discounted to its present value and are measured based on best estimate of the expenditure required
to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best
estimates.

In cases where the available information indicates that the loss on the contingency is reasonably possible but the amount of loss cannot
be reasonably estimated, a disclosure to this effect is made as contingent liabilities in the financial statements. The Group does not expect
the outcome of these contingencies to have a materially adverse effect on its financial results. Contingent assets are neither recognised nor
disclosed in the financial statements.

The Bank estimates the liability for credit card reward points and cost per point using actuarial valuation conducted by an independent actuary,
which includes assumptions such as mortality, redemption and spends.

Y. Scheme Expenses
New fund offer expenses and other expenses not chargeable to schemes, in accordance with applicable circulars and guidelines issued by SEBI
and Association of Mutual Funds in India (AMFI) are borne by the Asset management company of the Group. Brokerage paid for close ended
schemes before 22nd October, 2018 circular issued by SEBI in relation to upfront brokerage are amortised by the Asset Management Company
of the Group over the tenor of each scheme on a straight line basis.

Integrated Annual Report 2023-24

137 Financial Statements
Consolidated Schedules

Z. Contribution to Pool-For General Insurance Subsidiary

Terrorism Risk Insurance Pool

In accordance with the requirements of IRDAI, the General Insurance subsidiary, together with other insurance companies, participated in the
Terrorism Pool. This Pool is managed by General Insurance Corporation of India (GIC). In accordance with the terms of the agreement, GIC retro
cedes, to the Group, terrorism premium to the extent of shares agreed to be borne by the Group in the risk which is recorded as reinsurance
accepted. Such Insurance accepted is recorded based on quarterly confirmation received from GIC. Reinsurance accepted on account of
Terrorism Pool is recorded based on statement received from GIC.

The entire amount of reinsurance accepted for the current year on this account, net of claims and expenses up to the above date, is carried
forward to the subsequent accounting period as changes in unearned premium for subsequent risks, if any, to be borne by the Group.

Marine Cargo for Excluded Territories POOL (MCET Pool)

With the need for covering loss against shipment of fertilizers and other commodities, while under transit in marine cargo against Russia,
Ukraine, Belarus (referred as ‘excluded territories), the Company together with other insurance company, participated in Marine Cargo Pool for
Excluded Territories (referred as MCET Pool) which is managed by General Insurance Corporation of India (GIC Re). In accordance with the
terms of the agreement, the Company accepts retrocession risk as per shares specified in the Schedule of agreement, which is recorded as
reinsurance accepted. Such Insurance accepted is recorded based on quarterly confirmation received from GIC Re. Accordingly, reinsurance
accepted on account of MCET Pool has been recorded in accordance with the latest statement received from GIC Re.

The entire amount of reinsurance accepted for the current year on this account has been carried forward to the subsequent accounting period
as Changes in unearned premium under Insurance Contract Liabilities for subsequent risks, if any, to be borne by the company.

AA. Contribution to Solatium Fund

As per the requirements of IRDAI, the General Insurance subsidiary provides for contribution to solatium fund at 0.10% on the gross direct
premium of motor third party policies.

AB. Share Issue Expenses

Share issue expenses are adjusted from securities premium account as permitted by section 52 of the Companies Act, 2013.

AC. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting
attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity
shares outstanding during the year is adjusted for events of bonus issue and stock split.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted
average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Diluted earnings per
share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the
year.

AD. Impairment
The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external
factors. Impairment loss, if any, is recognised in the profit and loss account to the extent carrying amount of assets exceeds their estimated
recoverable amount.

AE. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise Cash in hand, Balances with Reserve Bank of India and Balances with Banks and
Money at Call and Short Notice (including the effect of changes in exchange rates on cash and cash equivalents in foreign currency).
138

NOTES TO ACCOUNTS
3. EMPLOYEE BENEFITS
a. The Group has recognised the following amounts in the profit and loss account towards contributions to provident fund and other funds.
(₹ in crore)

Year Ended
Particulars
31st March, 2024 31st March, 2023

Provident Fund 402.19 336.37

Superannuation Fund 1.38 1.35
New Pension Fund 18.13 14.75
DIFC Employee Workplace Savings Scheme (DEWS) 0.70 0.72

b. Gratuity1
The gratuity plan provides a lumpsum payment to vested employees at retirement or on termination of employment based on respective
employee’s salary and years of employment with the Group subject to a maximum of ₹ 0.20 crore. There is no ceiling on gratuity payable to
directors and certain categories of employees subject to service regulations and service awards.

Reconciliation of opening and closing balance of the present value of the defined benefit obligation for gratuity benefits is given below.
(₹ in crore)

As at 31 March, 2024
st
As at 31 March, 2023
st

Particulars
Funded Unfunded Funded Unfunded

Change in benefit obligations

Liability as at the beginning of the year 656.04 11.71 641.34 10.36
Transfer from Unfunded to Funded - - - -
Current Service cost 112.97 2.20 98.04 1.99
Interest cost 50.45 0.91 45.23 0.77
Actuarial (gain) / loss on obligations 24.82 0.98 (11.19) 0.50
Past Service cost 5.87 - - -
Addition due to acquisition 14.43 - - -
Liabilities assumed on acquisition / (settled on 0.24 (0.30) 0.68 (0.58)
divestiture)
Benefits paid (116.51) (1.54) (118.06) (1.33)
Liability as at the end of the year 748.31 13.96 656.04 11.71
Change in plan assets
Fair value of plan assets as at the beginning of the year 630.59 - 704.79 -
Expected return on plan assets 41.23 - 47.60 -
Actuarial Gain / (loss) 77.83 - (47.94) -
Addition due to amalgamation 12.94 - - -
Benefits paid (116.51) (1.54) (118.06) (1.33)
Employer contributions 159.75 1.54 44.20 1.33
Fair value of plan assets as at the end of the year 805.83 - 630.59 -

1
GRI 201-3

Integrated Annual Report 2023-24

139 Financial Statements
Consolidated Schedules

Reconciliation of present value of the obligation and the fair value of the plan Assets
(₹ in crore)

As at 31 March, 2024
st
As at 31 March, 2023
st

Particulars
Funded Unfunded Funded Unfunded

Fair value of plan assets as at the end of the year 805.83 - 630.59 -
Liability as at the end of the year 748.31 13.96 656.04 11.71
Net Asset / (Liability) included in “Others” under 57.52 (13.96) (25.45) (11.71)
“Other Assets”/ “Other Liabilities”
Expenses recognised for the year
Current service cost 112.97 2.20 98.04 1.99
Interest cost 50.45 0.91 45.23 0.77
Expected return on plan assets (41.23) - (47.60) -
Actuarial (gain) / loss (53.01) 0.98 36.75 0.50
Past Service Cost 5.87 - - -
Effect of the limit in Para 59(b) - - - -
Net gratuity expense recognised in Schedule 16.I 75.05 4.09 132.42 3.26
Actual return on plan assets 119.06 - (0.33) -

Reconciliation of the Liability recognised in the Balance Sheet

(₹ in crore)

As at 31st March, 2024 As at 31st March, 2023

Particulars
Funded Unfunded Funded Unfunded

Net (Asset) / Liability as at the beginning of the year 25.45 11.71 (63.45) 10.36
Transfer from Unfunded to Funded 1.49 - - -
Expense recognized 75.05 4.09 132.42 3.26
Liabilities assumed on acquisition / (settled on 0.24 (0.30) 0.68 (0.58)
divestiture)
Employer contributions (159.75) (1.54) (44.20) (1.33)
Effect of the limit in Para 59(b) - - - -
Net (Asset) / Liability included in “Others” under (57.52) 13.96 25.45 11.71
“Other Assets” or “Other Liabilities”

Investment details of plan assets

The plan assets are invested in insurer managed funds. Major categories of plan assets as a percentage of fair value of total plan assets:

As at As at
Particulars 31st March, 2024 31st March, 2023
% %

Equity shares 51.55 12.15

Government securities 26.92 49.59
Bonds, debentures and other fixed income instruments 14.48 22.80
LIC managed funds #
1.87 0.24
Money market instruments and other assets 5.18 15.22
Total 100.00 100.00

The plan assets are invested in a fund managed by Life Insurance Corporation of India. In the absence of detailed information regarding plan assets of the fund, the
#

composition of each major category of plan assets, the percentage or amount for each category of the fair value of plan assets has not been disclosed.
140

Actuarial assumptions used

Particulars As at 31st March, 2024 As at 31st March, 2023

Discount rate 7.15% to 7.18% p.a. 7.25% to 7.39% p.a.

Salary escalation rate 5.50% p.a. – (IBA) 5.50% p.a. (IBA)
7.00% to 9.00% p.a. – (Others) 7.00% to 8.00% p.a. (Others)
Expected rate of return on plan assets 7.00% to 7.50 % p.a. 7.00% to 7.25 % p.a.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

Expected rate of return on plan assets is based on expectation of the average long term rate of return expected on investments of the Fund
during the estimated term of the obligations.

Experience adjustments

Amounts for the current and previous four years are as follows:
(₹ in crore)

Year ended 31 March,

st

Gratuity
2024 2023 2022 2021 2020

Defined benefit obligation 762.27 667.77 651.68 618.14 559.07

Plan assets 805.83 630.61 704.80 666.73 498.16
Surplus / (deficit) 43.56 (37.16) 53.12 48.59 (60.91)
Experience adjustments on plan liabilities 19.61 8.68 28.32 12.38 42.40
Experience adjustments on plan assets 77.64 (47.93) 38.56 65.23 (43.65)

The Group expects to contribute ₹ 69.09 crore to gratuity fund in financial year 2024-25.

The above information is as certified by the actuaries of the respective companies and relied upon by the auditors.

c. Pension
Pension liability relates to employees of eIVBL.

Reconciliation of opening and closing balance of the present value of the defined benefit obligation for pension benefits is given below.
(₹ in crore)

As at As at
Particulars 31st March, 2024 31st March, 2023
Funded Funded

Change in benefit obligations

Liability as at the beginning of the year 1,912.65 1,909.31
Current Service cost 74.28 63.16
Interest cost 135.35 134.05
Actuarial (gain) / loss on obligations 171.29 40.66
Past Service cost - -
Benefits paid (181.90) (234.53)
Liability as at the end of the year 2,111.67 1,912.65
Change in plan assets
Fair value of plan assets as at the beginning of the year 1,873.26 1,953.43
Expected return on plan assets 126.45 133.47
Actuarial Gain / (loss) 13.37 11.27
Benefits paid (181.90) (234.53)
Employer contributions 48.13 9.62
Fair value of plan assets as at the end of the year 1,879.31 1,873.26

Integrated Annual Report 2023-24

141 Financial Statements
Consolidated Schedules

Reconciliation of present value of the obligation and the fair value of the plan Assets
(₹ in crore)

As at As at
Particulars 31st March, 2024 31st March, 2023
Funded Funded

Fair value of plan assets as at the end of the year 1,879.31 1,873.26
Liability as at the end of the year 2,111.67 1,912.65
Net Asset/ (Liability) included in “Others” under “Other Assets” or “Other Liabilities” (232.36) (39.39)
Expenses recognised for the year
Current service cost 74.28 63.16
Interest cost 135.35 134.05
Expected return on plan assets (126.45) (133.47)
Actuarial (gain) / loss 157.92 29.39
Effect of the limit in Para 59(b) - -
Net pension expense recognized in Schedule 16.I 241.10 93.13
Actual return on plan assets 139.81 144.74

Reconciliation of the Liability recognised in the Balance Sheet

(₹ in crore)

As at As at
Particulars 31st March, 2024 31st March, 2023
Funded Funded

Net (Asset) / Liability as at the beginning of the year 39.39 (44.12)

Expense recognized 241.10 93.13
Employer contributions (48.13) (9.62)
Effect of the limit in Para 59(b) - -
Net (Asset)/ Liability included in “Others” under “Other Assets” or “Other Liabilities” 232.36 39.39

Investment details of plan assets

The plan assets are invested in a fund managed by Life Insurance Corporation of India. In the absence of detailed information regarding plan
assets of the fund, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan
assets has not been disclosed.

Actuarial assumptions used

As at As at
Particulars
31st March, 2024 31st March, 2023

Discount rate 7.19% p.a. 7.39% p.a.

Salary escalation rate 5.50% p.a. 5.50% p.a.
Expected rate of return on plan assets 7.50% p.a. 7.50% p.a.
Inflation 10.00% p.a. 10.00% p.a.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant
factors like settlement with employee unions.

Expected rate of return on plan assets is based on expectation of the average long term rate of return expected on investments of the Fund
during the estimated term of the obligations.
142

Experience adjustments

Amounts for the current year and previous years are as follows:
(₹ in crore)

Year ended 31 March,

st

Pension
2024 2023 2022 2021 2020

Defined benefit obligation 2,111.67 1,912.65 1,909.31 1,891.94 1,600.48

Plan assets 1,879.31 1,873.26 1,953.43 1,872.49 1,514.35
Surplus / (deficit) (232.36) (39.39) 44.12 (19.45) (86.13)
Experience adjustments on plan liabilities 133.49 140.78 248.33 199.72 440.57
Experience adjustments on plan assets 13.37 11.27 34.13 (1.52) (7.85)

The Bank expects to contribute ₹ 228.21 crore to pension fund in financial year 2024-2025.

d. Compensated absences
The actuarially determined liability for compensated absences (accumulated leave) of the employees of the Group is given below:
(₹ in crore)

Particulars As at 31st March, 2024 As at 31st March, 2023

Total actuarial liability 184.57 149.38

Assumptions:
Discount rate 7.15% to 7.18% p.a. 7.25% to 7.39% p.a.
Salary escalation rate 5.50% p.a. (IBA) 5.50% p.a. (IBA)
7.00% to 9% p.a. (Others) 7.00% to 8% p.a. (Others)

e. Long Service Award

The actuarially determined liability in respect of Long Service Award of the employees of the Group is given below:
(₹ in crore)

As at As at
Particulars
31st March, 2024 31st March, 2023

Total actuarial liability 13.56 13.71

Assumptions:
Discount rate 7.15% to 7.19% 7.30% p.a.

4. DEPOSIT UNDER LIEN

Balance with Banks in other deposit accounts include ₹ 9,460.81 crore (previous year ₹ 6,480.75 crore) which are under lien.

5. SECURITIES PLEDGED AND ENCUMBERED

(a) Investments include Government Securities with face value of ₹ 4,327.45 crore (previous year ₹ 8,447.61 crore) pledged and encumbered for
availment of fund transfer facility, clearing facility, margin requirements and with the RBI for liquidity adjustment facility (LAF).

(b) Investments pledged with National Securities Clearing Corporation Limited towards exposure in derivatives segment as at 31st March, 2024
₹ 560.17 crore (previous year ₹ 319.85 crore).

(c) Investments pledged with Clearing Corporation of India Limited and Stock Exchange towards margin requirements as at 31st March, 2024
₹ 328.26 crore (previous year ₹ 306.04 crore).

Integrated Annual Report 2023-24

143 Financial Statements
Consolidated Schedules

6. “ Others” in Other Liabilities and Provisions (Schedule 5) include the following items of provisions in respect of contingencies and other
provisions, which have been recognised in the accounts in respect of obligations arising from past event, the settlement of which is expected
to result in an outflow embodying economic benefits.
a) Provision for Credit Card and Debit Card Reward Points
The following table sets forth, for the periods indicated, movement in actuarially determined provision for credit card and debit card account
reward points:
(₹ in crore)

Year Ended
Particulars
31st March, 2024 31st March, 2023

Opening provision for reward points 68.26 28.51

Provision for reward points made during the year 267.06 171.87
Utilisation/write-back of provision for reward points (211.20) (132.12)
Closing provision for reward points* 124.12 68.26
* This amount will be utilised towards redemption of the credit card and debit card accounts reward points.

b) Legal:
(₹ in crore)

Year Ended
Particulars
31 March, 2024
st
31st March, 2023

Opening Provision 43.01 43.78

Add: Addition during the year 0.56 2.27
Less: Reduction during the year (6.98) (3.04)
Closing Provision 36.59 43.01

c) Fraud and Other Provisions:

(₹ in crore)

Year Ended
Particulars
31st March, 2024 31st March, 2023

Opening Provision 39.04 45.11

Add: Addition during the year 27.74 4.78
Less: Reduction during the year (19.82) (10.85)
Closing Provision 46.96 39.04

7. A. PROVISIONS AND CONTINGENCIES:

Breakup of “Provisions and Contingencies” shown under the head Expenditure in Profit and Loss Account:
(₹ in crore)

Year Ended
Particulars
31st March, 2024 31st March, 2023

Provision for Taxation (Refer Note 8 below) 5,886.55 4,865.74

Provision for Non-performing Assets (including write-offs and net of recoveries) 1,691.65 508.45
Provision for Standard Assets 247.90 185.84
General Provision – COVID-19 Deferment Cases* (126.29) (170.98)
Provision for Unhedged Foreign Currency Exposure 10.71 (11.09)
Provision for Diminution in value of Investments# $ 74.23 (18.15)
Provision for country risk exposure - (4.79)
Other Provision and Contingencies 74.27 (49.60)
Total 7,859.02 5,305.42
* Provision/ (write-back) in respect of borrowers for which moratorium is granted by the Bank (H 124.90) crore (previous year H 159.55 crore) and its NBFC
subsidiaries (H 1.39) crore (previous year H 11.43 crore) in accordance with RBI guidelines.
#  Provision in respect of security receipts of H 64.91 crore for the year ended 31st March 2024 was re-classified as Non Performing Investments (NPI). The
same was earlier accounted as Mark to Market Loss under “Other Income”. Such reclassification has no impact on the result of the respective periods.
$ Includes provision of H 33.13 crore on applicable Alternate Investments Funds (AIF) Investments in accordance with RBI circular dated 19th December, 2023
and 27th March 2024.

B. The Bank and its subsidiaries held an aggregate COVID-19 related provision of ₹ 389.62 crore as of 31st March, 2023. Based on the improved
outlook and on actual collections, the Bank and its subsidiaries have reversed provisions amounting to ₹ 126.29 crore during the year ended
31st March, 2024 and continue to hold provisions aggregating to ₹ 263.33 crore as at 31st March, 2024.
144

8. PROVISION MADE FOR TAXES DURING THE YEAR:

(₹ in crore)

Year Ended
Particulars
31 March, 2024
st
31st March, 2023

Current tax 5,885.31 4,842.98

Deferred tax 1.24 22.76
Total 5,886.55 4,865.74

9. DESCRIPTION OF CONTINGENT LIABILITIES:

Sr.
Contingent Liability* Brief Description
No.

1. Claims not acknowledged as This includes liability on account of Direct and Indirect tax demands and legal cases filed against
debts the Group.
The Group is a party to various legal proceedings in the normal course of business. The Group
does not expect the outcome of these proceedings to have a material adverse effect on the Group’s
financial conditions, result of operations or cash flows. In respect of appeals filed by the Income Tax
department with higher authorities, where the matter was settled in favour of the Group at the first
appellate stage, and where in view of the Management, it gives rise to an item of timing difference, no
contingent liability is envisaged by the Group.
2. Liability on account of outstanding The Group enters into foreign exchange contracts with inter-bank participants and with its customers.
forward exchange contracts Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the
contracted rate.
3. Guarantees on behalf of Primarily as part of its banking activities, the Group issues guarantees on behalf of its customers.
constituents in and outside India Guarantees generally represent irrevocable assurances that the Group will make payments in the
event of customer failing to fulfill its financial or performance obligations.
4. Acceptances, endorsements and These include:
other obligations  Documentary credit such as letters of obligations, enhance the credit standing of the customers
of the Group
 Bills re-discounted by the Group and cash collateral provided by the Group on assets which
have been securitised.
 Underwriting commitments in respect of Debt Syndication
5. Other items for which the Group is These include:
contingently liable  Liabilities in respect of interest rate swaps, currency swaps, forward rate agreements, futures,
options and other derivative contracts. The Bank enters into these transactions with inter
Bank participants and its customers. Currency Swaps are commitments to exchange cash
flows by way of interest/ principal in one currency against another, based on predetermined
rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash
flows. The notional amounts that are recorded as contingent liabilities are amounts used as a
benchmark for the calculation of interest component of the contracts.
 Liability in respect of capital commitments relating to fixed assets and undrawn commitments
in respect of investments.
 Amount Transferred to RBI under the Depositor Education and Awareness Fund (‘DEA Fund’).
* Also refer Schedule 12 – Contingent Liabilities

10. EARNINGS PER EQUITY SHARE:

Year Ended
Particulars
31st March, 2024 31st March, 2023

Reconciliation between weighted shares used in the computation of basic and diluted earnings per share:
Weighted average number of equity shares used in computation of basic earnings per share 1,987,326,015 1,985,666,543
Effect of potential equity shares for stock options outstanding 150,565 502,301
Weighted average number of equity shares used in computation of diluted earnings per share 1,987,476,580 1,986,168,844
Following is the reconciliation between basic and diluted earnings per share:
Nominal value per share (₹) 5.00 5.00
Basic earnings per share (₹) 91.45 74.96
Effect of potential equity shares for stock options (₹) 0.00 0.02
Diluted earnings per share (₹) 91.45 74.94
Profit for the year after tax (₹ in crore) 18,213.21 14,925.01
Less : Preference dividend including tax (₹ in crore) 38.51 40.50
Earnings used in the computation of basic and diluted earnings per share (₹ in crore) 18,174.70 14,884.51

Integrated Annual Report 2023-24

145 Financial Statements
Consolidated Schedules

11. EMPLOYEE SHARE BASED PAYMENTS:

The shareholders of the Bank had passed Special Resolutions in the General meeting dated 29th June, 2015 and 22nd December 2023, to grant options
to the eligible employees of the Bank and its subsidiaries. Pursuant to these resolutions, the Kotak Mahindra Equity Option Scheme 2015 and Kotak
Mahindra Equity Option Scheme 2023 have been formulated and adopted, respectively. The Kotak Mahindra Equity Option Scheme 2015 is operational
only to the extent of treatment of options granted till 22nd December 2023 and Kotak Mahindra Equity Option Scheme 2023 is currently in force.

Equity-settled options
The Bank has granted options to employees of the Group vide various employee stock option schemes. During the year ended 31st March, 2024, the
following schemes were in operation:

Particulars Plan 2015 Plan 2023

Date of grant Various Dates Various Dates

Date of Board Approval Various Dates Various Dates
Date of Shareholder’s approval 29 June, 2015
th
22 December, 2023
nd

Number of options granted 21,080,963 108,417

Method of Settlement (Cash / Equity) Equity Equity
Vesting Period 0.01 – 4.16 years 1.03 – 3.40 years
Exercise Period 0.03 – 1 year 0.50 year
Vesting Conditions Graded / Cliff vesting Graded / Cliff vesting

The details of activity under Plan 2015 have been summarised below:

Year ended 31st March, 2024 Year ended 31st March, 2023
Particulars Number of Weighted Average Number of Weighted Average
Shares Exercise Price (`) Shares Exercise Price (`)

Outstanding at the beginning of the year 3,573,225 1,642.98 4,270,658 1,485.35

Granted during the year 1,112,490 1,939.00 1,474,424 1,804.47
Forfeited during the year 206,273 1,804.14 137,475 1,611.54
Exercised during the year 1,364,316 1,460.33 1,894,822 1,413.62
Expired during the year 415,397 1,768.94 139,560 1,670.66
Outstanding at the end of the year 2,699,729 1,825.57 3,573,225 1,642.98
Out of the above exercisable at the end of the year 334,878 1,579.64 835,480 1,439.84
Weighted average remaining contractual life (in years) 1.65 1.46
Weighted average fair value of options granted 509.70 490.13

The details of activity under Plan 2023 have been summarised below:

Year ended 31st March, 2024 Year ended 31st March, 2023
Particulars Number of Weighted Average Number of Weighted Average
Shares Exercise Price (`) Shares Exercise Price (`)

Outstanding at the beginning of the year - - - -

Granted during the year 108,417 1,823.00 - -
Forfeited during the year - - - -
Exercised during the year - - - -
Expired during the year - - - -
Outstanding at the end of the year 108,417 1,823.00 - -
Out of the above exercisable at the end of the year - - - -
Weighted average remaining contractual life (in years) 2.44 -
Weighted average fair value of options granted 377.70 -
The weighted average share price at the date of exercise for stock options exercised during the year was ₹ 1,842.83 (Previous year ₹ 1,772.38).
146

The details of exercise price for stock options outstanding at the end of the year are:

31st March, 2024

Weighted average
Number
remaining Weighted average
Range of exercise prices (₹) of options
contractual life of exercise price (`)
outstanding
options (in years)

1,201-1,300 10,020 0.28 1,240.89

1,301-1,400 174,514 0.25 1,341.00
1,701-1,800 786,518 1.65 1,798.00
1,801-1,900 774,484 1.48 1,814.32
1,901-2,000 1,062,610 2.08 1,939.00

31st March, 2023

Weighted average
Number
remaining Weighted average
Range of exercise prices (`) of options
contractual life of exercise price (`)
outstanding
options (in years)

901-1,000 75,321 0.73 1,000.00

1,001-1,100 10,000 0.25 1,050.00
1,201-1,300 20,040 1.03 1,240.89
1,301-1,400 738,312 0.72 1,341.00
1,401-1,500 442,832 0.25 1,460.00
1,701-1,800 1,224,120 2.08 1,798.00
1,801-1,900 1,062,600 1.83 1,809.20

Stock appreciation rights (SARs)

At the General Meeting on 29th June, 2015, the shareholders of the Bank had passed Special Resolution to grant SARs to the eligible employees of the
Bank and its subsidiaries. Pursuant to this resolution, Kotak Mahindra Stock Appreciation Rights Scheme 2015 had been formulated and adopted.
Subsequently, the SARs have been granted under this scheme.

The Board of Directors of the Bank have formulated and adopted the Kotak Mahindra Stock Appreciation Rights Scheme 2023 effective from 1st
December 2023 in place of SARs Scheme 2015. SARs Scheme 2015 is operational only to the extent of treatment of SARs granted till 30th November
2023.

The SARs are settled in cash and vest on the respective due dates in a graded manner as per the terms and conditions of grant. The contractual life
of the SARs outstanding range from 1.00 to 5.10 years.

Detail of activity under SARs is summarised below:

Year Ended Year Ended

Particulars
31st March, 2024 31st March, 2023

Outstanding at the beginning of the year 2,540,038 1,713,218

Granted during the year 1,849,441 1,637,601
Settled during the year 945,470 697,273
Forfeited during the year 267,336 113,508
Outstanding at the end of the year 3,176,673 2,540,038

Integrated Annual Report 2023-24

147 Financial Statements
Consolidated Schedules

Fair value of Employee stock options

The fair value of the equity-settled options is estimated on the date of grant using Black-Scholes options pricing model taking into account the terms
and conditions upon which the options were granted. The fair value of the cash-settled options is remeasured at each Balance Sheet date. The
following table lists the inputs to the model used for equity-settled and cash-settled options:

Year ended 31st March,

Particulars
2024 2023
Equity-settled Cash-settled Equity-settled Cash-settled

Exercise Price ₹ 1,823-1,939 0-1,939 1,798-1,900 0-1,828

Weighted Average Share Price ₹ 1,927.50 1,828.97 1,782.25 1,717.45
Expected Volatility 16.79%-32.42% 11.25%-25.27% 26.57%-36.85% 14.24%-33.18%
Historical Volatility 16.79%-32.42% 11.25%-25.27% 26.57%-36.85% 14.24%-33.18%
Life of the options granted (Vesting and exercise period)
- At the grant date 1.25-4.42 1.25-4.31
- As at 31 March
st
0.02-3.84 0.00-4.21
Risk-free interest rate 7.01%-7.26% 6.89%-7.19% 5.75%-7.77% 6.77%-7.32%
Expected dividend rate 0.08% 0.08%-0.09% 0.06% 0.06%

The expected volatility was determined based on historical volatility data and the Bank expects the volatility of its share price may not differ from
historical volatility. The measure of volatility used in the Black-Scholes options pricing model is the annualised standard deviation of the continuously
compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility of the stock prices on the National Stock
Exchange, over a period prior to the date of grant for equity settled options and remeasurement date for the cash settled options, corresponding with
the expected / residual life of the share-linked instruments has been considered.

Effect of the employee share-based payment plans on the Profit and Loss Account and on the financial position:

(₹ in crore)

Year ended 31st March,

Particulars
2024 2023

Total Employee compensation cost pertaining to share-based payment plans 265.22 201.01
Compensation cost pertaining to equity-settled employee share-based payment plan included above 44.95 45.64
Liability for employee stock options outstanding as at year end 140.44 121.78
Deferred Compensation Cost 61.15 61.48
Closing balance of liability for cash-settled options 264.13 196.93
Expense arising from increase in intrinsic value of liability for cash stock appreciation plan 141.85 69.87

Had the Group recorded the compensation cost for all share-linked instruments granted on or before 31 March 2021 on the basis of fair valuation
method instead of intrinsic value method, employee compensation cost would have been higher by ₹ 2.89 crore (Previous year ₹ 12.93 crore) and the
profit after tax would have been lower by ₹ 2.22 crore (Previous year ₹ 9.75 crore). Consequently the basic and diluted EPS would have been ₹ 91.44
(Previous year ₹ 74.91) and ₹ 91.43 (Previous year ₹ 74.89) respectively.

12. TIER II BONDS

Lower Tier II Bonds outstanding as at 31st March, 2024 ₹ 20 crore (previous year ₹ 20.00 crore).

13. Interest Expended - Others (Schedule 15.III) includes interest on subordinated debt (Lower and Upper Tier II) ₹ 1.67 crore for the year ended
31st March, 2024 (previous year ₹ 24.95 crore).
148

14. SEGMENT REPORTING

The summary of the operating segments of the Group for the year ended 31st March, 2024 are as given below:
(₹ in crore)

31 March,
st
2024 2023

Segment Revenues:
Treasury, BMU and Corporate Centre 10,956.31 7,437.57
Retail Banking 27,831.08 19,179.15
Corporate / Wholesale Banking 22,788.95 18,130.83
Vehicle Financing 3,415.80 2,607.39
Other Lending Activities 1,918.48 1,342.09
Broking 3,213.90 2,454.01
Advisory and Transactional Services 1,371.46 862.19
Asset Management 1,941.89 1,660.07
Insurance 28,110.08 19,009.59
Sub-total 101,547.95 72,682.89
Add: Unallocated Income - -
Less: inter-segment revenues (7,274.04) (4,540.86)
Total Income 94,273.91 68,142.03
Segment Results:
Treasury, BMU and Corporate Centre 5,505.43 4,331.00
Retail Banking 5,732.75 3,411.69
Corporate / Wholesale Banking 7,473.79 7,072.95
Vehicle Financing 706.11 724.58
Other Lending Activities 649.14 539.76
Broking 1,129.11 815.42
Advisory and Transactional Services 729.89 546.54
Asset Management 984.84 858.82
Insurance 952.32 1,345.42
Sub-total 23,863.38 19,646.18
Add: Unallocated Income / (Expense) - -
Total Profit before tax, minority interest and associates 23,863.38 19,646.18
Less: Provision for tax (5,886.55) (4,865.74)
Net Profit before share of Associates and Minority 18,213.21 14,780.44
Segment Assets:
Treasury, BMU and Corporate Centre 187,565.09 138,500.51
Retail Banking 384,257.91 310,374.20
Corporate / Wholesale Banking 239,539.02 223,845.52
Vehicle Financing 28,262.24 24,085.06
Other Lending Activities 23,779.45 18,523.54
Broking 17,562.29 10,491.70
Advisory and Transactional Services 1,169.06 677.08
Asset Management 6,442.32 5,669.64
Insurance 85,062.53 68,182.65
Sub-total 973,639.91 800,349.90
Less: inter-segment assets (207,816.22) (181,445.79)
Total 765,823.69 618,904.11
Add: Unallocated Assets 1,843.27 1,525.62
Total Assets as per Balance Sheet 767,666.96 620,429.73

Integrated Annual Report 2023-24

149 Financial Statements
Consolidated Schedules

(₹ in crore)

31 March,
st
2024 2023

Segment Liabilities:
Treasury, BMU and Corporate Centre 139,213.04 96,606.02
Retail Banking 353,357.46 287,429.54
Corporate / Wholesale Banking 218,547.17 202,922.48
Vehicle Financing 21,800.15 16,297.81
Other Lending Activities 16,755.39 13,641.89
Broking 15,618.60 8,851.84
Advisory and Transactional Services 294.45 134.31
Asset Management 1,115.25 890.38
Insurance 77,931.56 61,941.05
Sub-total 844,633.07 688,715.32
Less: inter-segment liabilities (207,816.22) (181,445.79)
Total 636,816.85 507,269.53
Add: Unallocated liabilities 957.71 906.11
Add: Share Capital, Reserves and Surplus and Minority Interest 129,892.40 112,254.09
Total Capital and Liabilities as per Balance Sheet 767,666.96 620,429.73
Capital Expenditure:
Treasury, BMU and Corporate Centre 187.35 122.68
Retail Banking 630.10 562.99
Corporate / Wholesale Banking 57.75 65.17
Vehicle Financing 16.68 16.85
Other Lending Activities 1.09 0.66
Broking 53.56 60.98
Advisory and Transactional Services 20.63 15.54
Asset Management 22.82 34.80
Insurance 128.02 86.57
Total 1,118.00 966.24
Depreciation / Amortisation:
Treasury, BMU and Corporate Centre 119.23 90.96
Retail Banking 448.99 337.81
Corporate / Wholesale Banking 47.55 33.81
Vehicle Financing 11.70 8.68
Other Lending Activities 0.88 2.09
Broking 55.63 45.20
Advisory and Transactional Services 11.30 4.37
Asset Management 22.22 17.32
Insurance 74.25 59.05
Total 791.75 599.29
Segment information is provided as per the management information system available for internal reporting purposes, which includes certain estimates and assumptions.
150

RBI’s Master Direction on Financial Statements - Presentation and Disclosures, requires to divide the ‘Retail banking’ into (a) Digital Banking (as
defined in RBI circular on Establishment of Digital Banking Units dated April 7, 2022) and (b) Other Retail Banking segment. The Bank has two DBUs
which commenced operations during the quarter ended 31st December, 2022. Accordingly, the segmental results for retail banking are subdivided as
under:

For March 31, 2024:-

(₹ in crore)

Segment Revenue Segment Results Segment Assets Segment Liability

Particulars for year ended for year ended as at as at
31st March, 2024 31st March, 2024 31st March, 2024 31st March, 2024

Retail Banking 27,831.08 5,732.75 384,257.91 353,357.46

(i) Digital Banking 1,536.19 118.36 60.60 15,585.65
(ii) Other Retail Banking 26,294.89 5,614.39 384,197.31 337,771.81

15. ASSETS TAKEN ON LEASE

(i) The Group has taken various premises and equipment under operating lease. The lease payments recognised in the Profit and Loss Account
are ₹ 765.74 crore (previous year ₹ 751.98 crore).

(ii) The future minimum lease payments under non-cancelable operating lease not later than one year is ₹ 772.48 crore (previous year ₹ 872.03
crore), later than one year but not later than five years is ₹ 2,210.07 crore (previous year ₹ 2,001.94 crore) and later than five years ₹ 954.30 crore
(previous year ₹ 804.28 crore).

The lease terms include renewal option after expiry of primary lease period. There are no restrictions imposed by lease arrangements. There are
escalation clauses in the lease agreements.

16. ASSETS GIVEN ON LEASE

Details of gross investments, unearned finance income and present value of rentals in respect of assets given under finance lease are as under:
(₹ in crore)

As at 31st March, 2024 2023

Gross Investments (A):

(i) Not later than 1 year 85.73 62.21
(ii) Between 1-5 years 163.86 120.50
Total 249.59 182.71
Unearned Finance Income (B):
(i) Not later than 1 year 21.95 15.89
(ii) Between 1-5 years 26.13 18.45
Total 48.08 34.34
Present Value of Rentals (A-B):
(i) Not later than 1 year 63.77 46.32
(ii) Between 1-5 years 137.74 102.05
Total 201.51 148.37
Accumulated provision on the Gross Investments 2.98 1.72

17. In accordance with the IRDAI Financial Statements Regulations, the Life Insurance subsidiary revalues its investment property at least once in three
years, the market value being the lower of valuations performed by two independent valuers. The real estate investment property is accordingly
valued at ₹ 239.16 crore at 31st March, 2024 (previous year ₹ 233.34 crore). The historical cost of the property is ₹ 158.56 crore (previous year ₹ 158.56
crore). The revaluation gains have been included in policyholders’ funds.

The life insurance subsidiary has entered into agreements for leasing out its real estate investment properties. These arrangement are in the nature
of operating lease. There are no restrictions imposed by lease arrangement and the rent is not determined based on any contingency. The lease
payments recognised in profit and loss account in the current year is ₹ 16.35 crore (previous year ₹ 14.93 crore).

Integrated Annual Report 2023-24

151 Financial Statements
Consolidated Schedules

18. The Group enters into various types of derivative contracts such as interest rate swaps, cross currency interest rate swaps, foreign currency swaps,
forwards, forward rate agreements, index / equity futures and options. The details of such derivatives for subsidiaries (other than bank) are as under:

Derivative instrument outstanding as at 31st March, 2024

As at 31st March, 2024 2023 Purpose

Particulars of Derivatives Quantity Quantity

Futures
S&P CNX Nifty Futures Short - - Trading
Bank Nifty Futures Short - - Trading
Stock Futures Long 1,801,455 632,075 Trading
Stock Futures Short 27,352,414 37,671,130 Trading
S&P CNX Nifty Futures Long - - Trading
Options
S&P CNX Nifty Options Long 52,700 189,300 Trading
S&P CNX Nifty Options Short 43,400 177,000 Trading
Stock option Long 160,000 - Trading
Bank Nifty option Long - 3,800 Trading
Bank Nifty option Short - 3,250 Trading
Forward Exchange Contracts
USD-INR Long USD 500,000 USD 500,000 Hedging
USD-INR Short USD 250,000 - Hedging
Interest Rate Swap - Hedging
Total Return Swap Trading
Forward rate agreement (₹ crore)# 10,362.16 5,953.91 Hedging

#
Total outstanding notional principal amount of forward rate agreement entered by Life insurance subsidiary to hedge Interest rate risk on its liability side

Unhedged forex exposure outstanding as at the Balance Sheet date

(₹ in crore)

As at As at
Particulars
31st March, 2024 31st March, 2023

Amount Receivable in foreign currency 12.81 (USD 1,535,884) 11.59 (USD 1,410,562)
1.44 (GBP 137,000) 0.54 (GBP 53,000)
0.05 (EUR 6,000) 0.36 (EUR 40,000)
0.16 (CAD 26,000) 0.08 (SGD 13,000)
Amount Payable in foreign currency 3.26 (USD 391,000) 2.33 (USD 2,83,000)
0.72 (SGD 116,000) 0.64 (SGD 1,04,000)
152

19. Additional information to consolidated accounts at 31st March, 2024, (Pursuant to Schedule III of the Companies Act, 2013)
(₹ in crore)

Net Assets* Share in Profit or Loss

As at As at For the year ended For the year ended
31st March, 2024 31st March, 2023 31st March, 2024 31st March, 2023
Name of the Entity As % of As % of
As % of As % of
Consolidated Consolidated
Consolidated Amount Consolidated Amount Amount Amount
Profit or Profit or
Net Assets Net Assets
Loss Loss

Kotak Mahindra Bank Limited 74.40% 96,639.46 74.35% 83,459.94 75.67% 13,781.58 73.30% 10,939.30
Indian Subsidiaries:
Kotak Mahindra Prime Limited 7.06% 9,176.48 7.40% 8,305.90 4.89% 888.06 5.55% 828.96
Kotak Securities Limited 6.38% 8,286.15 6.33% 7,107.98 6.74% 1,226.17 5.80% 865.22
Kotak Mahindra Capital Company 0.91% 1,181.03 0.89% 1,000.38 1.18% 215.01 1.00% 149.28
Limited
Kotak Mahindra Life Insurance 4.51% 5,863.23 4.75% 5,327.70 3.78% 688.62 7.06% 1,053.31
Company Limited
Kotak Mahindra General Insurance 0.34% 447.12 0.30% 341.07 (0.49%) (88.95) (0.79%) (117.28)
Company Limited
Kotak Mahindra Investments 2.56% 3,329.02 2.51% 2,814.81 2.82% 514.21 2.19% 326.26
Limited
Kotak Mahindra Asset 1.54% 1,995.62 1.50% 1,682.96 2.33% 424.41 3.18% 474.77
Management Company Limited
Kotak Mahindra Trustee Company 0.40% 525.32 0.38% 424.55 0.55% 100.77 0.54% 79.99
Limited
Kotak Alternate Asset Managers 0.67% 864.58 0.72% 805.72 0.32% 58.84 0.28% 42.27
Limited (formerly known as Kotak
Investment Advisors Limited)
Kotak Mahindra Trusteeship 0.03% 35.00 0.03% 29.13 0.03% 5.87 0.02% 2.63
Services Limited
Kotak Infrastructure Debt Fund 0.40% 519.61 0.42% 476.20 0.24% 43.40 0.19% 27.83
Limited
Kotak Mahindra Pension Fund 0.04% 52.40 0.05% 52.61 0.00% (0.21) (0.02%) (3.49)
Limited
IVY Product Intermediaries 0.01% 6.69 0.01% 6.36 0.00% 0.33 0.00% 0.16
Limited
BSS Microfinance Limited 0.78% 1,009.85 0.56% 626.63 2.10% 383.22 1.99% 297.21
Sonata Finance Private Limited 0.30% 389.41 - - (0.08%) (13.71) - -
Foreign Subsidiaries:
Kotak Mahindra (International) 0.77% 1,001.34 0.82% 922.93 0.35% 64.28 0.08% 12.41
Limited
Kotak Mahindra (UK) Limited 0.38% 495.19 0.40% 449.79 0.21% 38.63 0.10% 15.07
Kotak Mahindra, Inc. 0.08% 98.79 0.08% 86.33 0.06% 11.08 0.09% 13.25
Kotak Mahindra Financial Services 0.00% 3.05 0.00% 3.59 0.00% (0.59) (0.02%) (3.08)
Limited
Kotak Mahindra Asset 0.28% 363.99 0.25% 283.85 0.41% 75.32 0.26% 38.66
Management (Singapore) Pte.
Limited
Minority Interests in subsidiary 0.00% - 0.00% - 0.00% - 0.00% -
Associates:
Infina Finance Private Limited - - - - 0.70% 128.13 0.41% 60.50
Phoenix ARC Private Limited - - - - 0.60% 108.25 0.56% 84.07
Inter-company and Other (1.84%) (2,390.94) (1.75%) (1,954.34) (2.41%) (439.51) (1.77%) (262.29)
adjustments
Total 100.00% 1,29,892.39 100.00% 112,254.09 100.00% 18,213.21 100.00% 14,925.01
* Total assets minus total liabilities

Integrated Annual Report 2023-24

153 Financial Statements
Consolidated Schedules

20. The Group has recorded net deferred tax asset which has been included in “Others – Other Assets” (Schedule 11.VI).
The break-up of deferred tax assets and liabilities into major items is as follows:
(₹ in crore)

Year ended Year ended

Particulars
31st March, 2024 31st March, 2023

Deferred Tax Assets

Provision for non-performing and doubtful debts, general provisions and contingencies 618.41 577.65
Depreciation on assets 76.24 65.68
Provision for investments 13.37 6.65
Unamortised Income 9.78 6.93
Expenditure allowed on payment basis and others 160.81 163.75
Total Deferred Tax Assets 878.61 820.66
Deferred Tax Liabilities
Depreciation on assets 0.86 2.15
Deduction u/s. 36(1)(viii) of the Income Tax Act, 1961 244.02 212.56
Others 1.72 0.77
Total Deferred Tax Liabilities 246.60 215.48
Net Deferred Tax Assets / (Liabilities) 632.01 605.17

21. FIXED ASSETS

Fixed Assets as per Schedule 10 include intangible assets, details of which are as follows:
(₹ in crore)

Year ended Year ended

Particulars
31st March, 2024 31st March, 2023

PURCHASED SOFTWARE AND SYSTEM DEVELOPMENT EXPENDITURE

Gross Block
At cost on 31st March of the preceding year 1,345.87 1,100.59
Additions /Transfers due to acquisition 0.84 -
Add: Additions during the year 220.09 302.81
Less: Deductions during the year 30.99 57.53
Total 1,535.81 1,345.87
Amortisation
As at 31st March of the preceding year 959.78 837.24
Additions /Transfers due to acquisition 0.72 -
Add: Charge for the year 241.00 175.73
Less: Deductions during the year 27.49 53.19
Amortisation to date 1,174.01 959.78
Net Block 361.80 386.09
MEMBERSHIP CARDS OF STOCK EXCHANGE
Gross Block
At cost on 31st March of the preceding year 4.66 4.66
Add: Additions during the year - -
Less: Deductions during the year - -
Total 4.66 4.66
Amortisation
As at 31st March of the preceding year 4.66 4.66
Add: Charge for the year - -
Less: Deductions during the year - -
Amortisation to date 4.66 4.66
Net Block - -
ASSET MANAGEMENT RIGHTS
Gross Block
At cost on 31st March of the preceding year 15.90 15.90
Add: Additions during the year - -
Less: Deductions during the year - -
Total 15.90 15.90
Amortisation
As at 31st March of the preceding year 15.90 15.90
Add: Charge for the year - -
Less: Deductions during the year - -
Amortisation to date 15.90 15.90
Net Block - -
154

22. RELATED PARTY DISCLOSURES:

Nature of relationship Name of Related Party

A. Individual having significant Mr. Uday S. Kotak, Promoter along with the persons / entities forming part of the Promoter Group,
influence over the enterprise holds 25.90% of the paid-up share capital of Kotak Mahindra Bank Limited as on 31st March, 2024.
B. Other Related Parties
Associates / Others Infina Finance Private Limited
Phoenix ARC Private Limited
ING Vysya Foundation
Kotak Karma Foundation (w.e.f. 26th June, 2023)
Key Management Personnel Mr. Uday S. Kotak - Managing Director & CEO upto 1st September 2023
(KMP) Non Executive Director w.e.f. 2nd September 2023
Mr. Dipak Gupta - Joint Managing Director (upto 31st December 2023)
Mr. Ashok Vaswani – Managing Director and CEO (w.e.f. 1st January 2024)
Mr. KVS Manian – Joint Managing Director
Mr. Gaurang Shah - Whole-time Director (upto 31st October 2022)
Ms. Shanti Ekambaram – Deputy Managing Director (w.e.f. 1st November 2022)
Enterprises over which KMP / Aero Agencies Private Limited (formerly known as Aero Agencies Limited)
relatives of KMP have control / Kotak and Company Private Limited
significant influence Komaf Financial Services Private Limited
Asian Machinery & Equipment Private Limited
Insurekot Sports Private Limited
Kotak Trustee Company Private Limited
Cumulus Trading Company Private Limited
Palko Properties Private Limited
Kotak Chemicals Limited
Kotak Ginning & Pressing Industries Private Limited
Kotak Commodity Services Private Limited
Harisiddha Trading and Finance Private Limited
Puma Properties Private Limited
Business Standard Private Limited
Business Standard Online Private Limited
Allied Auto Accessories Private Limited
Uday S Kotak HUF
Suresh A Kotak HUF
KF Trust (formerly known as USK Benefit Trust II)
Kotak Family Foundation
Helena Realty Private Limited
Doreen Realty Private Limited
Renato Realty Private Limited
Pine Tree Estates Private Limited
Meluha Developers Private Limited
Quantyco Realty Private Limited
Xanadu Properties Private Limited
Laburnum Adarsh Trust
True North Enterprises (upto 31st October 2022)
Manian Family Trust
Brij Disa Arnav Trust (upto 31st December 2023)
Brij Disa Parthav Trust (upto 31st December 2023)
Kotak Mahindra Group Employee Welfare Trust
TML Benefit Trust
Brij Disa Foundation (upto 31st December 2023)
Amrit Lila Enterprises Private Limited
Manians Family Trust II
USK Benefit Trust III
Kudin Trusteeship Services Private Limited (w.e.f. 9th September 2022)
Shanti Family Trust (w.e.f. 1st November 2022)
Shivkaran Trust (w.e.f. 1st November 2022)
USK Capital Partners (w.e.f. 2nd January 2024)

Integrated Annual Report 2023-24

155 Financial Statements
Consolidated Schedules

Nature of relationship Name of Related Party

Relatives of KMP Ms. Pallavi Kotak

Mr. Suresh Kotak
Ms. Indira Kotak
Mr. Jay Kotak
Mr. Dhawal Kotak
Ms. Aarti Chandaria
Ms. Aditi Arya (w.e.f. 7th November 2023)
Ms. Anita Gupta (upto 31st December 2023)
Ms. Urmila Gupta (upto 31st December 2023)
Mr. Arnav Gupta (upto 31st December 2023)
Mr. Parthav Gupta (upto 31st December 2023)
Mr. Prabhat Gupta (upto 31st December 2023)
Ms. Jyoti Banga (upto 31st December 2023)
Ms. Seetha Krishnan
Ms. Lalitha Mohan
Ms. Shruti Manian
Mr. Shashank Manian
Mr. Ramesh Krishnan
Ms. Vanathi Gopalakrishnan (w.e.f. 15th April 2022)
Ms. Asha Shah (upto 31st October 2022)
Ms. Divya Shah (upto 31st October 2022)
Ms. Manasi Shah (upto 31st October 2022)
Ms. Mahima Shah (upto 31st October 2022)
Mr. Chetan Shah (upto 31st October 2022)
Ms. Chetna Shah (upto 31st October 2022)
Ms. G. Saraswathi (w.e.f. 1st November 2022)
Ms. Shobha Srivastava (w.e.f. 1st November 2022)
Veena Vaswani (w.e.f. 1st January 2024)

Details of related party transactions as at / for the year ended 31st March, 2024:
(₹ in crore)

Enterprises over which Relatives

Key
Associates/ KMP /relatives of of Key
Items/Related Party Management Total
others KMP have control / Management
Personnel
significant influence Personnel

I. Liabilities
Deposits 49.59 61.02 107.84 174.02 392.47
(67.64) (261.73) (104.26) (184.32) (617.95)
Interest Payable 0.23 - 1.13 0.61 1.97
(0.10) (1.94) (1.00) (0.50) (3.54)
Other Liabilities 3.48 # 0.06 # 3.54
(0.91) (#) (0.10) (#) (1.01)
II. Assets
Advances 25.31 0.01 1.31 0.04 26.68
(40.31) (-) (0.92) (4.45) (45.68)
Investments –Gross 103.28 - # - 103.28
(127.28) (-) (#) (-) (127.28)
Diminution on Investments - - # - #
(-) (-) (#) (-) (#)
Other Assets 0.23 # 10.49 0.03 10.75
(0.39) (#) (0.27) (0.03) (0.69)
Non Fund/ Commitments
Bank Guarantees - - 1.13 - 1.13
(-) (-) (1.13) (-) (1.13)
Forward/CIRS o/s - - - - -
(-) (-) (-) (1.65) (1.65)
156

(₹ in crore)

Enterprises over which Relatives

Key
Associates/ KMP /relatives of of Key
Items/Related Party Management Total
others KMP have control / Management
Personnel
significant influence Personnel

III. Expenses
Salaries (Include ESOP cost)* / fees - 24.60 - 0.57 25.17
(-) (23.66) (-) (0.45) (24.11)
Interest Paid 7.32 14.50 4.78 12.71 39.31
(4.40) (44.30) (3.09) (8.77) (60.56)
Other Expenses # - 4.29 0.02 4.31
(-) (2.17) (2.95) (1.44) (6.57)
IV. Income
Interest Income 4.53 - 0.06 0.30 4.89
(8.97) (0.17) (0.14) (0.35) (9.64)
Other Income 0.57 1.48 2.08 0.13 4.26
(0.61) (1.50) (1.45) (0.17) (3.74)

V. Other Transactions
Dividend Paid - 76.95 0.23 0.53 77.71
(-) (56.37) (0.14) (0.39) (56.90)
Reimbursement from companies 0.27 - - - 0.27
(-) (-) (-) (-) -
Loan Repaid 15.00 - - - 15.00
(15.00) (-) (-) (0.01) (15.01)
Purchase of Investments 1.00 - - - 1.00
(-) (-) (-) (-) (-)
Sale of Investments - - - 5.64 5.64
(-) (28.35) (-) (-) (28.35)
Swaps/Forwards/Options Contracts 2.84 4.50 4.32 24.61 36.27
(-) (5.90) (4.21) (26.02) (36.14)

Material transactions/outstanding with related parties:

(₹ in crore)

Enterprises over which Relatives

Key
Associates/ KMP /relatives of of Key
Items/Related Party Management Total
others KMP have control / Management
Personnel
significant influence Personnel

I. Liabilities:
Other liabilities
Infina Finance Private Limited 3.48 - - - 3.48
(0.90) (-) (-) (-) (0.90)
Others # # 0.06 # 0.06
(#) (#) (0.10) (#) (0.10)
II. Assets:
Investments
Phoenix ARC Private Limited 101.18 - - - 101.18
(126.18) (-) (-) (-) (126.18)
Others 1.10 - # - 1.10
(1.10) (-) (#) (-) (1.10)
Diminution on investments
Business Standard Private Limited - - # - #
(-) (-) (#) (-) (#)
Other Assets
Kotak Commodity Services Private Limited - - 10.30 - 10.30
(-) (-) (0.27) (-) (0.27)
Others 0.23 # 0.18 0.03 0.45
(0.39) (#) (#) (0.03) (0.42)
Non Fund Commitments
Bank Guarantees
Aero Agencies Private Limited - - 1.00 - 1.00
(-) (-) (1.00) (-) (1.00)
KF Trust (formerly known as USK Benefit - - 0.13 - 0.13
Trust II)
(-) (-) (0.13) (-) (0.13)

Integrated Annual Report 2023-24

157 Financial Statements
Consolidated Schedules

(₹ in crore)

Enterprises over which Relatives

Key
Associates/ KMP /relatives of of Key
Items/Related Party Management Total
others KMP have control / Management
Personnel
significant influence Personnel

III. Expenses:
Salaries (Includes ESOP cost)
Mr. Dipak Gupta* - 8.37 - - 8.37
(-) (8.22) (-) (-) (8.22)
Mr. KVS Manian* - 6.72 - - 6.72
(-) (7.82) (-) (-) (7.82)
Mr. Gaurang Shah* - - - - -
(-) (5.27) (-) (-) (5.27)
Ms. Shanti Ekambaram* - 6.73 - - 6.73
(-) (2.35) (-) (-) (2.35)
Mr. Ashok Vaswani - 1.83 - - 1.83
(-) (-) (-) (-) (-)
Others - 0.96 - 0.57 1.52
(-) (-) (-) (0.45) (0.45)
Other Expenses
Aero Agencies Private Limited - - 4.24 - 4.24
(-) (-) (2.87) (-) (2.87)
Others # - 0.05 0.02 0.07
(-) (2.17) (0.08) (1.44) (3.69)
IV. Income:
Other Income
Mr. Uday S. Kotak - 0.72 - - 0.72
(-) (0.73) (-) (-) (0.73)
Mr. KVS Manian - 0.73 - - 0.73
(-) (0.73) (-) (-) (0.73)
Kotak Commodity Services Private Limited - - 1.13 - 1.13
(-) (-) (0.88) (-) (0.88)
Others 0.57 0.02 0.96 0.13 1.68
(0.61) (0.04) (0.57) (0.17) (1.40)
V. Other Transactions:
Dividend Paid
Mr. Uday S. Kotak - 76.65 - - 76.65
(-) (56.20) (-) (-) (56.20)
Others - 0.29 0.23 0.53 1.05
(-) (0.16) (0.14) (0.39) (0.70)
Reimbursements from companies
Infina Finance Private Limited 0.14 - - - 0.14
(0.20) (-) (-) (-) (0.20)
Phoenix ARC Private Limited 0.13 - - - 0.13
(0.23) (-) (-) (-) (0.23)
Loan Repaid During the Year
Phoenix ARC Private Limited 15.00 - - - 15.00
(15.00) (-) (-) (-) (15.00)
Purchase of Investment
Kotak Karma Foundation 1.00 - - - 1.00
(-) (-) (-) (-) (-)
Sale of Investments
Mr. Dhawal Kotak - - - 5.64 5.64
(-) (-) (-) (-) (-)
Swaps/Forwards/Options Contracts
Mr. Dhawal Kotak - - - 13.12 13.12
(-) (-) (-) (12.95) (12.95)
Ms. Aarti Chandaria - - - 3.97 3.97
(-) (-) (-) (7.77) (7.77)
Others 2.84 4.50 4.32 7.52 19.18
(-) (5.90) (4.21) (5.31) (15.42)
*includes incentive paid during the year
# In the above table denotes amounts less than ` 50,000
Note: Figures of previous year (FY 2023) are given in bracket.
158

Maximum balance outstanding

(₹ in crore)

Enterprises over which Relatives

Key
Associates/ KMP /relatives of of Key
Items/Related Party Management
others KMP have control / Management
Personnel
significant influence Personnel

I. Liabilities
Deposits 347.49 311.72 269.00 207.31
(768.74) (2,553.73) (180.63) (248.59)
Other Liabilities* 3.71 1.94 1.18 0.61
(15.48) (1.94) (1.10) (0.50)
II. Assets
Investments-Gross* 127.28 - # -
(177.15) (-) # (-)
Advances* 40.31 0.01 1.31 4.45
(55.31) (4.62) (2.45) (4.45)
Other Assets* 0.39 # 10.49 0.03
(1.95) (0.02) (4.13) (0.03)
Non Funded Commitments
Bank Guarantees* - - 1.13 -
(-) (-) (1.13) (-)
* Based on maximum of opening and closing balances for the year.
# In the above table denotes amounts less than H 50,000.
Note: Figures of previous year (FY2023) are given in bracket.

23. ITEMS EXCEEDING 1% OF TOTAL ASSETS/ TOTAL INCOME

a. There are no items under Others (including provisions) (Schedule 5- Other Liabilities and Provisions) exceeding 1% of total assets of the Group.
b. There are no items under Others assets (Schedule 11- Other Assets) exceeding 1% of the total assets of the Group.
c. There are no items under Miscellaneous Income (Schedule 14- Other Income) exceeding 1% of total income of the Group.
d. Details of items under Other expenditure (Schedule 16- Operating Expenses) exceeding 1% of total income of the Group are given below:
(₹ in crore)

Year ended Year ended

Particulars
31st March, 2024 31st March, 2023

Professional Charges 1,319.17 1,371.45

Brokerage 1,633.91 1,515.84

24. The Group, as part of its normal banking business that is conducted ensuring adherence to all regulatory requirements, grants loans and advances,
makes investment, provides guarantees to and accept deposits and borrowings from its customers, other entities and persons.

Other than the transactions described above which are carried out in the normal course of business, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or deposits or any other sources or kinds of funds) by the Group to or in any other persons
or entities, including foreign entities (“intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall
lend or invest in party identified by or on behalf of the Group (“Ultimate Beneficiaries”). The Group has also not received any funds from any parties
(Funding Party) with the understanding that the Group shall whether, directly or indirectly lend or invest in other persons or entities identified by or on
behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

25. The Bank has 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 the RBI for a total consideration of ₹ 537.12 crore. With this acquisition, Sonata has become a wholly owned
subsidiary of the Bank with effect from 28th March, 2024. The excess of the purchase consideration over the book value of the net assets acquired of
₹ 134 crore has been accounted as Goodwill.

26. The Bank and Kotak Mahindra General Insurance Company Limited (“KGI”) have entered into definitive agreements for a transaction with Zurich
Insurance Company Limited (“Zurich”), whereby Zurich will acquire 70% stake in KGI by way of a combination of primary and secondary acquisitions
in a single tranche, for a total consideration of approximately ₹ 5,560 crore (“Transaction”). Transaction would be subject to fulfilment of customary
conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India and the Insurance Regulatory and Development
Authority of India. Upon completion of the Transaction (subsequent to receipt of all requisite approvals), KGI will cease to be a Wholly Owned
Subsidiary of the Bank.

Integrated Annual Report 2023-24

159 Financial Statements
Consolidated Schedules

27. The Board of Directors of the Bank have a proposed a dividend of ₹ 2.00 per share having a face value ₹ 5 for the year ended 31st March, 2024
(Previous Year ₹ 1.50 per share). The Bank is obliged to pay dividend to those shareholders whose names are appearing in the register of members
as on the book closure date. The dividend will be paid after the approval of the shareholders at the Annual General Meeting.

28. The Bank has received an order from the Reserve Bank of India dated April 24, 2024, directing the Bank to cease and desist, with immediate effect
from (i) onboarding 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 the RBI in their IT Examination of the Bank. These directions shall be reviewed by RBI upon satisfactory
remediation of the observations.

The Bank has taken concrete steps to adopt new technologies to strengthen its IT systems and will continue to work with RBI to swiftly resolve
balance issues at the earliest. The Bank believes that these directions will not materially impact its overall business. The Bank has evaluated the order
and assessed no material impact on its financial statements and internal financial controls over financial reporting for the year ended March 31, 2024.

29. Kotak Securities Limited, a subsidiary of the Bank had received an order dated 13th October 2023 from NSE MCSGFC Committee calling upon the
subsidiary to submit a plan in 45 days to divest its long term investments in associate companies, citing Rule 8 (3) (f) of the Securities Contract
Regulations Rules and NSE’s circular dated 7th January, 2022. The subsidiary had filed petition challenging the said circular and order in the Bombay
High Court. The Hon’ble High Court has from time to time extended the time to comply with NSE’s order and at the hearing held on 18th April, 2024
further extended this time till 15th June, 2024. The matter is sub- judice and next hearing is listed on 9th May, 2024.

30. ADDITIONAL DISCLOSURE

Additional statutory information disclosed in the separate financial statements of the Bank and Subsidiaries having no material bearing on the true
and fair view of the consolidated financial statements and the information pertaining to the items which are not material have not been disclosed in
the consolidated financial statement.

Figures for the previous year have been regrouped / reclassified wherever necessary to conform to current year’s presentation.

As per our report of even date attached. For and on behalf of the Board of Directors

For KKC & Associates LLP C S Rajan Ashok Vaswani

Chartered Accountants Chairman Managing Director and
(formerly Khimji Kunverji & Co LLP) DIN: 00126063 Chief Executive Officer
Firm Registration No. 105146W/W100621 DIN: 10227550

Gautam Shah Shanti Ekambaram Uday Khanna

Partner Deputy Managing Director Director
Membership No. 117348 DIN: 00004889 DIN: 00079129

For Price Waterhouse LLP Devang Gheewalla Avan Doomasia

Chartered Accountants President and Senior Executive Vice President and
Firm Registration No. 301112E/E300264 Group Chief Financial Officer Company Secretary
Membership No. 045993 FCS. No. 3430
Russell I Parera
Partner
Membership No. 042190

Mumbai
4th May, 2024
 FORM AOC - 1
Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules 2014
160

Statement containing salient features of the financial statement of subsidiaries/associate companies

PART "A" : Subsidiaries ₹ in crore

Particulars Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak IVY Product BSS Kotak Karma Sonata
Mahindra Securities Mahindra Mahindra Mahindra Mahindra Mahindra Mahindra Mahindra Mahindra Mahindra, Alternate Mahindra Infrastructure Mahindra Mahindra Mahindra Intermediaries Microfinance Foundation8 Finance
Prime Limited Capital Life General Investments Asset Trustee (International) (UK) Inc.5 Asset Trusteeship Debt Fund Pension Financial Asset Limited Limited Private
Limited Company Insurance Insurance Limited Management Company Limited5 Limited5 Managers Services Limited Fund Services Management Limited9
Limited Company Company Company Limited Limited Limited Limited Limited5 (Singapore)
Limited6 Limited Limited (formerly Pte. Limited5
known
as Kotak
Investment
Advisors

Integrated Annual Report 2023-24

Limited)

Share Capital 3.50 1.60 3.44 510.29 875.00 5.62 29.80 0.05 16.16 7.01 0.14 8.97 0.09 310.00 60.00 8.45 9.40 2.21 26.73 1.00 26.45

Reserves & Surplus 9,172.99 8,284.55 1,177.59 5,352.94 (427.88) 3,323.39 1,965.82 525.27 985.18 488.18 98.64 855.61 34.91 209.61 (7.60) (5.39) 354.59 4.48 983.12 (0.16) 362.96

Total Assets 38,394.45 24,460.39 1,304.31 83,375.38 2,541.76 14,900.83 2,179.91 531.73 1,230.81 736.67 111.78 1,432.84 40.16 1,442.94 54.92 5.93 390.52 6.75 1,196.01 0.93 923.70

Total Liabilites 29,217.97 16,174.24 123.28 77,512.15 2,094.64 11,571.81 184.29 6.41 229.48 241.48 13.00 568.26 5.16 923.33 2.52 2.88 26.53 0.06 186.16 0.09 534.28

Investments (excluding 3,186.83 2,279.90 503.06 80,016.73 2,295.36 2,720.63 2,036.64 517.30 1,189.06 241.59 47.86 1,161.97 - 367.18 53.73 - 155.23 - 51.91 - 0.05
investment in subsidiaries)1

Turnover2 4,130.95 3,824.33 431.68 26,846.82 1,014.63 1,493.53 941.83 140.53 91.66 163.78 50.34 413.12 19.46 119.07 6.38 5.11 123.84 0.45 996.07 - 4.19

Profit before taxation 1,188.36 1,635.18 276.69 1,041.24 (88.95) 690.51 570.64 135.20 65.82 55.24 13.95 76.87 7.68 43.40 (0.21) (0.59) 85.32 0.44 509.04 (0.16) (16.64)

Provision for taxation 300.30 409.01 61.68 352.61 - 176.30 146.23 34.43 1.54 16.60 2.87 18.03 1.81 - - - 10.00 0.11 125.82 - (2.94)

Profit after taxation 888.06 1,226.17 215.01 688.62 (88.95) 514.21 424.41 100.77 64.28 38.63 11.08 58.84 5.87 43.40 (0.21) (0.59) 75.32 0.33 383.22 (0.16) (13.71)

Proposed Dividend (Equity) NIL NIL NIL 229.63 NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL

% of Shareholding4 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Note:
(1) Investments include investments and stock-in-trade reported by the above entities and also include investments held to cover policy holders’ liabilities and unit linked liabilities.
(2) Turnover is the total income reported by each of the entities in their financial statements.
(3) As per Accounting Standard 4 “Contingencies and Events Occurring After the Balance Sheet Date” (‘AS 4(Revised)’), the Company is not required to create provision for dividend declared after the balance sheet date but before financial
statements are approved by the shareholders.
(4) % of Shareholding includes direct and indirect holding through subsidiaries.
(5) The financial statements of subsidiaries located outside India i.e. Kotak Mahindra, Inc., Kotak Mahindra (UK) Limited, Kotak Mahindra (International) Limited, Kotak Mahindra Financial Services Limited and Kotak Mahindra Asset
Management (Singapore) Pte. Limited are prepared in accordance with accounting principles generally accepted in their respective countries. For the purpose of preparation of the consolidated financial results, the results of these
subsidiaries are prepared under Generally Accepted Accounting Principles in India (‘Indian GAAP’). The reporting currency of these subsidiaries is USD and financial statements are translated on the following basis: (a) Income and
expenses are converted at the average rate of exchange applicable for the year ending 31st March, 2024 (1 USD = 82.80 INR) and (b) All assets and liabilities are translated at the closing rate as on the last day of the financial year ending
31st March, 2024 (1 USD = 83.41 INR).
(6) On 26th April, 2024, the Board of Directors of Kotak Mahindra Life Insurance Company Limited have proposed a final dividend of H 4.50 per share amounting to H 229.63 crore in respect of the year ending 31st March, 2024 subject
to the approval of shareholders at the Annual General Meeting.
(7) The financial statements of Indian subsidiaries (excluding insurance companies) and associates are prepared as per Indian Accounting Standards in accordance with the Companies (Indian Accounting Standards) Rules, 2015. For the
purpose of preparation of the consolidated financial results, the results of subsidiaries and associates are in accordance with Generally Accepted Accounting Principles in India (‘Indian GAAP’) specified under Section 133 and relevant
provision of Companies Act, 2013.
(8) On 26th June, 2023, the Bank has incorporated “Kotak Karma Foundation” (“the Foundation”) under Section 8 of the Companies Act, 2013, as a wholly owned subsidiary for setting up a Centre of Excellence (CoE) of the Bank for
furtherance of part of its Corporate Social Responsibility (CSR) Initiatives. Being a Section 8 Company and as per terms of articles, the Foundation would operate with restrictions to transfer funds to the parent, hence in accordance
with the requirements of Accounting Standard 21 on “Consolidated Financial Statements”, the Company shall be excluded from consolidation.
(9) The Bank acquired 100% of the issued and paid up capital of Sonata Finance Private Limited, a Non-Banking Finance Company – Micro Finance Institution registered with the RBI. With this acquisition, Sonata became a wholly-owned
subsidiary of the Bank w.e.f 28th March, 2024.
161 Financial Statements
Consolidated Schedules

PART "B" : Associates

₹ in crore

Particulars Infina Finance Private Limited Phoenix ARC Private Limited

Latest Audited Balance Sheet date 31-Mar-24 31-Mar-24

Shares of Associate held by the Group on the year end
No. of Equity Shares 1,100,240 83,832,000
Amount of Investment in Associates 1.10 100.02
Extent of Holding % 49.99% 49.90%
Description of how there is significance influence Ownership of 20% or Ownership of 20% or
more of the voting power more of the voting power
Reason why the associate is not consolidated Ownership of less than 50% Ownership of less than 50%
of the voting power and of the voting power and
no control over the Board no control over the Board
Networth attributable to Shareholding as per latest audited Balance Sheet 1,225.93 462.70
Profit for the year 256.31 216.94
i) Considered in the Consolidation 128.13 108.25
ii) Not considered in the Consolidation 128.18 108.69

For and on behalf of the Board of Directors

C S Rajan Ashok Vaswani

Chairman Managing Director and
DIN: 00126063 Chief Executive Officer
DIN: 10227550

Shanti Ekambaram Uday Khanna

Deputy Managing Director Director
DIN: 00004889 DIN: 00079129

Devang Gheewalla Avan Doomasia

President and Senior Executive Vice President and
Group Chief Financial Officer Company Secretary
Membership No. 045993 FCS. No. 3430

Mumbai
4th May, 2024

Basel III (Pillar 3) Disclosures (Consolidated) as at 31st March, 2024

In accordance with the RBI guidelines, Banks are required to make consolidated Pillar 3 disclosures including Leverage Ratio, Liquidity Coverage Ratio (LCR) and Net Stable
Funding Ratio (NSFR) under the Basel III Framework. These disclosures are available on the Bank’s website at the following link: https://www.kotak.com/en/investor-relations/
financial-results/regulatory-disclosure.html. These disclosures have not been subjected to audit.