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KOTAK MAHINDRA BANK LIMITED

Earnings Update – Q1 FY05 Unaudited Results

July 26, 2004

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The Board of Directors of Kotak Mahindra Bank Limited at their meeting held on July 26, 2004, took on record the unaudited financial results for the quarter ended June 30, 2004. Performance Highlights

• The Bank currently operates with 20 full-fledged branches across 14 cities in India. It plans to convert a significant number of its retail lending

branches into retail bank branches during the current financial year.

• Bank proposes to have a total of around 50 full-fledged bank branches by end of FY05. It had 17 full-fledged braches at the end of FY04.

• Net Interest Income (NII) of the Bank up 60% to Rs 459.4 mn from Rs 287.1 mn.

• Fee Income (including Insurance Premium) constituted 35% of consolidated revenues for Q1FY05 (21% of revenues in Q1FY04).

• Kotak Investment Banking topped the M&A league tables for the first half of calendar 2004 in terms of value of deals announced (Source:

Bloomberg – India targets). Also announced two prestigious M&A transactions – Ebay’s purchase of Baazee.com and Hutch Essar purchase

of Aircel.

• Kotak Securities awarded “Best Equity House” in India by FinanceAsia.

• Kotak Life Insurance recorded 106% growth in gross premium income from Rs 137.1mn in Q1FY04 to Rs 282.7 mn in Q1FY05.

• Equity assets managed by the group in the mutual fund, portfolio management and offshore funds around Rs 21 bn as on June 30, 2004.

• AUM of various mutual funds distributed by Kotak Mahindra Bank and Kotak Securities around Rs 42 bn as on June 30, 2004.

• In July 2004, Kotak Mutual Fund launched IPO of Kotak Equity FOF (Fund of Fund) scheme and collected around Rs 1.87 bn.



3

Consolidated Financials Revenues Rs million

Q1 FY05 Q1 FY04 Q4 FY04 (3 months) (3 months)

Growth (%) YOY (3 months)

FY 04 (12 months)

Financing activities 1,301.2 1,017.7 27.9% 1,356.2 4,618.8 Fee income 715.7 315.8 126.6% 940.3 2,672.0 Insurance Premium 264.0 131.2 101.1% 799.0 1,465.1 Treasury / Investments 437.4 586.0 -25.4% 613.2 2,298.7 Others 102.1 76.4 33.6% 216.0 600.0 Total Revenues 2,820.4 2,127.2 32.6% 3,924.7 11,654.7 Profits Rs million

Q1 FY05 Q1 FY04 Q4 FY04 FY 04 (3 months) (3 months)

Growth (%) YOY (3 months) (12 months)

Total operating profits before retail liabilities and life insurance losses 823.8 769.1 7.1% 1,362.0 4,217.5 Loss on Retail liabilities and branch banking (119.2) (84.8) - (119.7) (419.2) Loss on Life Insurance (147.5) (108.5) - (101.8) (491.2) Profit Before Tax 557.1 575.8 -3.2% 1,140.5 3,307.1 PAT (before minority interest/ associates/ adjustments) 333.8 319.6 4.4% 731.3 2,004.0 PAT (after minority interest/ associates / adjustments) 307.0 290.2 5.8% 619.2 1,741.6 EPS (diluted) (Rs) 5.1 4.9 4.3% 10.3 29.0



4

Consolidated Financials Assets Rs million

As on June 30th 2004


Growth (%) YOY

As on March 31st 2004

Advances • Commercial Vehicles 13,450 8,587 56.6% 12,389 • Car Loans 23,384 17,836 31.1% 22,164 • Personal Loans 3,374 2,315 45.7% 3,065 • Home Loans 1,445 23 6227.5% 855 • Corporate + SME 3,117 2,376 31.2% 3,605 • Others 3,150 3,225 -2.4% 4,428 Total Advances 47,920 34,362 39.5% 46,506 Investments / Treasury Assets 18,150 *23,814 -23.8% *35,907 Total Advances and Investments 66,071 58,176 13.6% 82,412 * A significant part of this is due to temporary increase in investments Consolidated Financials Liabilities Rs million As on

June 30th 2004 As on

June 30th 2003 Growth (%)

YOY As on

March 31st 2004 Deposits 25,685 **18,375 39.8% **42,207 Borrowings 25,632 30,752 -16.7% 31,036 ** A significant part of this is due to temporary increase in deposits



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Consolidated Financials Analytical Ratios As on



March 31st 2004 Net-worth after minority interest (Rs mn) 12,666 10,846 12,331 Book value per share (Rs) 213 183 207 Gross NPAs (Rs mn) 347 353 296 Net NPAs (Rs mn) 104 84 42 Net NPAs (%) 0.2% 0.2% 0.1% Annualised Return on average Net-worth (%) 9.8% 10.8% 15.2% Annualised Pre-Tax Return on average Net-worth (%) (before loss on retail liabilities and branch banking and life insurance businesses) 26.4% 28.7% 36.9% Company-wise Profit After Tax

Rs million Q1 FY05 Q1 FY04 Q4 FY04 FY 04

(3 months) (3 months) Growth (%) YOY (3 months) (12 months)

Kotak Mahindra Bank (Standalone) 220.6 193.4 14.1% 205.9 787.3 Kotak Mahindra Capital Company 19.3 133.2 -85.5% 144.1 579.6 Kotak Securities 193.9 62.5 210.4% 381.4 854.6 Kotak Mahindra Primus 23.7 29.4 -19.4% 33.8 127.0 Kotak Mahindra AMC & Trustee Co 15.5 3.2 382.0% 11.9 45.6 Kotak Mahindra Old Mutual Life Insurance (147.5) (108.5) - (101.8) (491.2) Kotak Mahindra Investments 23.0 7.8 193.6% 41.2 88.5 International subsidiaries 36.4 (17.5) - 16.8 5.9 Others (2.0) (1.0) - (2.0) (6.6) Total consolidated profit after tax 382.8 302.4 26.6% 731.3 1,990.5 Less: Minority interest & other adjustments 82.3 15.2 - 125.4 273.0 Add: Equity affiliates 6.5 3.0 117.3% 13.2 24.1 PAT (after minority interest / adjustments) 307.0 290.2 5.8% 619.2 1,741.6



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Kotak Mahindra Bank – Standalone

Rs million Q1 FY05 Q1 FY04 Q4 FY04 FY 04 Segmental Revenues

(3 months) (3 months) Growth (%)

YOY (3 months) (12 months) Retail Lending 582.8 395.5 47.4% 608.1 1,892.3 Corporate Banking 208.4 68.2 205.3% 314.3 622.1 Retail Liabilities and Branch Banking 48.6 4.2 1044.5% 46.3 80.8 Treasury 318.9 335.9 -5.1% 234.6 1,287.7 Corporate Centre 231.7 156.4 48.1% 163.0 670.0 Inter segment revenue (235.4) (165.7) - (197.0) (713.7) Net Revenues 1,155.0 794.6 45.3% 1,169.2 3,839.1 Operating profit before losses on retail liabilities & branch banking 424.8 385.8 10.1% 444.1 1,627.0 Retail Liabilities and Branch Banking loss (119.2) (84.8) - (119.7) (419.2) Profit before tax 305.6 300.9 1.6% 324.4 1,207.9 Provision for tax 85.0 107.5 - 118.5 420.6 Profit after tax 220.6 193.4 14.1% 205.9 787.3 Rs million

Q1 FY05 Q1 FY04 Q4 FY04 FY 04 Segmental Profit before tax (3 months) (3 months)


Retail Lending 168.9 156.5 7.9% 162.7 618.3 Corporate Banking 65.2 28.8 126.4% 162.6 237.3 Retail Liabilities and Branch Banking (119.2) (84.8) - (119.7) (419.2) Treasury (16.5) 65.1 - (27.9) 169.3 Corporate Centre 207.2 139.9 48.1% 134.1 602.2 Un allocable Expenditure - (4.6) - 12.6 - Total PBT 305.6 300.9 1.6% 324.4 1,207.9



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Kotak Mahindra Bank – Standalone Assets Rs million



Growth (%) YOY

As on March 31st 2004

Advances • Commercial Vehicles 13,450 8,587 56.6% 12,389 • Personal Loans 3,374 2,315 45.7% 3,065 • Home Loans 1,445 23 6139.9% 855 • Corporate + SME 3,162 2,356 34.2% 3,622 • Others 1,583 227 596.7% 1,040 Total Advances 23,014 13,508 70.4% 20,970 Treasury Assets 13,930 *17,952 -22.4% *28,828 Total Advances and Investments 36,944 31,460 17.4% 49,798 *A significant part of this is due to temporary increase in investments Liabilities Rs million As on


June 30th 2003 Growth (%)

YOY As on

March 31st 2004 Deposits 28,499 **18,382 55.0% **44,593 Borrowings 4,304 9,631 -55.3% 5,116 **A significant part of this is due to temporary increase in deposits



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Bank Performance Highlights • Kotak Mahindra Bank currently operates with 20 full-fledged bank branches across Mumbai (5), New Delhi (2), Noida, Gurgaon, Ahmedabad

(2), Vadodara, Chennai, Kolkata, Hyderabad, Bangalore, Ludhiana, Pune, Surat and Rajkot. • The Bank plans to convert to convert a significant number of its retail lending branches into retail bank branches during the current financial

year. • The Bank proposes to have a total of 50 full-fledged branches by end of FY05. It had 17 full-fledged braches at the end of FY04. • Fees from wealth management advisory at Rs 20.3 mn for Q1FY05 grew over 6 times as compared to Q1FY04. The mutual fund assets

under management distributed by the Bank were around Rs 19 bn as on June 30, 2004. • NII for Q1FY05 was Rs 459.4 mn up by 60% (Rs 287.1 mn in Q1FY04). • Asset quality

As on June 30th, 2004


As on March 31st, 2003

Gross NPA (Rs mn) 236 222 200 Net NPA (Rs mn) 54 54 35 Net NPA% 0.2% 0.4% 0.2%

• Capital Adequacy



As on March 31st, 2003

Capital Adequacy Ratio 14.69% 14.51% 15.25%



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Key Subsidiaries – Highlights Kotak Mahindra Capital Company – investment banking joint venture with Goldman Sachs



YOY (3 months) (12 months) Total income 115.8 364.4 -68.2% 318.0 1365.5 Profit before tax 21.5 222.8 -90.4% 179.6 836.2 Profit after tax 19.2 133.2 -85.6% 144.1 579.6 • Started the year by winning all three prestigious awards for second year in running - “Best Investment Bank” in India by FinanceAsia, “Best

Equity House” in India by Euromoney and “Best Domestic Equity House” in India by Asiamoney.

• Awarded “Best Investment Bank in India” by Global Finance.

• Topped the M&A league tables for the first half of calendar 2004 in terms of value of deals announced (Source: Bloomberg – India targets).

• Announced two prestigious M&A transactions – Ebay’s purchase of Baazee.com and Hutch Essar purchase of Aircel.

• Successfully completed the Rs 32.5 bn follow on equity offering for ICICI Bank and Rs 1.1 bn IPO for NDTV amidst choppy market

conditions, political uncertainty and declining secondary markets.

• Segmental profit before tax for Trading and Principal Investments stood at Rs 7.84 mn for Q1FY05 as against Rs 239.79 mn for Q1FY04.



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Kotak Securities - retail and institutional equities joint venture with Goldman Sachs



YOY (3 months) (12 months) Total income 638.5 284.2 124.7% 908.0 2,476.7 Profit before tax 296.9 99.7 197.9% 587.4 1,346.8 Profit after tax 193.9 62.5 210.4% 381.4 854.6 • Awarded “Best Equity House” in India by FinanceAsia.

• Kotak Securities (retail, online and institutional segments) clocked average daily volumes of over Rs 7.6 bn during Q1FY05 as compared to

Rs 2.5 bn during Q1FY04. Average daily volumes were Rs 7.2 bn during FY04.

• Average daily volumes on www.kotakstreet.com (online) during Q1FY05 increased to Rs 530 mn from Rs 130 mn during Q1FY04. Average

daily volumes for FY04 were around Rs 420 mn.

• Assets under management in Portfolio Management Services were around Rs 12 bn as on June 30, 2004 (Rs 4.5 bn as on June 30, 2003).

• Cash and Derivative market volumes in Q1FY05 were 250% of corresponding quarter of FY04 and Kotak Institutional Equities’ trading

volumes in Q1 FY05 outperformed market growth. Kotak Mahindra Primus – car finance joint venture with Ford Credit International



YOY (3 months) (12 months) Total income 622.2 574.3 8.3% 591.4 2,363.6 Profit before royalty & taxes 155.2 157.0 -1.28% 165.5 644.4 Profit after royalty before taxes 36.5 45.7 -20.1% 46.7 191.9 Profit after tax 23.7 29.3 -19.1% 33.8 127.0

• Asset base as on June 30, 2004 Rs 23.4 bn as compared to Rs 17.8 bn as on June 30, 2003.



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Kotak Mahindra Asset Management Company – mutual fund management Rs million

Q1 FY05 Q1 FY04 Q4 FY04 FY 04 (3 months) (3 months)


Total income (AMC) 73.1 48.5 50.5% 70.4 232.1 Profit before tax (AMC) 16.1 1.8 819.4% 8.6 36.4 Profit after tax (AMC) 11.8 1.6 625.9% 8.2 33.9 Profit before tax (Trustee Company) 5.8 2.5 132.9% 5.4 17.3 Profit after tax (Trustee Company) 3.7 1.6 132.5% 3.7 11.7 • Total AUM as on June 30, 2004 was Rs 56.5 bn (Rs 37.1 bn as on June 30, 2003). Equity AUM as on June 30, 2004 stood at Rs 6.1 bn (Rs

1.5 bn as on June 30, 2003).

• Presence in 49 cities through branches and franchisees.

• In July 2004, launched Kotak Equity FOF (Fund of Fund) scheme and collected around Rs 1.87 bn in the IPO. Kotak Equity FOF is a single-

asset-class (equity), multi-manager FOF. The uniqueness being that Kotak Equity FOF’s portfolio will be invested largely across schemes

from multiple fund houses. Kotak Mahindra Old Mutual Life Insurance - life insurance joint venture with Old Mutual



YOY (3 months) (12 months) Gross premium income 282.7 137.1 106.2% 822.3 1,507.2 Loss (147.5) (108.5) - (101.8) (491.2)

• Changed its name from OM Kotak Mahindra Life Insurance Company Limited to Kotak Mahindra Old Mutual Life Insurance Limited.

• First year premium in Q1FY05 grew by 67% as compared to Q1FY04.

• As on June 30, 2004, the company has over 80,000 individual policies on books representing a basic sum assured of Rs 26.3 bn (excluding

riders). Additionally, the company had 42 group policies covering over 61,000 lives with an aggregate sum assured of Rs 17.6 bn.



12

Safe Harbor This document contains certain forward-looking statements based on current expectations of Kotak Mahindra management. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and outside India, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the businesses of Kotak Mahindra group as well as its ability to implement the strategy. Kotak Mahindra does not undertake to update these statements. This document does not constitute an offer or recommendation to buy or sell any securities of Kotak Mahindra Bank or any of its subsidiaries and associate companies. This document also does not constitute an offer or recommendation to buy or sell any financial products offered by Kotak Mahindra, including but not limited to units of its mutual fund and life insurance policies. All investments in mutual funds and securities are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market. The performance of the sponsor, Kotak Mahindra Bank Limited, has no bearing on the expected performance of Kotak Mahindra Mutual Fund or any schemes thereunder. Contact Anshu Daga Genesis Public Relations Pvt. Ltd. Tel: +91 22 56607681 Fax: +91 22 24911788 E-mail: [email protected]

Jaimin Bhatt / Naozad Sirwalla Kotak Mahindra Bank Limited Tel: +91 22 56581100 Fax: +91 22 22855577 E-mail: [email protected] / [email protected]



September, 2004

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… business segments

Kotak MahindraAsset Management

Mutual Funds

Kotak SecuritiesBroking

Kotak MahindraCapital CompanyInvestment Banking

Kotak MahindraPrimus

Auto Finance

Kotak MahindraFinance

∞ Investment Banking∞ Primary Dealer

∞ Retail Equities∞ Institutional Equities

∞ Retail Assets∞ Retail Liabilities ∞ Wealth Management ∞ Corporate Banking∞ Treasury

3

Group Structure

75% 100% 74%

• Mutual funds

• Life insurance

75%

• Stock broking

• eBroking

• Distribution

• IPOs• Private equity• Project advisory• M&A• Primary Dealership

Kotak Mahindra Capital

Company

Kotak Mahindra Primus

Kotak Mahindra Old Mutual Life Insurance

KotakSecurities

• Financing of non-Ford passenger vehicles

• Financing dealers

• Commercial Banking

Kotak Mahindra Asset

Management Company

60% *35%

• Financing of Ford vehicles

Ford Credit Kotak

MahindraKotak Forex Brokerage

100%Kotak

Mahindra Investments

Kotak Mahindra Trustee

Company

100%100%

• Trustee companies

• Interbank forex broking

JVs with Ford Credit International Inc JVs with Goldman Sachs JV with Old

Mutual plc

100%

100%

100%

Kotak MahindraSecurities Limited

Kotak Mahindra International

Kotak Mahindra (UK) Ltd

Kotak Mahindra Inc.

• Investments

100%

Kotak Mahindra

Private-Equity Trustee

* 5% through KMIL

4

Group Management

Uday KotakExecutive VC & MDUday KotakUday Kotak

Executive VC & MDExecutive VC & MD

Shivaji DamLife Insurance

Shivaji DamShivaji DamLife InsuranceLife Insurance

Dipak GuptaRetail Banking

Dipak GuptaDipak GuptaRetail BankingRetail Banking

Ajay SondhiInvestment BankingInstitutional Equities

Ajay SondhiAjay SondhiInvestment BankingInvestment BankingInstitutional EquitiesInstitutional Equities

C. JayaramWealth Management

C. JayaramC. JayaramWealth ManagementWealth Management

5

The transition to a Bank…∞ Converted on March 22, 2003

First full year as a Bank

∞ Bank as a central platform for customer relationships

6 businesses – 1 brand

∞ Wallet share expansion opportunitiesWealth Management proposition

∞ Potentially higher ROE as a BankHigher ability to leverage

∞ Provides an element of solidity and stability

6

Bank… Broad Strategy∞ Focus on

Wealth management customers Retail affluent (Annual income > Rs 4.5 lacs)Net cash holders (trusts, NGOs)Active transacting small business

∞ ServicesOffer all basic Hygiene Services

Net Banking; ATM/Debit Cards; Phone; Depository; Home Banking; etc.

Differentiated servicesSuperior convenience on transactionsInvestment Advisory service

∞ DistributionDelivery thru “dense-retail” channel network

Focus on 20 largest cities; dense in Mumbai & New DelhiSet up about 60-75 Branches in 3 years

High Net-worth

Super Affluent

Mass Affluent

Mass Retail

Reta

il Ba

nk7 mn HH

KEY BUSINESSES

8

Investment Banking

∞ Consistently among top 3 investment banksStrong Goldman Sachs partnership

∞ Ranked “Best Domestic Equity house” in India for 2004

Asiamoney, Euromoney & Financeasia

∞ Strong IPO pipeline

∞ Continued focus on Equity IPOs/offerings

Large M&A transactions

Privatisation

9

Kotak Securities∞ India’s leading stock broker

∞ Largest Equity Portfolio MangerAround Rs 12 bn of discretionary equity funds

∞ Significant presence in Retail and Institutional segment

Retail network of 275 offices (own & franchisee) in 110 towns & cities

∞ Robust growth in online broking volumes on www.kotakstreet.com

10

Car Finance

∞ Have been through 2 “industry” cycles

∞ Consistently among top 3 car financiers

Portfolio – over Rs 23 bn

Customer base of over 100,000

High asset quality; net NPAs at 0.2%

∞ Strong manufacturer based business

Significant player in “Floor” financing

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Mutual Fund

∞ Fully owned by the Bank

∞ Significant corpus growthRs 30 bn in Mar’03 to around Rs 57 bn in June’04

∞ Consistently best performing Wholesale Bond Fund

∞ Presence in 49 cities through branches & Franchisies

∞ “Kotak Equity FOF” IPO garnered Rs 1.8 bn

12

Life Insurance

∞ Full suite of products – risk, savings & pension

∞ About 140,000 lives insured

∞ National presence (41 branches) with focus in Western India

∞ Bancassurance expected to be a key business driver

FINANCIALS

14

Consolidated Performance

47%

28%

15%

6% 4%

46%

16%

25%

9% 4%

39%

20%

23%

13% 5%

FinancingTreasuryFee IncomeInsurance

Rs 2,820 mn

Others

Q1 FY’04Q1 FY’05 FY’04

Rs 11,655 mnRs 2,127 mn

15

Consolidated Financials

4.9

290.2

319.6

575.8

(108.5)

(84.8)

769.1

2127.2

Q1 FY 04(3 M)

29.0

1,741.6

2,004.0

3,307.8

(491.2)

(419.2)

4,217.5

11654.7

FY 04(12 M)

(147.5)Insurance losses

(119.2)Loss on Retail Liabilities and Branch Banking

5.1EPS (diluted) (Rs.)

307.0PAT after Minority interest / associates

333.8PAT before Minority Interest/ adjustments

557.1Profit before tax

823.8Operating Profit before bank related expenses and Insurance losses

2820.4Revenue

Q1 FY 05(3 M)Financials

Rs million

16

Company-wise Financials

290.2

3.0

15.2

302.4

(1.0)

(17.5)

7.8

(108.5)

3.2

29.4

62.5

133.2

193.4

Q1 FY 04(3 M)

5.936.4International Subsidiaries

1,741.6307.0Consolidated for the Group

24.16.5Add: Equity Affiliates

2,73.082.3Less: Minority Interest/adjustments

1,990.5382.8Total

(6.6)(2.0)Others

88.523.0Kotak Mahindra Investments

(491.2)(147.5)Kotak Mahindra Old Mutual Life Insurance

45.615.5Kotak Mahindra AMC / Trustee

127.023.7Kotak Mahindra Primus

FY 04(12 M)

Q1 FY 05(3 M)Profit After Tax (PAT)

854.6

579.6

787.3

193.9Kotak Securities

19.3Kotak Mahindra Capital Company

220.6Kotak Mahindra Bank

Rs million

17

ConsolidatedAssets & Liabilities

30,565

**42,207

March 2004

25,632

25,685

June 2004

30,752Borrowings

June 2003Liabilities

**18,735Deposits

58,176*23,81434,3622,2252,376

232,315

17,8368,587

June 2003

66,07118,15047,9203,1503,1171,4453,374

23,38413,450

June 2004

3,605Corporate Banking

22,164Car Finance

*35,907Treasury82,412Total Assets

46,506Total Advances4,428Others

March 2004Assets

8553,065

12,389

Home LoansPersonal Loans

Commercial vehicles

Rs million

* A significant part of the increase was on account of temporary increase in advances / investments

** A significant part of the increase was on account of temporary increase in deposits

18

Consolidated Analytical Ratios

28.7%

10.8%

0.2%

84

353

183

10,846

June 2003

26.4%

9.8%

0.2%

104

347

213

12,666

June 2004

207Book Value per share (Rs)

12,331Net Worth (Rs mn)

15.2%Annualised Return on Net worth (%)

36.9%Annualised Pre Tax return on Net worth (%) (before losses on Retail Liabilities and Insurance businesses)

0.1%Net NPA (%)

March 2004

42

296

Net NPA (Rs mn)

Gross NPA (Rs mn)

19300.9(4.6)

139.965.1

(84.8)28.8

156.5

794.6(165.7)

156.4335.9

4.268.2

395.5

Q1 FY 04(3 M)

3,839.11,155.0Net Revenues

1,287.7318.9Treasury670.0231.7Corporate Centre

80.848.6Retail Liabilities & Branch Banking

169.3(16.5)Treasury

305.6-

207.2

(119.2)65.2

168.9

(235.4)

208.4582.8

Q1 FY 05(3 M)

1,207.9Total PBT

FY 04(12 M)

-602.2

(419.2)237.3618.3

(713.7)

622.11,892.3

Unallocated revenueCorporate Centre

Retail Liabilities & Branch BankingCorporate BankingRetail Lending

Segment Profit before Tax

Inter segment revenue

Corporate BankingRetail Lending

Segment Revenue

Rs million

Bank Standalone - Segment

20

Summary∞ Integrated business model

∞ Enhancing portfolio of stable businessesGrow asset lending business – Retail & SME focus

Continue investments in retail liabilities and life insurance

∞ Expand cutting-edge in capital market businesses

∞ Focus on offering synchronised Wealth Management

∞ Customer-centric approach

Building a worldBuilding a world--class financial institutionclass financial institution

21

Safe HarborThis document contains certain forward-looking statements based on current expectations of Kotak Mahindramanagement. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and outside India, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the businesses of Kotak Mahindra group as well as its ability to implement the strategy. Kotak Mahindra does not undertake to update these statements.

This document does not constitute an offer or recommendation to buy or sell any securities of Kotak MahindraBank or any of its subsidiaries and associate companies. This document also does not constitute an offer or recommendation to buy or sell any financial products offered by Kotak Mahindra, including but not limited to units of its mutual fund and life insurance policies.

All investments in mutual funds and securities are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market. The performance of the sponsor, Kotak Mahindra Bank Limited, has no bearing on the expected performance of Kotak MahindraMutual Fund or any schemes thereunder.

1

KOTAK MAHINDRA BANK LIMITED (CONSOLIDATED) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 2004 Rs Lakhs

Quarter Ended Quarter Ended Year Ended Sr No

Particulars June-04

(Unaudited) June-03

(Unaudited) Mar-04

(Audited) 1 Interest earned (a+b+c+d) 16,435.66 13,245.26 63,624.87 (a) Interest/discount on

advances/bills 13,021.58 10,160.82 46,188.74

(b) Income on investments 2,782.20 2,406.89 12,690.17 (c) Interest on balances with RBI &

other banks 417.49 148.81 1,041.58

(d) Others 214.39 528.74 3,704.38 2 Other Income (Refer Note 2) 11,768.16 8,026.86 52,921.99 (A) Total income (1+2) 28,203.82 21,272.12 116,546.86 3 Interest expended 7,085.75 5,930.15 25,289.08 4 Operating expenses (e+f) 14,989.75 9,424.52 57,188.09 (e) Payments to and Provisions for

employees 4,906.83 2,979.53 15,878.88

(f) Other Operating expenses 10,082.92 6,444.99 41,309.21 (B) Total expenditure (3+4) 22,075.50 15,354.67 82,477.17 (C) Operating Profit (A-B) 6,128.32 5,917.45 34,069.69 (D) Other provisions & contingencies

(Refer Note 1) 557.31 159.85 998.60

(E) Profit before tax 5,571.01 5,757.60 33,071.09 (F) Provision for taxes 2,233.29 2,561.40 13,031.02 (G) Profit after tax before Minority

Interest (E - F) 3,337.72 3,196.20 20,040.07

(H) Less: Share of Minority Interest 332.71 323.90 2,864.91

(I) Add: Share in Prof it of associates 64.90 29.86 240.70 Consolidated Profit after tax

attributable to the Group (G - H + I) 3,069.91 2,902.16 17,415.86

5 Paid Up Equity Capital - (face

value of Rs 10 per share) 5,953.28 5,921.28 5,953.28

6 Group Reserves (excluding minority interest)

117,357.19

7 Minority Interest 31,777.96 8 Analytical Ratios (i) Earnings per share Basic Rs. 5.16 4.90 29.35 (ii) Earnings per Share Diluted Rs. 5.10 4.89 29.00



2

KOTAK MAHINDRA BANK LIMITED (STANDALONE) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 2004 Rs Lakhs


Particulars June-04

(Reviewed) June-03

(Reviewed) Mar-04

(Audited) 1 Interest earned (a+b+c+d) 8,702.59 5,638.18 28,841.75 (a) Interest/discount on

advances/bills 6,504.97 4,451.60 21,052.51

(b) Income on investments 1,946.47 1,124.45 7,207.51 (c) Interest on balances with RBI &

other banks 221.07 33.27 505.95

(d) Others 30.08 28.86 75.78 2 Other Income 2,846.99 2,307.95 9,549.08 (A) Total income (1+2) 11,549.58 7,946.13 38,390.83 3 Interest expended 4,108.64 2,766.73 11,746.47 4

Operating expenses (e+f) 4,181.92 2,374.51 13,992.75 (e) Payments to and Provisions for

employees 1,493.16 848.66 4,293.17

(f) Other Operating expenses 2,688.76 1,525.85 9,699.58 (B) Total expenditure (3+4) 8,290.56 5,141.24 25,739.22 (C) Operating Profit (A-B) 3,259.02 2,804.89 12,651.61 (D) Other provisions & contingencies

(Refer Note 1) 203.01 (204.34) 573.06

(E) Profit before tax 3,056.01 3,009.23 12,078.55 (F) Provision for taxes 850.00 1,075.00 4,205.79 (G) Profit after tax (E - F) 2,206.01 1,934.23 7,872.76 5 Paid Up Equity Capital - (face value

Rs. 10 per share) 5,953.28 5,921.28 5,953.28

6 Reserves excluding revaluation reserves

54,612.82 7 Analytical Ratios (Refer note 5) (i) % of shares held by Govt. of India Nil Nil Nil (ii) % Capital adequacy ratio 14.69% 14.51% 15.25% (iii) Earnings per share Basic Rs. 3.71 3.27 13.27 (iv) Earnings per Share Diluted Rs. 3.66 3.26 13.11 8 Non Promoter Shareholding

(excluding other directors and relatives)

(i) No of shares 23,247,762 21,933,363 23,247,762 (ii) % of shareholding 39.05% 37.04% 39.05%



3

KOTAK MAHINDRA BANK LIMITED (STANDALONE) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 SEGMENT RESULTS Rs Lakhs


Particulars June-04

(Reviewed) June-03

(Reviewed) Mar-04

(Audited) 1 Segment Revenue (Standalone) Retail Lending activities 5,828.23 3,954.85 18,922.54 Corporate Banking 2,083.53 682.45 6,221.01 Treasury 3,189.17 3,359.12 12,877.03 Retail Liabilities and Branch banking 485.67 42.43 807.61 Corporate Centre 2,316.74 1,564.40 6,699.78

Total 13,903.34 9,603.25 45,527.97 Less: Inter segment revenue 2,353.76 1,657.12 7,137.14 Total Revenue 11,549.58 7,946.13 38,390.83 2 Segment Results (Standalone) Retail Lending activities 1,688.73 1,565.07 6,182.97 Corporate Banking 652.03 288.02 2,372.53 Treasury (164.78) 651.00 1,692.95 Retail Liabilities and Branch banking (1192.27) (848.42) (4,191.74) Corporate Centre 2,072.30 1,399.20 6,021.84 Total 3,056.01 3,054.87 12,078.55 Less: Un - allocable expenditure net

off Unallocated Income - (45.64) -

Profit Before Tax 3,056.01 3,009.23 12,078.55 3 Segment Assets (Standalone) Retail Lending activities 200,702.54 136,718.45 181,754.56 Corporate Banking 100,770.77 170,737.30 322,593.59 Treasury 206,186.94 131,515.43 173,617.68 Retail Liabilities and Branch banking 36,836.20 53,633.68 155,981.23 Corporate Centre 39,123.84 56,680.14 55,831.75 Total 583,620.29 549,285.00 889,778.81 Less: Inter segment assets 170,876.75 191,315.08 308,875.84 Total Assets 412,743.54 357,969.92 580,902.97 4 Segment Liabilities (Standalone) Retail Lending activities 178,023.75 103,010.36 163,375.12 Corporate Banking 91,118.74 169,329.39 318,945.14 Treasury 206,359.43 135,177.68 177,177.83 Retail Liabilities and Branch banking 38,042.59 58,053.30 162,912.84 Corporate Centre 7,605.81 27,351.61 7,529.13 Total 521,150.32 492,922.34 829,940.06 Less: Inter segment Liabilities 170,876.75 191,315.08 308,875.84 Total Liabilities 350,273.57 301,607.26 521,064.22 5 Unallocated Assets net off

Liabilities 452.75 (277.42) 792.48



4

NOTES: 1. Provisions and contingencies are net of recoveries made against accounts which have been

written off as bad in the previous year/s. 2. Details of other income forming part of the Consolidated unaudited results are as follows : Rs Lakhs


Particulars June-04

(Unaudited) June-03

(Unaudited) Mar-04

(Audited) 1 Commission, Fees, Exchange and

brokerage 7,292.12 3,172.86 27,040.68

2 Premium on insurance business 2,639.64 1,312.30 14,651.18 3 Profit on sale of investments 1,324.72 3,241.97 9,786.93 4 Others 511.68 299.73 1,443.20 Total - Other income 11,768.16 8,026.86 52,921.99 3. The Bank, upto the financial year ended 31st March 2003, accounted for brokerage expenses

and service charges received in respect of advances by using the internal rate of return method to provide a constant periodic rate of return over the period of the advance. The Bank changed its method of accounting for the financial year ended 31 st March 2004 (in the quarter January 2004 to March 2004), wherein service charges received on such transactions are recognized as revenue when due and brokerage expenses due on such transaction s are charged to revenue when due. Had the said change been effected for the quarter April 2003 to June 2003, the profit after tax for the said quarter would have been lower by Rs. 8.92 lakhs.

4. During the quarter, the Bank has subscribed to the rights iss ue of equity shares of its

subsidiary, Kotak Mahindra Old Mutual Life Insurance Company Limited amounting to Rs. 2238.61 lakhs.

5. The Board of Directors of the Bank at its meeting held on 25 th May 2004, approved the issue of

bonus shares in the ratio of one equity share for every share held subject to the approval of the shareholders at the Annual General Meeting. The earnings per share (basic and diluted) under para 7 (iii) and (iv) above is not adjusted for the bonus shares to be issued.

6. The Bank's business has been segregated into the following segments whose principal

activities are as under : Segment Principal activity Treasury Money market, forex market, derivatives and

investments other than those handled by Corporate Centre

Corporate Banking Wholesale borrowings and lendings and services to corporate sector

Retail liabilities and branch banking

Retail borrowings covering savings and current accounts and banking branch network and services.

Retail Lending Activities Commercial vehicle finance, personal loans, home loans, agriculture finance and other loans/services.

Corporate Centre Strategic and portfolio investments and group activities

The above segments have been identified based on the organization structure, the customer segment, products and services offered and its relation to risk and reward, and the internal reporting process.



5

A transfer pricing mechanism between all the above segments have been established to arrive at interest cost on the borrowings of the segments.

7. Status of shareholder complaints received during the quarter ended 30 th June 2004 : Total complaints pending as at 31st March 2004 Nil Total complaints received during the quarter ended 30 th June 2004 73 Total complaints resolved during the quarter ended 30th June 2004 73 Total complaints pending as at 30 th June 2004 Nil 8. Pursuant to Clause 5.2 of the Securities and Exchange Board of India (Delisting of Securities

Guidelines, 2003), the Bank’s equity shares have been voluntarily delisted from the Madra s Stock Exchange Ltd. effective 21st June 2004. The equity shares continue to be listed at the Bombay Stock Exchange and the National Stock Exchange.

9. The above results for the quarter ended June 2004 (of the standalone enti ty), have been

subjected to a “limited review” by the statutory auditors of the Bank. 10. Figures for the previous period/ year have been regrouped wherever necessary to conform to

current year's presentation. 11. The above results were taken on record at the Audit Committee meeting held on 23rd July

2004 and at the meeting of the Board of Directors held on 26 th July 2004.

By order of the Board of Directors For Kotak Mahindra Bank Limited

Dipak Gupta Mumbai, 26th July 2004 Executive Director



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