Auditors' Report Insights

Auditors Report
To the Members of Kotak Mahindra Bank Limited 1. We have audited the attached balance sheet of Kotak Mahindra Bank Limited (the Bank) as at 31st March, 2010 and also the profit and loss account and cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The balance sheet and profit and loss account are drawn up in conformity with Forms A and B (revised) of the Third Schedule to the Banking Regulation Act, 1949, read with Section 211 of the Companies Act, 1956 (the Companies Act). We report that: (a) (b) (c) (d) (e) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and have found them to be satisfactory; In our opinion, the transactions of the Bank which have come to our notice have been within its powers; In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches and representative office; The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in subsection (3C) of Section 211 of the Companies Act, read with the guidelines issued by Reserve Bank of India insofar as they apply to the Bank; On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act; In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act in the manner so required for banking companies, and give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. iii. in case of the balance sheet, of the state of the affairs of the Bank as at 31st March, 2010; in case of the profit and loss account, of the profit for the year ended on that date; and in case of cash flow statement, of the cash flows for the year ended on that date.
2.
3. 4.
(f)
(g)
For S.R. Batliboi & Co. Firm Registration No. 301003E Chartered Accountants per Viren H. Mehta Partner Membership No. 048749
Mumbai, 11th May, 2010
Kotak Mahi ndra Ban k Li mi te d
99
Balance Sheet as at 31st March, 2010
(Rupees in thousands) Schedule Capital and Liabilities Capital Reserves and Surplus Employees' Stock Options (Grants) Outstanding Deposits Borrowings Other Liabilities and Provisions Total 3 4 5 1 2 3,481,415 41,369,735 548,017 238,864,671 61,405,132 28,694,195 374,363,165 3,456,689 34,679,490 919,086 156,439,963 67,340,106 24,283,405 287,118,739 As at 31st March, 2010 As at 31st March, 2009
Assets Cash and Balances with Reserve Bank of India Balances with Banks and Money at Call and Short Notice Investments Advances Fixed Assets Other Assets Total Contingent Liabilities Bills for Collection Significant Accounting Policies and Notes to the Financial Statements The schedules referred to above form an integral part of this Balance Sheet. The Balance Sheet has been prepared in conformity with Form A of the Third Schedule to the Banking Regulation Act, 1949. 17 & 18 12 6 7 8 9 10 11 20,856,726 2,145,915 125,126,625 207,750,541 4,276,492 14,206,866 374,363,165 369,660,202 6,493,241 9,953,533 1,453,164 91,101,805 166,253,371 2,133,560 16,223,306 287,118,739 579,542,087 3,175,756
As per our report of even date. For S. R. Batliboi & Co. Firm Registration No. 301003E Chartered Accountants per Viren H. Mehta Partner (Membership No. 048749) Mumbai, 11th May, 2010
For and on behalf of the Board of Directors Dr. Shankar Acharya Chairman Dipak Gupta Executive Director Jaimin Bhatt Group Chief Financial Officer Bina Chandarana Company Secretary Uday Kotak Executive Vice Chairman & Managing Director
Profit and Loss Account for the Year Ended 31st March, 2010
(Rupees in thousands) Schedule I. Income Interest earned Other Income Total II. Expenditure Interest expended Operating expenses Provisions and Contingencies [Refer Note 12 schedule 18 B] Total III. Profit Net Profit for the year Add: Surplus brought forward from previous year Total IV. Appropriations Transfer to Statutory Reserve Transfer to Capital Reserve Transfer to General Reserve Transfer to Investment Reserve Account Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act,1961 Proposed Dividend Corporate Dividend Tax Balance carried over to Balance Sheet Total V. Earnings Per Share (Face Value of Rs. 10/-) Basic (Refer Note 1 Schedule 18 B) Diluted (Refer Note 1 Schedule 18 B) Significant Accounting Policies and Notes to the Financial Statements The schedules referred to above form an integral part of this Profit and Loss Account. The Profit and Loss account has been prepared in conformity with Form B of the Third Schedule to the Banking Regulation Act, 1949. 17 & 18 16.18 16.00 8.00 7.99 1,402,800 69,600 280,600 11,900 400,000 296,613 (20,074) 9,659,053 12,100,492 690,300 29,700 138,050 417,014 259,553 18,611 6,489,435 8,042,663 5,611,057 6,489,435 12,100,492 2,760,972 5,281,691 8,042,663 15 16 13,974,755 11,893,934 7,358,903 33,227,592 15,465,975 11,964,229 3,196,565 30,626,769 13 14 32,556,249 6,282,400 38,838,649 30,651,440 2,736,301 33,387,741 Year ended 31st March, 2010 Year ended 31st March, 2009
As per our report of even date. For S. R. Batliboi & Co. Firm Registration No. 301003E Chartered Accountants per Viren H. Mehta Partner (Membership No. 048749) Mumbai, 11th May, 2010
For and on behalf of the Board of Directors Dr. Shankar Acharya Chairman Dipak Gupta Executive Director Jaimin Bhatt Group Chief Financial Officer Bina Chandarana Company Secretary Uday Kotak Executive Vice Chairman & Managing Director
Cash Flow Statement for the Year Ended 31st March, 2010
(Rupees in thousands) Year Ended 31st March, 2010 Cash Flow from Operating Activities Profit after tax Add: Provision for incometax & FBT Net Profit Before Taxes Adjustments for: Employee Stock Options Grants Depreciation on bank property Profit on sale of investments in associates Diminution in the value of investments written back Dividend from Subsidiaries/Joint Ventures Amortization of Premium on HTM Investments Interest on Subordinated Debt Interest on Refinance from institutions Provision for Non Performing Assets, Standard Assets & other provisions Wealth Tax Loss / (Profit) on sale of fixed assets 135,955 899,955 (166,277) (24,020) (118,800) 1,443,116 580,957 1,562,449 4,882,944 244 29,443 17,336,758 Adjustments for: Decrease / (Increase) in Investments other than Subsidiaries, Joint Ventures & Other Long term Investments Increase in Advances Decrease / (Increase) in Other Assets Decrease / (Increase) in Cash Collateral with Banks Increase / (Decrease) in Deposits Increase / (Decrease) in Borrowings other than refinance and subordinated debt Increase in Other Liabilities & Provisions Direct Taxes Paid Net Cash Flow from Operating Activities (A) (35,475,265) (46,183,380) 2,496,883 82,424,708 (6,249,842) 4,356,168 1,369,272 (2,980,422) 15,725,608 639,781 (13,263,573) (3,018,786) 176,708 (7,787,120) 1,081,844 662,466 (21,508,680) (1,851,847) (13,455,532) 233,686 695,566 (822,431) (30,042) 760,894 647,769 1,642,322 2,519,394 302 (2,737) 9,904,995 5,611,057 2,499,735 8,110,792 2,760,972 1,499,300 4,260,272 Year Ended 31st March, 2009
Cash Flow from Investing Activities Purchase of Fixed assets Sale of Fixed assets Proceeds from sale of Investment in Associates Decrease / (Increase) in Investments in Subsidiaries Dividend from Subsidiaries / Joint Ventures Net Cash Flow from/(Used In) Investment Activities (B) (3,095,882) 23,552 366,261 (168,635) 118,800 (2,755,904) (755,271) 31,369 (260,164) 30,042 (954,024)
Cash Flow Statement for the Year Ended 31st March, 2010 (Contd.)
(Rupees in thousands) Year Ended 31st March, 2010 Cash Flow from / (Used In) Financing Activities Increase / (decrease) in Subordinated Debt Interest paid on Subordinated Debt Increase in Refinance Interest paid on Refinance Fresh issue of shares / Money received on exercise of stock options Dividend paid including Corporate Dividend Tax Net Cash Flow from Financing Activities (C) Net Increase / (Decrease) in Cash & Cash Equivalents (A + B + C) Cash & Cash Equivalents at the beginning of the Year (Refer Note Below) Cash & Cash Equivalents at the end of the year (Refer Note Below) Note: Balance with banks in India in Fixed Deposit (As per Sch 7 I (i) (b)) Balance with banks in India in Current Account (As per Sch 7 I (i) (a)) Cash in hand (including foreign currency notes) (As per Sch 6 I.) Balance with RBI in Current Accounts (As per Sch 6 II.) Balance with banks Outside India: (i) (ii) In Current Account (As per Sch 7 II (i)) In other Deposit Accounts (As per Sch 7 II (ii)) 124,745 898,000 23,002,641 For and on behalf of the Board of Directors Dr. Shankar Acharya Chairman Dipak Gupta Executive Director Jaimin Bhatt Group Chief Financial Officer Bina Chandarana Company Secretary Uday Kotak Executive Vice Chairman & Managing Director 166,712 253,600 11,406,697 3,125 1,120,045 2,111,412 18,745,314 6,571 1,026,281 1,497,006 8,456,527 (261,900) (580,957) 576,768 (1,562,449) 738,708 (283,930) (1,373,760) 11,595,944 11,406,697 23,002,641 477,000 (647,769) 6,766,330 (1,642,322) 90,276 (277,289) 4,766,226 (9,643,330) 21,050,027 11,406,697 Year Ended 31st March, 2009
Cash & Cash Equivalents at the end of the Year As per our report of even date. For S. R. Batliboi & Co. Firm Registration No. 301003E Chartered Accountants per Viren H. Mehta Partner (Membership No. 048749) Mumbai, 11th May, 2010
Schedules forming part of Balance Sheet as at 31st March, 2010
(Rupees in thousands) As at 31st March, 2010 Schedule 1 Capital Authorised Capital 40,00,00,000 Equity Shares of Rs.10/ each Issued, Subscribed and Paid-up Capital 34,81,41,477 (31st March, 2009: 34,56,68,859) Equity Shares of Rs.10/ each, fully paidup (Of the above 18,49,85,250 Equity shares have been issued as bonus shares by capitalisation of Reserves) Total 3,481,415 3,456,689 3,481,415 3,456,689 4,000,000 4,000,000 As at 31st March, 2009
Schedule 2 Reserves And Surplus I. Statutory Reserve Opening Balance Add: Transfer from Profit and Loss Account Total II. Capital Reserve Opening balance Add: Transfer from Profit and Loss Account Total III. General Reserve Opening Balance Add: Transfer from Profit and Loss Account Total IV. Investment Reserve Account Opening Balance Add: Transfer from Profit and Loss Account Total V. Special Reserve Account u/s 36(1)(viii) of Income Tax Act,1961 Opening Balance Add: Transfer from Profit and Loss Account Total VI. Share Premium Account Opening Balance Add: Received during the year Total VII. Balance in the Profit and Loss Account Total 21,675,186 1,355,727 23,030,913 9,659,053 41,369,735 21,386,724 288,462 21,675,186 6,489,435 34,679,490 400,000 400,000 417,014 11,900 428,914 417,014 417,014 2,817,352 280,600 3,097,952 2,679,302 138,050 2,817,352 212,603 69,600 282,203 182,903 29,700 212,603 3,067,900 1,402,800 4,470,700 2,377,600 690,300 3,067,900
Schedules forming part of Balance Sheet as at 31st March, 2010 (Contd.)
(Rupees in thousands) As at 31st March, 2010 SCHEDULE 3 DEPOSITS I. Demand Deposits i. ii. From Banks From Others Total II. III. Savings Bank Deposits Term Deposits i. ii. From Banks From Others [refer Note 16 Schedule 18 B] Total Total Deposits of branches in India (I to III) 648,677 163,584,654 164,233,331 238,864,671 3,110,711 102,147,883 105,258,594 156,439,963 989,260 48,932,036 49,921,296 24,710,044 743,196 33,429,041 34,172,237 17,009,132 As at 31st March, 2009
SCHEDULE 4 BORROWINGS I. Borrowings in India (i) (ii) (iii) Reserve Bank of India Other Banks Other Institutions and Agencies Total II. Borrowings outside India Banks & Other Institutions 3,614,450 3,614,450 Total Borrowings (I and II) Secured Borrowings under CBLO included in I (iii) above Tier II Bonds included in I (iii) above Tier II Bonds included in II above 61,405,132 19,802,238 6,017,000 2,020,500 3,667,304 3,667,304 67,340,106 30,940,709 6,017,000 2,282,400 12,281,685 45,508,997 57,790,682 1,100,000 6,502,102 56,070,700 63,672,802
SCHEDULE 5 OTHER LIABILITIES AND PROVISIONS I. II. III. IV. Bills Payable Interest Accrued Others (including provisions) Proposed Dividend (includes tax on proposed dividend for the current year) Total 6,691,977 4,349,281 17,357,017 295,920 28,694,195 4,252,779 4,142,640 15,584,674 303,312 24,283,405
(Rupees in thousands) As at 31st March, 2010 Schedule 6 Cash and Balances with Reserve Bank of India I. II. Cash in hand (including foreign currency notes) Balances with RBI in Current Account Total 2,111,412 18,745,314 20,856,726 1,497,006 8,456,527 9,953,533 As at 31st March, 2009
Schedule 7 Balances with Banks and Money at Call and Short Notice I. In India (i) Balances with Banks (a) (b) In Current Accounts In other Deposit Accounts Total II. Outside India (i) (ii) In Current Accounts In other Deposit Accounts Total Total (I and II) 124,745 898,000 1,022,745 2,145,915 166,712 253,600 420,312 1,453,164 1,120,045 3,125 1,123,170 1,026,281 6,571 1,032,852
Schedule 8 Investments I. Investments in India in (i) (ii) (iii) (iv) (v) (vi) Government Securities* Other approved Securities Shares Debentures and Bonds Subsidiaries and Joint Ventures Others [Units, Certificate of Deposits, Commercial Paper (CP), Security Receipts, RIDF Deposit & Pass Through Certificates (PTC)] Total * Net of Repo Rs. 1,562.37 crores (Previous Year Rs. 423.77 crores) II. Investments outside India in (i) (ii) Shares Subsidiaries and Joint Ventures Total Total Investments (I and II) 1,043 137,644 138,687 125,126,625 137,644 137,644 91,101,805 96,899,199 5,587 8,915,397 3,162,973 81,499,333 28,960 667,477 3,194,322
16,004,782 124,987,938
5,574,069 90,964,161
(Rupees in thousands) As at 31st March, 2010 Schedule 9 Advances A. (i) (ii) (iii) # B. (i) (ii) * C. (i) (ii) (iii) (iv) Bills purchased and discounted# Cash Credits, Overdrafts and loans repayable on demand Term Loans Total Bills purchased and discounted is net off Bills Rediscounted Rs. 1,171.88 crores (Previous Year Rs. 358.39 crores) Secured by tangible assets* Unsecured Total including advances against book debts Priority Sector Public Sector Banks Others Total Schedule 10 Fixed Assets A. Premises (Including Land) Gross Block At cost on 31st March of the preceding year Additions during the year Less: Deductions during the year Total Depreciation As at 31st March of the preceding year Add: Charge for the year Less: Deductions during the year Depreciation to date Net Block B. Other Fixed Assets (including furniture and fixtures) Gross Block At cost on 31st March of the preceding year Additions during the year Less: Deductions during the year Total Depreciation As at 31st March of the preceding year Add: Charge for the year Less: Deductions during the year Depreciation to date Net Block (Refer Note 5 Schedule 18 B) Total (A) + (B) 327,352 33,319 360,671 1,829,565 312,447 14,905 327,352 577,489 904,841 1,285,395 2,190,236 904,841 904,841 67,903,701 1,730,465 138,116,375 207,750,541 62,784,607 379,912 103,088,852 166,253,371 Advances in India 167,006,843 40,743,698 207,750,541 123,626,673 42,626,698 166,253,371 9,714,569 33,226,015 164,809,957 207,750,541 4,339,117 22,523,111 139,391,143 166,253,371 As at 31st March, 2009
3,701,225 1,810,487 248,562 5,263,150 2,145,154 866,637 195,568 2,816,223 2,446,927 4,276,492
3,009,365 755,271 63,411 3,701,225 1,499,272 680,661 34,779 2,145,154 1,556,071 2,133,560
(Rupees in thousands) As at 31st March, 2010 Schedule 11 Other Assets I. II. III. IV. V. VI. Interest accrued Advance tax (net of provision for tax) Stationery and Stamps Cheques in course of collection Non banking assets acquired in satisfaction of claims Others (refer Note 4 Schedule 18 B) Total Schedule 12 Contingent Liabilities I. II. III. IV. V. Claims not acknowledged as debts Liability on account of Outstanding Forward Exchange Contracts Guarantees on behalf of Constituents in India Acceptances, Endorsements and other obligations Other Items for which the Bank is contingently liable : a. b. c. Liability in respect of interest rate & currency swaps & forward rate agreements Liability in respect of Options Contracts Capital commitments not provided Total 290,650,311 12,516,018 789,193 369,660,202 496,822,179 28,525,896 625,305 579,542,087 809,864 20,839,963 19,911,705 24,143,148 647,304 31,146,704 13,068,781 8,705,918 3,488,679 169,227 16,155 130,755 113,288 10,288,762 14,206,866 2,596,055 2,895 16,434 145,779 364,107 13,098,036 16,223,306 As at 31st March, 2009
Schedules forming part of Profit and Loss Account for the Year Ended 31st March, 2010
(Rupees in thousands) Year ended 31st March, 2010 Schedule 13 Interest Earned I. II. III. IV. Interest / discount on Advances / Bills Income on Investments Interest on balances with RBI and other interbank funds Others Total Schedule 14 Other Income I. II. III. IV. V. VI. Commission, exchange and brokerage Profit / (Loss) on sale of Investments (net) Profit / (Loss) on sale of building and other assets (net) Profit on exchange transactions (net) Income earned from Subsidiaries / Joint Ventures Profit on recoveries of nonperforming assets acquired 3,055,051 522,402 (29,443) 567,755 408,828 2,072,738 (576,351) 261,420 6,282,400 2,237,478 (853,474) 2,737 131,003 280,808 1,160,655 (642,910) 420,004 2,736,301 25,269,110 7,268,573 10,570 7,996 32,556,249 24,937,258 5,584,038 117,235 12,909 30,651,440 Year ended 31st March, 2009
VII. Loss on Derivatives VIII. Miscellaneous Income Total
Schedules forming part of Profit and Loss Account for the Year Ended 31st March, 2010 (Contd.)
(Rupees in thousands) Year ended 31st March, 2010 Schedule 15 Interest Expended I. II. III. Interest on Deposits Interest on RBI / InterBank Borrowings Others (Refer Note 17 (c) Schedule 18 B) Total 9,800,769 1,992,223 2,181,763 13,974,755 10,966,949 2,199,064 2,299,962 15,465,975 Year ended 31st March, 2009
Schedule 16 Operating Expenses I. II. III. IV. V. VI. Payments to and provision for employees (refer Note 11 Schedule 18 B) Rent, taxes and lighting (refer Note 3(a) Schedule 18 B) Printing and Stationery Advertisement, Publicity and Promotion Depreciation on Banks property Directors fees, allowances and expenses 5,834,756 1,503,382 176,479 192,900 899,955 1,910 11,248 164,667 328,340 607,700 174,820 262,280 802,340 345,160 85,264 928,420 12,319,621 Less: Recovery of Costs from Group Companies Total 425,687 11,893,934 5,836,332 1,297,510 335,597 198,596 695,566 1,831 11,104 151,937 419,135 559,095 156,288 332,163 1,037,778 469,189 59,683 854,066 12,415,870 451,641 11,964,229
VII. Auditors fees and expenses VIII. Law Charges IX. X. XI. Postage, telephone etc. Repairs and maintenance Insurance
XII. Travel and Conveyance XIII. Professional Charges XIV. Brokerage XV. Stamping Expenses XVI. Other Expenditure
Schedules forming part of the Balance Sheet and Profit and Loss Account
Schedule 17 SignificAnt Accounting PoLicieS

A. Accounting MetHoDoLogY The financial statements have been prepared in accordance with statutory requirements prescribed under the Banking Regulation Act, 1949. The accounting and reporting policies of Kotak Mahindra Bank Limited used in the preparation of these financial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by Reserve Bank of India (RBI) from time to time, the Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Companies (Accounting Standards) Rules, 2006 to the extent applicable and practices generally prevalent in the banking industry in India. The Bank follows the accrual method of accounting, except where otherwise stated, and the historical cost convention. The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. B. ReVenue Recognition a. b. c. d. e. f. g. Interest income is recognised on accrual basis except in case of non-performing assets where it is recognised, upon realisation, as per RBI guidelines. Penal interest is recognised as income on realisation. Interest income in respect of retail advances is accounted for by using the internal rate of return method to provide a constant periodic rate of return on the net investment outstanding on the contract. Interest income on discounted instruments is recognised over the tenure of the instruments so as to provide a constant periodic rate of return. Service charges, Fees and Commission income are recognised when due except for Guarantee Commission which is recognised over the period of the guarantee. Dividend income is accounted on an accrual basis when the Banks right to receive the dividend is established. Gain on account of securitisation of assets is amortised over the life of the securities issued in accordance with the guidelines issued by the RBI. In respect of non-performing assets acquired from other Banks / FIs and NBFCs, collections in excess of the consideration paid at each asset level or portfolio level is treated as income in accordance with RBI guidelines and clarifications.
c.
fiXeD ASSetS a. b. Fixed assets have been stated at cost inclusive of incidental expenses less accumulated depreciation. Depreciation: The Bank adopts the Straight Line Method of depreciation so as to write off 100% of the cost of assets at rates higher than those prescribed under Schedule XIV to the Companies Act, 1956 for all assets other than premises, based on the Managements estimate of useful lives of all assets as follows: Asset type Premises Improvement to leasehold premises Office equipments (Chillers, Transformers, UPS & DG set) Office equipments (other than above) Computers Furniture and Fixtures Vehicles ATMs Software (including development) expenditure estimated useful life in years 58 Over the primary period of lease subject to a maximum of 6 years. 10 5 3 6 4 5 3
Items costing less than Rs. 5,000 are fully depreciated in the year of purchase.
Schedules forming part of the Balance Sheet Profit and Loss Account (contd.)
D.
eMPLoYee BenefitS a. Provident fund Defined contribution Plan Contribution as required by the Statute made to the Government Provident Fund is debited to the Profit and Loss Account. b. gratuity Defined Benefit Plan The Bank accounts for the liability for future gratuity benefits based on an actuarial valuation. The Bank makes contribution to a Gratuity Fund administered by trustees and managed by a life insurance company. The net present value of the Banks obligation towards the same is actuarially determined based on the projected unit credit method as at the Balance Sheet date. Actuarial gains and losses are immediately recognised in the Profit and Loss Account. c. Superannuation fund Defined contribution Plan The Bank contributes a sum equivalent to 15% of eligible employees salary, subject to a maximum of Rs. 1 lakh per employee per annum to a Fund administered by trustees and managed by a life insurance company. The Bank recognises such contributions as an expense in the year they are incurred. d. compensated Absences other Long-term employee Benefits The Bank accrues the liability for compensated absences based on the actuarial valuation as at the Balance Sheet date conducted by an independent actuary. The net present value of the Banks obligation is determined based on the projected unit credit method as at the Balance Sheet date. e. other employee Benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service. These benefits include performance incentives.
e.
inVeStMentS 1. classification a. In accordance with the RBI guidelines, investments are categorised into Held for Trading, Available for Sale and Held to Maturity and further classified under six groups, namely, Government Securities, Other Approved Securities, Shares, Debentures and Bonds, Investments in Subsidiaries / Joint Ventures and Other Investments for the purposes of disclosure in the Balance Sheet. Investments which are held for resale within 90 days from the date of purchase are classified as Held for Trading. Investments which the Bank intends to hold till maturity are classified as Held to Maturity. The Bank has classified investments in subsidiaries, joint ventures and associates as Held to Maturity. Investments which are not classified in either of the above two categories are classified as Available for Sale.
b. c. d. 2.
Valuation The cost of investments is determined on weighted average basis. Broken period interest on debt instruments is treated as a revenue item. The transaction costs including brokerage, commission etc. paid at the time of acquisition of investments is charged to Profit and Loss account. The valuation of investments is performed in accordance with the RBI guidelines: a. Held for trading / Available for Sale Each security in this category is revalued at the market price or fair value and the net depreciation of each group is recognised in the Profit and Loss Account. Net appreciation, if any, is ignored. Further, provision for diminution other than temporary is made for, at the individual security level. Held to Maturity These are carried at their acquisition cost. Any premium on acquisition of debt instruments is amortised over the balance maturity of the security. Any diminution, other than temporary, in the value of such securities is provided for. The market value of investments where market quotations are not available is determined as per the norms laid down by the RBI. Repurchase and reverse repurchase transactions These are accounted as outright purchase and outright sale respectively. The difference between the clean price of the first leg and the clean price of the second leg is recognised as interest income / interest expense over the period of the transaction. However, depreciation in their value, if any, compared to their original cost, is provided for.
b. c. d.
3.
transfer between categories Transfer between categories is done at the lower of the acquisition cost / book value / market value on the date of the transfer and depreciation, if any, on such transfer is fully provided for.
4.
Profit or Loss on sale / redemption of investments a. b. Held for trading and Available for Sale Profit or Loss on sale / redemption is included in the Profit and Loss Account. Held to Maturity Profit on sale / redemption of investments is included in the Profit and Loss Account and is appropriated to Capital Reserve after adjustments for tax and transfer to Statutory Reserve. Loss on sale / redemption is charged off to the Profit and Loss Account.
f.
foReign cuRRencY AnD DeRiVAtiVe tRAnSActionS a. b. c. Foreign currency assets and liabilities are translated as at the Balance Sheet date at rates notified by the Foreign Exchange Dealers Association of India (FEDAI). Income and Expenditure items are translated at the rates of exchange prevailing on the date of the transactions except in respect of representative office expenses, which are translated at monthly average exchange rate. Foreign Exchange contracts (other than deposit and placement swaps) outstanding at the Balance Sheet date are revalued at rates notified by FEDAI and resulting profits or losses are included in the Profit and Loss Account. Foreign exchange swaps linked to foreign currency deposits and placements are translated at the prevailing spot rate at the time of swap. The premium / discount on the swap arising out of the difference in the exchange rate of the swap date and the maturity date of the underlying forward contract is amortised over the period of the swap and the same is recognised as income / expense. Derivative transactions comprising of swaps and options are disclosed as off Balance Sheet exposures. The swaps are segregated into trading or hedge transactions. Trading swaps outstanding as at the Balance Sheet dates are marked to market and the resulting profits or losses, are recorded in the Profit and Loss Account. Outstanding derivative transactions designated as Hedges are accounted on an accrual basis over the life of the transaction. Option premium paid / received is accounted for in the Profit and Loss Account on expiry of the option. Contingent liabilities as at the Balance Sheet date on account of outstanding foreign exchange contracts are restated at year end rates notified by FEDAI.
d.
e. g.
ADVAnceS a. b. c. Advances are classified into standard, sub-standard, doubtful and loss assets in accordance with the RBI guidelines and are stated net of provisions made towards non-performing advances. Provision for non-performing advances comprising sub-standard, doubtful and loss assets is made in accordance with the RBI guidelines. In addition, the Bank adopts an approach to provisioning that is based on past experience, evaluation of security and other related factors. In accordance with RBI Guidelines dated 5th November, 2009 the bank has provided general provision on standard advances at uniform level of 0.40% except in case of direct advances to agricultural & SME sectors which are provided at 0.25% and to Commercial Real Estate sector at 1.00%. Excess standard provision due to revision in provisioning rates is not written back to Profit and Loss Account in accordance with the RBI guidelines and clarifications. d. Amounts paid for acquiring non-performing assets from other banks and NBFCs are considered as advances. Actual collections received on such non-performing assets are compared with the cash flows estimated while purchasing the asset to ascertain default. If the default is in excess of 90 days, then the assets are classified into sub-standard, doubtful or loss as required by the RBI guidelines on purchase of non-performing assets.
H.
SecuRitiSAtion The Bank enters into arrangements for sale of loans through Special Purpose Vehicles (SPVs). In most cases, post securitisation, the Bank continues to service the loans transferred to the SPV. At times the Bank also provides credit enhancement in the form of cash collaterals and / or by subordination of cash flows to Senior Pass Through Certificate (PTC) holders. In respect of credit enhancements provided or recourse obligations (projected delinquencies, future servicing etc.) accepted by the Bank, appropriate provision / disclosure is made at the time of sale in accordance with Accounting Standard 29, Provisions, Contingent Liabilities and Contingent Assets. The profit / premium on account of securitisation of assets at the time of sale computed based on the difference between the sale consideration and the book value of the securitised asset is amortised over the tenure of the securities issued. Loss on account of securitisation on assets is charged off to the Profit and Loss Account.
i.
tAXeS on incoMe The Income Tax expense comprises current tax, deferred tax and fringe benefit tax. Current tax is measured at the amount expected to be paid in respect of taxable income for the year in accordance with the Income Tax Act, 1961. Deferred tax adjustments comprise of changes in the
deferred tax assets and liabilities. Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted before the Balance Sheet date. Changes in deferred tax assets / liabilities on account of changes in enacted tax rates are given effect to in the Profit and Loss Account in the period of the change. The carrying amount of deferred tax assets are reviewed at each Balance Sheet date for recoverability based on future taxable income. Provision for Fringe benefit tax is made on the basis of applicable fringe benefit tax on the taxable value of chargeable expenditure as prescribed under Income Tax Act. J. SegMent RePoRting The Bank has adopted RBIs revised guidelines issued in April 2007 on segment reporting in terms of which the reportable segments are as under: Segment Treasury and BMU Principal activity Money market, forex market, derivatives, investments and primary dealership of government securities and Balance Sheet Management Unit (BMU) responsible for Asset Liability Management. Wholesale borrowings and lendings and other related services to the corporate sector which are not included under retail banking Includes: I. Lending Commercial vehicle finance, personal loans, home loans, agriculture finance, other loans / services & exposures which fulfill the four criterias for retail exposures laid down in Basel Committee on Banking Supervision document International Convergence of Capital Measurement and Capital Standards : A Revised Framework II. Branch Banking Retail borrowings covering savings, current, term deposit accounts and Branch Banking network / services including distribution of financial products. III. Credit Cards Receivables / loans relating to credit card business Any other business not classified above.
Corporate / Wholesale Banking Retail Banking
Other Banking business
A transfer pricing mechanism has been established by ALCO for allocation of interest cost to the above segments based on borrowing costs, maturity profile of assets / liabilities etc. Segment revenues consist of earnings from external customers and inter-segment revenues based on a transfer pricing mechanism. Segment expenses consist of interest expenses including allocated, operating expenses and provisions. Segment results are net of segment revenues and segment expenses. Segment assets include assets related to segments and exclude tax related assets. Segment liabilities include liabilities related to the segment excluding net worth, employees stock option (grants outstanding) and proposed dividend and dividend tax thereon. Since the business operations of the Bank are concentrated in India, the Bank is considered to operate only in the domestic segment. K. LeASeS Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term. L. cASH AnD cASH eQuiVALentS Cash and cash equivalents include cash in hand, balances with Reserve Bank of India and Balances with Other Banks / institutions and money at Call and short Notice (including the effect of changes in exchange rates on cash and cash equivalents in foreign currency). M. eARningS PeR SHARe Basic earnings per share are calculated by dividing the net Profit or Loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net Profit or Loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
n.
PRoViSionS A provision is recognised when the Bank has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Provision is made for Credit card reward points based on reward points accrued to the customer at Balance Sheet date.
o.
iMPAiRMent The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors.
P.
eMPLoYee StocK oPtion ScHeMe equity-settled scheme: The Bank has formulated Employee Stock Option Schemes (ESOSs) in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999. The Schemes provide for grant of options to employees of the Group to acquire the equity shares of the Bank that vest in cliff vesting or in a graded manner and that are to be exercised within a specified period. In accordance with the SEBI Guidelines and the guidance note on Accounting for Employee Share based payments notified under the Companies (Accounting Standard) Rules, 2006, the excess, if any, of the market price of the share preceding the date of grant of the option under ESOSs over the exercise price of the option is amortised on a straight-line basis over the vesting period. In respect of options granted to employees of subsidiaries, the Bank recovers the related compensation cost from the respective subsidiaries. cash-settled scheme: The cost of cash-settled transactions (stock appreciation rights) is measured initially using intrinsic value method at the grant date taking into account the terms and conditions upon which the instruments were granted. This intrinsic value is amortised on a straight-line basis over the vesting period with a recognition of corresponding liability. This liability is remeasured at each Balance Sheet date up to and including the settlement date with changes in intrinsic value recognised in Profit and Loss Account in Payments to and provision for employees.
Schedule 18 noteS to AccountS

A. DiScLoSuReS AS LAiD DoWn BY RBi ciRcuLARS : 1. capital Adequacy Ratio: With effect from 31st March, 2009, the Bank is subject to the new capital adequacy norms (Basel II) stipulated by the Reserve Bank of India (RBI). The Banks Capital Adequacy Ratios calculated in accordance with the RBI Guidelines are as follows: Rupees in crores BASEL I As at 31st March, As at 31st March, 2010 2009 4,040.13 3,406.11 768.46 818.63 4,808.59 4,224.74 26,641.67 21,273.26 15.17% 2.88% 18.05% 400.22 338.05 16.01% 3.85% 19.86% 426.96 364.24 BASEL II As at 31st March, As at 31st March, 2010 2009 4,040.13 3,406.11 768.46 818.63 4,808.59 4,224.74 26,204.93 21,112.59 15.42% 2.93% 18.35% 400.22 338.05 16.13% 3.88% 20.01% 426.96 364.24
Tier I Capital Tier II Capital total capital total Risk weighted assets and contingencies capital Ratios: (i) CRAR Tier I Capital (%) (ii) CRAR Tier II Capital (%) (iii) CRAR % (iv) Percentage of the shareholding of the Government of India (v) Amount raised by issue of IPDI (vi) Amount raised by issue of Upper Tier II instruments Amount of subordinated debt considered in Tier II capital Amount of subordinated debt considered in Upper Tier II Capital
2.
investments held under the 3 categories viz. Held for trading (Hft), Available for Sale (AfS) and Held to Maturity (HtM) are as under: Rupees in crores As at 31st March, 2010 Hft Government Securities Other Approved Securities Shares Debentures and Bonds Subsidiaries, Associates and Joint Ventures Units, Certificate of Deposits, CP, SRs RIDF, PTCs etc. total 560.60 222.42 759.30 1,542.32 AfS 3,874.27 0.66 669.12 333.70 4,877.75 HtM 5,255.05 330.06 507.48 total 9,689.92 0.66 891.54 330.06 1,600.48 HFT 2,518.64 46.75 2,565.39 As at 31st March, 2009 AFS 1,641.87 2.90 20.00 312.49 1,977.26 HTM 3,989.42 333.20 244.91 4,567.53 Total 8,149.93 2.90 66.75 333.20 557.40 9,110.18
6,092.59 12,512.66
3.
the details of investments and the movement of provisions held towards depreciation of investments of the Bank as on 31st March, 2010 and 31st March, 2009 are given below: Rupees in crores As on 31st March, 2010 1. Value of Investments i. Gross value of Investments a. In India b. Outside India ii. Provision for Depreciation c. iii. In India (6.95) 12,498.79 13.87 9.35 4.06 6.46 6.95 (9.35) 9,096.42 13.76 91.59 12.83 95.07 9.35 d. Outside India Net value of Investments e. f. 2. i. ii. iii. iv. In India Outside India 12,505.74 13.87 9,105.77 13.76 As on 31st March, 2009
Movement of provisions held towards depreciation on investments Opening balance Add: Provisions made during the year Less: Write-off / write-back of excess provisions during the year Closing balance
4.
Details of Repo / Reverse Repo (excluding LAf transactions for the year) deals: Year ended 31st March, 2010: Rupees in crores Particulars Minimum outstanding during the year 248.45 Maximum outstanding during the year 4,434.37 38.17 Daily Average outstanding during the year 1,430.49 14.94 As at 31st March, 2010 1,562.37
Securities sold under repos Securities purchased under reverse repos
Year ended 31st March, 2009: Rupees in crores Particulars Minimum outstanding during the year Maximum outstanding during the year 3,579.90 987.86 Daily Average outstanding during the year 646.84 263.64 As at 31st March, 2009 423.77
Securities sold under repos Securities purchased under reverse repos 5. Disclosure in respect of non-SLR investments: (i)
issuer composition of non-SLR investments as at 31st March, 2010: Rupees in crores no. issuer Amount extent of Private Placement extent of Below investment grade Securities (5) 64.70 108.86 173.56 extent of unrated Securities extent of unlisted Securities
(1) 1 2 3 4 5 6 7
(2) PSUs FIs Banks Private Corporates Subsidiaries, Associates and Joint Ventures Others Provision held towards depreciation total
(3) 560.26 907.63 682.08 330.08 349.54 (6.85) 2,822.74
(4) 545.39 103.00 439.95 330.08 322.60 1,741.02
(6) 495.39 2.83 330.08 38.31 866.61
(7) 495.39 759.30 2.48 330.08 349.54 1,936.79 Rupees in crores
issuer composition of non-SLR investments as at 31st March, 2009: no. issuer Amount extent of Private Placement extent of Below investment grade Securities (5) 72.03 72.03 extent of unrated Securities extent of unlisted Securities
(1) 1 2 3 4 5 6 7
(2) PSUs FIs Banks Private Corporates Subsidiaries, Associates and Joint Ventures Others Provision held towards depreciation total
(3) 2.43 234.18 45.00 27.02 333.20 327.02 (8.62) 960.23
(4) 234.18 45.00 2.39 333.20 299.98 914.75
(6) 234.18 7.02 333.20 38.59 612.99
(7) 234.18 2.39 333.20 327.02 896.79
Above does not include Non SLR Government Securities Rs. 361.88 crores (Previous Year Rs. 268.21 crores) which are included under Government Securities in the Schedule 8 Investments. (ii) non-performing non-SLR investments: Rupees in crores Particulars Opening balance Additions during the year since 1st April Reductions during the above period Closing balance Total provisions held 31st March, 2010 2.27 0.02 2.25 2.18 31st March, 2009 2.42 0.15 2.27 2.19
6.
Derivatives: A. forward Rate Agreements / interest Rate Swaps: Rupees in crores Particulars The notional principal of swap agreements Losses which would be incurred if counterparties failed to fulfill their obligations under the agreements Collateral required by the Bank upon entering into swaps Concentration of credit risk arising from the swaps The fair value of the swap book B. exchange traded interest Rate Derivatives: Rupees in crores Particulars Notional principal amount of exchange traded interest rate derivatives undertaken during the year (instrument wise) Interest Rate Futures entered with NSE_contract expiry date 18th Dec09 underlying being notional 10 Year 7% GOI Bonds Notional principal amount of exchange traded interest rate derivatives outstanding Notional principal amount of exchange traded interest rate derivatives outstanding and not highly effective (instrument wise) Mark to market value of exchange traded interest rate derivatives outstanding and not highly effective c. Disclosures on risk exposures in derivatives: Qualitative disclosures: (a) Structure and organization for management of risk in derivatives trading: The Derivative policy defines the framework for carrying out the derivative business and lays down the policies and processes adopted to measure, monitor and report risk arising from derivative transactions. The ALCO is responsible for implementing the derivative policy. To effect this, the ALCO: 31st March, 2010 31st March, 2009 31st March, 2010 28,500.27 563.53 nA 99.52% (Banks) (4.56) 31st March, 2009 48,554.10 1,265.44 NA 99.38% (Banks) (5.82)
0.08 niL nA nA
NA NA NA NA
determines appropriate limits for different derivative products within broad policy framework reviews the limit breaches and take appropriate actions
The Bank has Customer Appropriateness Policy which is used to classify the clients depending on their understanding of the derivative products. Further the Bank also has New Product Committee that is responsible for approving any new derivative structure and also for deciding to which category of clients the product can be offered. (b) Scope and nature of risk measurement, risk reporting and risk monitoring systems: The Risk department of the Bank is responsible for measuring, reporting and monitoring risk arising from Derivative transactions and functions independently of the Treasury. The risk management methods generally applied are quantitative like counter party limits, deal sizes, overnight, PVBP and stop-loss limits. The Risk Management function undertakes the following activities: (c) monitors daily derivative operations against the set out policies and limits reviews daily dealers profitability and activity reports for derivative operations reports MIS to the ALCO on a periodic basis as well as exception reporting approves non-vanilla derivative deals for proprietary business
Policies for hedging and / or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges / mitigants: The Bank enters into derivative transactions for trading and hedging purposes. The Balance Sheet Management Unit of the Bank obtains approvals from the Asset Liability Management Committee (ALCO) for hedging on a case to case basis depending on the market conditions and Balance Sheet positions.
These hedges are monitored for its hedge effectiveness periodically having regard to the terms of the hedging instrument and the underlying hedged risk. (d) Accounting policy for recording hedge and non-hedge transactions; recognition of income, premiums and discounts; valuation of outstanding contracts; provisioning, collateral and credit risk mitigation Derivative transactions are segregated into trading or hedge transactions. Trading transactions outstanding as at the Balance Sheet dates are marked to market and the resulting profits or losses, are recorded in the Profit and Loss Account. Derivative transactions designated as Hedges are accounted on an accrual basis over the life of the transaction. Option premium paid / received is accounted for in the Profit and Loss Account on expiry of the option. Provisioning on derivative receivables is made in accordance with RBI guidelines. The derivative limit sanctioned to clients is part of the overall limit sanctioned post credit appraisal. Collateral is accepted on a case to case basis considering the volatility of the price of the collateral and any increase in operational, legal and liquidity risk. D. Quantitative Disclosures: Rupees in crores Sr. Particulars No. 1. Derivatives (notional Principal Amount) (a) For hedging (b) For trading 2. Marked to Market Positions** (a) Asset (+) (b) Liability () 3. credit exposure 4. Likely impact of one percentage change in interest rate (100*PV01) # (a) on hedging derivatives (b) on trading derivatives 5. Maximum of 100*PV01 observed during the year # (a) on hedging derivatives (b) on trading derivatives 6. Minimum of 100*PV01 observed during the year # (a) on hedging derivatives (b) on trading derivatives Currency interest rate swaps have been included under currency derivatives.
#
currency Derivatives 3,900.36 226.75 3,673.61 139.28 82.93 316.56 1.95 0.38 6.42 1.06 1.63 0.08
interest rate Derivatives 28,500.27 89.80 28,410.47 432.84 437.40 770.12 0.47 3.92 1.71 6.71 0.47 2.11
Excludes PV01 on options.
** MTM has been considered at product level. The net position is shown under asset / liability, as the case is for each type of derivatives. the nature and terms of the interest Rate Swaps (iRS) as on 31st March, 2010 are set out below: Rupees in crores nature Trading Trading Trading Trading Trading Trading Trading Trading Hedging total no. 363 367 30 24 1 1 5 4 3 798 notional Principal 13,127.00 13,392.00 825.00 600.00 20.00 37.88 224.50 184.09 89.80 28,500.27 Benchmark MIBOR MIBOR MIFOR MIFOR INBMK LIBOR LIBOR LIBOR LIBOR terms Receive Fixed vs. Pay Floating Receive Floating vs. Pay Fixed Receive Fixed vs. Pay Floating Receive Floating vs. Pay Fixed Receive Floating vs. Pay Fixed Cap & Floor Receive Floating vs. Pay Floating Receive Floating vs. Pay Fixed Receive Floating vs. Pay Fixed
Schedules forming part of the Balance Sheet Profit and Loss Account (Contd.)
The nature and terms of the Cross Currency Swaps (CCS) as on 31st March, 2010 are set out below: Rupees in crores Nature Hedging Hedging Trading Trading Trading Trading Trading Total 7. No. 6 2 3 2 1 1 3 18 Notional Principal 136.95 89.80 58.56 38.58 12.66 12.66 215.55 564.76 Benchmark LIBOR LIBOR LIBOR LIBOR LIBOR Terms Receive Floating vs. Pay Fixed Pay Fixed Receive Fixed vs. Pay Floating Receive Floating vs. Pay Fixed Principal Only Swap Receive Floating Receive Floating vs. Pay Floating
The overnight Net open position as at 31st March, 2010 is Rs. 32.16 crores (Previous Year Rs. 11.82 crores). Movements in Non Performing Advances (Funded): Rupees in crores Particulars i. ii. iii. Net NPAs to Net Advances % Net NPAs to Net Advances % (excluding NPAs acquired from other Banks / FIs and NBFCs) Movement of NPAs (Gross) Gross NPAs as on 1st April (opening balance) Additions (Fresh NPAs) during the year Sub-total (A) Less: (i) Upgradations (ii) Recoveries (excluding recoveries made from upgraded accounts) (iii) Write-offs Sub-total (B) Gross NPAs as on 31st March (closing balance) (A-B) Movement of Net NPAs a. Opening balance b. Additions during the year c. Reductions during the year d. Closing balance Movement of provisions for NPAs (excluding provisions on standard assets) a. Opening balance b. Provisions made during the year c. Write-off / write-back of excess provisions d. Closing balance Year ended 31st March, 2010 1.73% 1.25% 689.21 626.43 1,315.64 (37.03) (137.01) (374.26) (548.30) 767.34 396.84 111.98 (148.57) 360.25 292.37 514.45 (399.73) 407.09 Year ended 31st March, 2009 2.39% 1.26% 439.18 521.93 961.11 (25.42) (131.07) (115.41) (271.90) 689.21 276.16 267.46 (146.78) 396.84 163.02 254.47 (125.12) 292.37
iv.
v.
8. 9.
The Provision Coverage Ratio (PCR) of the Bank after considering Technical Write-off is 58.34% as at 31st March, 2010. Concentration of NPAs Rupees in crores Total Exposure to top four NPA accounts Above represents Gross NPA 115.75
10. Sector-wise NPAs Sr. Sector No. 1. Agriculture & Allied activities 2. Industry (Micro & small, Medium and Large including corporate stressed assets purchased) 3. Services 4. Personal Loans including Credit Cards and retail stressed assets purchased Above % represents Gross NPA to Gross Advances for respective sectors. The bank has compiled the data for the purpose of this disclosure from its internal MIS system and has been furnished by the management which has been relied upon by the auditors. Percentage of NPAs to Total Advances in that sector 1.49% 5.81% 1.96% 9.61%
11. overseas Assets, nPAs and Revenue Particulars Total Assets Total NPAs Total Revenue 12. Details of Loan Assets subjected to Restructuring Rupees in crores Particulars of Accounts Restructured 31st March, 2010 cDR SMe Debt others Mechanism Restructuring 2,491 118.65 2.60 1,964 14.53 0.68 1 0.50 0.05 4,456 133.68 3.33 31st March, 2009 CDR SME Debt Mechanism Restructuring Amount NIL NIL NIL
Others 97 56.27 9 13.48 1 1.16 107 70.91
Standard advances restructured Sub standard advances restructured Doubtful advances restructured Total
No. of Borrowers Amount outstanding Sacrifice (diminution in the fair value) No. of Borrowers Amount outstanding Sacrifice (diminution in the fair value) No. of Borrowers Amount outstanding Sacrifice (diminution in the fair value) No. of Borrowers Amount outstanding Sacrifice (diminution in the fair value)
Note: The amount in above table represents loans outstanding at the time of restructuring. Outstanding Restructured loans (net of provisions) as at 31st March, 2010 are Rs.132.53 crores (Previous Year Rs. 63.54 crores). Sacrifice amount represents provision made for diminution in fair value of the loan based on assessment at Balance Sheet date for all restructured loans. 13. gross nPA, Provisions for nPA and net nPA above include the following in respect of non- performing assets acquired from other Banks / fis and nBfcs: Rupees in crores Particulars Gross NPA Provision for NPA Net NPA 14. Details of non-performing financial assets purchased: Rupees in crores Particulars (a) Number of accounts purchased during the year* (b) Aggregate outstanding in the Banks books** * ** Retail assets portfolio purchased by the Bank has been considered as single portfolio. Represents outstanding balance of total non-performing financial assets purchased by the Bank at the year end. As at 31st March, 2010 3 280.84 As at 31st March, 2009 15 403.19 As at 31st March, 2010 269.01 (166.00) 103.01 As at 31st March, 2009 283.23 (91.92) 191.31
None of the non-performing financial assets purchased have been restructured during the year (Previous Year Nil) There were no non-performing financial assets sold by the Bank during the current year. (Previous Year Nil) The Bank has not sold any financial asset to securitisation or Reconstruction Company for asset reconstruction.
15. Under Unsecured Loans, amount of advances for which intangible security such as charge over the rights, licenses, authority, etc. are accepted as collateral is Nil. 16. Provisions on Standard Assets Rupees in crores Particulars Provisions towards Standard Assets 17. Business ratios / information: Year ended 31st March, 2010 Interest income as a percentage of working funds Non interest income as a percentage of working funds Operating profit as a percentage of working funds Return on assets (average) Business (deposit plus advance) per employee (Rupees in crores) Profit per employee (Rupees in crores) Definitions: (A) (B) (C) (D) Working funds is the monthly average of total assets as reported to the RBI under Section 27 of the Banking Regulation Act, 1949. Operating profit = (Interest Income + Other Income Interest expenses Operating expenses). Business is monthly average of net advances and deposits. Inter bank deposits are excluded for the purposes of computation of this ratio. Productivity ratios are based on average number of employees. 9.96% 1.92% 3.97% 1.72% 4.87 0.07 Year ended 31st March, 2009 11.44% 1.34% 2.54% 1.03% 3.47 0.03 Year ended 31st March, 2010 152.32 Year ended 31st March, 2009 152.32
18. Maturity pattern of certain items of assets and liabilities: As at 31st March, 2010: Rupees in crores Day 1 2 to 7 days 8 to 14 15 to 28 days days 29 days over 3 over 6 to months months & 3 months & upto 6 upto 12 months months 2,254.58 2,028.41 1,184.16 967.73 over 1 year & upto 3 years over 3 years & upto 5 years over 5 years total
Advances* Investments Deposits Borrowings Foreign Currency Assets Foreign Currency Liabilities (*)
291.63 4,820.32
326.28 (527.79)
286.55 281.77
702.85 329.52
2,692.61 7,132.65 1,930.70 3,107.99 20,754.25 1,027.76 3,228.04 3,521.20 7,294.84 555.25 979.95 195.47 1,005.68 12,512.66 149.34 365.01 66.80 23,886.47 670.93 6,140.51
442.82 1,668.15 1,719.14 1,008.35 16.72 2,000.67 100.00
4,098.82 3,917.01 546.00 905.98
16.24
93.45
3.85
38.73
94.12
104.91
4.05
16.16
371.51
17.28
58.10
66.81
0.87
6.27
140.44
51.12
222.29
0.26
202.88
766.32
Advances shown above are net of the Advance EMI received amounting to Rs.20.80 crores.
In computing the above information, certain estimates and assumptions have been made by the Management which have been relied upon by the auditors.
As at 31st March, 2009: Rupees in crores Day 1 2 to 7 days 8 to 14 15 to 28 29 days to days 3 months days Over 3 months & upto 6 months Over 6 months & upto 12 months Over 1 year & upto 3 years Over 3 years & upto 5 years Over 5 years Total
Advances* Investments Deposits Borrowings Foreign Currency Assets Foreign Currency Liabilities (*)
306.92 4,266.45 106.04
380.90 (302.78)
428.74 165.43
405.47 109.19 325.55 51.00
1,857.97 1,525.38 484.33 862.75
2,480.77 5,650.97 1,159.34 2,399.67 16,596.13 572.43 1,887.51 2,064.99 5,516.61 435.31 813.56 201.38 257.86 378.58 863.49 9,110.18
777.78 1,093.75 11.62
2,252.20 3,173.74 686.00 494.92
75.48 15,644.00 696.24 6,734.01
2.61 3,164.17
29.05
27.48
3.96
15.24
33.70
27.25
0.23
3.63
18.26
158.80
3.18
18.82
28.80
0.31
2.19
79.10
50.94
132.07
0.65
228.63
544.69
Advances shown above are net of the Advance EMI received amounting to Rs. 29.21 crores.
19. Lending to sensitive sectors: (a) Real estate Sector*: Rupees in crores Particulars (a) Direct exposure i. Residential Mortgages: Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented; (Includes Individual housing loans eligible for inclusion in priority sector advances as at 31st March, 2010 Rs. 494.26 crores and as at 31st March, 2009 Rs. 505.91 crores) ii. Commercial Real Estate: Lending secured by mortgages on commercial real estates (office buildings, retail space, multi-purpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure also includes non-fund based (NFB) limits iii. Investments in Mortgage Backed Securities (MBS) and other securitised exposures: a. b. (b) Residential Commercial Real Estate 127.34 127.34 5,774.28 30.75 30.75 4,844.56 As at 31st March, 2010 5,646.94 As at 31st March, 2009 4,813.81
3,318.03
2,732.00
2,328.91
2,081.81
Indirect Exposure Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs).
total exposure to Real estate Sector * on limit basis or outstanding basis whichever is higher
(b) exposure to capital Market*: Rupees in crores Particulars i. Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt; Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds; Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds `does not fully cover the advances; Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers; Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoters contribution to the equity of new companies in anticipation of raising resources; Bridge loans to companies against expected equity flows / issues; Underwriting commitments taken up by the banks in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds; Financing to stockbrokers for margin trading; All exposures to Venture Capital Funds (both registered and unregistered) Others (Financial Guarantees) As at 31st March, 2010 As at 31st March, 2009
18.51
27.03
ii.
1.07
1.11
iii.
iv.
9.14 599.32
1.05 328.99
v. vi.
vii. viii.
23.55 25.00 676.59
22.80 5.10 386.08
ix. x. xi.
total exposure to capital Market* * On limit basis or outstanding basis whichever is higher (c) Risk category wise country exposure:
As per extant RBI guidelines, the country exposure of the Bank is categorised into various risk categories listed in following table. Since the country exposure (net) of the Bank in respect of any country does not exceed 1% of the total funded assets, no provision is required to be maintained on country exposure as on 31st March, 2010. (NIL Provision for the year ended 31st March, 2009) Rupees in crores Risk category Insignificant Low total 20. concentration of Deposits: Rupees in crores Total Deposits of twenty largest depositors Percentage of Deposits of twenty largest depositors to Total Deposits of the bank 8,415.87 35.23% exposure (net) as at 31st March, 2010 57.19 45.32 102.51 Provision held as at 31st March, 2010 Exposure (net) as at 31st March, 2009 42.56 0.19 42.75 Provision held as at 31st March, 2009
21. concentration of Advances*: Rupees in crores Total Advances to twenty largest borrowers Percentage of Advances to twenty largest borrowers to Total Advances of the bank * Advances represents Credit Exposure including derivatives furnished in Master Circular on Exposure Norms DBOD.No.Dir. BC.15/13.03.00/2009-10 dated 1st July, 2009 The bank has compiled the data for the purpose of this disclosure from its internal MIS system and has been furnished by the management which has been relied upon by the auditors 22. concentration of exposures**: Rupees in crores Total Exposure to twenty largest borrowers / customers Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the bank on borrowers / customers 5,806.66 13.76% 5,516.80 13.41%
** Exposures represents credit, derivatives and investment exposure as prescribed in Master Circular on Exposure Norms DBOD.No.Dir. BC.15/13.03.00/2009-10 dated 1st July, 2009 The bank has compiled the data for the purpose of this disclosure from its internal MIS system and has been furnished by the management which has been relied upon by the auditors 23. During the year ended 31st March, 2010 the bank has exceeded the single exposure limit with the approval of the Board incase of one borrower being in excess of 15% of the capital funds as indicated hereunder: Rupees in crores name of Party Larsen & Toubro Ltd. total exposure 800.00 % of capital funds 18.94%
The above exposure was within the ceiling of 20% of the Capital Funds, with the approval of the Board, in terms of the RBI guidelines. During the year ended 31st March, 2009 the Bank had not exceeded the prudential exposure limits as laid down by RBI guidelines for the Single Borrower Limit (SBL). During the year ended 31st March, 2010 and year ended 31st March, 2009 the Bank has not exceeded the prudential exposure limits as laid down by RBI guidelines for the Group Borrower Limit (GBL). 24. Provision made for taxes during the year: Rupees in crores 31st March, 2010 Current tax* Deferred tax Fringe benefit tax Wealth Tax total * Net of excess provision for tax of earlier years written back Rs. 18.86 crores (Previous Year Rs. NIL) 25. No penalties or strictures have been imposed on the Bank during the year by the RBI. 26. There are no Off-Balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms). 27. Bancassurance Business: Rupees in crores Sr. nature of income no. 1. 2. 3. 4. For selling Life insurance policies For selling non life insurance policies For selling mutual fund products Others for the year ended 31st March, 2010 30.05 2.04 41.74 281.39 (31.41) 0.02 250.00 31st March, 2009 190.28 (46.05) 5.70 0.03 149.96
B.
otHeR DiScLoSuReS : 1. earnings per equity Share: Year ended 31st March, 2010 Reconciliation between weighted shares used in the computation of basic and diluted earnings per share: Weighted average number of equity shares used in computation of basic earnings per share Effect of potential equity shares for stock options outstanding Weighted average number of equity shares used in computation of diluted earnings per share Following is the reconciliation between basic and diluted earnings per share Nominal value per share: Basic earnings per share Effect of potential equity shares for stock options Diluted earnings per share Earnings used in the computation of basic and diluted earnings per share (Rs. crores) 2. Segment Reporting: Effective 31st March, 2008, the Bank has adopted RBIs revised guidelines issued in April 2007 on segment reporting in terms of which the reportable segments are as outlined in para J of Significant Accounting Policies. Summary of the operating segments of the Bank for the year ended 31st March, 2010 are as given below. Rupees in crores 31st March, 2010 1. Segment Revenue a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business Sub-total Less : Inter-segmental revenue Add : Unallocated Income total Segment Results a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business Sub-total Add: Unallocated Income total Profit Before tax Provision for tax total Profit After tax 1,126.23 1,156.39 1,742.30 755.36 60.38 2,558.04 4,840.66 956.88 0.09 3,883.87 367.46 385.46 377.51 (189.05) (127.40) 61.06 813.98 (2.87) 811.11 250.00 561.11 31st March, 2009 833.21 887.93 1,929.17 784.71 38.31 2,752.19 4,473.33 1,134.71 0.15 3,338.77 129.29 225.34 366.42 (225.34) (69.80) 71.28 425.91 0.15 426.06 149.96 276.10 10.00 16.18 0.18 16.00 561.11 10.00 8.00 0.01 7.99 276.10 34,68,87,602 37,00,281 35,05,87,883 34,52,37,379 4,13,570 34,56,50,949 Year ended 31st March, 2009
2.
Rupees in crores 31st March, 2010 3. Segment Assets a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business Sub-total Less: Inter-segmental Assets total Add: Unallocated Assets total Assets as per Balance Sheet Segment Liabilities a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business Sub-total Less: Inter-segmental Liabilities total Add: Unallocated liabilities Add: Share Capital & Reserves & surplus total Liabilities as per Balance Sheet capital expenditure a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business total Depreciation a. Treasury and BMU b. Corporate / Wholesale Banking c. Retail Banking: (i) Lending (ii) Branch Banking (iii) Credit cards Sub-total d. Other Banking business total 14,587.47 10,931.75 13,074.55 11,713.92 197.81 24,986.28 50,505.50 13,294.32 37,211.18 225.14 37,436.32 13,053.13 9,789.53 11,392.90 11,902.96 22.61 23,318.47 46,161.13 13,294.32 32,866.81 84.39 4,485.12 37,436.32 272.01 2.63 3.65 29.39 1.91 34.95 309.59 37.60 4.73 7.61 35.31 4.75 47.67 90.00 31st March, 2009 10,932.19 7,720.55 12,216.30 9,492.40 244.49 21,953.19 40,605.93 12,071.16 28,534.77 177.10 28,711.87 9,687.26 6,733.58 10,688.93 9,717.74 19.66 20,426.33 36,847.17 12,071.16 24,776.01 122.24 3,813.62 28,711.87 10.10 6.05 9.68 43.04 6.66 59.38 75.53 16.46 5.82 9.12 35.57 2.59 47.28 69.56
4.
5.
6.
Segmental Information is provided as per the MIS available for internal reporting purposes, which includes certain estimates and assumptions. The methodology adopted In compiling and reporting the above information has been relied upon by the auditors.
3.
Lease Disclosures: a. The Bank has taken various premises and equipment under operating lease. The lease payments recognised in the Profit and Loss Account are Rs.115.75 crores (Previous Year Rs. 105.62 crores). The sub-lease income recognised in the Profit and Loss Account is Rs.5.33 crores (Previous Year Rs. 6.15 crores). The future minimum lease payments under non cancellable operating lease not later than one year is Rs. 89.05 crores (Previous Year Rs. 88.54 crores), later than one year but not later than five years is Rs.278.28 crores (Previous Year Rs.277.18 crores) and later than five years Rs.104.64 crores (Previous Year Rs. 136.39 crores). The lease terms include renewal option after expiry of primary lease period. There are no restrictions imposed by lease arrangements. There are escalation clauses in the lease agreements.
b.
4.
Deferred taxes: Others in Other Assets (Schedule 11 (VI)) includes deferred tax asset (net) of Rs.208.22 crores (Previous Year Rs. 176.81 crores). The components of the same are as follows: Rupees in crores Particulars Year ended 31st March, 2010 189.99 15.94 2.29 208.22 Year ended 31st March, 2009 167.80 8.91 0.10 176.81
Provision for NPA and general provision on standard assets Expenditure allowed on payment basis Depreciation net Deferred tax Asset
5.
fixed Assets as per Schedule 10 include intangible assets relating to software and system development expenditure which are as follows : Rupees in crores Year ended 31st March, 2010 gross Block At cost on 31st March of the preceding year Additions during the year Deductions during the year total Depreciation As at 31st March of the preceding year Charge for the year Deductions during the year Depreciation to date net Block 36.94 15.66 0.04 52.56 28.84 26.11 10.83 36.94 22.40 59.34 22.06 81.40 42.29 17.05 59.34 Year ended 31st March, 2009
6.
Related Party Disclosures: A. Parties where control exists: nature of relationship Individual having control over the enterprise Related Party Uday S. Kotak along with relatives and enterprises in which he has beneficial interest holds 48.21% of the equity share capital of Kotak Mahindra Bank Limited as on 31st March, 2010 Kotak Mahindra Prime Limited Kotak Securities Limited Kotak Mahindra Capital Company Limited Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra Investments Limited Kotak Mahindra Asset Management Company Limited Kotak Mahindra Trustee Company Limited Kotak Mahindra (International) Limited Kotak Mahindra (UK) Limited Kotak Mahindra Inc. Global Investment Opportunities Fund Limited Kotak Investment Advisors Limited Kotak Mahindra Trusteeship Services Limited Kotak Forex Brokerage Limited Kotak Mahindra Pension Fund Limited Kotak Mahindra Financial Services Limited B. other Related Parties: nature of relationship Associates Related Party Business Standard Limited (Upto 16th June, 2009) Ahmedabad Commodity Exchange Ltd. (Effective 4th August, 2009) Kotak Mahindra Asset Reconstruction Company Limited Infina Finance Private Limited Matrix Business Services India Private Limited Phoenix ARC Private Limited Regency Hospitals Limited (Upto 30th March, 2010) Key Management Personnel Mr. Uday S. Kotak, Executive Vice Chairman and Managing Director Mr. C Jayaram, Executive Director Mr. Dipak Gupta, Executive Director Enterprise over which Key Management Personnel have significant Influence Relatives of Key Management Personnel Aero Agencies Limited Kotak & Company Limited Komaf Financial Services Limited Ms. Pallavi Kotak Mr. Suresh Kotak Ms. Indira Kotak Mr. Jay Kotak Mr. Dhawal Kotak Ms. Aarti Chandaria Ms. Anita Gupta Ms. Urmila Gupta Ms. Usha Jayaram
Subsidiary Companies
Rupees in crores items / Related Party individual having control Subsidiary companies Associates Key Management Personnel enterprise Relatives over which of Key Relative Management of Key Personnel Management Personnel have control / significant influence 0.52 (0.38) 0.01 (0.02) total
Liabilities Deposits Interest Payable Other Liabilities Assets Advances Investments-Gross Diminution on Investments Commission Receivable Others expenses Salaries / fees (Include ESOP) Interest Paid Others income Dividend Interest Received Others 11.88 (3.00) 19.06 (8.37) 60.56 (60.52) () (0.57) () () () () 11.88 (3.00) 19.06 (8.94) 60.56 (60.52) 142.65 (158.45) 0.75 (0.63) 31.70 (2.50) 0.54 (0.21) 6.69 (8.66) 0.35 (0.31) 6.30 (6.25) 0.03 (0.03) () 6.69 (8.66) 174.73 (161.29) 7.59 (7.09) () 515.54 (313.20) (0.04) 15.69 (20.02) 0.02 (0.02) 4.54 (5.37) 9.42 (2.96) () 0.30 (0.04) (0.04) 531.23 (333.22) 0.02 (0.02) 4.54 (5.37) 9.72 (3.00) 2,067.29 (1,822.16) 98.41 (50.76) 3.35 (86.14) 514.71 (419.72) 7.53 (1.27) 4.14 (3.73) 0.16 (0.17) 2,586.66 (2,245.99) 106.11 (52.22) 3.35 (86.14)
Rupees in crores items / Related Party individual having control Subsidiary companies Associates Key Management Personnel enterprise Relatives over which of Key Relative Management of Key Personnel Management Personnel have control / significant influence 29.28 () () total
other transactions Sale of Investment Purchase of Loan Loan Disbursed Loan repaid Purchase of debenture Dividend paid Reimbursement to companies Reimbursement from companies Purchase of Fixed assets Sale of Fixed assets i. Liabilities: other liabilities other Payable Kotak Mahindra Capital Company Kotak Mahindra Prime Limited Kotak Mahindra (International) Limited Other Subsidiaries 1.03 (2.12) (83.50) 2.29 () 0.03 (0.52) 1.03 (2.12) (83.50) 2.29 () 0.03 (0.52) 25.09 () 39.45 (168.36) 50.00 (175.00) 225.00 () 259.15 () () 6.78 (4.68) 68.56 (95.75) 0.24 (1.34) 0.29 (0.67) () () () () () () 0.02 (0.17) 0.36 (0.06) 12.53 (12.53) 0.08 (0.08) 54.37 () 39.45 (168.36) 50.00 (175.00) 225.00 () 259.15 () 12.61 (12.61) 6.80 (4.85) 68.92 (95.81) 0.24 (1.34) 0.29 (0.67)
Rupees in crores items / Related Party individual having control Subsidiary companies Associates Key Management Personnel enterprise Relatives over which of Key Relative Management of Key Personnel Management Personnel have control / significant influence total
ii. Assets: investments Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra Prime Ltd. Other Subsidiaries Business Standard Limited Ahmedabad Commodity Exchange Kotak Mahindra Asset Reconstruction Company Limited Diminution on investments Kotak Mahindra Asset Reconstruction Company Limited commission Receivable Kotak Mahindra Old Mutual Life Insurance Limited others Kotak Mahindra Prime Limited Kotak Securities Limited 4.89 (0.62) 3.06 (0.44) 4.89 (0.62) 3.06 (0.44)
260.25 (260.25) 202.92 (1.78) 52.37 (51.17) (20.00) 15.67 ()
260.25 (260.25) 202.92 (1.78) 52.37 (51.17) (20.00) 15.67 ()
0.02 (0.02)
0.02 (0.02)
0.02 (0.02)
0.02 (0.02)
4.54 (5.37)
4.54 (5.37)
Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra (UK) Limited Other Subsidiaries iii. expenses: Salaries / fees (include eSoP) Mr. Uday Kotak Mr. C. Jayaram Mr. Dipak Gupta other expenses Brokerage Kotak Securities Limited Premium Kotak Mahindra Old Mutual Life Insurance Limited other expenses: Aero Agencies Limited Kotak & Company Limited Other subsidiaries / Associates
0.42 (0.61) 0.23 (0.65) 0.82 (0.64) 0.30 (0.04)
0.42 (0.61) 0.23 (0.65) 1.12 (0.68)
1.13 (1.53) 2.75 (3.81) 2.81 (3.32)
1.13 (1.53) 2.75 (3.81) 2.81 (3.32)
0.31 (0.05)
0.31 (0.05)
0.44 (0.58) 5.89 (5.83) 0.41 (0.42) 0.54 (0.21)
0.44 (0.58) 5.89 (5.83) 0.41 (0.42) 0.54 (0.21)
iV. income: Dividend Kotak Mahindra Asset Management Company Limited Kotak Mahindra Trustee Co Ltd other income insurance commission and Rental income Kotak Mahindra Old Mutual Life Insurance Limited Rental and other income Kotak Securities Limited Kotak Mahindra Capital Company Limited Kotak Mahindra Asset Management Company Limited Kotak Mahindra Prime Limited Other Subsidiaries V. other transactions: Sale of investment Komaf Financial Services Limited Kotak Securities Limited
11.88 () (3.00)
11.88 () (3.00)
34.77 (36.51)
34.77 (36.51)
9.74 (8.27)
9.74 (8.27)
3.84 (4.04)
3.84 (4.04)
3.21 (3.06) 5.22 (5.38) 3.78 (3.26)
3.21 (3.06) 5.22 (5.38) 3.78 (3.26)
29.28 () 25.09 ()
29.28 () 25.09 ()
Purchase of Loan Kotak Mahindra Prime Limited Loan Disbursed Kotak Mahindra Prime Limited Loan Repaid Kotak Mahindra Prime Limited Purchase of Debenture Kotak Securities Limited Kotak Mahindra Prime Limited Other Subsidiaries Dividend paid Mr. Uday Kotak Mr. C. Jayaram Mr. Dipak Gupta Ms. Pallavi Kotak Ms. Indira Kotak Others 12.49 (12.49) 0.02 (0.02) 0.02 (0.02) 0.02 (0.02) 0.05 (0.05) 0.01 (0.01) 12.49 (12.49) 0.02 (0.02) 0.02 (0.02) 0.02 (0.02) 0.05 (0.05) 0.01 (0.01) 167.75 () 26.56 () 64.84 () 167.75 () 26.56 () 64.84 () 225.00 () 225.00 () 50.00 (175.00) 50.00 (175.00) 39.45 (168.36) 39.45 (168.36)
Reimbursements to companies Kotak Mahindra Capital Company Limited Kotak Mahindra Prime Limited Kotak Mahindra Old Mutual Life Insurance Limited Kotak Securities Limited Kotak Mahindra Investments Limited Other Subsidiaries Reimbursements from companies Kotak Mahindra Capital Company Limited Kotak Mahindra Prime Limited Kotak Mahindra Old Mutual Life Insurance Limited Kotak Securities Limited Other Subsidiaries
1.12 (1.69) 4.14 (0.78)
1.12 (1.69) 4.14 (0.78)
0.48 (0.71) 0.83 (0.67) 0.10 (0.74) 0.11 (0.09) 0.02 (0.17)
0.48 (0.71) 0.83 (0.67) 0.10 (0.74) 0.13 (0.26)
4.93 (7.29) 6.54 (6.38)
4.93 (7.29) 6.54 (6.38)
6.12 (8.72) 41.93 (56.51) 9.04 (16.85) 0.36 (0.06)
6.12 (8.72) 41.93 (56.51) 9.40 (16.91)
Purchase of fixed assets Kotak Mahindra Prime Limited 0.04 (0.81) Kotak Securities Limited 0.06 (0.28) Kotak Mahindra Capital Company Limited 0.04 (0.81) 0.06 (0.28)
0.11 (0.17)
0.11 (0.17) 0.02 () 0.01 (0.08)
Kotak Mahindra International Limited
0.02 ()
Other Subsidiaries
0.01 (0.08)
Sale of fixed assets Kotak Securities Limited 0.11 () Kotak Mahindra Capital Company Limited 0.11 ()
0.06 (0.36)
0.06 (0.36) 0.12 (0.19) (0.12)
Kotak Investment Advisors Limited
0.12 (0.19)
Kotak Mahindra Prime Ltd.
(0.12)
Notes: 1. 2. 3. Figures in brackets represent previous years figures. The above does not include any transactions in relation to listed securities done on recognised stock exchange during the year. # In the above table denotes Amount less than Rs. 50,000.
Maximum Balance outstanding during the year Rupees in crores items / Related Party individual having control Subsidiary companies Associates Key Management Personnel enterprise over which Relative of Key Management Personnel have control / significant influence Relatives of Key Management Personnel
Liabilities Deposits 9,464.30 (3,882.96) Other Liabilities 0.83 (86.15) Assets Advances 225.00 (175.00) Investments-Gross 515.54 (313.20) Diminution on Investments (16.88) 15.68 (20.02) 0.02 (0.02) Commission Receivable 4.38 (7.09) Others 20.40 (38.61) 0.32 () 3,390.73 (544.81) 49.46 (40.69) 2.80 (6.03)
7.
eSoPs : At the General Meetings of the holding company, Kotak Mahindra Bank Limited, the shareholders of the Bank had unanimously passed Special Resolution on 28th July, 2000, 26th July, 2004, 26th July, 2005, 5th July, 2007 and 21st August, 2007, to grant options to the eligible Employees of the Bank and its subsidiaries companies. Pursuant to these resolutions, the following four Employees Stock Option Schemes had been formulated and adopted: (a) (b) (c) (d) Kotak Mahindra Equity Option Scheme 2001-02 Kotak Mahindra Equity Option Scheme 2002-03 Kotak Mahindra Equity Option Scheme 2005 Kotak Mahindra Equity Option Scheme 2007
Consequent to the above, the Bank has granted stock options to the employees of the Bank and its subsidiaries. The Bank under its various plan / schemes, has granted in aggregate 2,46,37,720 options as on 31st March, 2010 (Previous Year 2,44,84,700).
Stock appreciation rights The Bank has also granted stock appreciation rights (SARs) to select employees which can be settled in cash. These options will vest on the respective due dates in a graded manner as per the terms and conditions of grant. The contractual life of the SARs range from 0.34 to 4.36 years. During the year the Bank has granted 1,32,650 SARs. The number of SARs outstanding as on 31st March, 2010 are 1,32,650. The intrinsic value of SARs is measured at the grant date taking into account terms and conditions upon which the instruments were granted. The Bank has granted options to its employees vide various employee stock option schemes. During the year ended 31st March, 2010, the following schemes were in operation: Plan 2002-03* Date of grant Date of Board Approval Date of Shareholders approval Various Dates Various Dates 28th July, 2000 as amended on 5th July, 2007 28,52,500 Equity 1 3.08 Years 0.58 0.75 Years Graded Vesting Plan 2005 Various Dates Various Dates 26th July, 2005 as amended on 5th July, 2007 54,86,600 Equity 1 4.13 Years 0.42 0.92 Years Graded / Cliff vesting Plan 2007 Various Dates Various Dates 5th July, 2007 as amended on 21st August, 2007 96,92,620 Equity 1 4.31 Years 0.17 1.01 Years Graded / Cliff vesting
Number of options granted Method of Settlement (Cash / Equity) Vesting Period Exercise Period Vesting Conditions
The details of activity under Plan 2002-03* have been summarized below: Year ended 31st March, 2010 number of Weighted Shares Average exercise Price (Rs.) Year ended 31st March, 2009 Number of Weighted Shares Average Exercise Price (Rs.) 8,12,812 80.00 2,84,649 80.00 3,53,351 80.00 1,74,812 80.00
Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Out of the above exercisable at the end of the year Weighted average remaining contractual life (in years) Weighted average fair value of options granted
* The options have been adjusted for issue of bonus shares one share for every share allotted on 28th August, 2004 and three equity shares for every two shares allotted on 30th August, 2005. The details of activity under Plan 2005 have been summarized below: Year ended 31st March, 2010 number of Shares Outstanding at the beginning of the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Out of the above exercisable at the end of the year Weighted average remaining contractual life (in years) Weighted average fair value of options granted 33,79,670 1,63,250 7,19,750 2,370 24,94,300 1,76,800 0.72 Weighted Average exercise Price (Rs.) 295.72 315.85 183.52 150.00 328.72 172.34 Year ended 31st March, 2009 Number of Shares 42,74,990 3,91,470 4,91,400 12,450 33,79,670 3,00,180 1.52 Weighted Average Exercise Price (Rs.) 272.66 276.18 115.44 109.52 295.72 187.98
The details of activity under Plan 2007 have been summarized below: Year ended 31st March, 2010 number of Shares Outstanding at the beginning of the year Granted during the year* Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year* Out of the above exercisable at the end of the year Weighted average remaining contractual life (in years) Weighted average fair value of options granted 84,77,297 1,53,020 4,31,486 17,52,868 38,838 64,07,125 8,35,369 1.98 520.08 Weighted Average exercise Price (Rs.) 449.07 397.18 477.77 346.07 653.35 472.84 294.27 Year ended 31st March, 2009 Number of Shares 47,48,550 45,31,550 6,31,200 1,51,266 20,337 84,77,297 6,07,172 2.51 277.73 Weighted Average Exercise Price (Rs.) 512.13 370.06 463.42 34.92 201.09 449.07 326.01
The weighted average share price at the date of exercise for stock options exercised during the year was Rs.727.98 (Previous Year Rs. 517.74). The details of exercise price for stock options outstanding at the end of the year are: 31st March, 2010 Range of exercise prices (Rs.) number of options outstanding Weighted average remaining contractual life of options (in years) 1.42 0.17 2.52 0.68 1.90 1.25 2.06 2.13 1.20 1.42 Weighted average exercise price (Rs.)
0-100 101-200 201-300 301-400 401-500 501-600 601-700 701-800 901-1000 1201-1300 31st March, 2009 Range of exercise prices (Rs.)
60,040 1,51,800 18,94,750 29,63,587 11,93,248 20,000 25,20,000 17,000 43,500 37,500
10.00 151.32 263.65 338.14 410.00 584.00 682.90 745.00 984.48 1,250.00
number of options outstanding
Weighted average remaining contractual life of options (in years) 0.86 3.25 1.40 2.25 3.05 3.13 1.71 2.00
Weighted average exercise price (Rs.)
101-200 201-300 301-400 401-500 601-700 701-800 901-1000 1201-1300
7,42,180 22,50,000 42,31,687 18,98,500 26,34,600 17,000 33,000 50,000
150.47 265.13 334.02 410.00 682.55 745.00 996.36 1,250.00
Stock options granted The fair value of the equity-settled and cash-settled options is estimated on the date of grant using Black Scholes options pricing model taking into account the terms and conditions upon which the options were granted. The fair value of the cash-settled options is remeasured at the each reporting date. The following table lists the inputs to the model used for equity-settled and cash-settled options: Year ended Year ended 31st March, 2010 31st March, 2009 equity-settled cash-settled Equity-settled Cash-settled 10-950 10.00 225 745 762.08 764.42 513.89 57.71% 36.26% 48.15% 77.02% 67.54% 73.67% 57.71% 36.26% 48.15% 77.02% 67.54% 73.67% 1.06 4.42 0.67 4.09 1.16 4.56 4.65% 7.22% 4.78% 7.37% 5.36% 8.81% 0.09% 0.19% 0.10% 0.10% 0.32%
Exercise Price Rs. Weighted Average Share Price Rs. Expected Volatility Historical Volatility Life of the options granted (Vesting and exercise period) in years Risk-free interest rate Expected dividend rate
The expected volatility was determined based on historical volatility data; historical volatility includes early years of the Banks life; the Bank expects the volatility of its share price to reduce as it matures. The above information has been prepared by the Bank and relied upon by the auditors. Effect of the employee share-based payment plans on the Profit and Loss Account and on its financial position: Rupees in crores Year ended 31st March, 2010 14.75 13.60 76.56 21.76 1.15 Year ended 31st March, 2009 23.37 23.37 142.86 50.95
Total Employee Compensation Cost pertaining to share-based payment plans Compensation Cost pertaining to equity-settled employee share-based payment plan included above Liability for employee stock options outstanding as at year end Deferred Compensation Cost Closing balance of liability for cash-settled options Expense arising from increase in intrinsic value of liability for cash stock appreciation plan
Had the Bank recorded the compensation cost computed on the basis of Fair Valuation method instead of intrinsic value method, employee compensation cost would have been higher by Rs. 24.09 crores (Previous Year Rs. 21.32 crores) and the profit after tax would have been lower by Rs. 15.90 crores (Previous Year Rs. 14.07 crores). Consequently the basic and diluted EPS would have been Rs. 15.72 (Previous Year Rs. 7.59) and Rs. 15.55 (Previous Year Rs. 7.58) respectively. In computing the above information, certain estimates and assumptions have been made by the Management which have been relied upon by the auditors. 8. Advances securitised by the Bank: Rupees in crores Particulars Book value of advances securitised Number of accounts Sale consideration received for the accounts securitised Gain on securitisation amortized during the year Credit enhancement, liquidity support provided Nature of post securitisation support As at 31st March, 2010 500.00 1 500.65 1.99 niL collection and paying agent or servicer As at 31st March, 2009 1,450.00 7 1,451.56 7.43 NIL Collection and paying agent or servicer
9.
Provisions on securitised assets: Rupees in crores Particulars a. b. c. Opening balance Provision made during the year Closing balance Year ended 31st March, 2010 Year ended 31st March, 2009 1.32 (1.32)
10. The Bank has agreed with International Finance Corporation (IFC) in a loan agreement dated 8th November, 2004 that it shall (i) not create or permit to exist any lien over and above what was existing prior to the Bank converting into a scheduled commercial Bank (ii) request IFCs consent before granting any lien which is not pre-authorised, should the RBI allow the Bank to grant liens and (iii) grant in favour of IFC a similar lien which shall rank pari passu with the lien created in case it creates any such lien which is not a pre-authorized lien. 11. employee Benefits i. The Bank has recognised the following amounts in the Profit and Loss Account towards contributions to Provident Fund and Other Funds. Provident Fund Superannuation Fund Rs. 22.17 crores (Previous Year Rs. 24.24 crores) Rs. 0.50 crores (Previous Year Rs. 0.52 crores) ii. In accordance with law, the Bank provides for gratuity, a defined benefit retirement plan covering all employees. The plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employees salary and the years of employment with the Bank subject to maximum of Rs. 0.035 crores. The gratuity benefit is provided to the employees through a fund administered by a Board of Trustees and managed by Kotak Mahindra Old Mutual Life Insurance Limited. The Bank is responsible for settling the gratuity obligation through contributions to the fund. The plan is fully funded. iii. Reconciliation of opening and closing balance of present value of defined benefit obligation for gratuity benefits is given below: Rupees in crores Particulars change in benefit obligations Liability at the beginning of the year Current service cost Interest cost Actuarial Losses / (Gain) Liability assumed on acquisition / (Settled on divestiture) Benefits paid Liability at the end of the year change in plan assets Fair value of plan assets at the beginning of the year Expected return on plan assets Actuarial Gain / (Losses) Benefits paid Employer contributions Fair value of plan assets at the end of the year 15.39 1.17 4.61 (4.31) 8.77 25.63 13.96 0.98 (3.57) (0.48) 4.50 15.39 19.75 6.09 1.73 (0.49) (0.58) (4.31) 22.19 14.41 6.48 1.55 (3.05) 0.84 (0.48) 19.75 As of 31st March, 2010 As of 31st March, 2009
Rupees in crores Reconciliation of present value of the obligation and the fair value of the plan assets Fair value of plan assets at the end of the year Liability at the end of the year Net Asset / (Liability) expense recognised for the year Current service cost Interest cost Expected return on plan assets Actuarial (Gain) / Loss Net gratuity expense Actual return on plan assets 6.09 1.73 (1.17) (5.10) 1.55 5.78 6.48 1.55 (0.98) 0.52 7.57 (2.59) Rupees in crores Reconciliation of the Liability recognised in the Balance Sheet Net Liability / (Asset) at the beginning of the year Expense recognised Liability assumed on acquisition / (Settled on divestiture) Employer contributions Net Liability / (Asset) investment details of plan assets The plan assets have been invested in insurer managed funds. Actuarial assumptions used Interest rate Salary escalation rate 8.01% p.a. (Previous Year 7.18% p.a.) 15% p.a. for first 2 years, 10% p.a. for next 2 years & 6% p.a. thereafter (Previous Year 0% p.a. for first year, 10% p.a. for next 2 years & 6% p.a. thereafter) 7.50% p.a. (Previous Year 7.50% p.a.) 31st March, 2010 4.36 1.55 (0.58) (8.77) (3.44) 31st March, 2009 0.45 7.57 0.84 (4.50) 4.36 31st March, 2010 25.63 22.19 3.44 31st March, 2009 15.39 19.75 (4.36)
Expected return on plan assets
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors. The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. The above information is as certified by the actuary and relied upon by the auditors. experience adjustments Amounts for the current and previous three years are as follows: The Company expects to contribute Rs. 4.00 crores to gratuity fund in 2010-11. Rupees in crores gratuity Year ended 31st March, 2010 Defined benefit obligation Plan assets Surplus / (deficit) Experience adjustments on plan liabilities Experience adjustments on plan assets 22.19 25.63 3.44 (0.47) 4.61 2009 19.75 15.39 (4.36) (2.59) (3.58) 2008 14.41 13.96 (0.45) 0.96 1.38 2007 8.54 9.26 0.72 0.92 0.49 2006 5.73 3.33 (2.40)
12. Provisions and contingencies: Breakup of Provisions and Contingencies shown under the head Expenditure in Profit and Loss Account Rupees in crores Particulars Provisions for depreciation on Investment Provision towards NPA (including write-offs net of write-backs) Provision towards restructured assets Provision towards Standard Asset Provision for Taxes Other Provision and Contingencies*(net) Total Provisions and Contingencies 31st March, 2010 (2.40) 465.29 3.33 250.00 19.67 735.89 31st March, 2009 (82.24) 253.25 21.51 149.96 (22.82) 319.66
*For year ended 31st March, 2010 includes provision Rs. 14.83 crores (Previous Year writeback of Rs. 23.56 crores) in respect of derivative contracts and provision for fees receivable Rs. 4.84 crores (Previous Year Rs. 0.74 crores). 13. floating Provision Rupees in crores Particulars (a) (b) (c) (d) 14. (a) Opening balance in the floating provisions account The quantum of floating provisions made in the accounting year Amount of draw down made during the accounting year Closing Balance in floating provisions account Status of Shareholder Complaints: Particulars (a) No. of complaints pending at the beginning of the year (b) No. of complaints received during the year (c) No. of complaints redressed during the year 31st March, 2010 niL 79 79 niL 31st March, 2009 NIL 100 100 NIL 31st March, 2010 niL niL niL niL 31st March, 2009 NIL NIL NIL NIL
(d) No. of complaints pending at the end of the year (b) Status of Customer Complaints: Particulars (a) No. of complaints pending at the beginning of the year (b) No. of complaints received during the year (c) No. of complaints redressed during the year
31st March, 2010 356 9,330 9,593 93
31st March, 2009 241 19,279 19,164 356
(d) No. of complaints pending at the end of the year
(c)
Status of Awards passed by the Banking Ombudsman: Particulars (a) No. of unimplemented Awards at the beginning of the year (b) No. of Awards passed by the Banking Ombudsman during the year (c) No. of Awards implemented during the year 31st March, 2010 niL 1* 1* niL 31st March, 2009 NIL NIL NIL NIL
(d) No. of unimplemented Awards at the end of the year
*The award represents payment to a customer which is to be recovered from another bank due to their deficiency in resolving one disputed ATM transaction. The above details are as furnished by the Management and relied upon by the auditors. 15. Bank has not issued any letters of comforts during the year. There were no outstanding letter of comforts at the year end (Previous Year Nil). 16. The Bank receives deposits from customers as part of margin requirements in respect of its professional clearing member (PCM) business with National Securities Clearing Corporation Ltd (NSCCL). Correspondingly, the Bank is required to maintain margins / deposits with NSCCL. For the said purpose of placing margins / deposits, the Bank has issued its own Fixed Deposit receipts amounting to Rs. 591.41 crores (Previous Year Rs. 844.61 crores) in favour of NSCCL which have not been included in Term Deposits from Others [Schedule 3 (III) (ii) ] . 17. tier ii Bonds (a) Lower Tier II Bonds outstanding as at 31st March, 2010 Rs. 465.70 crores (Previous Year Rs. 465.70 crores). During the year, the Bank did not raise lower Tier II bonds (Previous Year Nil). In accordance with the RBI requirements lower Tier II bonds of Rs. 65.48 crores (Previous Year Rs. 38.74 crores) are not considered as Tier II capital for the purposes of capital adequacy computation. (b) Upper Tier II Bonds outstanding as at 31st March, 2010 Rs. 338.05 crores (Previous Year Rs. 364.24 crores) of which bonds issued outside India Rs. 202.05 crores (Previous Year Rs. 228.24 crores). During the year, the Bank did not raise upper Tier II bonds. (Previous Year Nil) (c) Interest Expended-Others (Schedule 15(III)) includes interest on subordinated debt (Lower and Upper Tier II) Rs. 58.10 crores (Previous Year Rs. 64.78 crores).
18. Description of contingent Liabilities: Sr. contingent Liability* no. 1. Claims not acknowledged as debts Brief Description This includes liability on account of income tax, interest tax, sales tax and lease tax demands and legal cases filed against the Bank. The Bank is a party to various legal proceedings in the normal course of business. The Bank does not expect the outcome of these proceedings to have a material adverse effect on the Banks financial conditions, result of operations or cash flows. Against the above Rs.19.00 crores have been paid, which shall be refunded to the Bank, if the outcome of the legal proceedings will be in the favour of the Bank. 2. Liability on account of outstanding forward exchange contracts The Bank enters into foreign exchange contracts with inter Bank participants on its own account and for customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate.
Sr. contingent Liability* no. 3. Guarantees on behalf of constituents in India
Brief Description
As a part of its Banking activities, the Bank issues guarantees on behalf of its customers. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of customer failing to fulfill its financial or performance obligations. These includes: Documentary credit such as letters of obligations, enhance the credit standing of the customers of the Bank. Bills re-discounted by the Bank and cash collateral provided by the Bank on assets which have been securitised.
4.
Acceptances, endorsements and other obligations
5.
Other items for which the Bank is contingently liable
These includes: Liabilities in respect of interest rate swaps, currency swaps, forward rate agreements and options contracts. The Bank enters into these transactions with inter Bank participants on its own account and for customers. Currency Swaps are commitments to exchange cash flows by way of interest / principal in one currency against another, based on predetermined rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. The notional amounts that are recorded as contingent liabilities are amounts used as a benchmark for the calculation of interest component of the contracts. Liability in respect of Capital commitments relating to fixed assets. This also includes undrawn commitments in respect of investments.
* Also refer Schedule 12 Contingent Liabilities 19. The Bank has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given. 20. Figures for the previous year have been regrouped / reclassified wherever necessary to conform to current years presentation.
For and on behalf of the Board of Directors Dr. Shankar Acharya Chairman Dipak gupta Executive Director Jaimin Bhatt Group Chief Financial Officer Bina chandarana Company Secretary uday Kotak Executive Vice Chairman & Managing Director
Mumbai, 11th May, 2010

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Auditors Report

Mumbai, 11th May, 2010

Kotak Mahi ndra Ban k Li mi te d

Balance Sheet as at 31st March, 2010

Schedules forming part of Balance Sheet as at 31st March, 2010

Schedules forming part of Balance Sheet as at 31st March, 2010 (Contd.)

Schedules forming part of Balance Sheet as at 31st March, 2010 (Contd.)

Schedules forming part of Balance Sheet as at 31st March, 2010 (Contd.)

Schedules forming part of Balance Sheet as at 31st March, 2010 (Contd.)

VII. Loss on Derivatives VIII. Miscellaneous Income Total

Schedule 17 SignificAnt Accounting PoLicieS

Corporate / Wholesale Banking Retail Banking

Other Banking business

Schedule 18 noteS to AccountS

Securities sold under repos Securities purchased under reverse repos

(3) 560.26 907.63 682.08 330.08 349.54 (6.85) 2,822.74

(4) 545.39 103.00 439.95 330.08 322.60 1,741.02

(6) 495.39 2.83 330.08 38.31 866.61

(7) 495.39 759.30 2.48 330.08 349.54 1,936.79 Rupees in crores

(3) 2.43 234.18 45.00 27.02 333.20 327.02 (8.62) 960.23

(4) 234.18 45.00 2.39 333.20 299.98 914.75

(6) 234.18 7.02 333.20 38.59 612.99

(7) 234.18 2.39 333.20 327.02 896.79

Excludes PV01 on options.

Others 97 56.27 9 13.48 1 1.16 107 70.91

442.82 1,668.15 1,719.14 1,008.35 16.72 2,000.67 100.00

4,098.82 3,917.01 546.00 905.98

306.92 4,266.45 106.04

405.47 109.19 325.55 51.00

1,857.97 1,525.38 484.33 862.75

777.78 1,093.75 11.62

2,252.20 3,173.74 686.00 494.92

75.48 15,644.00 696.24 6,734.01

23.55 25.00 676.59

22.80 5.10 386.08

260.25 (260.25) 202.92 (1.78) 52.37 (51.17) (20.00) 15.67 ()

260.25 (260.25) 202.92 (1.78) 52.37 (51.17) (20.00) 15.67 ()

0.42 (0.61) 0.23 (0.65) 0.82 (0.64) 0.30 (0.04)

0.42 (0.61) 0.23 (0.65) 1.12 (0.68)

1.13 (1.53) 2.75 (3.81) 2.81 (3.32)

1.13 (1.53) 2.75 (3.81) 2.81 (3.32)

0.44 (0.58) 5.89 (5.83) 0.41 (0.42) 0.54 (0.21)

0.44 (0.58) 5.89 (5.83) 0.41 (0.42) 0.54 (0.21)

3.21 (3.06) 5.22 (5.38) 3.78 (3.26)

3.21 (3.06) 5.22 (5.38) 3.78 (3.26)

1.12 (1.69) 4.14 (0.78)

1.12 (1.69) 4.14 (0.78)

0.48 (0.71) 0.83 (0.67) 0.10 (0.74) 0.13 (0.26)

4.93 (7.29) 6.54 (6.38)

4.93 (7.29) 6.54 (6.38)

6.12 (8.72) 41.93 (56.51) 9.04 (16.85) 0.36 (0.06)

6.12 (8.72) 41.93 (56.51) 9.40 (16.91)

0.11 (0.17) 0.02 () 0.01 (0.08)

Kotak Mahindra International Limited

0.06 (0.36) 0.12 (0.19) (0.12)

Kotak Investment Advisors Limited

Kotak Mahindra Prime Ltd.

number of options outstanding

Weighted average exercise price (Rs.)

101-200 201-300 301-400 401-500 601-700 701-800 901-1000 1201-1300

7,42,180 22,50,000 42,31,687 18,98,500 26,34,600 17,000 33,000 50,000

150.47 265.13 334.02 410.00 682.55 745.00 996.36 1,250.00