Kotak Mahindra Bank Ltd

To the Members,

KOTAK MAHINDRA BANK LIMITED

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

(A) CONSOLIDATED*

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

(B) STANDALONE

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

**The Bank has complied with all criteria specified in the Reserve Bank of India circular dated 4th May, 2005 on payment of dividend on equity shares and the Board of Directors of the Bank has recommended a dividend of RS. 2.50 per equity share (Face Value of RS. 5/-) for FY 2024-25 (previous year: RS. 2.00 per equity share), from the profits for FY 2024-25. As per the requirements of revised AS 4 – ‘Contingencies and Events Occurring after the Balance Sheet Date?, the dividend pay-out is appropriated from the amount available for appropriation in the year of pay-out.

FINANCIAL PERFORMANCE

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

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

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

CAPITAL

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

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

DIVIDEND

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

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

DEBENTURES AND BONDS

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

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

CAPITAL ADEQUACY RATIO

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

CREDIT RATINGS

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

DEPOSITS

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

REMOVAL OF SUPERVISORY RESTRICTIONS - LETTER OF RESERVE BANK OF INDIA DATED _TH FEBRUARY, _ _6

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

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

CONSUMER BANKING

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

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

Aligning Distribution Architecture with customer personas

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

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

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

Curated propositions through customer lens

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

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

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

Strengthening the liabilities franchise

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

Building momentum on assets while managing risk

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

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

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

Kotak811 - where Banking meets Technology

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

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

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

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

Strengthening Customer Service

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

COMMERCIAL BANKING

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

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

The slow market growth in CV and CE segments was primarily on account of the implementation of election model code of conduct, heat wave and overall lower than expected government spending. On the collection side, your Bank saw some deterioration due to aforementioned factors. However, with risk analytics and credit policy interventions, improvement was visible in Q4 FY 2024-25. The Tractor industry grew by approximately 7% during the year, backed by near normal monsoon, government support and rising adoption of mechanisation. Your Bank?s disbursement growth in the Tractor business was in line with the industry growth, maintaining its leadership position. Priority Sector Lending ("PSL") book constitutes more than 90% of these loans, demonstrating your Bank?s continued commitment towards making difference in the lives and livelihood of farmers. This was aided by focus on new products / customer segments, deeper geographies and productivity per employee through digital adoption for onboarding and collections.

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

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

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

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

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

WHOLESALE BANKING

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

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

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

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

Your Bank has, over the years, invested in developing expertise and forming Centre-of-Excellence in areas, such as, Structured Lending, Infrastructure Financing, Real Estate Financing, Banking for Financial Sponsors and Custodial Services, among others. Your Bank?s expertise in these areas is disproportionately higher than its asset share. Your Bank seeks to leverage on this expertise to deepen existing relationships, acquire new quality customers on a consistent basis and secure value addition through deeper penetration of varied products and services.

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

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

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

1.7 times increase in the on-boarded base

1.6 times growth in active users on the platform

2.9 times growth in daily user logins

1.2 times growth in transactions processed

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

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

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

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

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

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

PRIVATE BANKING

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

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

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

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

INTERNATIONAL BANKING UNITS

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

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

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

ASSET RECONSTRUCTION

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

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

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

TREASURY

Your Bank?s Treasury actively contributes by way of:

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

(ii) Proprietary Trading: The Proprietary Trading Desk actively trades in Fixed Income products (viz. Bonds, Debentures, Money Markets Instruments and INR Derivatives), Foreign Exchange and Equity. Within the Proprietary Trading Desk, the Primary Dealer Desk participates in primary auctions of Government securities, makes market in these securities and engages in their retailing. The Proprietary desks also provide market access to sales teams to facilitate customer transactions and requirements. (iii) Customer Transactions: The customer facing desks at Treasury assist and manage customer transactions across Foreign Exchange, Derivatives and Bullion products. The Forex and Derivatives Desk facilitates customer access to foreign currency markets through cash and derivatives products for remittances, trade transactions and for managing Foreign Exchange and Interest Rate risks.

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

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

TECHNOLOGY AND DIGITISATION

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

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

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

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

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

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

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

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

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

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

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

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

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

HUMAN RESOURCES

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

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

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

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

2. Colleague Development

a. Kotak Young Leaders Council b. Strategic Leadership and Executive Education Programmes c. Managerial Effectiveness Programmes d. Talent Marketplace platform

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

4. Transparent Communication

a. Amber, our AI powered real-time feedback platform b. My Kotak My Say c. Townhall and Leadership Connects d. KotakWorld, our Intranet platform

5. Enhanced Colleague Value Proposition

a. Diversity, Equity, Inclusion and Belonging Initiatives b. Health and Wellbeing c. Caring Kotakite d. Careers and Rewards

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

EMPLOYEES

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

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

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

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

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

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

PROHIBITION OF INSIDER TRADING

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

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

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

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

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

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

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

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

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

SHARE-BASED EMPLOYEE BENEFITS

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

The Employee Stock Options ("ESOPs") and Stock Appreciation Rights ("SARs") granted to the employees of the Bank and its subsidiaries, currently operate under the following schemes: (i) ESOP Scheme 2023 (ii) ESOP Scheme 2015 (iii) SARs Scheme 2023; and (iv) SARs Scheme 2015.

During FY 2024-25, after receiving the requisite approvals, the Board implemented the Kotak Mahindra Performance Linked Restricted Stock Unit Scheme 2025 ("PRSU Scheme") to create, grant, issue, offer and allot 9,000,000 (Ninety Lakh) Performance Linked Restricted Stock Units ("PRSUs"). In order to create the pool for PRSUs, the ESOP pool available under ESOP Scheme 2023 was reduced from 20,000,000 (Two Crore) equity shares (equivalent to 1.01% of the issued equity shares of the Bank, as at 31st December, 2024), to 11,000,000 (One Crore Ten Lakh) equity shares. No PRSUs have been granted till the date of this Report.

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

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

ENVIRONMENT, SOCIAL AND GOVERNANCE PRACTICES

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

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

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

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

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

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

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

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

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

SUBSIDIARIES AND ASSOCIATES

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

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

Highlights of a few subsidiaries are given below:

Kotak Mahindra Prime Limited and Kotak Mahindra Investments Limited

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

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

Kotak Securities Limited and Kotak Mahindra Capital Company Limited

Kotak Mahindra Capital Company Limited (Kotak Investment Bank) was ranked No. 1 in the Equity Capital Markets for third year in a row and continued to be the Left Lead Banker of Choice. FY 2024-25 was a stellar year for Indian Equity Capital Markets, with the highest-ever activity across all the product categories, viz., Initial Public Offering (IPOs), follow-on primary raises via Qualified Institutional Placements (QIPs) and sell-downs. Indian Equity Capital Markets hit all-time high in FY 2024-25, led by strong FII and DII inflows in RS.1FY25. While FIIs turned net sellers (USD 15.6 billion) by the end of FY 2024-25, record DII inflows of USD 71.6 billion sustained market momentum. This reflects growing market resilience and strong domestic fundamentals. A total of _ 386,469 crore (versus _ 209,746 crore in FY 2023-24, up 184% YoY) was raised in FY 2024-25 across primary market deals, i.e., IPOs, QIPs, Further Public Offering (FPO) and Rights Issues. All sectors saw capital market deals being executed on the back of strong investor response.

The Institutional Equities division of Kotak Securities Limited ("KSL") in FY 2024-25, registered the highest-ever growth in revenues and maintained its leadership position in both, the cash equities and derivatives segments. In FY 2024-25, overall market volumes in the institutional segment increased by 46% YoY for the cash segment and by 24% YoY for the derivatives segment. Kotak Institutional Equities saw significant growth in revenues YoY and was able to maintain its yields across client segments. It continued to add new clients to its franchise and was able to maintain its leadership position in the distribution of IPOs, QIPs, open offers and the execution of block trades. FY 2024-25 witnessed market volume growth in equity cash segment, with average daily volumes (excluding proprietary segment) increasing to _ 78,015 crore in FY 2024-25 from _ 56,866 crore in the previous financial year and equity derivative segment increasing to _ 140,724 crore in FY 2024-25 from _ 105,035 crore in previous financial year. Consequently, KSL?s volumes also increased for equity cash and derivative segments.

Kotak Mahindra Life Insurance Company Limited

Kotak Mahindra Life Insurance Company Limited ("KLI") has solvency ratio of 2.45 against a regulatory requirement of 1.50. The Net worth of KLI increased by 9.21% to _ 6,403.07 crore as on 31st March, 2025 from _ 5,863.23 crore as on 31st March, 2024. The Indian Embedded Value (IEV) was _ 17,612 crore (31st March, 2024: _15,242 crore) as on 31st March, 2025, up 15.6% YoY. The Value of New Business ("VNB") for FY 2024-25 stood at _ 959 crore (FY 2023-24: _ 1,053 crore) and the VNB margin was 25%. On an individual, Annual Premium Equivalent ("APE") Basis (Single 1/10), KLI has registered 5.73% growth against private insurance industry growth of 15.09% and overall industry growth of 10.46%. KLI?s market share for Individual New Business premium (APE terms) was 3.51% for FY 2024-25 among private insurers. This was due to higher proportion of traditional policies compared to industry. On a group APE Basis (Single 1/10), KLI?s market share for Group New Business premium (APE terms) was 10.67% for FY 2024-25 among private insurers. KLI saw an increase in its AUM (including shareholders) by 14.55% YoY to _ 91,806.85 crore in FY 2024- 25.

Kotak Mahindra Asset Management Company Limited

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

BSS Microfinance Limited and Sonata Finance Private Limited

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

MATERIAL SUBSIDIARY

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

ASSOCIATES

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

(i) Infina Finance Private Limited (ii) Phoenix ARC Private Limited

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

Further,pursuanttotheprovisionsofSection136(1)oftheAct,theAnnualReportoftheBank,containingthestandaloneandconsolidatedfinancial statementsandallotherrelevantdocumentsrequiredtobeannexedtheretoandtheseparateauditedfinancialstatementsinrespectofeachofthe subsidiaries, are available on the Bank?s website viz., URL: https://www.kotak.com/en/investor-relations/financial-results/annual-reports.html Pursuant to the provisions of Section 129(3) of the Act, the Statement containing the salient features of the Financial Statements of the said subsidiaries and associates of the Bank, in Form AOC-1, forms part of the Integrated Annual Report.

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

BOARD COMPOSITION

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

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

CHANGES IN COMPOSITION OF THE BOARD

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

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

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

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

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

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

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

DIRECTORS RETIRING BY ROTATION

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

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

DECLARATION FROM INDEPENDENT DIRECTORS

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

DIRECTOR E-KYC

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

DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY

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

BOARD EVALUATION

The Board conducted the performance evaluation of individual Directors, Chairperson, Board Committees and the Board as a whole for FY 2024-25, in accordance with the provisions of the Act and the SEBI Listing Regulations, including the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January, 2017.

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

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

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

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

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

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

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

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

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

KEY MANAGERIAL PERSONNEL

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

(i) Mr. Ashok Vaswani, Managing Director & CEO (ii) Ms. Shanti Ekambaram, Deputy Managing Director

(iii) Mr. Jaideep Hansraj, Whole- time Director (Executive Director) (iv) Mr. Devang Gheewalla, Group Chief Financial Officer (v) Ms. Avan Doomasia, Company Secretary

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

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

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

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

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

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

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

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

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

Compensation Policy for Non-Executive Directors

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

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

The above mentioned policy is available on the Bank?s website viz., URL: https://www.kotak.com/content/kotakcl/en/investor-relations/ governance/policies.html The salient features of the Compensation Policy for NEDs are, inter alia, as follows:

(i) Compensation structure is divided into:

Sitting fees

Reimbursement of expenses

Compensation in the form of Fixed Remuneration

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

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

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

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

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

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

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

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

Objective:

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

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

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

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

Compensation structure comprises total remuneration consisting of:

Fixed Pay, which includes perquisite pay / benefits

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

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

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

(i) Category I – Comprising Managing Director & CEO and Whole-time Directors (WTDs) (ii) Category II – Material Risk Takers (MRTs):

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

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

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

This excludes employees under Category III.

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

Risk & Policy function

Financial Control including group consolidation

Compliance

Internal Audit

Back-office Operations

Vigilance

Legal

Secretarial

Human Resources

Corporate Social Responsibility

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

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

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

DISCLOSURES PURSUANT TO RULE 6 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, _ y

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

MEETINGS OF THE BOARD / COMMITTEES

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

DIRECTORS? RESPONSIBILITY STATEMENT

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

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

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

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

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

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

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

REPORT ON CORPORATE GOVERNANCE

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

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

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

ANNUAL RETURN

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

SECRETARIAL STANDARDS

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

SECRETARIAL AUDITOR

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

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

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

In compliance with Regulation 24A of the SEBI Listing Regulations and Section 204 of the Act, the Board has, at its meeting held on 31st May, 2025 approved the appointment of Parikh & Associates, Practising Company Secretaries, a peer reviewed firm (Firm Registration No. P1988MRS.009800) as Secretarial Auditors of the Bank for a term of five consecutive years commencing from FY 2025-26 upto FY 2029-30, subject to the approval of the members at the ensuing AGM. Accordingly, the approval of members of the Bank is being sought for the said appointment, at the ensuing Fortieth AGM.

STATUTORY AUDITORS

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

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

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

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

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

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

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

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

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

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

INTERNAL FINANCIAL CONTROL

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

IMPLMENTATION OF IND AS

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

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

RELATED PARTY TRANSACTIONS

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

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

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

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

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

RISK MANAGEMENT POLICY

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

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

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

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

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

REPORTING OF FRAUDS BY AUDITORS

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

MAINTENANCE OF COST RECORDS

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

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

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

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE BANK

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

DESPATCH OF ANNUAL REPORT

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

ANNEXURES

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

(i) Annual Report on Corporate Social Responsibility Activities of the Bank for the financial year ended 31st March, 2025. (ii) Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. (iii) Secretarial Audit Report of the Bank, pursuant to Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations.

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

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

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

ACKNOWLEDGEMENT

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