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Kotak Mahindra Bank

BSE: 500247|NSE: KOTAKBANK|ISIN: INE237A01028|SECTOR: Banks - Private Sector
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Notes to Accounts Year End : Mar '19

2. Segment Reporting:

The Summary of the operating segments of the Bank for the year ended 31st March, 2019 are as given below:

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

1. Segment Revenue

 

 

a. Treasury, BMU and Corporate Centre

5,965.16

5,730.26

b. Corporate/ Wholesale Banking

11,392.66

9,061.32

c. Retail Banking

13,885.48

11,437.61

d. Other Banking business

-

 

Sub-total

31,243.30

26,229.19

Less : Inter-segmental revenue

2,696.06

2,428.49

Total

28,547.24

23,800.70

2. Segment Results

 

 

a. Treasury, BMU and Corporate Centre

2,050.07

1,723.06

b. Corporate/ Wholesale Banking

3,287.57

2,984.45

c. Retail Banking

2,048.15

1,510.71

d. Other Banking business

-

 

Sub-total

7,385.79

6,218.22

Total Profit Before Tax

7,385.79

6,218.22

Provision for Tax

2,520.46

2,133.92

Total Profit After Tax

4,865.33

4,084.30

3. Segment Assets

 

 

a. Treasury, BMU and Corporate Centre

101,401.71

91,500.50

b. Corporate /Wholesale Banking

134,695.27

100,506.20

c. Retail Banking

174,501.61

143,303.89

d. Other Banking business

-

-

Sub-total

410,598.59

335,310.59

Less : Inter-segmental Assets

98,604.66

70,571.48

Total

311,993.93

264,739.11

Add : Unallocated Assets

178.16

194.28

Total Assets as per Balance Sheet

312,172.09

264,933.39

4. Segment Liabilities

 

 

a. Treasury, BMU and Corporate Centre

84,885.34

76,300.61

b. Corporate /Wholesale Banking

122,068.09

88,984.44

c. Retail Banking

160,851.80

132,725.09

d. Other Banking business

-

 

Sub-total

367,805.23

298,010.14

Less : Inter-segmental Liabilities

98,604.66

70,571.48

Total

269,200.57

227,438.66

Add : Unallocated liabilities

73.14

13.08

Add : Share Capital & Reserves & surplus

42,898.38

37,481.65

Total Liabilities as per Balance Sheet

312,172.09

264,933.39

 

Particulars

31st March, 2019

31st March, 2018

5.

Capital Expenditure

 

 

 

a. Treasury, BMU and Corporate Centre

83.41

44.21

 

b. Corporate /Wholesale Banking

53.64

20.71

 

c. Retail Banking

364.75

237.94

 

d. Other Banking business

 

-

 

Total

501.80

302.86

6.

Depreciation / Amortisation

 

 

 

a. Treasury, BMU and Corporate Centre

107.47

101.30

 

b. Corporate /Wholesale Banking

25.21

16.47

 

c. Retail Banking

234.24

184.92

 

d. Other Banking business

-

-

 

Total

366.92

302.69

Segmental Information is provided as per the MIS available for internal reporting purposes, which includes certain estimates and assumptions.

3. Lease Discloures:

a. The Bank has taken various premises and equipment under operating lease. The lease payments recognised in the Profit and Loss Account are Rs 500.92 crore (previous year Rs 453.31 crore). The sub-lease income recognised in the Profit and Loss Account is Rs 5.53 crore (previous year Rs 5.56 crore).

b. The future minimum lease payments under non-cancellable operating lease - not later than one year is Rs 438.26 crore (previous year Rs 402.44 crore), later than one year but not later than five years is Rs 1,378.45 crore (previous year Rs 1,275.44 crore) and later than five years Rs 1,101.50 crore (previous year Rs 1,089.00 crore).

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.

4. Deferred Taxes:

Others in Other Assets (Schedule 11 (VI)) includes deferred tax asset (net) of Rs 178.16 crore (previous year Rs 194.28 crore). The components of the same are as follows:

(Rs in crore)

Particulars of Asset/ (Liability)

31st March, 2019

31st March, 2018

Provision for NPA and general provision on standard assets

170.05

197.66

Expenditure allowed on payment basis

139.68

130.47

Depreciation

29.02

9.43

Deduction u/s. 36(1)(viii) of the Income Tax Act, 1961

(160.59)

(143.28)

Net Deferred Tax Asset

178.16

194.28

5. Credit card reward points:

The following table sets forth, for the periods indicated, movement in provision for credit card account reward points:

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Opening provision for reward points

13.12

7.95

Provision for reward points made during the year

24.53

17.18

Utilisation/write-back of provision for reward points

(22.72)

(12.01)

Closing provision for reward points*

14.93

13.12

* This amount will be utilised towards redemption of the credit card accounts reward points.

6. Fixed Assets as per Schedule 10 B include intangible assets relating to purchased software and system development expenditure which are as follows:

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Gross Block

 

 

At cost on 31st March of the preceding year

489.16

506.01

Additions during the year

169.35

67.47

Deductions during the year

149.62

84.32

Total

508.89

489.16

Depreciation / Amortisation

 

 

As at 31st March of the preceding year

400.61

424.45

Charge for the year

94.95

60.48

Deductions during the year

145.97

84.32

Depreciation to date

349.59

400.61

Net Block

159.30

88.55

Capital commitments for purchase of software and system development expenditure are Rs 38.73 crore (previous year Rs 53.87 crore).

7. Related Party Disclosures:

As per Accounting Standard -18, Related Party Disclosure, the Bank's related parties are disclosed below:

A. Parties where control exists:

Nature of relationship

Related Party

Subsidiary Companies

Kotak Mahindra Prime Limited

Kotak Securities Limited

Kotak Mahindra Capital Company Limited

Kotak Mahindra Life Insurance Company Limited (formerly known as Kotak Mahindra

Old Mutual Life Insurance Limited)

Kotak Mahindra Investments Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Trustee Company Limited

Kotak Mahindra (International) Limited

Kotak Mahindra (UK) Limited

Kotak Mahindra Inc.

Kotak Investment Advisors Limited

Kotak Mahindra Trusteeship Services Limited

Kotak Infrastructure Debt Fund Limited

Kotak Mahindra Pension Fund Limited

Kotak Mahindra Financial Services Limited

Kotak Mahindra Asset Management (Singapore) Pte. Ltd.

Kotak Mahindra General Insurance Company Limited

IVY Product Intermediaries Limited

BSS Microfinance Limited (formerly known as BSS Microfinance Private Limited) (w.e.f 27 September, 2017)

B. Other Related Parties:

Nature of Relationship

Related Party

Individual having significant influence over the enterprise

Mr. Uday S. Kotak along with relatives and enterprises in which he has beneficial interest holds 29.99% of the equity share capital and 19.68% of the paid-up share capital of Kotak Mahindra Bank Limited as on 31st March, 2019.

Associates / Others

ACE Derivatives and Commodity Exchange Limited.

Infina Finance Private Limited

Matrix Business Services India Private Limited

Phoenix ARC Private Limited

Kotak Education Foundation

ING Vysya Foundation

Key Management Personnel (KMP)

Mr. Uday S. Kotak, Managing Director and CEO

Mr. Dipak Gupta, Joint Managing Director

Enterprises over which KMP / relatives of KMP have control / significant influence

Aero Agencies Limited

Kotak and Company Private Limited

Komaf Financial Services Private Limited

Asian Machinery & Equipment Private Limited.

Insurekot Sports Private Limited

Kotak Trustee Company Private Limited

Cumulus Trading Company Private Limited

Palko Properties Private Limited

Kotak Chemicals Limited

Kotak Ginning & Pressing Industries Private Limited

Kotak Commodities Services Private Limited

Harisiddha Trading and Finance Private Limited

Puma Properties Private Limited

Business Standard Private Limited

Business Standard Online Private Limited

Allied Auto Accessories Private Limited

Uday S Kotak HUF

Suresh A Kotak HUF

USK Benefit Trust II

Kotak Family Foundation (w.e.f. 2 May 2017)

Helena Realty Private Limited (w.e.f. 2 Feb 2018)

Doreen Realty Private Limited (w.e.f. 15 Feb 2018)

Renato Realty Private Limited (w.e.f. 15 Feb 2018)

Pine Tree Estates Private Limited (w.e.f. 20 Mar 2018)

Meluha Developers Private Limited (w.e.f. 20 Mar 2018)

Quantyco Realty Private Limited (w.e.f. 16 Mar 2018)

Xanadu Properties Private Limited (w.e.f. 20 Mar 2018)

Relatives of KMP

Ms. Pallavi Kotak

Mr. Suresh Kotak

Ms. Indira Kotak

Mr. Jay Kotak

Mr. Dhawal Kotak

Ms. Aarti Chandaria

Ms. Anita Gupta

Ms. Urmila Gupta

Mr. Arnav Gupta

Mr. Parthav Gupta

Mr. Prabhat Gupta

Ms. Jyoti Banga

 

(Rs in crore)

Items/Related Party

Subsidiary Associates/ Companies Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

Liabilities

 

 

 

 

 

 

Deposits

1056.10

125.00

632.99

144.75

143.35

2102.19

 

(1,407.47)

(57.75)

(128.35)

(134.45)

(1.99)

(1,730.01)

Borrowings

 

 

 

 

 

 

 

(-)

(-)

(-)

(-)

(-)

(-)

Interest Payable

1.65

0.39

5.56

1.72

0.41

9.73

 

(8.21)

(0.05)

(0.95)

(1.37)

(0.01)

(10.59)

Other Liabilities

16.91

0.01

-

0.01

-

16.93

 

(14.42)

(0.01)

(-)

(0.30)

(-)

(14.73)

Assets

 

 

 

 

 

 

Advances

0.52

-

-

-

-

0.52

 

(#)

(-)

(-)

(-)

(-)

(#)

Investments-Gross

3067.74

33.88

-

#

-

3101.62

 

(3,072.15)

(33.88)

(-)

(#)

(-)

(3,106.03)

Diminution on

-

29.82

-

#

-

29.82

Investments

(-)

(29.82)

(-)

(#)

(-)

(29.82)

Commission Receivable

49.54

-

-

-

-

49.54

 

(43.81)

(-)

(-)

(-)

(-)

(43.81)

Others

65.04

0.01

#

#

#

65.05

 

(69.58)

(0.04)

(-)

(0.07)

(-)

(69.69)

Expenses

 

 

 

 

 

 

Salaries/fees (Include ESOP)

-

-

8.84

-

-

8.84

 

(-)

(-)

(8.06)

(-)

(-)

(8.06)

Interest Paid

48.96

7.31

36.10

11.66

1.09

105.12

 

(88.37)

(38.23)

(12.02)

(15.38)

(0.31)

(154.31)

Others

120.36

10.02

-

4.29

-

134.67

 

(27.85)

(19.00)

(-)

(4.51)

(-)

(51.36)

Income

 

 

 

 

 

 

Dividend

45.14

-

-

-

-

45.14

 

(7.61)

(-)

(-)

(-)

(-)

(7.61)

Interest Received

51.86

-

-

-

-

51.86

 

(44.23)

(-)

(-)

(-)

(-)

(44.23)

Others

392.36

0.11

#

0.86

#

393.33

 

(319.71)

(0.10)

(#)

(0.87)

(-)

(320.68)

Other Transactions

 

 

 

 

 

 

Sale of investment

642.67

-

-

-

-

642.67

 

(180.27)

(-)

(-)

(-)

(-)

(180.27)

Purchase of Investment

1185.64

-

-

-

-

1185.64

 

(821.57)

(-)

(-)

(-)

(-)

(821.57)

 

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control /significant influence

Relatives of KMP

Total

Loan disbursed during the year

343.38

-

-

-

-

343.38

(1,820.23)

(-)

(-)

(-)

(-)

(1,820.23)

Loan repaid during the year

343.05

-

-

-

-

343.05

(1,881.48)

(-)

(-)

(-)

(-)

(1,881.48)

Dividend paid

-

-

39.78

0.05

0.26

40.09

(-)

(-)

(34.10)

(0.04)

(0.22)

(34.36)

Reimbursement to companies

21.12

-

-

-

-

21.12

(20.06)

(-)

(-)

(-)

(-)

(20.06)

Reimbursement from companies

98.82

0.09

-

-

-

98.91

(165.17)

(0.10)

(-)

(-)

(-)

(165.27)

Purchase of Fixed assets

0.14

-

-

-

-

0.14

(0.59)

(-)

(-)

(-)

(-)

(0.59)

Sale of Fixed assets

0.04

-

-

-

-

0.04

(0.55)

(-)

(-)

(-)

(-)

(0.55)

Swaps/Forward/ Options contracts

2132.70

-

-

-

1.88

2134.58

(5,068.59)

(-)

(-)

(-)

(-)

(5,068.59)

Guarantees/Lines of credit

20.25

-

-

-

-

20.25

(0.25)

(0.05)

(-)

(-)

(-)

(0.30)

 

QIP Issuance Expense adjusted against Share Premium

_

_

_

_

_

_

(10.09)

(-)

(-)

(#)

(-)

(10.09)

Professional Charges towards Strategic investment -capitalized

-

-

-

-

 

 

(3.51)

(-)

(-)

(-)

(-)

(3.51)

I. Liabilities:

 

 

 

 

 

 

Other liabilities

 

 

 

 

 

 

Other Payable

 

 

 

 

 

 

Kotak Mahindra Prime Limited

0.89

-

-

-

-

0.89

(0.33)

(-)

(-)

(-)

(-)

(0.33)

BSS Microfinance Limited

13.59

-

-

-

-

13.59

(4.03)

(-)

(-)

(-)

(-)

(4.03)

Kotak Securities Limited

1.06

-

-

-

-

1.06

(6.86)

(-)

(-)

(-)

(-)

(6.86)

Others

1.37

0.01

-

0.01

-

1.39

(3.20)

(0.01)

(-)

(0.30)

(-)

(3.51)

 

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

II. Assets: Investments

 

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

1557.20

-

-

-

-

1557.20

(1,557.20)

(-)

(-)

(-)

(-)

(1,557.20)

Kotak Mahindra Prime Limited

141.71

_

_

_

_

141.71

(361.82)

(-)

(-)

(-)

(-)

(361.82)

BSS Microfinance Limited

138.56

-

-

-

-

138.56

(117.87)

(-)

(-)

(-)

(-)

(117.87)

Kotak Mahindra Investments Limited

338.03

-

-

-

-

338.03

(338.03)

(-)

(-)

(-)

(-)

(338.03)

Kotak Mahindra General Insurance Company Limited

220.00

-

-

-

-

220.00

(175.00)

(-)

(-)

(-)

(-)

(175.00)

Kotak Infrastructure Debt Fund Limited

492.19

-

-

-

-

492.19

(342.19)

(-)

(-)

(-)

(-)

(342.19)

Others

180.05

-

-

#

-

180.05

(180.05)

(-)

(-)

(#)

(-)

(180.05)

ACE Derivatives and Commodity Exchange Limited

-

33.88

-

-

-

33.88

(-)

(33.88)

(-)

(-)

(-)

(33.88)

Diminution on Investments

 

 

 

 

 

 

ACE Derivatives and Commodity Exchange Limited

_

29.82

_

_

_

29.82

(-)

(29.82)

(-)

(-)

(-)

(29.82)

Business Standard Private Ltd

-

-

-

#

-

#

(-)

(-)

(-)

(#)

(-)

(#)

Commission Receivable

 

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

48.35

-

-

-

-

48.35

(42.81)

(-)

(-)

(-)

(-)

(42.81)

Kotak Mahindra General Insurance Company Limited

1.19

_

_

_

_

1.19

(0.99)

(-)

(-)

(-)

(-)

(0.99)

Others Receivable

 

 

 

 

 

 

Kotak Mahindra Prime Limited

14.97

-

-

-

-

14.97

(22.29)

(-)

(-)

(-)

(-)

(22.29)

Kotak Securities Limited

11.01

-

-

-

-

11.01

(2.89)

(-)

(-)

(-)

(-)

(2.89)

Kotak Investment Advisors Limited

2.70

-

-

-

-

2.70

(3.29)

(-)

(-)

(-)

(-)

(3.29)

Kotak Mahindra Life Insurance Company Limited

4.70

-

-

-

-

4.70

(8.97)

(-)

(-)

(-)

(-)

(8.97)

 

 

 

 

 

 

 

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

Kotak Infrastructure Debt Fund Limited

15.02

_

_

_

_

15.02

(4.88)

(-)

(-)

(-)

(-)

(4.88)

BSS Microfinance Limited

10.88

-

-

-

-

10.88

(23.03)

(-)

(-)

(-)

(-)

(23.03)

Others

5.76

0.01

-

#

-

5.77

(4.23)

(0.04)

(-)

(0.07)

(-)

(4.34)

III. Expenses:

 

 

 

 

 

 

Salaries / fees (Include ESOPs)

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Uday Kotak

-

-

3.54

-

-

3.54

(-)

(-)

(3.20)

(-)

(-)

(3.20)

Mr. Dipak Gupta

-

-

5.30

-

-

5.30

(-)

(-)

(4.86)

(-)

(-)

(4.86)

Other Expenses

 

 

 

 

 

 

Brokerage

 

 

 

 

 

 

Kotak Securities Limited

0.02

-

-

-

-

0.02

(0.30)

(-)

(-)

(-)

(-)

(0.30)

Premium

 

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

4.51

_

_

_

_

4.51

(3.30)

(-)

(-)

(-)

(-)

(3.30)

Kotak Mahindra General Insurance Company Limited

2.47

-

-

-

-

2.47

(2.66)

(-)

(-)

(-)

(-)

(2.66)

Others

 

 

 

 

 

 

Kotak Mahindra Prime Limited

3.36

-

-

-

-

3.36

(3.30)

(-)

(-)

(-)

(-)

(3.30)

Kotak Infrastructure Debt Fund Limited

0.06

-

-

-

-

0.06

(-)

(-)

(-)

(-)

(-)

(-)

Aero Agencies Limited

-

-

-

4.22

-

4.22

(-)

(-)

(-)

(4.39)

(-)

(4.39)

Business Standard Private Limited

-

-

-

0.07

-

0.07

(-)

(-)

(-)

(0.12)

(-)

(0.12)

BSS Microfinance Limited

104.92

-

-

-

-

104.92

(13.78)

(-)

(-)

(-)

(-)

(13.78)

Kotak Mahindra Financial Services Limited

5.02

-

-

-

-

5.02

(4.51)

(-)

(-)

(-)

(-)

(4.51)

Kotak Mahindra (UK) Limited

#

-

-

-

-

#

 

(-)

(-)

(-)

(-)

(-)

(-)

Others

#

0.28

-

-

-

0.28

(#)

(0.22)

(-)

(-)

(-)

(0.22)

 

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

Donations

 

 

 

 

 

 

Kotak Education Foundation

-

9.74

-

-

-

9.74

(-)

(18.79)

(-)

(-)

(-)

(18.79)

IV. Income:

 

 

 

 

 

 

Dividend

 

 

 

 

 

 

Kotak Mahindra Capital Company Limited

41.23

-

-

-

-

41.23

(-)

(-)

(-)

(-)

(-)

(-)

Kotak Mahindra Trustee Company Limited

3.75

_

_

_

_

3.75

(7.50)

(-)

(-)

(-)

(-)

(7.50)

Kotak Infrastructure Debt Fund Limited

0.05

-

-

-

-

0.05

(-)

(-)

(-)

(-)

(-)

(-)

Kotak Mahindra Prime Limited

0.11

_

_

_

_

0.11

(0.11)

(-)

(-)

(-)

(-)

(0.11)

Other Income

 

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

215.19

_

_

_

_

215.19

(193.44)

(-)

(-)

(-)

(-)

(193.44)

Kotak Mahindra General Insurance Company Limited

15.71

-

-

-

-

15.71

(11.73)

(-)

(-)

(-)

(-)

(11.73)

Kotak Securities Limited

93.02

-

-

-

-

93.02

(22.82)

(-)

(-)

(-)

(-)

(22.82)

Kotak Mahindra Capital Company Limited

9.71

-

-

-

-

9.71

(9.91)

(-)

(-)

(-)

(-)

(9.91)

Kotak Mahindra Asset Management Company Limited

26.37

-

-

-

-

26.37

(47.13)

(-)

(-)

(-)

(-)

(47.13)

Kotak Mahindra Prime Limited

11.74

_

_

_

_

11.74

(14.19)

(-)

(-)

(-)

(-)

(14.19)

Kotak Investment Advisors Limited

9.91

_

_

_

_

9.91

(11.32)

(-)

(-)

(-)

(-)

(11.32)

Others

10.71

0.11

#

0.86

#

11.68

(9.17)

(0.10)

(#)

(0.87)

(-)

(10.14)

V. Other Transactions:

 

 

 

 

 

 

Sale of Investment

 

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

262.70

_

_

_

_

262.70

(130.15)

(-)

(-)

(-)

(-)

(130.15)

 

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives Total of KMP

Kotak Mahindra Prime Limited

100.00

-

-

-

100.00

(-)

(-)

(-)

(-)

(-) (-)

Kotak Mahindra (UK) Limited

236.63

-

-

-

236.63

(-)

(-)

(-)

(-)

(-) (-)

Kotak Securities Limited

43.34

-

-

-

43.34

(-)

(-)

(-)

(-)

(-) (-)

Kotak Infrastructure Debt Fund Limited

-

-

-

-

-

(50.12)

(-)

(-)

(-)

(-) (50.12)

Purchase of Investments

 

 

 

 

 

Kotak Mahindra Life Insurance Company Limited

_

_

_

_

_

(70.37)

(-)

(-)

(-)

(-) (70.37)

Kotak Mahindra Prime Limited

723.43

-

-

-

723.43

(300.67)

(-)

(-)

(-)

(-) (300.67)

Kotak Infrastructure Debt Fund Limited

150.00

-

-

-

150.00

(250.00)

(-)

(-)

(-)

(-) (250.00)

Kotak Mahindra Investments Limited

-

 

-

-

-

(100.00)

(-)

(-)

(-)

(-) (100.00)

Kotak Investment Advisors Limited

-

-

-

-

-

(50.00)

(-)

(-)

(-)

(-) (50.00)

Kotak Mahindra General Insurance Company Limited

45.00

-

-

-

45.00

(40.00)

(-)

(-)

(-)

(-) (40.00)

Kotak Mahindra (UK) Limited

267.21

-

-

-

267.21

(-)

(-)

(-)

(-)

(-) (-)

Kotak Securities Limited

-

-

-

-

-

(10.53)

(-)

(-)

(-)

(-) (10.53)

Loan Disbursed during the year

 

 

 

 

 

 

 

 

 

 

Kotak Mahindra Prime Limited

-

-

-

-

-

(60.00)

(-)

(-)

(-)

(-) (60.00)

Kotak Mahindra (International) Limited

343.38

-

-

-

343.38

(1,760.23)

(-)

(-)

(-)

(-) (1,760.23)

Loan Repaid during the year

 

 

 

 

 

 

 

 

 

 

Kotak Mahindra (International) Limited

343.05

-

-

-

343.05

(1,761.48)

(-)

(-)

(-)

(-) (1,761.48)

 

 

 

 

(

Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

Kotak Mahindra Prime Limited

_

_

_

_

_

_

(120.00)

(-)

(-)

(-)

(-)

(120.00)

Dividend paid

 

 

 

 

 

 

Mr. Uday Kotak

-

-

39.69

-

-

39.69

(-)

(-)

(34.02)

(-)

(-)

(34.02)

Mr. Dipak Gupta

-

-

0.09

-

-

0.09

(-)

(-)

(0.08)

(-)

(-)

(0.08)

Ms. Pallavi Kotak

-

-

-

-

0.08

0.08

(-)

(-)

(-)

(-)

(0.07)

(0.07)

Ms. Indira Kotak

-

-

-

-

0.16

0.16

(-)

(-)

(-)

(-)

(0.14)

(0.14)

Others

-

-

-

0.05

0.02

0.07

(-)

(-)

(-)

(0.04)

(0.02)

(0.06)

Reimbursements to companies

 

 

 

 

 

 

 

 

 

 

 

 

Kotak Mahindra Capital Company Limited

2.15

-

-

-

-

2.15

(2.39)

(-)

(-)

(-)

(-)

(2.39)

Kotak Mahindra Prime Limited

5.96

-

-

-

-

5.96

(5.99)

(-)

(-)

(-)

(-)

(5.99)

Kotak Securities Limited.

10.53

-

-

-

-

10.53

(9.87)

(-)

(-)

(-)

(-)

(9.87)

Kotak Mahindra Life Insurance Company Limited

0.67

-

-

-

-

0.67

(0.79)

(-)

(-)

(-)

(-)

(0.79)

Kotak Infrastructure Debt Fund Limited

-

-

-

-

-

-

(0.03)

(-)

(-)

(-)

(-)

(0.03)

Others

1.81

-

-

-

-

1.81

(1.00)

(-)

(-)

(-)

(-)

(1.00)

Reimbursements from companies

 

 

 

 

 

 

 

 

 

 

 

 

Kotak Mahindra Capital Company Limited

7.16

-

-

-

-

7.16

(7.09)

(-)

(-)

(-)

(-)

(7.09)

Kotak Mahindra Prime Limited

21.52

-

-

-

-

21.52

(21.64)

(-)

(-)

(-)

(-)

(21.64)

Kotak Mahindra Life Insurance Company Limited

17.47

-

-

-

-

17.47

(20.20)

(-)

(-)

(-)

(-)

(20.20)

Kotak Securities Limited

20.67

-

-

-

-

20.67

(84.93)

(-)

(-)

(-)

(-)

(84.93)

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control /significant influence

Relatives of KMP

Total

Kotak Mahindra Investments Limited

8.92

_

_

_

_

8.92

(9.45)

(-)

(-)

(-)

(-)

(9.45)

Others

23.08

0.09

-

-

-

23.17

(21.86)

(0.10)

(-)

(-)

(-)

(21.96)

Purchase of Fixed assets

 

 

 

 

 

 

Kotak Mahindra Prime Limited

0.14

-

-

-

-

0.14

(0.03)

(-)

(-)

(-)

(-)

(0.03)

Kotak Securities Limited

-

-

-

-

-

-

(0.52)

(-)

(-)

(-)

(-)

(0.52)

Kotak Mahindra Investments Limited

#

-

-

-

-

#

(-)

(-)

(-)

(-)

(-)

(-)

Kotak Mahindra Capital Company Limited

-

-

-

-

-

-

(0.04)

(-)

(-)

(-)

(-)

(0.04)

Sale of Fixed assets

 

 

 

 

 

 

Kotak Mahindra Capital Company Ltd

-

-

-

-

-

-

(0.08)

(-)

(-)

(-)

(-)

(0.08)

Kotak Investment Advisors Limited

#

-

-

-

-

#

(#)

(-)

(-)

(-)

(-)

(#)

Kotak Mahindra Asset Management Company Limited

-

-

-

-

-

-

(0.06)

(-)

(-)

(-)

(-)

(0.06)

Kotak Infrastructure Debt Fund Limited

-

-

-

-

-

-

(0.25)

(-)

(-)

(-)

(-)

(0.25)

Kotak Mahindra Investments Limited

0.03

-

-

-

-

0.03

(-)

(-)

(-)

(-)

(-)

(-)

Kotak Mahindra Life Insurance Company Limited

_

_

_

_

_

_

(0.06)

(-)

(-)

(-)

(-)

(0.06)

Kotak Mahindra Prime Limited

-

-

-

-

-

-

(0.09)

(-)

(-)

(-)

(-)

(0.09)

Kotak Securities Limited

0.01

-

-

-

-

0.01

(#)

(-)

(-)

(-)

(-)

(#)

Swaps/Forward /Options contract

 

 

 

 

 

 

Kotak Mahindra (International) Limited

2132.70

_

_

_

_

2132.70

(5,068.59)

(-)

(-)

(-)

(-)

(5,068.59)

Others

-

-

-

-

1.88

1.88

(-)

(-)

(-)

(-)

(-)

(-)

 

(Rs in crore)

Items/Related Party

Subsidiary A Companies

issociates/ Others

Key Management Personnel (KMP)

Enterprise over which KMP/ Relative of KMP have control / significant influence

Relatives of KMP

Total

Guarantees/Lines of credit

 

 

 

 

 

 

Kotak Investment Advisors Limited

20.25

-

-

-

-

20.25

(-)

(-)

(-)

(-)

(-)

(-)

Kotak Mahindra Life Insurance Company Limited

-

-

-

-

-

-

(0.25)

(-)

(-)

(-)

(-)

(0.25)

Matrix Business Services India Private Limited

-

-

-

-

-

-

(-)

(0.05)

(-)

(-)

(-)

(0.05)

QIP Issuance Expense adjusted against Share Premium

 

Kotak Mahindra Capital Company Ltd

-

-

-

-

-

-

(10.09)

(-)

(-)

(-)

(-)

(10.09)

Aero Agencies Limited

-

-

-

-

-

-

(-)

(-)

(-)

(#)

(-)

(#)

Professional Charges towards Strategic investment - capitalized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kotak Mahindra Capital Company Ltd

-

-

-

-

-

-

(3.51)

(-)

(-)

(-)

(-)

(3.51)

Note:

1. Figures in brackets represent previous year's figures.

2. The above does not include any transactions in relation to listed securities done on recognised stock exchange during the year. However above includes transactions done on NDS with known related parties.

3. * in the above table denotes amounts less than Rs 50,000

4. Remuneration paid to KMPs is pursuant to approval from RBIl

Maximum Balance outstanding during the year

(Rs in crore)

Items/Related Party

Subsidiary Companies

Associates/ Others

Key Management Personnel

Enterprise over which KMP/Relative of KMP have control / siqnificant influence

Relatives of Key Management Personnel

Liabilities

 

 

 

 

 

Deposits

9,000.39

2,174.53

1,274.95

351.93

147.02

(5,936.64)

(5,180.30)

(358.56)

(397.28)

(16.37)

Borrowings

-

-

-

-

-

(10.00)

(-)

(-)

(-)

(-)

Other Liabilities

38.21

0.62

5.56

3.84

0.41

(116.96)

(1.56)

(1.52)

(2.55)

(0.03)

Assets

 

 

 

 

 

Advances

915.01

0.85

-

#

-

(412.05)

(-)

(-)

(#)

(-)

Investments-Gross

3737.88

33.88

-

#

-

(3,222.15)

(33.88)

(-)

(#)

(-)

Commission Receivable

49.53

-

-

-

-

(43.81)

(-)

(-)

(-)

(-)

Others

129.17

0.11

-

0.16

-

(138.65)

(0.10)

(-)

(0.32)

(-)

Note:

1. Figures in brackets represent previous year's figures.

2. # in the above table denotes amounts less than Rs 50,000

8. Employee Share Based Payments:

At the General Meetings, the shareholders of the Bank had unanimously passed Special Resolutions on 28th July, 2000, 26th July, 2004, 26th July, 2005, 5th July, 2007, 21st August, 2007 and 29th June, 2015, to grant options to the eligible employees of the Bank and its subsidiaries and associate companies. Pursuant to these resolutions, the following 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; and

(e) Kotak Mahindra Equity Option Scheme 201 5

Further, pursuant to the Scheme of Amalgamation of ING Vysya Bank Limited with the Bank, the Bank has renamed and adopted the ESOP Schemes of the elVBL, as given below:

• Kotak Mahindra Bank Limited (IVBL) Employees Stock Option Scheme 2005;

• Kotak Mahindra Bank Limited (IVBL) Employees Stock Option Scheme 2007;

• Kotak Mahindra Bank Limited (IVBL) Employee Stock Option Scheme 2010; and

• Kotak Mahindra Bank Limited (IVBL) Employees Stock Option Scheme 2013

Consequent to the above, the Bank has granted stock options to the employees of the Group. The Bank under its various plan / schemes, has granted in aggregate 152,525,793 options (including options issued in exchange on amalgamation) as on 31st March, 2019 (Previous year 148,401,294).

In aggregate 10,046,188 options are outstanding as on 31st March, 2019 (Previous year 9,475,005) under the aforesaid schemes. Equity-settled options

The Bank has granted options to employees of the Group vide various employee stock option schemes. During the year ended 31st March, 2019, the following schemes were in operation:

 

Plan 2007

Plan 2015

Date of grant

Various Dates

Various Dates

Date of Board Approval

Various Dates

Various Dates

Date of Shareholder's approval

5th July, 2007 as amended on 21st August, 2007

29th June, 2015

Number of options granted

68,873,000

12,212,139

Method of Settlement (Cash / Equity)

Equity

Equity

Vesting Period

1.00-4.14years

1.00-4.02 years

Exercise Period

0.30- 1.08 years

0.21 -0.50 years

Vesting Conditions

Graded / Cliff vesting

Graded / Cliff vesting

 

KMBL (IVBL) Plan KMBL (IVBL) Plan 2007 2010

KMBL (IVBL) Plan 2013

Number of options granted (addition on amalgamation)

1,245,010 5,773,046

4,642,198

Method of Settlement (Cash / Equity)

Equity Equity

Equity

The details of activity under Plan 2007 have been summarised below:

 

Year ended 31st March, 2019

Year ended 31st March, 2018

Number of Shares

Weighted Average Exercise Price(Rs)

Number of Shares

Weighted Average Exercise Price(Rs)

Outstanding at the beginning of the year

1,320,788

614.14

3,228,236

572.03

Granted during the year -

Forfeited during the year

35,880

665.00

149,740

640.29

Exercised during the year

947,069

595.88

1,741,978

533.47

Expired during the year

8,153

657.12

15,730

657.33

Outstanding at the end of the year

329,686

660.00

1,320,788

614.14

Out of the above exercisable at the end of the year

329,686

660.00

231,244

396.02

Weighted average remaining contractual life (in years)

 

0.24

 

0.87

The details of activity under Plan 201 5 have been summarised below:

 

Year ended 31st March, 2019

Year ended 31st March, 2018

Number of Shares

Weighted Average Exercise Price(Rs)

Number of Shares

Weighted Average Exercise Price(Rs)

Outstanding at the beginning of the year

6,873,434

855.14

3,778,230

721.10

Granted during the year

4,124,499

1,265.43

4,191,170

952.24

Forfeited during the year

379,029

955.68

453,894

849.09

Exercised during the year

1,873,709

847.35

631,975

704.46

Expired during the year

23,933

867.88

10,097

710.00

Outstanding at the end of the year

8,721,262

1,046.44

6,873,434

855.14

Out of the above exercisable at the end of the year

49,513

901.99

103,630

710.00

Weighted average remaining contractual life (in years)

-

1.69

-

1.94

Weighted average fair value of options granted during the year

 

350.19

 

232.34

The details of activity under KMBL (IVBL) Plan 2007 have been summarised below:

 

Year ended 31st

'March, 2019

Year ended 31st March, 2018

Number of Shares

Weighted Average Exercise Price(Rs)

Number of Shares

Weighted Average Exercise Price(Rs)

Outstanding at the beginning of the year

150,802

416.00

156,022

408.82

Forfeited during the year

-

Exercised during the year

-

-

5,220

201.50

Expired during the year

-

 

-

 

Outstanding at the end of the year

150,802

416.00

150,802

416.00

Out of the above exercisable at the end of the year

150,802

416.00

150,802

416.00

Weighted average remaining contractual life (in years)

-

0.70

-

1.70

The details of activity under KMBL (IVBL) Plan 2010 have been summarised below:

 

Year ended 31st March, 2019

Year ended 31st March, 2018

Number of Shares

Weighted Average Exercise Price(Rs.)

Number of Shares

Weighted Average Exercise Price(Rs.)

Outstanding at the beginning of the year

552,406

285.62

716,978

280.53

Forfeited during the year

 

-

 

-

Exercised during the year

212,614

258.00

164,572

263.45

Expired during the year

 

-

 

-

Outstanding at the end of the year

339,792

302.90

552,406

285.62

Out of the above exercisable at the end of the year

339,792

302.90

552,406

285.62

Weighted average remaining contractual life (in years)

-

0.70

-

1.31

The details of activity under KMBL (IVBL) Plan 2013 have been summarised below:

 

Year ended 31st March, 2019

Year ended 31st March, 2018

Number of Shares

Weighted Average Exercise Price(Rs.)

Number of Shares

Weighted Average Exercise Price(Rs.)

Outstanding at the beginning of the year

577,575

386.53

784,459

387.72

Forfeited during the year

 

-

 

Exercised during the year

72,929

398.00

206,884

391.05

Expired during the year

-

-

-

-

Outstanding at the end of the year

504,646

384.87

577,575

386.53

Out of the above exercisable at the end of the year

504,646

384.87

577,575

386.53

Weighted average remaining contractual life (in years)

-

1.04

-

2.04

The weighted average share price at the date of exercise for stock options exercised during the year was Rs1,266.32 (Previous year Rs. 1,008.92).

The details of exercise price for stock options outstanding at the end of the year are: 31st March, 2019:

Range of exercise prices (Rs.)

Number of options outstanding

Weighted average remaining contractual life of options (in years)

Weighted average exercise price (Rs.)

201-300

226,830

0.66

246.58

301-400

430,347

1.08

379.50

401-500

348,063

0.74

418.41

501-600

28,572

0.88

550.00

601-700

371,185

0.42

669.76

701-800

1,965,284

1.07

735.48

801-900

58,820

2.08

900.00

901-1000

2,607,868

1.58

955.10

1001-1100

46,800

1.71

1,076.10

1201-1300

3,962,419

2.08

1,270.71

31st March, 2018:

Range of exercise prices (Rs.)

Number of options outstanding

Weighted average remaining contractual life of options (in years)

Weighted average exercise price (Rs.)

201-300

442,958

1.14

247.70

301-400

469,656

2.08

379.50

401-500

629,573

1.21

416.89

501-600

50,001

1.43

550.00

601-700

1,134,954

1.07

667.27

701-800

2,877,113

1.71

728.13

901-1000

3,823,950

2.10

955.07

1001-1100

46,800

2.71

1,076.10

Stock appreciation rights (SARs)

At the General Meeting on 29th June, 2015, the shareholders of the Bank had passed Special Resolution to grant SARs to the eligible employees of the Bank, its subsidiaries and associate companies. Pursuant to this resolution, Kotak Mahindra Stock Appreciation Rights Scheme 201 5 has been formulated and adopted. Subsequently, the SARs have been granted under this scheme and the existing SARs will continue.

The SARs are settled in cash and vest on the respective due dates in a graded manner as per the terms and conditions of grant. The contractual life of the SARs outstanding range from 1.10 to 4.02 years.

Detail of activity under SARs is summarised below:

 

31st March 2019

Year Ended 31st March, 2018

Outstanding at the beginning of the year

1,224,556

1,355,642

Granted during the year

407,842

586,858

Additions / (Reduction) due to transfer of employees

(8,849)

23,823

Settled during the year

552,138

611,673

Lapsed during the year

(66,463)

130,094

Outstanding at the end of the year

1,004,948

1,224,556

Fair value of Employee stock options

The fair value of the equity-settled and cash-settled options is estimated on the date of grant using Black-Scholes options pricing model taking into account the terms and conditions upon which the options were granted. The fair value of the cash-settled options is remeasured at each Balance Sheet date. The following table lists the inputs to the model used for equity-settled and cash-settled options:

Year ended 31st March,

2019

2018

Equity-settled

Cash-settled

Equity-settled

Cash-settled

Exercise Price Rs.

900-1271

0-1271

700-1,084

0-955

Weighted Average Share Price Rs.

1,268.97

1,047.97

957.63

948.80

Expected Volatility

18.68%-32.95%

19.74%-28.06%

18.12%-39.37%

16.74%-22.56%

Historical Volatility

18.68%-32.95%

19.74%-28.06%

18.12%-39.37%

16.74%-22.56%

Life of the options granted (Vesting and exercise period)

- At the grant date

1.10-3.87

 

1.19-3.88

 

-As at 31st March

 

0.06-3.38

 

0.08-3.59

Risk-free interest rate

6.97%-7.99%

6.17%-6.84%

6.30%-7.42%

6.01%-7.33%

Expected dividend rate

0.06%

0.05%

0.06%

0.06%

The expected volatility was determined based on historical volatility data and the Bank expects the volatility of its share price may reduce as it matures. The measure of volatility used in the Black-Scholes options pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. For calculating volatility, the daily volatility of the stock prices on the National Stock Exchange, over a period prior to the date of grant, corresponding with the expected life of the options has been considered.

Effect of the employee share-based payment plans on the Profit and Loss Account and on the financial position:

(Rs in crore)

Year ended 31st March,

2019

2018

Total Employee compensation cost pertaining to share-based payment plans

78.00

67.42

Compensation cost pertaining to equity-settled employee share-based payment plan included above

1.80

1.75

Liability for employee stock options outstanding as at year end

4.10

4.41

Deferred Compensation Cost

2.02

2.24

Closing balance of liability for cash-settled options

79.81

73.10

Expense arising from increase in intrinsic value of liability for cash stock appreciation plan

63.07

56.79

Had the Bank recorded the compensation cost computed on the basis of Fair Valuation method instead of intrinsic value method, employee compensation cost would have been higher by Rs 56.98 crore (Previous year Rs 42.26 crore) and the profit after tax would have been lower by Rs 37.26 crore (Previous year Rs 27.64 crore). Consequently the basic and diluted EPS would have been Rs. 25.32 (Previous year Rs 21.40) and Rs 25.28 (Previous year Rs. 21.37) respectively.

In computing the above information, certain estimates and assumptions have been made by Management

9. Advances securitised by the Bank :

 

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Book value of advances securitized

 

-

Number of accounts

-

-

Sale consideration received for the accounts securitized

 

-

Gain on securitisation amortised during the year

-

-

Credit enhancement, liquidity support provided

 

-

Provision on securitised assets

 

-

Nature of post securitisation support

-

-

10. Employee Benefits

i. The Bank has recognised the following amounts in the Profit and Loss Account towards contributions to Provident Fund and Other Funds:

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Provident Fund

110.17

97.23

Superannuation Fund

1.61

1.85

New Pension Fund

4.16

3.56

ii. Gratuity

The gratuity plan provides a lumpsum payment to vested employees at retirement or on termination of employment based on respective employee's salary and years of employment with the Bank subject to a maximum of Rs 0.20 crore. There is no ceiling on gratuity payable to directors and certain categories of employees subject to service regulations and service awards.

Reconciliation of opening and closing balance of present value of defined benefit obligation for gratuity benefits is given below.

(Rs in crore)

Particulars

31st March. 2019

As at 31st March, 2018

Change in benefit obligations

 

 

Liability at the beginning of the year

373.13

280.66

Current Service cost

36.38

32.13

Interest cost

28.55

21.38

Actuarial Losses /(Gain)

28.97

5.98

Past Service Cost

-

81.92

Liability assumed on acquisition / (Settled on divestiture)

(0.39)

(0.04)

Benefits paid

(66.58)

(48.90)

Liability at the end of the year

400.06

373.13

Change in plan assets

 

 

Fair value of plan assets at the beginning of the year

289.56

296.23

Expected return on plan assets

23.85

22.83

Actuarial Gain /(Losses)

9.63

(0.84)

Benefits paid

(66.58)

(48.90)

Employer contributions

145.53

20.24

Fair value of plan assets at the end of the year

401.99

289.56

 

(Rs in crore)

Reconciliation of present value of the obligation and the fair value of the plan assets |

31st March, 2019

31st March, 2018

Fair value of plan assets at the end of the year

401.99

289.56

Liability at the end of the year

400.06

373.13

Net Asset /(Liability) (included under Schedule 5.1V)

1.93

(83.57)

Expense recognised for the year

Current Service cost

36.38

32.13

Interest cost

28.55

21.38

Expected return on plan assets

(23.85)

(22.83)

Actuarial (Gain)/ Loss

19.35

6.82

Past Service Cost

-

81.92

Net gratuity expense recognised in Schedule 16.1

60.42

119.42

Actual return on plan assets

33.48

21.98

 

(Rs in crore)

Reconciliation of the Liability recognised in the Balance Sheet

|31st March, 2019

31st March, 2018

Net Liability /(Asset) at the beginning of the year

83.57

(15.57)

Expense recognized

60.42

119.42

Liability assumed on acquisition / (Settled on divestiture)

(0.39)

(0.04)

Employer contributions

(145.53)

(20.24)

Net Liability /(asset)

(1.93)

83.57

Investment details of plan assets

The plan assets are invested in insurer managed funds. Major categories of plan assets as a percentage of fair value of total plan assets are as follows:

 

31st March, 2019

31st March, 2018 %

LIC managed funds *

10.97%

26.16%

Government securities

28.22%

33.94%

Bonds, debentures and other fixed income instruments

22.19%

14.03%

Money market instruments

3.53%

1.63%

Equity shares

35.09%

24.24%

Total

100.00%

100.00%

# In the absence of detailed information regarding plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.

Actuarial assumptions used

Discount rate

7.15% - 7.64% p.a. (Previous Year 7.71% - 7.90% p.a.)

Salary escalation rate

5.50% (IBA) and 7.00% (others) p.a. (Previous Year 5.50% (IBA) and 7.00% (others) p.a.)

Expected return on plan assets

7.50% - 8.00% p.a. (Previous Year 7.50% - 8.00% p.a.)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Experience adjustments

Amounts for the current and previous four years are as follows:

(Rs in crore)

 

Gratuity

 

 

Year ended 31st March

2019

2018

2017

2016

2015 I

Defined benefit obligation

400.06

373.13

280.66

278.33

86.23

Plan assets

401.99

289.56

296.23

256.35

84.68

Surplus /(Deficit)

1.93

(83.57)

15.57

(21.98)

(1.55)

Experience adjustments on plan liabilities

20.46

10.20

3.15

43.40

1.30

Experience adjustments on plan assets

9.63

(0.83)

11.38

(6.66)

15.59

The Bank expects to contribute Rs 60.00 crore to gratuity fund in financial year 2019-2020. The above information is as certified by the actuary and relied upon by the auditors.

iii. Pension

Pension liability relates to employees of elVBL.

Reconciliation of opening and closing balance of the present value of the defined benefit obligation for pension benefits is given below.

(Rs in crore)

 

31st March, 2019

As at 31st March, 2018

 

Funded

Funded

Change in benefit obligations

 

 

Liability at the beginning of the year

1,057.85

950.14

Transfer of liabilities funded during the year

-

-

Current Service cost

35.13

29.19

Interest cost

74.81

67.99

Actuarial (gain) / loss on obligations

145.66

147.03

Past Service cost

-

-

Benefits paid

(157.12)

(136.50)

Liability at the end of the year

1,156.33

1,057.85

Change in plan assets

 

 

Fair value of plan assets at the beginning of the year

1,063.69

924.91

Expected return on plan assets

88.91

79.54

Actuarial Gain /(loss)

(6.46)

(0.72)

Benefits paid

(157.12)

(136.50)

Employer contributions

170.14

196.46

Fair value of plan assets as at the end of the year

1,159.16

1,063.69

 

(Rs in crore)

Reconciliation of present value of the obligation and the fair value of the plan Assets

As at 31st March, 2019

As at 31st March, 2018

Funded

Funded

Fair value of plan assets as at the end of the year

1,159.16

1,063.69

Liability at the end of the year

1,156.33

1,057.85

Net Asset / (Liabilities) included in Others under Other Assets / Other Liabilities

2.83

5.84

Expenses recognised for the year

Current service cost

35.13

29.19

Interest cost

74.81

67.99

Expected return on plan assets

(88.91)

(79.54)

Actuarial (gain)/ loss

152.12

147.75

Effect of the limit in Para 59(b)

Net pension expense included in [payments to and provision for employees] under Operating Expenses [Schedule 16.1]

173.15

165.39

Actual return on plan assets

82.46

78.82

 

(Rs in crore)

Reconciliation of the Liability recognised in the Balance Sheet

As at 31st March, 2019

As at I

31st March, 2018

Funded

 

Net (Asset) / Liability at the beginning of the year

(5.84)

25.23

Expense recognized

173.15

165.39

Employer contributions

(170.14)

(196.46)

Effect of the limit in Para 59(b)

-

-

Net (Asset) / Liability is included in Others under Other Assets / Other Liabilities

(2.83)

(5.84)

Investment details of plan assets

The plan assets are invested in a fund managed by Life Insurance Corporation of India. In the absence of detailed information regarding plan assets of the fund, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed.

Actuarial assumptions used

 

31st March, 2019

As at 31st March, 2018

Discount rate

7.64% p.a.

7.71% p.a.

Salary escalation rate

5.50% p.a.

5.50% p.a.

Expected rate of return on plan assets

8.00% p.a.

8.00% p.a.

Inflation

8.00% p.a.

8.00% p.a.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Experience adjustments

Amounts for the current year are as follows:

(Rs in crore)

Pension

Year ended

Year ended 31st March, 2018

Defined benefit obligation

1,156.33

1,057.85

Plan assets

1,159.16

1,063.69

Surplus /(deficit)

2.83

5.84

Experience adjustments on plan liabilities

102.64

208.24

Experience adjustments on plan assets

(6.46)

(0.72)

The Bank expects to contribute Rs 8.01 crore to pension fund in financial year 2019-2020.

iv. Compensated absences

The actuarially determined liability for compensated absences of accumulated leaves of the employees of the Bank is given below:

(Rs in crore)

 

31st March, 2019

31st March, 2018

Total actuarial liability

192.95

177.57

Assumptions:

 

 

Discount rate

7.15% -7.64%

7.71% -7.90%

Salary escalation rate

5.50%(IBA) and 7.00% (others)

5.50% (IBA) and 7.00% (others)

v. Long Service Award

The actuarially determined liability in respect of Long Service Award of the employees of the Bank is given below:

(Rs in crore)

 

31st March, 2019

31st March, 2018

Total actuarial liability

10.34

9.22

Assumptions:

 

 

Discount rate

7.15% -7.64%

7.90%

11. Provisions and Contingencies

Breakup of Provisions and Contingencies (including write-offs; net of write-backs) shown under the head Expenditure in Profit and Loss Account:

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Provisions for Depreciation on Investments

(13.74)

196.91

Provision towards NPA

844.15

624.81

Provision towards Unhedged Foreign Currency Exposure

6.17

(0.30)

Provision towards Standard Assets

114.70

112.65

Provision for Taxes

2,520.46

2,133.92

Other Provision and Contingencies

11.11

5.88

Total Provisions and Contingencies

3,482.85

3,073.87

12. Corporate Social Responsibility (CSR)

As per the provisions of the Section 135 of the Companies Act, 2013 the Bank is required to contribute Rs 96.27 crore. The Bank has contributed Rs 9.74 crore to the Kotak Education Foundation and Rs 26.81 crore to other CSR initiatives in the current financial year. The Bank has also adopted a strong CSR policy, charting out its plan to invest in society and its own future. The Bank is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years.

(Rs in crore)

Details of CSR expenditure

 

a) Gross amount required to be spent during the year Rs. 96.27 (Previous year Rs73.97)

(b) Amount spent during the year ending on 31st March, 2019:

Paid

Yet to be paid

Total

i) Construction/acquisition of any asset

-

-

-

ii) On purposes other than (i) above

36.55

 

36.55

b) Amount spent during the year ending on 31st March, 2018:

Paid

Yet to be paid

Total

i) Construction/acquisition of any asset

-

-

-

ii) On purposes other than (i) above

26.40

-

26.40

13. Tier II Bonds

a) Lower Tier II Bonds outstanding as at 31st March, 2019 Rs 456.00 crore (previous year Rs 701.80 crore).

During the current year and previous year, the Bank had not issued lower Tier II bonds. In accordance with the RBI requirements lower Tier II bonds of Rs 212.40 crore (previous year Rs 367.00 crore) are not considered as Tier II capital for the purposes of capital adequacy computation under Basel III guidelines.

b) Upper Tier II Bonds outstanding as at 31st March,2019 are Rs Nil (previous year Rs 225.10 crore) of which bonds issued outside India are Rs. Nil (previous year Rs 225.10 crore).

During the current and previous year, the Bank did not issue upper Tier II bonds.

c) Interest Expended-Others (Schedule 15(lll)) includes interest on subordinated debt (Lower and Upper Tier II) Rs 58.35 crore (previous year Rs 81.68 crore).

14. Details of payments of audit fees

(Rs in crore)

Particulars

31st March, 2019

31st March, 2018

Statutory Audit fees

2.26

1.93

Other Matters

0.15

0.18

Total

2.41

2.11

15. Description of Contingent Liabilities:

Sr. No.

Contingent Liability*

Brief Description

 

1.

Claims not acknowledged as debts

This includes liability on account of income tax, sales tax, lease tax demands, property 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 Bank's financial conditions, result of operations or cash flows. In respect of appeals filed by the Income Tax department with higher authorities, where the matter was settled in favour of the Bank at the first appellate stage, and where in view of the Management, it gives rise to an item of timing difference, no contingent liability is envisaged by the Bank. 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.

 

2.

Liability on account of outstanding forward exchange contracts

 

3.

Guarantees on behalf of constituents

As a part of its Banking activities, the Bank issues guarantees on behalf of its customers. Guarantees generally represent irrevocable assurances that the Bank will make payments in the event of customer failing to fulfill its financial or performance obligations. These includes:

 

4.

Acceptances, endorsements and other obligations

 

• 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.

 

• Underwriting commitments in respect of Debt Syndication. These include:

 

5.

Other items for which the Bank is contingently liable

 

• Liabilities in respect of interest rate swaps, currency swaps, forward rate agreements, futures 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.

 

• Amount Transferred to RBI under the Depositor Education and Awareness Fund ('DEAF').

 

* Also refer Schedule 12 - Contingent Liability

16. With regard to a recent Supreme Court (SC) judgement on PF there are various interpretative issues including applicability. The Bank has based on a legal opinion taken the view that the judgement will be applicable from March 2019.

17. The Bank has received few intimations from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and there is no outstanding against those suppliers as on 31st March, 2019, 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.

As per our report of even date attached.

For and on behalf of the Board of Directors

 

For S. R. Batliboi & Co. LLP

Prakash Apte

Uday Kotak

Chartered Accountants

Chairman

Chief Executive Officer and Managing Director

Firm Registration No. 301003E/E300005

per Viren H. Mehta

Dipak Gupta

Uday Khanna

Partner

Joint Managing Director

Director

Membership No 048749

 

 

Mumbai

Jaimin Bhatt

Bina Chandarana

30th April, 2019

President and Group Chief Financial Officer

Company Secretary

 

Source : Dion Global Solutions Limited
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