KOTAK MAHINDRA BANK LIMITED

Earnings Update – FY06 Results May 15, 2006

This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America unless they are registered or exempt from registration. Any public offering of securities to be made in the United States of America will be made by means of a prospectus that will contain detailed information about the Kotak Mahindra Group and management, as well as financial statements.

Highlights

a

•

Consolidated total income (excluding Hutch*) up 57% to Rs 11,251.3 mn in Q4FY06 from Rs 7,155.9 mn in Q4FY05. For FY06, the total income (excluding. Hutch) up 67% to Rs 28,541.1 mn from Rs 17,115.1 mn in FY05.

•

Consolidated PAT (excluding Hutch) up 104% to Rs 1,308.1 mn in Q4FY06 from Rs 642.8 mn in Q4FY05. For FY06 the Consolidated PAT (pre Hutch) up 100% to Rs 3,424.5 mn from Rs 1,709.1 mn in FY05.

•

Consolidated advances up 46% to Rs 104.2 bn as on March 31, 2006, with retail loans comprising 87% of the portfolio.

•

The Group employee strength was around 6,700 as on March 31, 2006 (around 4,400 employees as on March 31, 2005).

•

Net Interest Income (NII) of the Bank (Standalone) for FY06 up 57% to Rs 3,549.3 mn.

•

PAT of the Bank (Standalone) up 39% to Rs 1,182.3 mn in FY06 from Rs 848.9 mn in FY05.

•

Other income of the Bank (Standalone) up 84% to Rs 2,429.3 mn in FY06 from Rs 1,324.3 mn in FY05. Of this fees from distribution of financial products were Rs 1,177.9 mn in FY06 up from Rs 260.8 mn in FY05. In Q4FY06, fees from distribution of financial products were Rs 624.9 mn up from Rs 170.6 mn in Q4FY05. This has resulted into a profit in the retail liabilities and branch banking segment for the last quarter and the year.

•

Deposits of the Bank grew by 53% to Rs 65.7 bn (including current and savings deposits of Rs 12.5 bn) as on March 31, 2006 from Rs 43.0 bn (including current and savings deposits of Rs 5.4 bn) as on March 31, 2005. Total number of deposit accounts were around 168,200 as on March 31, 2006 (66,400 as on March 31, 2005).

•

Group’s stressed assets portfolio on the books was Rs 4.2 bn with outstanding recoverable of around Rs 24 bn.

•

Kotak Investment Banking was ranked no. 1 in the league table for Book Runners/Lead Managers in public equity offerings on the basis of value of transactions during 2005-06 as per PRIME Database. It also topped the Bloomberg M&A league tables for calendar year 2005.

•

Kotak Securities with a market share of 8.5% in FY06 (6.3% in FY05), clocked average daily volumes of over Rs 24.4 bn during FY06 (Rs 10.6 bn in FY05). For Q4FY06 the average daily volumes were over Rs 35.7bn (Rs 15.6 bn in Q4FY05).

•

Total assets managed/ advised by the Group were Rs 186.5 bn (Rs 97.4 bn as on March 31, 2005).

•

In April 2006, Kotak Mahindra Bank raised approximately US$ 100 million through issue of 15,000,000 Global Depository Shares (GDS). The GDS were placed at US$ 6.66 per GDS (~ Rs 300). The GDS increases the book value per share by Rs 10.5.

* Sale of stake in Hutchison Essar Limited (Hutch) has been discussed under Strategic Developments during FY06 on page 3. a

Consolidated numbers for FY 06 are unaudited. Bank stand-alone numbers are audited.

2

Strategic Developments during FY06 •

On March 15, 2006, Kotak Group agreed to buy 25% stake held by Goldman Sachs Mauritius LLC (GS) in Kotak Mahindra Capital Company Limited (KMCC) and Kotak Securities Limited (KS) for Rs 3,330 mn. The consideration for the 25% stake in KS is Rs 1,230 mn and the consideration for the 25% stake in KMCC is Rs 2,100 mn. As on March 31, 2006, KMCC (consolidated along with its subsidiaries and share of associates) had a net worth of Rs 8,750 mn and KS had a net worth of Rs 4,986 mn. The transaction will be completed after the receipt of necessary regulatory approvals. Kotak Group and Goldman Sachs have also entered into a business co-operation agreement for a period of up to one year.

•

On March 1, 2006, Kotak Group sold its entire effective economic interest of 3.2% (at the Bank level) in Hutchison Essar Limited (Hutch) resulting in a consolidated profit after tax of Rs 3.87 bn.

•

In October 2005, the Kotak Mahindra Group ownership in Kotak Mahindra Prime increased to 100% following the acquisition of 40% stake held by Ford Credit International (FCI). Simultaneously, Kotak Mahindra Group sold its entire holding in Ford Credit Kotak Mahindra (FCKM) to FCI. Subsequently, KMP has also bought the entire retail car finance portfolio of FCKM.

Consolidated Financials Revenues

Financing activities Fee Income * Premium income Treasury / Investments Others Total Revenues (excluding Hutch) Income on sale of stake in Hutch Total Revenues (including Hutch)

Q4 FY06 Q4 FY05 (3 months) (3 months) 2,852.0 1,849.3 3,243.6 1,503.9 3,617.7 3,192.3 1,287.6 496.2 250.5 114.2 11,251.3 7,155.9 1,265.9 12,517.3 7,155.9

Q3 FY06 FY06 FY05 (3 months) (12 months) (12 months) 2,236.1 9,404.1 6,227.2 1,923.9 8,595.5 3,980.7 1,177.7 6,121.2 4,608.9 1,000.0 3,699.7 1,911.9 198.1 720.6 386.4 6,535.7 28,541.1 17,115.1 1,265.9 6,535.7 29,807.1 17,115.1

Rs million Growth (%) 51.0% 115.9% 32.8% 93.5% 86.5% 66.8% 74.2%

* Brokerage income is net of sub brokerage 3

Consolidated Financials Profits

Profit before tax excl. retail liabilities & branch banking and life insurance (excluding Hutch) Retail liabilities & branch banking Life insurance Profit Before Tax (excluding Hutch) PAT (after MI/ associates) (excluding Hutch) EPS (diluted) (Rs) (excluding Hutch) * PAT (after MI/ associates) (including Hutch) EPS (diluted) (Rs) (including Hutch) *

Q4 FY06

Q4 FY05

Q3 FY06

(3 months)

(3 months)

(3 months)

2,098.5 232.1 (12.3) 2,318.3 1,308.1 4.2 5,181.0 16.7

1,303.6 (84.1) (56.2) 1,163.3 642.8 2.1 642.8 2.1

1,639.0 (53.5) (120.5) 1,465.0 818.2 2.6 818.2 2.6

Rs million FY06 FY05 Growth (%) (12 months) (12 months) 6,576.8 17.8 (432.4) 6,162.3 3,424.6 11.0 7,297.5 23.5

4,018.0 (464.3) (458.0) 3,095.6 1,709.1 5.7 1,709.1 5.7

63.7% 99.1% 100.4% 94.7% 327.0% 314.7%

* Adjusted for 3:2 bonus issued in August 2005

4

Consolidated Financials Assets Rs million As on March 31, 2006 Advances • Commercial vehicles • Auto loans • Personal loans • Home loans • Corporate Banking • Others Total Advances Investments / Treasury Assets Total Assets

As on March 31, 2005

18,731 30,653 10,069 9,707 13,357 21,698 104,214 50,487 154,702

Growth (%)

17,175 25,975 5,421 4,006 9,004 9,866 71,447 27,057 98,504

9.1% 18.0% 85.7% 142.3% 48.3% 119.9% 45.9% 86.6% 57.1%

Liabilities

Deposits Borrowings

As on March 31, 2006 56,167 57,979

As on March 31, 2005 38,326 37,236

Rs million Growth (%) 46.5% 55.7%

5

Consolidated Financials Company-wise Profit After Tax

Kotak Mahindra Bank (Standalone) Kotak Mahindra Capital Company * Kotak Securities Kotak Mahindra Prime Kotak Mahindra AMC & Trustee Co Kotak Mahindra Old Mutual Life Insurance Kotak Mahindra Investments International subsidiaries # Others * Total consolidated profit after tax Equity Affiliates* Minority interest- Goldman JVs* Balance MI and other adjustments

Rs million Q4 FY06 Q4 FY05 Q3 FY06 FY06 FY05 (3 months) (3 months) (3 months) (12 months) (12 months) 347.3 230.8 326.4 1,182.3 848.9 267.2 62.3 182.6 565.7 158.2 804.1 433.7 490.2 2,155.4 1,055.9 95.2 13.3 86.2 208.8 92.3 10.2 7.7 13.8 76.3 45.1 (12.3) (56.2) (120.5) (432.4) (458.0) 82.1 72.5 65.2 278.0 205.2 25.3 98.5 68.7 133.3 125.4 (2.6) 22.1 2.7 67.9 37.8 1,616.7 884.6 1,115.3 4,235.3 2,110.7 14.3 10.4 9.9 22.5 33.3 (272.9) (154.1) (186.4) (730.7) (345.2)

Growth (%) 39.3% 257.6% 104.1% 126.1% 69.4% 35.5% 6.3% 79.5% 100.7% -32.4% -

(50.1)

(98.2)

(120.6)

(102.6)

(89.6)

-

PAT (after minority interest / adjustments) *

1,308.1

642.8

818.2

3,424.6

1,709.1

100.4%

PAT on sale of stake in Hutch

3,872.9

-

-

3,872.9

-

-

PAT (after minority interest / adjustments)

5,181.0

642.8

818.2

7,297.5

1,709.1

327.0%

# For FY05, the financials for international subsidiaries are for 15 month period from January 2004 to March 2005 and forQ4FY05, they are for six months period from October 2004 to March 2005 * excluding profit on sale of stake in Hutch

6

Consolidated Financials Analytical Ratios Net-worth before minority interest (Rs mn) Net-worth after minority interest (Rs mn) Book value per share (Rs) # Net Interest Margin (%) Gross NPAs (Rs mn) Net NPAs (Rs mn) Net NPAs (%) Return on average Net-worth (%) (excl Hutch) Pre-Tax Return on average net-worth (%) (before branch banking and life insurance businesses) (excl Hutch)

As on March 31, 2006 25,180 22,471 72.7 5.1% 520 235 0.23% 20.6%

As on March 31, 2005 18,268 14,668 47.6 5.3% 372 202 0.28% 12.6%

39.5%

29.7%

# The GDS issue will increase the book value per share by Rs 10.5

7

Kotak Mahindra Bank – Standalone Segmental Revenue Retail Lending Corporate Banking Retail liabilities & branch banking Treasury Corporate Centre Inter-segment revenue Un-allocable revenue(net) Total Revenue Profit before tax excluding retail liabilities & branch banking Retail liabilities & branch banking Profit before tax Provision for tax Profit after tax

Segmental PBT Retail Lending Corporate Banking Retail liabilities & branch banking Treasury Corporate Centre Un-allocable revenue(net) Total PBT

Q4 FY06 (3 months) 1,492.6 633.3 957.8 339.6 145.2 (636.3) 2.3 2,934.5

Q4 FY05 (3 months) 951.0 259.1 260.6 372.6 217.7 (344.9) (0.8) 1,715.4

281.8 232.1 513.9 166.6 347.3

403.9 (84.1) 319.8 89.0 230.8

Q4 FY06 (3 months) 320.3 122.5 232.1 (163.9) 0.6 2.3 513.9

Q4 FY05 (3 months) 274.0 9.6 (84.1) (60.8) 181.8 (0.8) 319.8

Q3 FY06 FY06 FY05 (3 months) (12 months) (12 months) 1,157.8 4,928.0 2,935.6 458.8 1,817.0 1,060.3 444.2 2,019.8 503.5 538.9 1,884.1 1,343.4 225.5 724.6 836.7 (515.9) (2,006.3) (1,155.4) 2.3 3.3 2,309.2 9,369.5 5,527.4 494.9 (53.5) 441.4 115.0 326.4

1,718.1 17.8 1,736.0 553.7 1,182.3

1,648.2 (464.3) 1,183.9 335.0 848.9

Q3 FY06 FY06 FY05 (3 months) (12 months) (12 months) 265.4 1,146.1 815.8 98.7 386.6 251.9 (53.5) 17.8 (464.3) (2.9) (173.9) (148.4) 133.6 357.0 725.6 2.3 3.3 441.4 1,736.0 1,183.9

Rs million Growth (%) 67.9% 71.4% 301.1% 40.2% -13.4% 69.6% 4.2% 46.6% 65.3% 39.3%

Rs million Growth (%) 40.5% 53.5% -50.8% 46.6%

8

Kotak Mahindra Bank – Standalone Assets

Rs million As on March 31, 2006

Advances • Commercial vehicles • Personal loans • Home loans • Corporate Banking • Others Total Advances Treasury Assets Total Assets

As on March 31, 2005

18,731 10,069 9,707 13,358 11,620 63,485 28,555 92,041

17,175 5,421 4,006 9,021 4,548 40,171 18,270 58,441

As on March 31,2006 65,659 16,092

As on March 31,2005 42,995 9,018

Liabilities

Deposits Borrowings

Growth (%) 9.1% 85.7% 142.3% 48.1% 155.5% 58.0% 56.3% 57.5%

Rs million Growth (%) 52.7% 78.4%

9

Bank Performance Highlights •

As on March 31, 2006, the Bank had 65 full-fledged bank branches across 43 towns and cities in India. The Bank proposes to have a total of around 110 full-fledged branches by March 2007 across 65 towns and cities.

•

Net Interest Income (NII) of the Bank for Q4 FY06 was up 61% YoY to Rs 1,081.8 mn. For FY06 NII of the Bank grew 57% to Rs 3,549.3 mn from Rs 2,254.8 mn in FY05.

•

PAT up 51% to Rs 347.3 mn in Q4FY06 from Rs 230.8 mn in Q4FY05. For FY06 PAT up 39% to Rs 1,182.3 mn from Rs 848.9 mn in FY05.

•

Advances up 58% YoY to Rs 63.5 bn. Personal loans up 86% to 10.1 bn.

•

Deposits of the Bank grew by 53% to Rs 65.7 bn (including current and savings deposits of Rs 12.5 bn) as on March 31, 2006 from Rs 43.0 bn (including current and savings deposits of Rs 5.4 bn) as on March 31, 2005. Total number of deposit accounts was around 1,68,200 as on March 31, 2006 (66,400 as on March 31, 2005).

•

PBT of the retail lending segment was up 17% to Rs 320.3 mn in Q4FY06 from Rs 274.0 mn in Q4FY05.

•

Fees from distribution of financial products were Rs 1,177.9 mn in FY06 up from Rs 260.8 mn in FY05, and in Q4FY06 fees from distribution of financial products were Rs 624.9 mn up from Rs 170.6 mn in Q4FY05. This is one of the primary reasons for a profit in the retail liabilities and branch banking segment for the last quarter and the year. As on March 31, 2006 the mutual fund assets under management distributed by the Bank were around Rs 40.1 bn (Rs 23.3 bn as on March 31, 2005).

•

Capital adequacy ratio of the Bank as on March 31, 2006 was 11.27% (12.80% as on March 31, 2005). Tier I ratio was 8.07%.

•

The royalty agreement between KMP and the Bank has been terminated with effect from October 4, 2005. Royalty income of Rs 235.1 mn has been considered in FY06 as against Rs 458.1 mn for FY05.

10

Key Subsidiaries – Highlights

Kotak Mahindra Capital Company – investment banking and primary dealer

Total income (including Hutch) Profit before tax (excluding Hutch) Profit after tax (excluding Hutch) Profit before tax (including Hutch) Profit after tax (including Hutch)

Q4 FY06 (3 months) 1,745.6 350.6 267.2 1,407.1 1,323.7

Q4 FY05 (3 months) 224.5 64.3 62.3 64.3 62.3

Rs million Q3 FY06 FY06 FY05 (3 months) (12 months) (12 months) 402.5 2,598.9 629.6 257.6 764.9 191.3 182.6 565.7 158.2 257.6 1,821.4 191.3 182.6 1,622.2 158.2

•

Kotak Investment Banking topped the domestic IPO league tables for the fourth year running as Book Runners (Source : Prime Database).

•

Kotak Investment Banking was ranked no. 1 in the Bloomberg M&A league tables for calendar year 2005.

•

Kotak Investment Banking through its International subsidiaries acted as Joint Global Co-ordinator Joint Book runner to the US$ 54 mn GDR issue of Dhampur Sugar mills Limited.

•

Kotak Investment Banking acted as sole advisors to Mantri Developers, Vimta Labs and Jindal Polyfilms in private equity placement transactions.

•

During Q4FY06, Kotak Investment Banking successfully completed domestic equity offerings of Andhra Bank, Bank of Baroda, Union Bank, GVK Power, M&M Financial Services and GSPL.

•

Segmental profit for Trading and Principal Investments (excluding Hutch) stood at Rs 201.8 mn for FY06 as compared to profit before tax of Rs 120.1 mn for FY05.

11

Kotak Securities – stock broking Rs million Q4 FY06

Q4 FY05

Q3 FY06

FY06

FY05

(3 months)

(3 months)

(3 months)

(12 months)

(12 months)

Total income

2,227.9

1,289.0

1,429.2

6,207.3

3,296.5

Profit before tax

1,225.4

678.4

707.0

3,204.8

1,641.1

804.1

433.7

490.2

2,155.4

1,055.9

Profit after tax •

Kotak Securities had a market share of 8.5% in FY06 (6.3% in FY05).

•

Kotak Securities (retail, online and institutional segments) clocked average daily volumes of over Rs 24.4 bn during FY06 as compared to around Rs 10.6 bn during FY05. For Q4FY06 the average daily volumes were over Rs 35.7bn (Rs 15.6 bn in Q4FY05).

•

Average daily volumes on www.kotaksecurities.com (online) during FY06 increased to Rs 2.5 bn from Rs 0.9 bn during FY05. For Q4FY06 the average daily volumes were over Rs 3.8bn (Rs 1.4 bn in Q4FY05).

•

AUM in Portfolio Management Services (PMS) was Rs 25.9 bn as on March 31, 2006 (Rs 18.4 bn as on March 31, 2005).

•

Kotak Institutional Equities’ revenues continued to grow in FY06. The financial year saw an unprecedented increase in FII participation in Indian capital markets. The sustained buoyancy in the capital markets also saw an increase in AUM of domestic mutual funds. Institutional investment coverage increased and also included stocks other than traditional investments in large cap stocks.

•

Kotak Institutional equities increased its institutional client base, reach and research coverage. It also achieved strong growth in volumes and market share in the F&O segment. The research team currently covers approximately 117 stocks with a market capitalization of approximately US$ 490.0 bn, which is approximately 68.0% of the total market capitalization in India.

•

Kotak Securities has a network of over 660 offices (own & franchisees) across 232 cities and towns and services over 220,000 secondary market customers.

12

Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus) – car finance, other lending

Total income Profit before royalty & taxes Profit after royalty before taxes Profit after tax • •

Q4 FY06 (3 months) 907.1 137.9 137.9 95.2

Q4 FY05 (3 months) 647.2 125.2 9.6 13.3

Rs million Q3 FY06 FY06 FY05 (3 months) (12 months) (12 months) 747.6 3,032.0 2595.8 134.6 546.2 593.9 130.7 311.1 135.8 86.2 208.8 92.3

Receivables for car finance were Rs 30.3 bn as on March 31, 2006, up 17% YoY. During the year, in addition to car finance, the company has commenced other retail lending businesses

Kotak Mahindra Asset Management Company and Trustee Company – asset management

Total income Profit before tax (AMC) Profit after tax (AMC) Profit before tax (Trustee Company) Profit after tax (Trustee Company) •

Q4 FY06 (3 months) 108.0 4.2 2.5 11.0 7.7

Q4 FY05 (3 months) 48.5 2.6 2.6 8.0 5.1

Q3 FY06 FY06 (3 months) (12 months) 103.4 393.1 11.4 78.3 7.1 50.6 9.9 37.7 6.7 25.7

Rs million FY05 (12 months) 233.6 31.2 28.9 25.2 16.1

Total AUM as on March 31, 2006 was Rs 104.1bn (Rs 66.5 bn as on March 31, 2005). Equity AUM as on March 31, 2006 was Rs 31.3 bn (Rs 12.9 bn as on March 31, 2005).

•

Kotak Mutual Fund bagged the Lipper India Fund Award 2006 for Best Bond Fund House and Kotak Bond Regular Plan was ranked the best debt fund over 3 years.

•

Kotak Lifestyle NFO during Q4FY06 garnered Rs 8.7 bn from 85,000 investors.

•

KMAMC has 47 branches and satellite offices across 47 cities and towns servicing around 436,000 investors. 13

Kotak Mahindra Old Mutual Life Insurance - life insurance Rs million

Premium income Loss

Q4 FY06 (3 months) 3,639.8 (12.3)

Q4 FY05 (3 months) 3,206.8 (56.2)

Q3 FY06 (3 months) 1,209.7 (120.5)

FY06 (12 months) 6,218.5 (432.4)

FY05 (12 months) 4,661.6 (458.0)

•

Kotak Life Insurance (KLI) premium income grew to Rs 6,218.5 mn in FY06 from Rs 4,661.6 mn in FY05.

•

First year premium adjusted for single premium for 1/10 up 82% to Rs 3,510 mn.

•

KLI has a network of 45 branches in 34 cities (30 branches in FY05).

•

Over 12,500 life advisors

•

Offers wide range of products comprising 15 individual, 5 group and 1 rural policy.

•

As on March 31, 2006, KLI had around 190,000 individual policies on books representing a basic sum assured of approximately Rs 85.8 bn (excluding riders). Additionally, the company had around 125 group policies covering over 152,000 lives with an aggregate sum assured of approximately Rs 41.2 bn.

th

14

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. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America unless they are registered or exempt from registration. Any public offering of securities to be made in the United States of America will be made by means of a prospectus that will contain detailed information about the Kotak Mahindra Group and management, as well as financial statements. 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. Figures for the previous period/year have been regrouped wherever necessary to conform to current period’s/year’s presentation. Totals in some columns / rows may not agree due to rounding off. Contact Pooja Sabharwal Genesis Burson-Marsteller Tel: +91 22 66607681 Fax: +91 22 24911788

Jaimin Bhatt / Naozad Sirwalla Kotak Mahindra Bank Limited Tel: +91 22 66581100 Fax: +91 22 22855577

E-mail: [email protected]

E-mail: [email protected] / [email protected]

15

Kotak Mahindra Bank

Analyst Meet May 16, 2006

Coverage ∞ Highlights ∞ Strategic Developments ∞ Businesses ~ Assets & Liabilities ~ Wealth Management ~ Asset Management ~ Life Insurance ~ Investment Banking ~ Securities

∞ Financials ∞ Summary Page 2

Highlights

Page 3

Highlights ∞ Bank roll-out as planned ~ 65 full-fledged bank branches across 43 cities (38 branches March 05)

∞ Consolidated advances up 46% YoY to Rs 104.2 bn ∞ Consolidated NIM 5.1% (5.3% March 05) ∞ CASA deposits grew 133% to Rs 12.5 bn ~ CASA ratio 19% (12.5% March 05)

∞ Stressed assets portfolio Rs 4.19 bn; Outstanding recoverable Rs 24 bn ∞ Consolidated net NPAs 0.23% (0.28% March 05)

Page 4

Highlights ∞ Kotak Securities – India’s leading stock broking house ~ Market share - 8.5% (6.3% FY05) ~ Average daily volumes - Rs 24.4 bn (Rs 10.6 bn FY05) ~ Awarded the Best Broker and Best Equity House in India - 2005 & 2004

∞ Kotak Investment Banking ~ # 1 Book Runner / Lead Manager in FY06 (PRIME Database) ~ #1 M&A advisor in CY05 (Bloomberg)

∞ Wealth Management business gaining momentum ~ # 1 in six categories in the Annual Euromoney Private Banking Survey Poll ~ Amongst top three distributors of equity products in India Page 5

Highlights ∞ AUM of the group around Rs 186 bn (Rs 97 bn March 05) ~ Equity AUM Rs 113 bn (Rs 43 bn March 05)

∞ Private Equity / Real Estate ~ Final closing of “India Growth Fund” with commitments of Rs 7 bn ~ Kotak Realty Fund domestic tranche commitments of Rs 4.6 bn

∞ First year life insurance premium income up 82% to Rs 3.5 bn (adjusted for single premium - 1/10th) ∞ Total group headcount 6,700 ~ Added 2,300 employees during FY06

Page 6

Strategic Developments

Page 7

Ford Credit JVs ∞ In Oct 05 bought 40% stake in Kotak Mahindra Prime (KMP) from Ford Credit at Rs 1.2 bn - 37% discount to book value ∞ Sold 35% stake in Ford Credit Kotak Mahindra at book value ∞ Resulted in an increase in consolidated net worth of Rs 718 mn ∞ Leads to more efficient utilisation of Rs 5 bn net worth in KMP and ability to diversify into other financing businesses

Page 8

Stake Sale in Hutchison Essar ∞

Non–strategic investment made in 1998

∞

Investment held through KMCC, KMSL and underlying associate

∞

Amount realised on sale of stake at KMCC level – Rs 5,245 mn

∞

Minimal capital gains as bulk of proceeds in Sec. 54EC bonds

∞

PAT at consolidated Bank level – Rs 3,873 mn

Page 9

Agreement to purchase Goldman’s stake ∞ Agreed to buy 25% stake of Goldman Sachs in KMCC and KS subject to regulatory approvals ~ Aggregate purchase consideration Rs 3,330 mn KMCC*

KS

Total

2,100

1,230

3,330

FY06 PAT (excluding Hutch)

789

2,155

2,944

Net worth - March 31, 2006

8,750

4,986

13,736

25% of net worth

2,188

1,247

3,435

0.28

0.67

-

Rs mn Purchase consideration

Leverage ratio - March 31, 2006 * Consolidated - includes its subsidiaries and associate

Page 10

Assets & Liabilities

Page 11

Consolidated Advances Advances Rs 104.2 bn (Mar 06)

∞ Retail assets 87% of advances

Others 17%

∞ NIMs – 5.1% (5.3% FY05)

ARD 4%

∞ Net NPA 0.23% (0.28% March 05) ∞ Stressed assets portfolio Rs 4.19 bn; outstanding recoverable Rs 24 bn – potential for significant returns

Corporate 13% Home 9%

∞ Target 30% growth in advances Total Advances Growth (Rs bn)

C

R: 5 AG

Cars 29%

CVs 18% PL 10%

Growth in Advances - Mar 06 v/s Mar 05

1%

142%

104.2

86%

71.4

48%

46.5

18%

30.3 Mar 2003

Mar 2004

Mar 2005

Mar 2006

Cars

9% CVs

PL

Home

Corporate Page 12

Retail Liabilities Overview

∞

65 full fledged bank branches across 43 cities as on March 31, 2006

∞

Target around 110 branches across 65 cities by March 07

∞

Focus primarily on HNI and mass affluent population

∞

Emphasis on personalised advisory solutions

∞

CASA ratio 19% (12.5% March 05)

∞

Significant contribution from distribution of financial products Customer Focus

No. of full fledged Bank branches

38

High Net-worth Super Affluent

Re

50% of mass affluent reside in 6 cities

t ai lB

an

k

65

Mass Affluent

17 Mass Retail

1 Mar 2003

Mar 2004

Mar 2005

Mar 2006 Page 13

Bank Deposits Rs million

Mar 06

Mar 05

Current

7,586

3,886

95%

Savings

4,893

1,469

233%

CASA Deposits

12,480

5,355

133%

Term

53,179

37,641

41%

Total Deposits

65,659

42,995

53%

CASA* (Rs mn)

Growth %

CASA Ratio* 12,375

19%

12%

4,935

10%

1,987

Mar 2004

Mar 2005

Mar 2006

* excluding monies held as collection bankers

Mar 2004

Mar 2005

Mar 2006 Page 14

Retail Deposits No. of Retail Accounts

Mar 06

Mar 05

Current

21,400

10,000

Savings

113,800

42,500

32,900

13,900

168,100

66,400

Current

215,000

199,000

Savings

40,000

34,000

Term Total Deposit Accounts Average balance / Account (Rs)

Page 15

Wealth Management

Page 16

Wealth Management ∞ Focus on HNI customers ~ Managing wealth of over 3,000 families

∞ Presence in 14 cities with over 100 relationship managers ∞ Amongst top 3 distributors of equity products in India ∞ Awards in six categories in Euromoney Private Banking Poll 2006 ~ Best Private Bank for ultra high net worth investors

Wide Range of Products Mutual Funds

Life Insurance

Private Equity

Equity & Derivatives

Portfolio Management Services

Real Estate Fund

Structured Products

IPO

Page 17

Asset Management

Page 18

Asset Management Overview ∞

Around Rs 186 bn (US$ 4.2 bn) of assets managed / advised by the group

∞

Alternate asset classes added during FY06 ~

Private equity – India Growth Fund with commitments of Rs 7 bn

~

Kotak Mahindra Realty Fund with commitments of over Rs 4.6 bn Group AUM (Rs bn) Equity

Debt

Total

186

Equity AUM CAGR: 188%

97 67 33 114 5 Mar'03

20 Mar'04

44 Mar'05

Mar'06 Page 19

Life Insurance

Page 20

Life Insurance ∞

JV with Old Mutual

∞

Group synergies contribute to growth

~

Kotak Bank garnered 24% of total premium income

∞

Continue investments to build a long-term stable business

∞

Focus on value creation while scaling size Total Premium Income (Rs mn) Other

Single Premium

Total

First year premium (single @ 1/10th) (Rs mn)

6,219

4,662 C

R: 1 AG

5,893

FY03

2,815

950

1,265 FY04

3,510

1,930

1,509 403

06 %

403 FY05

FY06

FY03

FY04

FY05

FY06 Page 21

Building blocks for growth ∞ Capability

950

8,000

1000

~ 1,650 employees 6,000

750

~ 12,500 life advisors

460 4,000

~ 220 corporate agents; 110 brokers 2,000

~ Established systems and processes

∞ Geographical reach

7,170

300 2,970

500

250

2,850

0

0 FY04

FY05

LA recruitment

FY06

Sales managers

~ 45 branches in 34 cities

∞ Products ~ Full suite of products – risk, saving and pension ~ 15 products – Individual; 5 products – Group; 1 product - Rural

Page 22

Investment Banking

Page 23

Investment Banking Industry Awards & Rankings Best Equity House in India

2005,2004, 2003

Best Equity House in India

2004, 2003

Best Investment Bank in India

2004, 2003

Best Equity House in India

2004

KMCC - Investment Banking segment Revenue

PBT

(Rs mn)

1,049

563 352

354

239

Topped league tables for book running equity offerings for last four years in a row

118

132

71

Topped Bloomberg M&A league tables for CY2005

FY03

FY04

FY05

International Subsidiaries

Registered with

∞ Kotak Mahindra (UK)

∞ FSA, SEBI, DFSA

∞ Kotak Mahindra Inc

∞ NASD

∞ Kotak Mahindra (International)

∞ FSC

FY06

∞ International Offerings ∞ Investment Management

Page 24

Market size & composition Local IPOs & Follow-ons

ADRS & ADS

GDRS & GDS

CBs

800.00 Total:

Rs 225.70bn USD 5.01bn

Rs 403.68bn USD 8.97bn

Rs 682.52bn USD 15.16bn

700.00 600.00

233.18

(Rs.bn)

500.00 400.00

120.35 126.70

300.00 200.00 100.00

13.77

27.27

178.21

6.45

30.44 32.23

92.25

214.32

236.74

FY 05

FY 06

0.00 FY 04

Page 25

IPOs / GDRs Major offerings managed in FY06 Rs. 13.7 bn

Rs. 8.2 bn

Rs. 6.4 bn

Rs. 4.1 bn

Rs. 4.0 bn

Infrastructure Development Finance Co Ltd

Allahabad Bank

Punj Lloyd Ltd.

HT Media Ltd.

Mahindra & Mahindra Financial Serv. Ltd.

Follow-on Offering

Initial Public Offering

Initial Public Offering

Initial Public Offering

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

Sole Book Running Lead Manager

Book Running Lead Manager

July 2005

April 2005

December 2005

August 2005

February 2006

Rs. 3.7 bn

Rs. 2.6 bn

Rs. 1.7 bn

Rs. 1.4 bn

Rs. 1.4 bn

Gujarat State Petronet Ltd.

GVK Power & Infrastructure Ltd.

PVR Ltd.

IL&FS Investsmart Ltd.

Shopper’s Stop Ltd.

Initial Public Offering

Initial Public Offering

Initial Public Offering

Initial Public Offering

Initial Public Offering

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

January 2006

February 2006

December 2005

July 2005

May 2005

Rs. 57.5 bn

Rs. 16.3 bn

Rs. 14.5 bn

Rs. 7.7 bn

Rs. 4.95 bn

ICICI Bank Ltd.

Bank of Baroda

Oriental Bank of Commerce

Andhra Bank

Follow-on Offering

Follow-on Offering

Follow-on Offering

Follow-on Offering

Follow-on Offering

Co-Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

Book Running Lead Manager

December 2005

January 2006

April 2005

January 2006

February 2006

US$ 100 mn

US$ 70 mn

US$ 60 mn

US$ 54 mn

US$ 40 mn

IL&FS Investsmart Ltd.

Apollo Hospitals Enterprise Ltd.

Himatsingka Seide Ltd.

Dhampur Sugar Mills Ltd.

CESC Ltd.

Initial Public Offering

Union Bank of India

GDS

GDR

GDR

GDR

GDR

Co-Lead Manager

Joint Global Co-ordinator and Joint Book Runner

Joint Global Co-ordinator and Joint Book Runner

Joint Global Co-ordinator and Joint Book Runner

Co-Lead Manager

December 2005

July 2005

December 2005

March 2006

September 2005

Page 26

Major M&A / Private Equity Transactions Client

Hutchison Essar Limited Anil Dhirubhai Ambani Enterprises Group

Bilakhia Group

Transaction

Size

∞ Acquisition of BPL circles in Mumbai, Maharashtra, Kerala and TN ∞ Acquisition of Essar Spacetel Limited

$ 1.1 bn

∞ Expansion of capital through preferential issue and open offer by Anil D. Ambani and his associates to shareholders of Reliance Capital Limited

$ 956 mn

∞ Divestment of promoter stake to Huber Group, and acquiring stake in Huber’s Group’s European Unit

$ 303 mn

∞ Demerger of Offshore Division – Business Restructuring

$ 150 mn

∞ Hive-off of the Component Business of Hindustan Motors and inviting Actis Capital LLP to acquire 30% stake in the new company

$ 98 mn

∞ Divestment of 60% stake in Thomas Cook India Limited to Dubai International group

$ 92 mn

Great Eastern Shipping

Hindustan Motors

US$ 17.4 mn

US$ 13.3 mn

US$ 12.5 mn

Investment by Five global investors

Investment by

Picked up 6.66% stake in

Classic PE (Sole Advisor)

Private Placement (Sole Advisor)

Pre –IPO (Sole Advisor)

Negotiated PIPE (Sole Advisor)

February 2006

March 2006

January 2006

March 2006

US$ 68 mn

First Apex Level Real Estate Transaction. Investment by Morgan Stanley Real Estate

Page 27

Securities

Page 28

Securities India’s leading securities brokerage firm 8.5% market share in FY06 (6.3% in FY05) ∞ Strong presence in retail and institutional segments ∞ Institutional sales team in New

Best Broker

2005

Best Equity House

2005

Best Equity House

2004

York and London ∞ Network of 660 offices (own & franchisees) across 232 cities (500 offices in 155 cities March 05)

Page 29

Securities ∞ Strong research team ∞ Wide coverage ~ Institutional research 117 companies ~ Retail research 150 companies

∞ PMS AUM Rs 26 bn of which > 50% on profit sharing ~ Awarded Best Provider of Portfolio Management – Equities by Euromoney Private Banking Poll 2006

∞ Over 220,000 secondary market customers KS PAT (Rs mn)

KS Average Daily Volumes (Rs bn) 2,155

G CA

24

19% 1 : R

1,056

11

855 7 244 Mar 03

2 Mar 04

Mar 05

Mar 06

Mar 03

Mar 04

Mar 05

Mar 06 Page 30

Financials*

* Consolidated numbers are unaudited. Bank stand-alone numbers are audited. Page 31

Consolidated Revenue Rs mn

Q4FY06

Q4FY05

FY 06

FY 05

Financing

2,852

1,849

9,404

6,227

Fees #

3,244

1,504

8,595

3,981

Insurance Premium

3,618

3,192

6,121

4,609

Treasury (excluding Hutch)

1,287

497

3,700

1,912

250

114

721

386

Total Revenue (excl Hutch)

11,251

7,156

28,541

17,115

Total Revenue

12,517

7,156

29,807

17,115

Others

3%

3%

11%

13% 33%

36%

21%

27% 30%

23%

FY05 – Rs 17,115 mn

FY06 – Rs 28,541 mn Financing

Fees

# brokerage income is net of sub-brokerage

Insurance Premium

Treasury

Others

Page 32

Consolidated PAT Rs mn

Q4 FY06 (3M)

Q4 FY05 (3M)

FY06 (12M)

FY05 (12M)

Kotak Mahindra Bank

347.3

230.8

1,182.3

848.9

Kotak Mahindra Capital Company*

267.2

62.3

565.7

158.2

Kotak Securities

804.1

433.7

2,155.4

1,055.9

95.2

13.3

208.8

92.3

Kotak Mahindra Life Insurance

(12.3)

(56.2)

(432.4)

(458.0)

Kotak Mahindra AMC / Trustee

10.2

7.7

76.3

45.1

Kotak Mahindra Investments

82.1

72.5

278.0

205.2

25.3 (2.8) 0.3 1,616.7

98.5 21.8 0.3 884.6

133.3 70.3 (2.4) 4,235.3

125.4 41.5 (3.7) 2,110.7

14.3

10.4

22.5

33.3

Minority interest - Goldman JVs *

(272.9)

(154.1)

(730.7)

(345.2)

Balance MI and other adjustments

(50.1)

(98.2)

(102.6)

(89.6)

1,308.1

642.8

3,424.6

1,709.1

3,872.9

-

3,872.9

-

5,181.0

642.8

7,297.5

1,709.1

Kotak Mahindra Prime

International Subsidiaries Kotak Mahindra Securities* Others Total Group * Equity Affiliates *

Consolidated for the Group * Add : Profit on sale of stake in Hutch Consolidated for the Group * excluding profit on sale of stake in Hutch

Page 33

Consolidated Ratios Key Parameters

Mar 06

Mar 05

22,471

14,668

EPS (Rs) (excluding Hutch)

11.0

5.7

EPS (Rs) (including Hutch)

23.5

5.7

0.23%

0.28%

5.1%

5.3%

Post tax return on net worth (%)(excluding Hutch)

20.6%

12.6%

Pre tax return on net worth (%) (before Retail Liabilities and Insurance businesses) (excluding Hutch)

39.5%

29.7%

Net worth after minority interest (Rs mn)

Net NPA (%) Net Interest Margin (%)

Page 34

Book value per share (Rs) 10.5

12.5

83.2

72.7

2.3 10.3

47.6 72.7 57.9

60.2

Realignment of Ford JVs

Sale of stake in Hutch

47.6

March-05

PAT FY 06 (excl Hutch)

March-06

GDR

March 06 + Post GDR

Page 35

Bank Standalone - Segmental Rs million

Q4FY06 (3M)

Q4FY05 (3M)

FY06 (12M)

FY05 (12M)

Retail Lending

320.3

274.0

1,146.1

815.8

Corporate Banking

122.5

9.6

386.6

251.9

Retail Liabilities & Branch Banking

232.1

(84.1)

17.8

(464.3)

(163.9)

(60.8)

(173.9)

(148.4)

Corporate Centre

0.6

181.8

357.0

725.6

Un-allocable revenue (net)

2.3

(0.8)

2.3

3.3

Profit before tax

513.9

319.8

1,736.0

1,183.9

Profit after tax

347.3

230.8

1,182.3

848.9

Treasury

Page 36

Summary

Page 37

Value Drivers ∞ Build retail liabilities & distribution business – 110 branches by Mar07 ∞ Focus on wealth management ∞ Retail and commercial lending with focus on NIMs ∞ Stress assets business ∞ Leadership in securities broking ∞ Integrated corporate & investment bank ∞ Thrust in asset management business across asset classes ∞ Life insurance – a long term value creator ∞ New businesses – bullion, custodial services ∞ International expansion ∞ Effective utilisation of surplus capital in subsidiaries Page 38

Safe Harbour 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. This document is not an offer of securities for sale in the United States of America. Securities may not be offered or sold in the United States of America unless they are registered or exempt from registration. Any public offering of securities to be made in the United States of America will be made by means of a prospectus that will contain detailed information about the Kotak Mahindra Group and management, as well as financial statements. 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. Figures for the previous period/ year have been regrouped wherever necessary to conform to current period’s/ year’s presentation. Totals in some columns/ rows may not agree due to rounding off.

Page 39

Thank you

Page 40

KOTAK MAHINDRA BANK LIMITED (CONSOLIDATED) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 UNAUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 2006 Rs lakhs Sr No

1

Particulars

118,447.68

77,612.59

63,703.78

27,265.52

17,924.02

90,969.30

61,735.19

(b) Income on investments

16,127.78

6,823.45

3,243.85

22,951.23

13,015.28

1,056.40

947.66

289.14

2,004.06

1,564.55

1,647.24

875.85

528.73

2,523.09

1,297.57

90,362.93

76,600.79

49,573.01

166,963.72

93,538.18

5

9

Mar-05 (Audited)

21,985.74

4

8

Mar-06 (Unaudited)

35,912.48

3

7

Mar-05 (Unaudited)

Year Ended

82,535.20

Other income {other than non recurring} (see Notes 2, 12 & 19) b. Other income {non recurring} (see Note 18) Total income (1+2)

6

Mar-06 (Unaudited)

Quarter Ended

Interest earned (a+b+c+d) (a) Interest/discount on advances/bills (c) Interest on balances with RBI & other banks (d) Others

2

Nine Months Ended Dec-05 (Unaudited)

a.

-

12,659.41

-

12,659.41

-

172,898.13

125,172.68

71,558.75

298,070.81

171,150.77

Interest expended

36,151.88

15,804.86

8,994.92

51,956.74

32,865.35

Operating expenses (a+b) a. Payments to and Provisions for employees (see Note 15) b. Other operating expenses (see Note 3) Total expenditure (4+5)

94,826.55

71,880.75

50,406.38

166,707.30

105,510.70

28,804.32

14,334.43

9,499.88

43,138.75

25,167.45

66,022.23

57,546.32

40,906.50

123,568.55

80,343.25

Operating Profit (3-6) Other provisions & contingencies (see Note 1 ) a. Profit before tax {before non recurring income} (7-8-2b) b. Profit before tax {non recurring income} (see Note 18)

130,978.43

87,685.61

59,401.30

218,664.04

138,376.05

41,919.70

37,487.07

12,157.45

79,406.77

32,774.72

3,479.41

1,644.74

524.48

5,124.15

1,818.46

38,440.29

23,182.92

11,632.97

61,623.21

30,956.26

-

12,659.41

-

12,659.41

-

1

10

19

Provision for taxes (see Note 16) a. Profit after tax before Minority Interest {before non recurring} (9a - 10) b. Profit after tax before Minority Interest (non recurring) (a) Less: Share of Minority Interest (other than non recurring) (b) Less : Share of Minority Interest {non recurring} (see Note 18) (a) Add: Share in Profit of associates (other than non recurring) (b) Add : Share in Profit of associates {non recurring} (see Note 18) Consolidated Profit after tax attributable to the Group {other than non recurring} (11a- 12a+13a) Consolidated Profit after tax attributable to the Group {non recurring} (11b-12b+13b) Consolidated Profit after tax attributable to the Group {including non recurring} (14+15) Paid Up Equity Capital - (Face Value of Rs 10 per share) Group Reserves (excluding Minority Interest) Networth (17+18)

20

Minority Interest

21

Analytical Ratios

11

12

13

14

15

16

17 18

(i) Earnings per Share Basic Rs. (see Notes 4 & 5) Before non recurring income

13,751.95

7,548.24

3,941.01

21,300.19

11,567.39

24,688.34

15,634.68

7,691.96

40,323.02

19,388.87

-

12,659.41

-

12,659.41

-

3,605.52

2,696.57

1,368.21

6,302.09

2,630.72

-

3,166.12

-

3,166.12

-

81.77

143.24

103.89

225.01

332.52

-

29,235.67

-

29,235.67

-

21,164.59

13,081.35

6,427.64

34,245.94

17,090.67

-

38,728.96

-

38,728.96

-

21,164.59

51,810.31

6,427.64

72,974.90

17,090.67

30,909.28

30,929.46

12,332.35

30,929.46

12,332.35

193,781.29

134,352.17

224,710.75

146,684.52

27,086.50

35,991.71

6.86

4.23

2.12

11.09

5.70

-

12.52

-

12.55

-

Earnings per Share Basic Rs. Total

6.86

16.75

2.12

23.64

5.70

(ii) Earnings per Share Diluted Rs. (see Notes 4 & 5) Before non recurring income

6.82

4.22

2.10

11.01

5.66

-

12.47

-

12.46

-

6.82

16.69

2.10

23.47

5.66

Non recurring income (see Note 18)

Non recurring income (see Note 18) Earnings per Share Diluted Rs. Total

2

KOTAK MAHINDRA BANK LIMITED (STANDALONE) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 2006 Rs lakhs Sr No

1

2 3 4 5

6 7 8 9 10 11 12 13 14

15

Particulars

Interest earned (a+b+c+d) (a) Interest/discount on advances/ bills (b) Income on investments (c) Interest on balances with RBI & other banks (d) Others Other income (see Note 12) Total income (1+2) Interest expended Operating expenses (a+b) (a) Payments to and Provisions for employees (see Note 15) (b) Other operating expenses Total expenditure (4+5) Operating Profit (3-6) Other provisions & contingencies (see Note 1) Profit before tax Provision for taxes (see Note 16) Profit after tax (9-10) Paid Up Equity Capital - (Face Value Rs. 10 per share) Reserves excluding revaluation reserves Analytical Ratios (i) % of shares held by Govt. of India (ii) % Capital adequacy ratio (see Note 10) (iii) Earnings per Share Basic Rs. (see Notes 4 & 5) (iv) Earnings per Share Diluted Rs. (see Notes 4 & 5) Non Promoter Shareholding (i) No. of shares (ii) % of shareholding

Nine Months Ended Dec-05 (Reviewed) 48,569.37 38,084.08 10,026.21

Mar-06 (Unaudited) 20,832.89 15,820.71 4,328.74

Mar-05 (Unaudited) 12,278.70 10,004.95 2,098.38

Mar-06 (Audited) 69,402.26 53,904.79 14,354.95

Mar-05 (Audited) 42,030.49 31,986.67 9,094.86

428.73 30.35 15,781.54 64,350.91 23,893.87 25,607.10

624.30 59.14 8,511.61 29,344.50 10,014.99 13,123.14

174.67 0.70 4,875.14 17,153.84 5,552.61 7,657.34

1,053.03 89.49 24,293.15 93,695.41 33,908.86 38,730.24

879.75 69.21 13,243.26 55,273.75 19,482.27 22,449.99

9,944.05 15,663.05 49,500.97 14,849.94

5,438.28 7,684.86 23,138.13 6,206.37

2,863.34 4,794.00 13,209.95 3,943.89

15,382.33 23,347.91 72,639.10 21,056.31

7,835.97 14,614.02 41,932.26 13,341.49

2,629.19 12,220.75 3,871.00 8,349.75

1,067.57 5,138.80 1,665.50 3,473.30

746.37 3,197.52 890.00 2,307.52

3,696.76 17,359.55 5,536.50 11,823.05

1,502.45 11,839.04 3,350.00 8,489.04

30,909.28

30,929.46

12,332.35

30,929.46

12,332.35

54,345.21

62,755.02

Quarter Ended

Year Ended

Nil

Nil

Nil

Nil

Nil

11.05%

11.27%

12.80%

11.27%

12.80%

2.71

1.12

0.76

3.83

2.83

2.69

1.11

0.76

3.80

2.81

128,013,200 41.42%

128,216,169 41.45%

50,873,504 41.25%

128,216,169 41.45%

50,873,504 41.25%

3

KOTAK MAHINDRA BANK LIMITED (STANDALONE) Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021 SEGMENT RESULTS Rs lakhs Sr N o 1

2

3

Nine Months Ended Dec-05 (Reviewed)

Mar-06 (Unaudited)

Mar-05 (Unaudited)

Segment Revenue Retail Lending activities Corporate Banking Treasury Retail Liabilities and Branch banking Corporate Centre Total Less: Inter segment revenue Add: Unallocable revenue Total Revenue

34,354.14 11,837.07 15,445.47 10,620.55 5,793.62 78,050.85 13,699.94 64,350.91

14,926.12 6,332.82 3,395.87 9,577.84 1,452.02 35,684.67 6,362.88 22.71 29,344.50

9,510.00 2,591.15 3,726.28 2,605.95 2,177.45 20,610.83 3,449.45 (7.54) 17,153.84

49,280.26 18,169.89 18,841.34 20,198.39 7,245.64 113,735.52 20,062.82 22.71 93,695.41

29,355.56 10,602.78 13,433.94 5,035.23 8,367.44 66,794.95 11,553.85 32.65 55,273.75

Segment Results {see Note 11} Retail Lending activities Corporate Banking Treasury Retail Liabilities and Branch banking Corporate Centre Total Add: Unallocable revenue Profit Before Tax

8,258.12 2,640.66 (99.09) (2,142.45) 3,563.51 12,220.75 12,220.75

3,203.24 1,225.37 (1,639.47) 2,320.87 6.08 5,116.09 22.71 5,138.80

2,739.83 96.42 (608.23) (841.12) 1,818.16 3,205.06 (7.54) 3,197.52

11,461.36 3,866.03 (1,738.56) 178.42 3,569.59 17,336.84 22.71 17,359.55

8,158.28 2,519.04 (1,483.77) (4,643.34) 7,256.18 11,806.39 32.65 11,839.04

4,32,193.86 3,17,345.68 2,79,056.10 1,89,927.24 32,043.15

496,089.22 2,83,622.61 3,61,271.68 2,55,993.09 35,117.57

3,15,866.55 1,50,097.20 3,23,007.96 75,236.14 50,303.51

496,089.22 2,83,622.61 3,61,271.68 2,55,993.09 35,117.57

3,15,866.55 1,50,097.20 3,23,007.96 75,236.14 50,303.51

12,50,566.03

14,32,094.17

9,14,511.36

14,32,094.17

9,14,511.36

3,54,396.57 8,96,169.46

4,17,111.76 10,14,982.4

2,64,083.73 6,50,427.63

4,17,111.76 10,14,982.4

2,64,083.73 6,50,427.63

3,78,137.13 2,96,362.17 2,72,479.93 1,93,721.78 26,678.53

4,38,634.63 2,61,269.35 3,56,429.02 2,58,063.10 31,549.25

2,85,834.49 1,38,283.41 3,24,320.81 81,635.79 7,844.61

4,38,634.63 2,61,269.35 3,56,429.02 2,58,063.10 31,549.25

2,85,834.49 1,38,283.41 3,24,320.81 81,635.79 7,844.61

11,67,379.54

13,45,945.35

8,37,919.11

13,45,945.35

8,37,919.11

3,54,396.57 8,12,982.97 713.37

4,17,111.76 9,28,833.59 (874.15)

2,64,083.75 5,73,835.36 (1,504.90)

4,17,111.76 9,28,833.59 (874.15)

2,64,083.75 5,73,835.36 (1,504.90)

Particulars

Segment Assets Retail Lending activities Corporate Banking Treasury Retail Liabilities and Branch banking Corporate Centre Total Less: Inter segment assets Total Assets

4

5

Segment Liabilities {see Note 11} Retail Lending activities Corporate Banking Treasury Retail Liabilities and Branch banking Corporate Centre Total Less: Inter segment liabilities Total Liabilities Unallocated Assets/(Liabilities) - (net)

Quarter Ended

Year Ended Mar-06 (Audited)

Mar-05 (Audited)

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

Commission, Fees, Exchange and brokerage Premium on insurance business Profit on sale of investments (other than non recurring) incl. revaluation Others Total – Other income (Other than non recurring) Profit on sale of investments (non recurring) Total – Other income

Nine Months Ended Dec-05 (Unaudited)

Mar-06 (Unaudited)

Mar-05 (Unaudited)

Mar-06 (Unaudited)

54,013.43 25,035.56

32,685.99 36,176.65

15,151.59 31,922.84

86,699.42 61,212.21

39,902.98 46,088.66

5,948.78 5,365.16

6,161.52 1,576.63

2,129.78 368.80

12,110.30 6,941.79

4,962.52 2,584.02

90,362.93

76,600.79

49,573.01

166,963.72

93,538.18

90,362.93

12,659.41 89,260.20

49,573.01

12,659.41 179,623.13

93,538.18

Quarter Ended

Year Ended Mar-05 (Audited)

3. Details of other expenditure forming part of Consolidated unaudited results are as follows: Rs. lakhs

Particulars

Policy holders’ reserves Brokerage Depreciation Rent, taxes and lighting Others Total – Other operating expenses

Nine Months Ended Dec-05 (Unaudited) 21,183.92 8,182.05 4,379.86 4,172.00 28,104.40 66,022.23

Quarter Ended Mar-06 (Unaudited) 33,647.69 4,901.41 1,691.31 1,544.73 15,761.18 57,546.32

Mar-05 (Unaudited) 26,600.47 3,500.61 1,293.58 1,333.32 8,178.52 40,906.50

Year Ended Mar-06 (Unaudited) 54,831.61 13,083.46 6,071.17 5,716.73 43,865.58 123,568.55

Mar-05 (Audited) 36,954.29 9,234.93 4,549.41 4,190.74 25,413.88 80,343.25

4. Consequent to the approval of the shareholders at the Annual General Meeting held on 26th July, 2005, the bonus allotment committee of the Board of Directors at its meeting held on 30th August, 2005, allotted bonus shares in the ratio of three equity shares for every two shares held. In accordance with Accounting Standard 20 (AS 20), Earnings Per Share issued by the Institute of Chartered Accountants of India (ICAI), the earnings per share for all the reporting periods including the previous quarter and year ended 31st March, 2005 have been reworked as if the bonus shares were in existence during the said periods. 5. During the quarter January to March 2006, the Bank allotted 201,875 equity shares to employees consequent to the exercise of employee stock options. As on 31st March, 2006, the employee stock options outstanding are 37,01,250. th

6. The Bank on 27 April, 2006 allotted 1,50,00,000 equity shares, consequent to the issue of Global Depository Shares (GDSs) which are listed on the Luxembourg Stock Exchange (each GDS represents 1 equity share). The price per GDS representing one equity share was USD 6.66, approximately translating to Rs. 300 per share. 7. During the year, share issue expenses amounting to Rs. 87.17 lakhs have been charged off to the Share Premium Account as allowed under Section 78 of the Companies Act, 1956. 8. During the period January to March 2006, the Bank has transferred equity shares held in its subsidiary, Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life) amounting to Rs. 5,625.42 lakhs to its subsidiary, Kotak st Mahindra Prime Limited. The total investment made by the Bank in Kotak Life as on 31 March, 2006 is Rs. 12,473.16 lakhs. 5

9. The Bank's business has been segregated into the following segments whose principal activities are as under: Segment Treasury Corporate Banking Retail liabilities and branch banking Retail Lending Activities Corporate Centre

Principal activity Money market, forex market, derivatives and investments other than those handled by Corporate Centre Wholesale borrowings and lendings and services to corporate sector Retail borrowings covering savings and current accounts; banking branch network and services and distribution of financial products Commercial vehicle finance, personal loans, home loans, agriculture finance and other loans/services Strategic investments and group activities

The above segments have been identified based on the organisation structure, the customer segment, products and services offered and its relation to risk and reward, and the internal reporting process. A transfer pricing mechanism between all the above segments has been established to arrive at interest cost on the borrowings of the segments. 10. As on 31st March, 2006, the Bank has raised Rs. 24,000.00 lakhs of Bonds eligible to be classified as Tier II Capital and the same has been considered for arriving at the capital adequacy as on 31st March, 2006. st

11. Till 31 March, 2005 interest expenses on Tier II Capital and the said borrowing by the Bank was considered as part of Treasury. From 1st April, 2005, based on the transfer pricing arrived at, the Borrowing has been considered as part of Corporate Centre activities. Consequent to this, interest expenses amounting to Rs. 436.34 lakhs for the quarter January to March 2006, and Rs. 1,390.18 lakhs for the year ended 31st March, 2006, have been considered under Corporate Centre. Had the said classification been applied for the reporting periods, Corporate Centre results would have been lower by Rs. 252.15 lakhs for the year April 2004 to March 2005, with the results for the quarter January to March 2005 lower by Rs. 151.63 lakhs. 12. The Bank, together with its 100% subsidiary, Kotak Mahindra Investments Limited (KMIL) held 35% stake in Ford Credit Kotak Mahindra Limited (FCKM). The investments in FCKM were accounted under AS 23 issued by the ICAI in the consolidated accounts of the Bank. In October 2005, the stake held in FCKM by the Bank and KMIL were sold to Ford Credit International. Consequently, FCKM has not been considered as an associate for the period commencing 1st April, 2005. Other income (consolidated results) includes a sum of Rs. 29.11 lakhs being the profit on sale of FCKM (for the nine months ended 31st December, 2005 and for the year ended 31st March, 2006) and Rs. 1256.40 lakhs (standalone results) for the nine months ended 31st December, 2005 and for the year ended 31st March, 2006. 13. Kotak Mahindra Prime Ltd. (KMP) {earlier known as Kotak Mahindra Primus Ltd.} was held 60% by the Bank and the balance 40% stake was held by Ford Credit International Inc. (FCI). On 4th October, 2005, KMP’s 40% stake held by FCI was purchased by Kotak Mahindra Investment Ltd., a 100% subsidiary of the Bank. The Bank now has an effective economic interest of 100% in KMP. 14. Consequent to guidelines on securitisation issued by the RBI, the Bank has changed its policy of recognizing gains on securitization of assets in the profit and loss account in the period of sale to amortising it over the tenure of assets. Accordingly profit before the tax for the quarter January to March 2006 and for the year ended 31st March, 2006 is lower by Rs. 323.06 lakhs. 15. The Bank (standalone) has discontinued its policy of encashment of leave unavailed by the employees. No provision for leave encashment has, therefore, been made for the current period. Further, the balance accumulated provision for leave encashment made as at 31st March, 2005 amounting to Rs. 152.38 lakhs has been written back to the profit st st and loss account during the nine months ended 31 December, 2005 and for the year ended 31 March, 2006. 16. Provision for taxes for the quarter January to March 2006 includes Fringe Benefit Tax provision of Rs. 75.00 lakhs (standalone) and Rs. 191.13 lakhs (consolidated) and for the year ended 31st March, 2006 Rs. 250.00 lakhs (standalone) and Rs. 645.84 lakhs (consolidated). 17. The Bank has declared a dividend of 6.0% for the year ended 31st March, 2006. The Bank has made a provision for dividend in the books of account after taking into consideration the applications for 15,000,000 Global Depository Shares (GDSs) received after the year end which were allotted on 27th April 2006 and ESOPs allotted as on date. The Bank is obliged to pay the dividend to these GDSs/ shareholders whose names are appearing in the register of 6

members as on the book closure date. The dividend will be paid after the approval of shareholders at the Annual General Meeting. 18. During the quarter ended 31st March, 2006, subsidiaries and an associate of the Bank have sold their effective economic interest in Hutchison Essar Limited (HEL). Other income (non-recurring) represents profit on such sale made by the Bank’s subsidiaries. Share in profits of associate (non- recurring) represents profit on such sale by an associate. The earnings per share basic (other than non- recurring) and diluted (other than non-recurring) is before the profits attributable to the group on the aforesaid sale. 19. Other income in the consolidated results for the reporting periods is net off sub-brokerage paid in the brokerage subsidiary amounting to Rs. 4,879.42 lakhs for the year ended 31st March, 2006 (Previous year Rs. 4,397.28 lakhs), for the nine months ended 31st December, 2005 Rs. 3,289.42 lakhs and for the quarter ended 31st March, 2006 Rs. 1,590.00 lakhs (Previous quarter Rs. 1,059.73 lakhs). 20. Status of shareholder complaints received during the quarter January to March 2006: Total complaints pending as at 31st December, 2005 Total complaints received during the quarter January to March 2006 Total complaints resolved during the quarter January to March 2006 st Total complaints pending as at 31 March, 2006

Nil 38 38 Nil

21. Figures for the previous period/ year have been regrouped wherever necessary to conform to current year's presentation. 22. The above results were taken on record at the Audit Committee meeting and at the meeting of the Board of Directors held on 15th May, 2006. By order of the Board of Directors For Kotak Mahindra Bank Limited

Mumbai, 15th May 2006

Dipak Gupta Executive Director

7