1.  There are no unsecured loans for which intangible security such as
 charge over the rights, licenses, authority, etc are accepted as
 collateral by the bank.
 
 2.  RBI has imposed a penalty of Rs. 0.15 crores vide letter dated 26th
 April 2011 in respect of foreign exchange derivative transactions done
 by the bank with certain corporates during the period 2007-08.
 
 3.  There are no Off-Balance Sheet SPVs sponsored (which are required
 to be consolidated as per accounting norms).
 
 4. Draw Down from Reserves:
 
 In accordance with the RBI requirement on creation and utilisation of
 Investment reserve in respect of HFT and AFS investments, reserve of Rs.
 26.83 crores (net of taxes & applicable transfer to statutory reserves)
 has been utilised.
 
 5.  Bank has not issued any letters of comfort during the year. There
 were no outstanding letters of comfort during the year end (Previous
 year Nil).
 
 B.  OTHER DISCLOSURES:
 
 1.  Pursuant to the approval of the shareholders at the Annual General
 Meeting held on 21st July 2010, each equity share of the Bank having
 face value of Rs. 10 fully paid up was sub-divided into two equity shares
 of the face value of Rs. 5 each fully paid up as at 14th September 2010.
 
 2.  In August 2010, the Bank allotted 1,64,00,000 equity shares of Rs. 10
 each at a premium Rs. 823 per equity share for a total consideration of Rs.
 1,366.12 crores on a preferential basis to Sumitomo Mitsui Banking
 Corporation. The net issue expenses of Rs. 0.58 crores related to the
 aforesaid issue have been charged to the securities premium account as
 allowed under section 78 of the Companies Act, 1956. The above expenses
 include Rs. 0.08 crores paid to the auditors in connection with the
 issue.
 
 3.  Till 31st March 2010, the Bank used to account for market
 repurchase and reverse repurchase transactions in government securities
 and corporate debt securities, if any, as sale and repurchase
 transactions. However, as per RBI circular no. RBI/2009- 2010/356 IDMD/
 4135/11.08.43/2009-10 dated 23rd March 2010; the Bank has started
 accounting for such transactions as borrowing and lending
 transactions, effective 1st April 2010. If the Bank had continued to
 account the reverse and reverse repurchase transactions as sale and
 repurchase at 31st March 2011, the investments would have been lower
 by Rs. 561.89 crores and the Balances with Banks and Money at call and
 short notice and Borrowings would have been lower by Rs. 51.07 crores
 and Rs. 612.96 crores respectively.
 
 6.  Lease Disclosures:
 
 a.  The Bank has taken various premises and equipment under operating
 lease. The lease payments recognised in the Profit and Loss Account are
 Rs. 115.73 crores (previous year Rs. 115.75 crores). The sub-lease income
 recognised in the Profit and Loss Account is Rs. 5.97 crores (previous
 year Rs. 5.33 crores).
 
 b.  The future minimum lease payments under non cancellable operating
 lease – not later than one year is Rs. 111.59 crores (previous year Rs.
 89.05 crores), later than one year but not later than five years is Rs.
 356.45 crores (previous year Rs. 278.28 crores) and later than five years
 Rs. 138.00 crores (previous year Rs. 104.64 crores).
 
 The lease terms include renewal option after expiry of primary lease
 period. There are no restrictions imposed by lease arrangements. There
 are escalation clauses in the lease agreements.
 
 10.  ESOPs:
 
 At the General Meetings of the holding company, Kotak Mahindra Bank
 Limited, the shareholders of the Bank had unanimously passed Special
 Resolution on 28th July 2000, 26th July 2004, 26th July 2005, 5th July
 2007 and 21st August 2007, to grant options to the eligible Employees
 of the Bank and its subsidiaries companies. Pursuant to these
 resolutions, the following four Employees Stock Option Schemes had been
 formulated and adopted:
 
 a) Kotak Mahindra Equity Option Scheme 2001-02
 
 b) Kotak Mahindra Equity Option Scheme 2002-03
 
 c) Kotak Mahindra Equity Option Scheme 2005
 
 d) Kotak Mahindra Equity Option Scheme 2007
 
 Consequent to the above, the Bank has granted stock options to the
 employees of the Bank and its subsidiaries. The Bank under its various
 plan / schemes, has granted in aggregate 5,40,24,680 options as on 31st
 March 2011 (Previous year 4,92,75,440).
 
 Stock appreciation rights
 
 The Bank has also granted stock appreciation rights (SARs) to select
 employees which can be settled in cash. These options will vest on the
 respective due dates in a graded manner as per the terms and conditions
 of grant. The contractual life of the SARs range from 0.72 to 4.36
 years.
 
 13.  Provisions and Contingencies:
 
 Breakup of Provisions and Contingencies shown under the head
 Expenditure in Profit and Loss Account
 
                                                     (Rs. in crores)
 
 Particulars                      31st March 2011    31st March 2010
 
 Provisions for depreciation on 
 Investment                              53.10            (2.40)
 
 Provision towards NPA (including 
 write-offs; net of write-backs)        100.74           465.29
 
 Provision towards restructured assets    --               3.33
 
 Provision towards Standard Asset         --                --
 
 Provision for Taxes                    369.52           250.00
 
 Other Provision and Contingencies*
 (net)                                  (16.75)           19.67
 
 Total Provisions and Contingencies     506.61           735.89
 
 *For year ended 31st March 2011 includes write-back of provisions
 against derivative contracts Rs. (21.41) crores (Previous year provision
 of Rs. 14.83 crores) and provision for fees receivable Rs. 4.66 crores
 (Previous year Rs. 4.84 crores).
 
 14.  The Bank receives deposits from customers as part of margin
 requirements in respect of its professional clearing member (PCM)
 business with National Securities Clearing Corporation Ltd (NSCCL).
 Correspondingly, the Bank is required to maintain margins / deposits
 with NSCCL. For the said purpose of placing margins / deposits, the
 Bank has issued its own Fixed Deposit receipts amounting to Rs. 582.85
 crores (Previous year Rs. 591.41 crores) in favour of NSCCL which have
 not been included in Term Deposits from Others [Schedule 3 (III)
 (ii)].
 
 15.  Tier II Bonds
 
 a) Lower Tier II Bonds outstanding as at 31st March 2011 Rs. 465.70
 crores (Previous year Rs. 465.70 crores).
 
 During the year, the Bank did not raise lower Tier II bonds (Previous
 year Nil). In accordance with the RBI requirements lower Tier II bonds
 of Rs. 113.48 crores (Previous year Rs. 65.48 crores) are not considered as
 Tier II capital for the purposes of capital adequacy computation.
 
 b) Upper Tier II Bonds outstanding as at 31st March 2011 Rs. 336.68
 crores (Previous year Rs. 338.05 crores) of which bonds issued outside
 India Rs. 200.68 crores (Previous year Rs. 202.05 crores).
 
 During the year, the Bank did not raise upper Tier II bonds. (Previous
 year Nil).
 
 c) Interest Expended-Others (Schedule 15(III)) includes interest on
 subordinated debt (Lower and Upper Tier II) Rs. 57.49 crores (Previous
 year Rs. 58.10 crores).
 
 16.  Description of Contingent Liabilities:
 
 1.  Claims not acknowledged as debts
 
 This includes liability on account of income tax, interest tax, sales
 tax and lease tax demands and legal cases filed against the Bank. The
 Bank is a party to various legal proceedings in the normal course of
 business. The Bank does not expect the outcome of these proceedings to
 have a material adverse effect on the Banks financial conditions,
 result of operations or cash flows. Against the above Rs. 31.52 crores
 have been paid, which shall be refunded to the Bank, if the outcome of
 the legal proceedings will be in the favour of the Bank.
 
 2.  Liability on account of outstanding forward exchange contracts
 
 The Bank enters into foreign exchange contracts with inter Bank
 participants on its own account and for customers. Forward exchange
 contracts are commitments to buy or sell foreign currency at a future
 date at the contracted rate.
 
 3.  Guarantees on behalf of constituents in India
 
 As a part of its Banking activities, the Bank issues guarantees on
 behalf of its customers. Guarantees generally represent irrevocable
 assurances that the Bank will make payments in the event of customer
 failing to fulfill its financial or performance obligations.
 
 4.  Acceptances, endorsements and other obligations
 
 These includes:
 
 - Documentary credit such as letters of obligations, enhance the credit
 standing of the customers of the Bank.
 
 - Bills re-discounted by the Bank and cash collateral provided by the
 Bank on assets which have been securitised.
 
 5.  Other items for which the Bank is contingently liable
 
 These include:
 
 - Liabilities in respect of interest rate swaps, currency swaps,
 forward rate agreements and options contracts. The Bank enters into
 these transactions with inter Bank participants on its own account and
 for customers. Currency Swaps are commitments to exchange cash flows by
 way of interest / principal in one currency against another, based on
 predetermined rates. Interest rate swaps are commitments to exchange
 fixed and floating interest rate cash flows. The notional amounts that
 are recorded as contingent liabilities are amounts used as a benchmark
 for the calculation of interest component of the contracts.
 
 - Liability in respect of Capital commitments relating to fixed assets
 and undrawn commitments in respect of investments.
 
 * Also refer Schedule 12 – Contingent Liabilities
 
 17.  The Bank has not received any intimation from suppliers
 regarding their status under the Micro, Small and Medium Enterprises
 Development Act, 2006 and hence disclosures, if any, relating to
 amounts unpaid as at the year end together with interest paid / payable
 as required under the said Act have not been given.
 
 18.  Figures for the previous year have been regrouped / reclassified
 wherever necessary to conform to current years presentation.