To the Members,


KOTAK MAHINDRA BANK LIMITED

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


FINANCIAL HIGHLIGHTS

(A) Consolidated* :

(Rs. in crore)


  

    

    
FY 2023-24
    
FY 2022-23*
  
  

    
Total Income
    
94,273.91
    
68,142.03
  
  

    
Total expenditure, excluding provisions and contingencies
    
68,438.06
    
48,056.17
  
  

    
Operating Profit
    
25,835.85
    
20,085.86
  
  

    
Provisions and contingencies, excluding provision for tax
    
1,972.47
    
439.68
  
  

    
Profit Before Tax
    
23,863.38
    
19,646.18
  
  

    
Provision for Taxes
    
5,886.55
    
4,865.74
  
  

    
Profit After Tax
    
17,976.83
    
14,780.44
  
  

    
Add: Share in Profit of Associates
    
236.38
    
144.57
  
  

    
Consolidated Profit for the Group
    
18,213.21
    
14,925.01
  
  

    
Earnings per equity share:
    

    

  
  

    
Basic (?)
    
91.45
    
74.96
  
  

    
Diluted (?)
    
91.45
    
74.94
  


Notes:

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

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

(B) Standalone:

(Rs. in crore)


  

    

    
FY 2023-24
    
FY 2022-23*
  
  

    
Total Income
    
56,072.01
    
41,333.90
  
  

    
Total expenditure, excluding provisions and contingencies
    
36,484.56
    
26,485.92
  
  

    
Operating Profit
    
19,587.45
    
14,847.98
  
  

    
Provisions and contingencies, excluding provision for tax
    
1,573.73
    
456.99
  
  

    
Profit Before Tax
    
18,013.72
    
14,390.99
  
  

    
Provision for Taxes
    
4,232.14
    
3,451.69
  
  

    
Profit After Tax
    
13,781.58
    
10,939.30
  
  

    
Add: Surplus brought forward from the previous year
    
37,760.09
    
30,455.85
  
  

    
Amount available for appropriation
    
51,541.67
    
41,395.15
  
  

    
Less: Appropriations
    

    

  
  

    
Statutory Reserve under Section 17 of the Banking Regulation Act, 1949
    
3,445.40
    
2,734.83
  
  

    
Transfer to Capital Reserve
    
-
    
0.99
  
  

    
Transfer to Special Reserve
    
125.00
    
115.00
  
  

    
Transfer to Investment Reserve Account
    
831.63
    
-
  
  

    
Transfer to Investment Fluctuation Reserve Account
    
1,200.00
    
525.32
  
  

    
Transfer to Capital Redemption Reserve
    
500.00
    
-
  
  

    
Dividend paid **
    
336.62
    
258.92
  
  

    
Surplus carried to Balance Sheet
    
45,103.02
    
37,760. 09
  


Notes:

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

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


FINANCIAL PERFORMANCE

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

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

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


CAPITAL

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

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

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


DIVIDEND

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

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

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


DEBENTURES AND BONDS

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

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


CAPITAL ADEQUACY RATIO

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


CREDIT RATINGS

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


DEPOSITS

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


RESERVE BANK OF INDIA ORDER DATED 24th APRIL, 2024

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

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

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

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


OPERATIONS CONSUMER BANKING

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


COMMERCIAL BANKING

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

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

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

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

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

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

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


WHOLESALE BANKING

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

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

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

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

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

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

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

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

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

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


PRIVATE BANKING

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

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

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


INTERNATIONAL BANKING UNITS

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

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

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

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


ASSET RECONSTRUCTION

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

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

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


TREASURY

Your Bank's Treasury actively contributes by way of:

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

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

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

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

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


HUMAN RESOURCES

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

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

(i) Health and Wellness

(ii) Leadership and Manager Connect

(iii) Diversity and Inclusion

(iv) Employee Experience

(v) Kotak Young Leaders Council

(vi) My Kotak My Say

(vii) Employee Development

(viii) Talent Management

(ix) Caring Kotakite (Employee Volunteering)

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


EMPLOYEES

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

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


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

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

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

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


PROHIBITION OF INSIDER TRADING

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

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


WHISTLE BLOWER POLICY1/VIGIL MECHANISM

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

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

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

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

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

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

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

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

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

(i) ESOP Scheme 2023;

(ii) ESOP Scheme 2015;

(iii) SARs Scheme 2023; and

(iv) SARs Scheme 2015

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

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

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


ENVIRONMENT, SOCIAL AND GOVERNANCE PRACTICES

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

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


BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

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

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

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

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


CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

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

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

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

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

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

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


TECHNOLOGY AND DIGITISATION

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

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

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

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

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

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

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

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

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

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


SUBSIDIARIES AND ASSOCIATES

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


  

    
Sr. No.
    
Name of the subsidiary
    
Business activity
  
  

    
1.
    
Kotak Mahindra Prime Limited
    
Car Finance and other Lending
  
  

    
2.
    
Kotak Mahindra Investments Limited
    
Lending and Investments
  
  

    
3.
    
Kotak Infrastructure Debt Fund Limited
    
Infrastructure Financing
  
  

    
4.
    
Kotak Securities Limited
    
Stock Broking, Distribution
  
  

    
5.
    
Kotak Mahindra Capital Company Limited
    
Investment Banking
  
  

    
6.
    
Kotak Mahindra Life Insurance Company Limited
    
Life Insurance
  
  

    
7.
    
Kotak Mahindra General Insurance Company Limited
    
General Insurance
  
  

    
8.
    
Kotak Mahindra Asset Management Company Limited
    
Mutual Fund Asset Management, Portfolio Management
  
  

    
9.
    
Kotak Mahindra Trustee Company Limited
    
Trustee Company for Mutual Fund
  
  

    
10.
    
Kotak Mahindra Pension Fund Limited
    
Pension Fund Management
  
  

    
11.
    
Kotak Alternate Asset Managers Limited (Formerly known as Kotak Investment Advisors
    Limited)
    
Alternate Asset Management, Investment Advisory
  
  

    
12.
    
Kotak Mahindra Trusteeship Services Limited
    
Trusteeship Services
  
  

    
13.
    
Kotak Mahindra (UK) Limited
    
Distribution of financial products and dealing in securities
  
  

    
14.
    
Kotak Mahindra (International) Limited
    
Advisory Services, Investments
  
  

    
15.
    
Kotak Mahindra Inc.
    
Broker/Dealer
  
  

    
16.
    
Kotak Mahindra Asset Management (Singapore) Pte. Limited
    
Asset Management
  
  

    
17.
    
Kotak Mahindra Financial Services Limited
    
Advisory services for Middle East
  
  

    
18.
    
IVY Product Intermediaries Limited
    
Marketing and distribution of various financial products/services
  
  

    
19.
    
BSS Microfinance Limited
    
Business Correspondent
  
  

    
20.
    
Sonata Finance Private Limited (with effect from 28th March, 2024)
    
Business Correspondent
  
  

    
21.
    
Kotak Karma Foundation
    
Centre of Excellence for part of Bank's CSR activities
  


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

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

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


MATERIAL SUBSIDIARY:

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


ASSOCIATE COMPANIES:

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

(i) Infina Finance Private Limited

(ii) Phoenix ARC Private Limited

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

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

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


BOARD OF DIRECTORS BOARD COMPOSITION

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

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


CHANGES IN COMPOSITION OF THE BOARD

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

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

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

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

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

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

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

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

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

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

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

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


DIRECTORS RETIRING BY ROTATION

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

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


DECLARATION FROM INDEPENDENT DIRECTORS

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


DIRECTOR E-KYC

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


DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY

The Bank has a Directors and Officers Liability Insurance Policy which protects
Directors and Officers of the Bank for any breach of fiduciary duty.


BOARD EVALUATION1

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

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

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

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

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

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

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

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

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

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


KEY MANAGERIAL PERSONNEL

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

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

(ii) Ms. Shanti Ekambaram, Deputy Managing Director

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

(iv) Ms. Avan Doomasia, Company Secretary.

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

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

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

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


POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

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

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

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

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

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

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

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

(i) Compensation structure is divided into:

• Sitting fees

• Compensation in the form of Fixed Remuneration

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

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

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

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

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

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

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

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

Objective:

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

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

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

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

Compensation structure comprises total remuneration consisting of:

• Fixed Pay, which includes perquisite pay/benefits

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

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

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

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

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

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

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

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

This excludes employees under Category III.

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

• Risk & Policy function

• Financial Control including group consolidation

• Compliance

• Internal Audit

• Back-office Operations

• Vigilance

• Legal

• Secretarial

• Human Resources

• Corporate Social Responsibility

• Investor Relations

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

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

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


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

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

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

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

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


SECRETARIAL STANDARDS

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


SECRETARIAL AUDITOR

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

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

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


DIRECTORS' RESPONSIBILITY STATEMENT

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

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

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

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

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

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

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


ANNUAL RETURN

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


STATUTORY AUDITORS

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

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

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

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

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

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

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

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

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

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


INTERNAL FINANCIAL CONTROLS

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


IMPLEMENTATION OF IND AS

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

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

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

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


RELATED PARTY TRANSACTIONS

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

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

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

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

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


PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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


RISK MANAGEMENT POLICY

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


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

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

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

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


REPORTING OF FRAUDS BY AUDITORS

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


MAINTENANCE OF COST RECORDS

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


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

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

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

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


DESPATCH OF ANNUAL REPORT

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


ANNEXURES

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

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

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

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

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

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


ACKNOWLEDGEMENT

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


For and on behalf of the Board of Directors

C S Rajan

Chairman

Date: 29th June, 2024

Place: Mumbai