Cash Flow Statement

A
PROJECT REPORT
ON
CASH FLOW STATEMENT
AT
KOTAK MAHINDRA LIMITED
PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
SUBMITED BY
SUNAINA SHARMA
H.T. NO: 142017672047
UNDER THE GUIDANCE OF

Mrs. SHAILA DHAIPULE
(ASSOCIATE PROFESSOR)
VIVEK VARDHINI SCHOOL OF BUSINESS MANAGEMENT

(Affiliated to Osmania University)
1
Vivek Vardhini Education Society’s
VIVEK VARDHINI
SCHOOL OF BUSINESS MANAGEMENT

(Approved by AICTE/Affiliated to Osmania University)
Jambagh, Hyderabad – 500 095.
Ph : 040-24601844/040-24617666
CERTIFICATION
This is to certify that the Project Report titled CASH

FLOW STATEMENT at KOTAK MAHINDRA LIMITED submitted
in partial fulfillment for the award of M.B.A. Programme of
Department of Business Management, O.U., Hyderabad, was
carried out by SUNAINA SHARMA Roll No. 142017672047
under my guidance.
This has not been submitted to any other University

or Institution for the award of any Degree/Diploma/Certificate.
SIGNATURE OF GUIDE Principal
2
Vivek Vardhini Education Society’s
VIVEK VARDHINI
SCHOOL OF BUSINESS MANAGEMENT

(Approved by AICTE/Affiliated to Osmania University)
Jambagh, Hyderabad – 500 095.
Ph : 040-24601844/040-24617666
DECLARATION
I, hereby declare that, this project report entitled “CASH
FLOW STATEMENT” at KOTAK MAHINDRA LIMITED has been
prepared by me during the year 2017-19, under the Guidance of
SHAILA DHAIPULE.
I also declare that this project is the result of my own
efforts and it has not been submitted to another University for
the award of any Degree or Diploma.
Date : SUNAINA SHARMA

Place : Hyderabad. Roll No.142017672047
3
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ACKNOWLEDGEMENT
I owe my sincere thanks to MUTHUSWAMY S of KOTAK
MAHINDRA LIMITED Hyderabad, who are helped me to bringing
this report.
This report has been prepared with the able guidance and
kind co-operation of the faculty of Principle Prof. P.N. Reddy
Sir “Vivek Vardhini School of Business Management”
I express my deep sense of gratitude and thank to SHAILA

DHAIPULE (Assistant Professor) of Business Management, for
her/his co-operation and valuable guidance.
I have to express my special thanks to all Lecturers who

has given valuable suggestions in completing this Project Report.
SUNAINA SHARMA
Roll No. 142017672047
5
ABSTRACT
Motivation is one of the most vital factors of human resource development. In

this present context corporate companies show predominant concern for the
motivation of their employees, but the public sector lacks behind.
The study aims at to focus on motivation of employees in private sector, so as

to understand the motivational strategies, draw facts and suggestions for the better
motivation and to align the motivation with the organizational objectives.
Salary, benefits, working conditions, supervision, policy, safety, security, affiliation
and relationships are all externally motivated needs. These are the first three levels of
“Hewlett Hierarchy” when these needs are achieved; the person moves up to level
four and five. However, if levels one through three are not met, the person becomes
dissatisfy with their job. When satisfaction is not found, the person becomes less
productive and eventually quits or is fired. Achievements, advancement, recognition,
growth, responsibility, and job nature or internal motivators. These are the last two
levels of “Hewlett Hierarchy”.
They occur when the person motives themselves(after external motivation

needs are met) an employer or leader that needs the needs on the “Hewlett Hierarchy”
will see motivated employees and see productivity increases. Understanding the
definition of motivation and then applying it, is one of the most prevalent challenges
facing employers and supervisors. Companies often spend thousands of dollars each
year hiring outside firms just to give motivation seminars.
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CONTENT
Chapter No. Name of the concept Page No.

Introduction
Objectives of the study
Need and scope of the Study

I 1-7
Methodology of the study
Limitations of the study
II Review of Literature 8-18
III Industry & Company profile 19-42
IV Data analysis and interpretation 43-66
V Findings, Suggestion & Conclusions 67-70
Bibliography 71
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CHAPTER-I
INTRODUCTION
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INTRODUCTION
CASH FLOW STATEMENT IN KOTAK MAHINDRA
In financial accounting, a cash flow statement, also known as statement of cash flows
or funds flow statement, is a financial statement that shows how changes in balance
sheet accounts and income affect cash and cash equivalents, and breaks the analysis
down to operating, investing, and financing activities. Essentially, the cash flow
statement is concerned with the flow of cash in and cash out of the business. The
statement captures both the current operating results and the accompanying changes
in the balance sheet As an analytical tool, the statement of cash flows is useful in
determining the short-term viability of a company, particularly its ability to pay bills.
International Accounting Standard 7 (IAS 7) is the International Accounting Standard
that deals with cash flow statements.
People and groups interested in cash flow statements include:
 Accounting personnel, who need to know whether the organization will be

able to cover payroll and other immediate expenses
 Potential lenders or creditors, who want a clear picture of a company's ability
to repay
 Potential investors, who need to judge whether the company is financially
sound
 Potential employees or contractors, who need to know whether the company
will be able to afford compensation
 Shareholders of the business.
Purpose
The cash flow statement was previously known as the flow of funds statement. The
cash flow statement reflects a firm's liquidity.
The balance sheet is a snapshot of a firm's financial resources and obligations at a

single point in time, and the income statement summarizes a firm's financial
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transactions over an interval of time. These two financial statements reflect the
accrual basis accounting used by firms to match revenues with the expenses
associated with generating those revenues. The cash flow statement includes only
inflows and outflows of cash and cash equivalents; it excludes transactions that do not
directly affect cash receipts and payments. These noncash transactions include
depreciation or write-offs on bad debts or credit losses to name a few. The cash flow
statement is a cash basis report on three types of financial activities: operating
activities, investing activities, and financing activities. Noncash activities are usually
reported in footnotes.
The cash flow statement is intended to provide information on a firm's liquidity and
solvency and its ability to change cash flows in future circumstances
1. provide additional information for evaluating changes in assets, liabilities and

equity
2. improve the comparability of different firms' operating performance by
eliminating the effects of different accounting methods
3. indicate the amount, timing and probability of future cash flows
The cash flow statement has been adopted as a standard financial statement because it
eliminates allocations, which might be derived from different accounting methods,
such as various timeframes for depreciating fixed assets.
RESEARCH METHODOLOGY
The following are the main sources of date used for this study which are
Collected and compiled from published and unpublished sources of the Company
data. The published sources are as follows.
1) Management information system published by Kotak Mahindra Group.
(Formerly Kotak Mahindra bank Ltd.).
2) Status Report on Kotak Mahindra Group. (Formerly Kotak Mahindra bank

Ltd.). .
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4) Journals, books and other published reports.
The present study is mainly based on primary and secondary sources of Data
collection. The primary data was directly collected by observations, Interviews
questionnaire etc.
The secondary data was collected from the literate available in libraries and
research studies and annual reports are related to the present study. It includes
published and unpublished literature like books, reports and generally Articles
of the Kotak Mahindra Group. (Formerly Kotak Mahindra bank Ltd.). .
NEED AND IMPORTENCE OF STUDY
Many business owners disregard the importance of cash flow statements because they
unwittingly believe that their current financial standing can be construed from other
financial reports and projections. Unfortunately, however, a cash flow statement is
necessary to adequately assess the incoming and outgoing flow of cash and other
resources in a business.
Not only will a business owner with a cash flow system be more aware of his or her
financial standing, but it will also help investors to make educated decisions on future
investments. A business with regular and reliable cash flow statements shows more
economic solvency, and is more attractive to investors.
A cash flow statement documents the incoming and outgoing cash in plain terms.
Future sales and sales made for credit (unless they have been paid off) are not
included in the cash flow statement, and most of the data will come from core
operations. Payables and receivables should be expressly defined, as should
depreciation of product value and inventory that has not yet been moved.
This will allow a business owner to compare past periods with the current financial
standing and determine whether your receivables have increased or decreased.
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This can also help to track your investments next to your receivables and payables.
Are your investments increasing or decreasing in value? And has your inventory
moved at a steady pace? New or expanding businesses can expect to see a decrease in
cash flow, but this doesn’t mean that the business is going under. More stables
businesses should see a steadily increase in cash flow over a period of several months
or years.
There are typically five different sections in a cash flow statement, though large
businesses might have more complex cash flow systems as required.
SCOPE OF THE STUDY:
Since it will not be possible to conduct a micro level study of all Cement
industries in Andhra Pradesh, the study is restricted to Kotak Mahindra Group.
(Formerly Kotak Mahindra bank Ltd.) only.
A study that involves an examination of long term as well as short term sources that a
company taps in order to meet its requirements of finance. The scope of the study is
confined to the sources that Kotak Mahindra Group tapped over the years under
study i.e. 2013-17.
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OBJECTIVES OF THE STUDY
 To know the flow of cash in the organization Kotak Mahindra

Group. (Formerly Kotak Mahindra bank Ltd.).
 To access the efficiency with sources and uses of cash were made by
the co ordinance the present year 2013-2014 to 2017-2018.
 To identify the changes in the elements of focus and uses of working
capital in between above mentioned years.
 To improve the financial performance of the company
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LIMITATIONS OF THE STUDY:
The limitations of present study are as follows:
1. The study cover a period of FIVE years from 2014-2018.

2. The study does not flow the fund.
3. The study is based mainly on secondary information.
4. The study does not touch all the units of Kotak Mahindra Group. (Formerly
Kotak Mahindra bank Ltd.). .
5. The present study cannot be used for inter firm comparison.
6. Limited span of time is a major limitation for this project.
7. The act and figures of the study is limited to the period of FIVE years i.e.
2014-2018.
8. The data used in reports are taken from the annual reports, published at the
end of the years.
9. The result does not reflect the day-to-day transactions.
10. It is also impossible to the study of day-to-day transactions in cash
management.
11. The analysis of the working capital is taken FIVE years.
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CHAPTER-II
LITERATURE REVIEW
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Cash flow is calculated by making certain adjustments to net income by adding or
subtracting differences in revenue, expenses and credit transactions (appearing on the
balance sheet and income statement) resulting from transactions that occur from one
period to the next. These adjustments are made because non-cash items are calculated
into net income (income statement) and total assets and liabilities (balance sheet). So,
because not all transactions involve actual cash items, many items have to be re-
evaluated when calculating cash flow from operations.
For example, depreciation is not really a cash expense; it is an amount that is deducted
from the total value of an asset that has previously been accounted for. That is why it
is added back into net sales for calculating cash flow. The only time income from an
asset is accounted for in CFS calculations is when the asset is sold.
Changes in accounts receivable on the balance sheet from one accounting period to
the next must also be reflected in cash flow. If accounts receivable decreases, this
implies that more cash has entered the company from customers paying off their
credit accounts - the amount by which AR has decreased is then added to net sales. If
accounts receivable increase from one accounting period to the next, the amount of
the increase must be deducted from net sales because, although the amounts
represented in AR are revenue, they are not cash.
An increase in inventory, on the other hand, signals that a company has spent more
money to purchase more raw materials. If the inventory was paid with cash, the
increase in the value of inventory is deducted from net sales. A decrease in inventory
would be added to net sales. If inventory was purchased on credit, an increase in
accounts payable would occur on the balance sheet, and the amount of the increase
from one year to the other would be added to net sales.
The same logic holds true for taxes payable, salaries payable and prepaid insurance. If
something has been paid off, then the difference in the value owed from one year to
the next has to be subtracted from net income. If there is an amount that is still owed,
then any differences will have to be added to net earnings. (For mroe insight, see
Operating Cash Flow: Better Than Net Income?)
16
Investing
Changes in equipment, assets or investments relate to cash from investing. Usually
cash changes from investing are a "cash out" item, because cash is used to buy new
equipment, buildings or short-term assets such as marketable securities. However,
when a company divests of an asset, the transaction is considered "cash in" for
calculating cash from investing.
Financing
Changes in debt, loans or dividends are accounted for in cash from financing.
Changes in cash from financing are "cash in" when capital is raised, and they're "cash
out" when dividends are paid. Thus, if a company issues a bond to the public, the
company receives cash financing; however, when interest is paid to bondholders, the
company is reducing its cash.
Difference between Cash Flow Statement and
Income Statement
Cash Flow Statement Income Statement
1. The Statements narrates the item of

1. It is disclosing the reasons for change
cost and revenue to arrive at the figures
in working capital i.e., where from the
of profit and loss earned / incurred during
working capital cash has been applied.
a particular period of time.
2. Income Statement helps the

preparation of Cash Flow Statement in as
2. Cash Flow Statement doesn’t help
much as one source of cash i.e., cash
preparation of income statement
from operation is found out from the
income statement
3. Cash raised are matched with cash

3. Expenses are matched with income in
used. No distinction is made between
order to find out the result of operation.
capital and revenue items
Only revenue items are considered
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Difference between Cash Flow Statement and
Position Statement
Cash Flow Statement Position Statement

1. It is a Statement changes in financial 1. It is statement of financial position
position.
2. It shows the amount of changes during the 2. It present the amount of assets and
particular period of time. liabilities at a particular point of time
3. It doesn’t analyze the change in current 3. It shows all the accounting liabilities
asset and current liability. whether current or non-current
4. It is a analytical statement analyzing form 4. It is not a analytical statement hence not

where they have been used, hence more that much useful for decision making as the
useful. cash flow statement
Importance of cash flow statement:
The information which is provided by cash flow statement is neither available in the
balance sheet nor in the income statement and hence its important. The changes
which have taken place in between two accounting dates are highlighted by cash flow
statement. A lay man cannot grasp the underlying significance of achievements and
progress of the company simply by a personal of the balance sheet and income
statement of different years. The comparative and analytical study presented by the
statement giving the details of sources and uses of cash during a given period of
immense help to the users of information. It is very useful tool in analytical kit of the
management also, besides the outsiders, in order to have ‘at a glance’ appraisal of the
financial and operating performance of a company. Since the statement shows the
extent to which the working capital has been effectively put to use, the
management’s task of taking policy decision regarding investment, dividends etc, is
great facilitated.
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The projected cash flow statement can also be prepared and then budgetary
control and capital expenditure control can be exercised to the benefit of the entire
organization.
Uses of cash flow statement:
Cash flow statement of a company is of great value to management share

holders, creditors, bankers, money lending institutions etc.,
 Informative value:- The financial consequence of business operation are

clearly explained in details by a cash flow statement some of the problems
which crop up in the minds of investors are well solved by a simple perusal of
this statement for e.g.,
1. Where have the profit gone.

2. Why does an imbalance exist between liquidity position and profitability
position of enterprise?
 Forecasting value:- A projected cash flow statement can be prepared and

resources can be properly allocated after an analysis of the present state of
affairs. The optimal utilization of available cash in necessary for the overall
growth of the enterprise. The cash flow statement prepared in advance given a
clear direction to the management in this raged.
 Testing value:- Whether the working capital has been effectively is used or
not by the management can well be tested by cash flow statement. Whether
working capital has been maintained at proper level, and whether it is
adequate or inadequate can be known by a study of the statement. The
management is warned against the injudicious uses of cash.
Decision-making value:- Since over all credit worthiness of the enterprise is known,
creditors and money lenders can decide as to whether they have to provide loans to
company or not. The sources of raising cash and their application help the shareholders
to decide whether the management of the business is an enlightened or not regarding
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managing cash. Mismanagement of cash may be prevented. The management can be
decide about the future financing policies and capital expenditure programmers.
STATEMENT OF CHANGES IN WORKING CAPITAL
PARTICULARS Previous Current

Year Year CHANGES IN WORKING
CAPITAL
INCREASE
DECREASE
Current assets:
Inventories:
*********** *********
Raw material
Consumable stores *********** *********
Finished goods *********** *********
Sundry debtors *********** *********
Cash in hand *********** *********
Balance with bank *********** *********
Other current assets:
Deposits *********** *********
Income tax (advance tax) *********** *********
Sales tax *********** *********
Total current assets *********** *********
Current liabilities
Trade creditors ** *********
Dealers deposits ** *********
Expenses payable *** *********
Totalurrent liabilities *********** *********
Working capital (current ***********

Assets-current liabilities)
Net Increase/decrease
working capital **
***********
*********** ********* ***********
***********
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The balance sheet, income statement, and cash flow statement are the three generally
accepted financial statements used by most businesses for financial reporting. All
three statements are prepared from the same accounting data, but each statement
serves its own purpose. The purpose of the cash flow statement is to report the
sources and uses of cash during the reporting period.
Structure of the Cash Flow Statement
The most commonly used format for the cash flow statement is broken down into
three sections: cash flows from operating activities, cash flows from investing
activities, and cash flows from financing activities.
Cash flows from operating activities are related to your principal line of business and
include the following:
 Cash receipts from sales or for the performance of services

 Payroll and other payments to employees
 Payments to suppliers and contractors
 Rent payments
 Payments for utilities
 Tax payments
Investing activities include capital expenditures – disbursements that are not charged
to expense but rather are capitalized as assets on the balance sheet. Investing
activities also include investments (other than cash equivalents as indicated below)
that are not part of your normal line of business. These cash flows could include:
 Purchases of property, plant and equipment

 Proceeds from the sale of property, plant and equipment
 Purchases of stock or other securities (other than cash equivalents)
 Proceeds from the sale or redemption of investments
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Financing activities include cash flows relating to the business’s debt or equity
financing:
 Proceeds from loans, notes, and other debt instruments

 Installment payments on loans or other repayment of debts
 Cash received from the issuance of stock or equity in the business
 Dividend payments, purchases of treasury stock, or returns of capital
Cash for purposes of the cash flow statement normally includes cash and cash
equivalents. Cash equivalents are short-term, temporary investments that can be
readily converted into cash, such as marketable securities, short-term certificates of
deposit, treasury bills, and commercial paper. The cash flow statement shows the
opening balance in cash and cash equivalents for the reporting period, the net cash
provided by or used in each one of the categories (operating, investing, and financing
activities), the net increase or decrease in cash and cash equivalents for the period,
and the ending balance.
There are two methods for preparing the cash flow statement – the direct method and
the indirect method. Both methods yield the same result, but different procedures are
used to arrive at the cash flows.
Direct Method
Under the direct method, you are basically analyzing your cash and bank accounts to
identify cash flows during the period. You could use a detailed general ledger report
showing all the entries to the cash and bank accounts, or you could use the cash
receipts and disbursements journals. You would then determine the offsetting entry
for each cash entry in order to determine where each cash movement should be
reported on the cash flow statement.
Another way to determine cash flows under the direct method is to prepare a
worksheet for each major line item, and eliminate the effects of accrual basis
accounting in order to arrive at the net cash effect for that particular line item for the
period. Some examples for the operating activities section include:
Cash receipts from customers:
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 Net sales per the income statement
 Plus beginning balance in accounts receivable
 Minus ending balance in accounts receivable
 Equals cash receipts from customers
Cash payments for inventory:
 Ending inventory
 Minus beginning inventory
 Plus beginning balance in accounts payable to vendors
 Minus ending balance in accounts payable to vendors
 Equals cash payments for inventory
Cash paid to employees:
 Salaries and wages per the income statement

 Plus beginning balance in salaries and wages payable
 Minus ending balance in salaries and wages payable
 Equals cash paid to employees
Cash paid for operating expenses:
 Operating expenses per the income statement

 Minus depreciation expenses
 Plus increase or minus decrease in prepaid expenses
 Plus decrease or minus increase in accrued expenses
 Equals cash paid for operating expenses
Taxes paid:
 Tax expense per the income statement

 Plus beginning balance in taxes payable
 Minus ending balance in taxes payable
 Equals taxes paid
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Interest paid:
 Interest expense per the income statement

 Plus beginning balance in interest payable
 Minus ending balance in interest payable
 Equals interest paid
Under the direct method, for this example, you would then report the following in the
cash flows from operating activities section of the cash flow statement:
 Cash receipts from customers

 Cash payments for inventory
 Cash paid to employees
 Cash paid for operating expenses
 Taxes paid
 Interest paid
 Equals net cash provided by (used in) operating activities
Similar types of calculations can be made of the balance sheet accounts to eliminate
the effects of accrual accounting and determine the cash flows to be reported in the
investing activities and financing activities sections of the cash flow statement.
Indirect Method
In preparing the cash flows from operating activities section under the indirect
method, you start with net income per the income statement, reverse out entries to
income and expense accounts that do not involve a cash movement, and show the
change in net working capital. Entries that affect net income but do not represent cash
flows could include income you have earned but not yet received, amortization of
prepaid expenses, accrued expenses, and depreciation or amortization. Under this
method you are basically analyzing your income and expense accounts, and working
capital. The following is an example of how the indirect method would be presented
on the cash flow statement:
 Net income per the income statement

 Minus entries to income accounts that do not represent cash flows
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 Plus entries to expense accounts that do not represent cash flows
 Equals cash flows before movements in working capital
 Plus or minus the change in working capital, as follows:
o An increase in current assets (excluding cash and cash equivalents)
would be shown as a negative figure because cash was spent or
converted into other current assets, thereby reducing the cash balance.
o A decrease in current assets would be shown as a positive figure,
because other current assets were converted into cash.
o An increase in current liabilities (excluding short-term debt which
would be reported in the financing activities section) would be shown
as a positive figure since more liabilities mean that less cash was spent.
o A decrease in current liabilities would be shown as a negative figure,
because cash was spent in order to reduce liabilities.
The net effect of the above would then be reported as cash provided by (used in)
operating activities.
The cash flows from investing activities and financing activities would be presented
the same way as under the direct method.
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CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE
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A bank is a financial institution that accepts deposits and channels those deposits into
lending activities. Banks primarily provide financial services to customers while
enriching investors. Government restrictions on financial activities by banks vary over
time and location. Banks are important players in financial markets and offer services
such as investment funds and loans. In some countries such as Germany, banks have
historically owned major stakes in industrial corporations while in other countries
such as the United States banks are prohibited from owning non-financial companies.
In Japan, banks are usually the nexus of a cross-share holding entity known as the
keiretsu. In France, bancassurance is prevalent, as most banks offer insurance services
(and now real estate services) to their clients.
Introduction
India’s banking sector is constantly growing. Since the turn of the century, there has
been a noticeable upsurge in transactions through ATMs, and also internet and mobile
banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian
Parliament in 2016, the landscape of the banking industry began to change. The bill
allows the Reserve Bank of India (RBI) to make final guidelines on issuing new
licenses, which could lead to a bigger number of banks in the country. Some banks
have already received licences from the government, and the RBI's new norms will
provide incentives to banks to spot bad loans and take requisite action to keep rogue
borrowers in check.
Over the next decade, the banking sector is projected to create up to two million new
jobs, driven by the efforts of the RBI and the Government of India to integrate
financial services into rural areas. Also, the traditional way of operations will slowly
give way to modern technology.
Market size
Total banking assets in India touched US$ 1.8 trillion in FY17 and are anticipated to
cross US$ 28.5 trillion in FY25.
Bank deposits have grown at a compound annual growth rate (CAGR) of 21.2 per
cent over FY06–17. Total deposits in FY17 were US$ 1,274.3 billion.
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Total banking sector credit is anticipated to grow at a CAGR of 18.1 per cent (in
terms of INR) to reach US$ 2.4 trillion by 2017.
In FY18, private sector lenders witnessed discernable growth in credit cards and
personal loan businesses. ICICI Bank witnessed 181.6 per cent growth in personal
loan disbursement in FY18, as per a report by Emkay Global Financial Services. Axis
Bank's personal loan business also rose 49.8 per cent and its credit card business
expanded by 31.1 per cent.
Investments
Bengaluru-based software services exporter Mphasis Ltd has bagged a five-year

contract from Punjab National Bank (PNB) to set up the bank’s contact centres in
Mangalore and Noida (UP). Mphasis will provide support for all banking products
and services, including deposits operations, lending services, banking processes,
internet banking, and account and card-related services. The company will also offer
services in multiple languages.
Microfinance companies have committed to setting up at least 30 million bank
accounts within a year through tie-ups with banks, as part of the Indian government’s
financial inclusion plan. The commitment was made at a meeting of representatives of
25 large microfinance companies and banks and government representatives, which
included financial services secretary Mr GS Sandhu.
Export-Import Bank of India (Exim Bank) will increase its focus on supporting
project exports from India to South Asia, Africa and Latin America, as per Mr
Yaduvendra Mathur, Chairman and MD, Exim Bank. The bank has moved up the
value chain by supporting project exports so that India earns foreign exchange. In
2016–17, Exim Bank lent support to 85 project export contracts worth Rs 24,255
crore (US$ 3.96 billion) secured by 47 companies in 23 countries.
Government Initiatives
The RBI has given banks greater flexibility to refinance current long-gestation project
loans worth Rs 1,000 crore (US$ 163.42 million) and more, and has allowed partial
buyout of such loans by other financial institutions as standard practice. The earlier
stipulation was that buyers should purchase at least 50 per cent of the loan from the
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existing banks. Now, they get as low as 25 per cent of the loan value and the loan will
still be treated as ‘standard’.
The RBI has also relaxed norms for mortgage guarantee companies (MGC) enabling
these firms to use contingency reserves to cover for the losses suffered by the
mortgage guarantee holders, without the approval of the apex bank. However, such a
measure can only be initiated if there is no single option left to recoup the losses.
SBI is planning to launch a contact-less or tap-and-go card facility to make payments
in India. Contact-less payment is a technology that has been adopted in several
countries, including Australia, Canada and the UK, where customers can simply tap
or wave their card over a reader at a point-of-sale terminal, which reads the card and
allows transactions.
SBI and its five associate banks also plan to empower account holders at the bottom
of the social pyramid with a customer call facility. The proposed facility will help
customers get an update on available balance, last five transactions and cheque book
request on their mobile phones.
Road Ahead
India is yet to tap into the potential of mobile banking and digital financial services.
Forty-seven per cent of the populace have bank accounts, of which half lie dormant
due to reliance on cash transactions, as per a report. Still, the industry holds a lot of
promise.
India's banking sector could become the fifth largest banking sector in the world by
2020 and the third largest by 2025. These days, Indian banks are turning their focus to
servicing clients and enhancing their technology infrastructure, which can help
improve customer experience as well as give banks a competitive edge.
Exchange Rate Used: INR 1 = US$ 0.0163 as on October 28, 2018
The level of government regulation of the banking industry varies widely, with
countries such as Iceland, having relatively light regulation of the banking sector, and
countries such as China having a wide variety of regulations but no systematic
process that can be followed typical of a communist system.
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in
Siena, Italy, which has been operating continuously since 1872.
29
History
Origin of the word
The name bank derives from the Italian word banco "desk/bench", used during the
Renaissance by Jewish Florentine bankers, who used to make their transactions above
a desk covered by a green tablecloth. However, there are traces of banking activity
even in ancient times, which indicates that the word 'bank' might not necessarily come
from the word 'banco'.
In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancu did not so much invest money
as merely convert the foreign currency into the only legal tender in Rome—that of the
Imperial Mint.
The earliest evidence of money-changing activity is depicted on a silver drachm coin

from ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, c. 350–
325 BC, presented in the British Museum in London. The coin shows a banker's table
(trapeza) laden with coins, a pun on the name of the city.
In fact, even today in Modern Greek the word Trapeza (Τράπεζα) means both a table
and a bank.
Traditional banking activities
Banks act as payment agents by conducting checking or current accounts for

customers, paying cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable customer payments via
other payment methods such as telegraphic transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current accounts, by accepting

term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by making installment
30
loans, and by investing in marketable debt securities and other forms of money
lending.
Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that
provide payment services such as remittance companies are not normally considered
an adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend
most funds to households and non-financial businesses, but non-bank lenders provide
a significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings to.
Entry regulation
Currently in most jurisdictions commercial banks are regulated by government

entities and require a special bank licence to operate.
Usually the definition of the business of banking for the purposes of regulation is
extended to include acceptance of deposits, even if they are not repayable to the
customer's order—although money lending, by itself, is generally not included in the
definition.
Unlike most other regulated industries, the regulator is typically also a participant in
the market, i.e. a government-owned (central) bank. Central banks also typically have
a monopoly on the business of issuing banknotes. However, in some countries this is
not the case. In the UK, for example, the Financial Services Authority licences banks,
and some commercial banks (such as the Bank of Scotland) issue their own banknotes
in addition to those issued by the Bank of England, the UK government's central
bank.
31
Accounting for bank accounts
Bank statements are accounting records produced by banks under the various
accounting standards of the world. Under GAAP and IFRS there are two kinds of
accounts: debit and credit. Credit accounts are Revenue, Equity and Liabilities. Debit
Accounts are Assets and Expenses. This means you credit a credit account to increase
its balance, and you debit a debit account to decrease its balance.
This also means you debit your savings account every time you deposit money into it
(and the account is normally in deficit), while you credit your credit card account
every time you spend money from it (and the account is normally in credit).
However, if you read your bank statement, it will say the opposite—that you credit
your account when you deposit money, and you debit it when you withdraw funds. If
you have cash in your account, you have a positive (or credit) balance; if you are
overdrawn, you have a negative (or deficit) balance.
The reason for this is that the bank, and not you, has produced the bank statement.
Your savings might be your assets, but the bank's liability, so they are credit accounts
(which should have a positive balance). Conversely, your loans are your liabilities but
the bank's assets, so they are debit accounts (which should also have a positive
balance).
Where bank transactions, balances, credits and debits are discussed below, they are
done so from the viewpoint of the account holder—which is traditionally what most
people are used to seeing.
Economic functions
1. issue of money, in the form of banknotes and current accounts subject to

cheque or payment at the customer's order. These claims on banks can act as
money because they are negotiable and/or repayable on demand, and hence
valued at par. They are effectively transferable by mere delivery, in the case of
banknotes, or by drawing a cheque that the payee may bank or cash.
2. netting and settlement of payments – banks act as both collection and paying
agents for customers, participating in interbank clearing and settlement
32
systems to collect, present, be presented with, and pay payment instruments.
This enables banks to economise on reserves held for settlement of payments,
since inward and outward payments offset each other. It also enables the
offsetting of payment flows between geographical areas, reducing the cost of
settlement between them.
3. credit intermediation – banks borrow and lend back-to-back on their own
account as middle men.
4. credit quality improvement – banks lend money to ordinary commercial and
personal borrowers (ordinary credit quality), but are high quality borrowers.
The improvement comes from diversification of the bank's assets and capital
which provides a buffer to absorb losses without defaulting on its obligations.
However, banknotes and deposits are generally unsecured; if the bank gets
into difficulty and pledges assets as security, to raise the funding it needs to
continue to operate, this puts the note holders and depositors in an
economically subordinated position.
5. maturity transformation – banks borrow more on demand debt and short term
debt, but provide more long term loans. In other words, they borrow short and
lend long. With a stronger credit quality than most other borrowers, banks can
do this by aggregating issues (e.g. accepting deposits and issuing banknotes)
and redemptions (e.g. withdrawals and redemptions of banknotes),
maintaining reserves of cash, investing in marketable securities that can be
readily converted to cash if needed, and raising replacement funding as needed
from various sources (e.g. wholesale cash markets and securities markets).
Law of banking
Banking law is based on a contractual analysis of the relationship between the bank
(defined above) and the customer—defined as any entity for which the bank agrees to
conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the bank and the
customer: when the account is in credit, the bank owes the balance to the
33
customer; when the account is overdrawn, the customer owes the balance to
the bank.
2. The bank agrees to pay the customer's cheques up to the amount standing to
the credit of the customer's account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from
the customer, e.g. a cheque drawn by the customer.
4. The bank agrees to promptly collect the cheques deposited to the customer's
account as the customer's agent, and to credit the proceeds to the customer's
account.
5. The bank has a right to combine the customer's accounts, since each account is
just an aspect of the same credit relationship.
6. The bank has a lien on cheques deposited to the customer's account, to the
extent that the customer is indebted to the bank.
7. The bank must not disclose details of transactions through the customer's
account—unless the customer consents, there is a public duty to disclose, the
bank's interests require it, or the law demands it.
8. The bank must not close a customer's account without reasonable notice, since
cheques are outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the
customer and the bank. The statutes and regulations in force within a particular
jurisdiction may also modify the above terms and/or create new rights, obligations or
limitations relevant to the bank-customer relationship.
Some types of financial institution, such as building societies and credit unions, may
be partly or wholly exempt from bank licence requirements, and therefore regulated
under separate rules.
The requirements for the issue of a bank licence vary between jurisdictions but
typically include:
1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors,
and/or senior officers
34
4. Approval of the bank's business plan as being sufficiently prudent and
plausible.
Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals
and small businesses; business banking, providing services to mid-market business;
corporate banking, directed at large business entities; private banking, providing
wealth management services to high net worth individuals and families; and
investment banking, relating to activities on the financial markets. Most banks are
profit-making, private enterprises. However, some are owned by government, or are
non-profit organizations.
Central banks are normally government-owned and charged with quasi-regulatory

responsibilities, such as supervising commercial banks, or controlling the cash interest
rate. They generally provide liquidity to the banking system and act as the lender of
last resort in event of a crisis.
Types of retail banks
 Commercial bank: the term used for a normal bank to distinguish it from an
investment bank. After the Great Depression, the U.S. Congress required that
banks only engage in banking activities, whereas investment banks were
limited to capital market activities. Since the two no longer have to be under
separate ownership, some use the term "commercial bank" to refer to a bank or
a division of a bank that mostly deals with deposits and loans from
corporations or large businesses.
 Community Banks: locally operated financial institutions that empower
employees to make local decisions to serve their customers and the partners.
 Community development banks: regulated banks that provide financial
services and credit to under-served markets or populations.
 Postal savings banks: savings banks associated with national postal systems.
 Private banks: banks that manage the assets of high net worth individuals.
 Offshore banks: banks located in jurisdictions with low taxation and
regulation. Many offshore banks are essentially private banks.
35
 Savings bank: in Europe, savings banks take their roots in the 19th or
sometimes even 18th century. Their original objective was to provide easily
accessible savings products to all strata of the population. In some countries,
savings banks were created on public initiative; in others, socially committed
individuals created foundations to put in place the necessary infrastructure.
Nowadays, European savings banks have kept their focus on retail banking:
payments, savings products, credits and insurances for individuals or small
and medium-sized enterprises. Apart from this retail focus, they also differ
from commercial banks by their broadly decentralised distribution network,
providing local and regional outreach—and by their socially responsible
approach to business and society.
 Building societies and Landesbanks: institutions that conduct retail banking.
 Ethical banks: banks that prioritize the transparency of all operations and
make only what they consider to be socially-responsible investments.
 Islamic banks: Banks that transact according to Islamic principles.
Types of investment banks
 Investment banks "underwrite" (guarantee the sale of) stock and bond issues,
trade for their own accounts, make markets, and advise corporations on capital
market activities such as mergers and acquisitions.
 Merchant banks were traditionally banks which engaged in trade finance. The
modern definition, however, refers to banks which provide capital to firms in
the form of shares rather than loans. Unlike venture capital firms, they tend
not to invest in new companies.
Both combined
 Universal banks, more commonly known as financial services companies,

engage in several of these activities. These big banks are very diversified
groups that, among other services, also distribute insurance— hence the term
bancassurance, a portmanteau word combining "banque or bank" and
"assurance", signifying that both banking and insurance are provided by the
same corporate entity.
36
Other types of banks
 Islamic banks adhere to the concepts of Islamic law. This form of banking
revolves around several well-established principles based on Islamic canons.
All banking activities must avoid interest, a concept that is forbidden in Islam.
Instead, the bank earns profit (markup) and fees on the financing facilities that
it extends to customers.
37
COMPANY PROFILE
Kotak Mahindra Bank is the fourth largest Indian private sector bank by market
capitalization, headquartered in Mumbai, Maharashtra.
Since the inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has
been a steady and confident journey leading to growth and success. The milestones of
the group growth story are listed below year wise.
2014-  Ahmedabad Derivatives and Commodities Exchange, a Kotak
2018 anchored enterprise, became operational as a national

commodity exchange.
 Kotak Mahindra Bank Ltd. opened a representative office in Dubai

2013
 Entered Ahmedabad Commodity Exchange as anchor investor.
 Launched a Pension Fund under the New Pension System.

2008
 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra

2006
Capital Company and Kotak Securities.
 Kotak Group realigned joint venture in Ford Credit; their stake in

2005
Kotak Mahindra Prime was bought out (formerly known as Kotak
Mahindra Primus Ltd) and Kotak group’s stake in Ford credit Kotak
Mahindra was sold.
 Launched a real estate fund.
 Launched India Growth Fund, a private equity fund.

2004
38
 Kotak Mahindra Finance Ltd. converted into a commercial bank - the
2003
first Indian company to do so.
 Matrix sold to Friday Corporation.

2001
 Launched Insurance Services.
 Kotak Securities Ltd. was incorporated
 Kotak Mahindra tied up with Old Mutual plc. for the Life Insurance
2000
business.
 Kotak Securities launched its on-line broking site.
 Commencement of private equity activity through setting up of
Kotak Mahindra Venture Capital Fund.
 Entered the mutual fund market with the launch of Kotak Mahindra
Asset Management Company.
1998
 The Auto Finance Business is hived off into a separate company -

1996
Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra
Primus Limited). Kotak Mahindra takes a significant stake in Ford
Credit Kotak
 Mahindra Limited, for financing Ford vehicles. The launch of Matrix
Information Services Limited marks the Group's entry into information
distribution.
 Brokerage and Distribution businesses incorporated into a separate

1995
company - Securities. Investment banking division incorporated into
a separate company - Kotak Mahindra Capital Company
 Entered the Funds Syndication sector

1992
39
 The Investment Banking Division was started. Took over FICOM, one
1991
of India's largest financial retail marketing networks
 The Auto Finance division was started

1990
 Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase
market
1987
 Kotak Mahindra Finance Ltd started the activity of Bill Discounting

1986
Our Businesses
Multiple businesses. One brand.
Kotak Mahindra is one of India's leading banking and financial services groups,
offering a wide range of financial services that encompass every sphere of life.
Kotak Mahindra Bank Ltd
 Kotak Mahindra Bank Ltd is a one stop shop for all banking
needs. The bank offers personal finance solutions of every kind from savings
accounts to credit cards, distribution of mutual funds to life insurance
products. Kotak Mahindra Bank offers transaction banking, operates lending
verticals, manages IPOs and provides working capital loans. Kotak has one of
the largest and most respected Wealth Management teams in India, providing
the widest range of solutions to high net worth individuals, entrepreneurs,
business families and employed professionals.
40
For more information, please visit the Kotak Mahindra Bank website
www.kotak.com/bank/personal-banking/
Kotak Mahindra Old Mutual Life Insurance Ltd
 Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26

joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual
plc. A Company that combines its international strengths and local advantages
to offer its customers a wide range of innovative life insurance products,
helping them take important financial decisions at every stage in life and stay
financially independent. The company covers over 3 million lives and is one
of the fastest growing insurance companies in India.
www.kotaklifeinsurance.com
Kotak Securities Ltd
 Kotak Securities is one of the largest broking houses in

India with a wide geographical reach. Kotak Securities operations include
stock broking and distribution of various financial products including private
and secondary placement of debt, equity and mutual funds.
Kotak Securities operate in five main areas of business:
o Stock Broking (retail and institutional)

o Depository Services
o Portfolio Management Services
o Distribution of Mutual Funds
o Distribution of Kotak Mahindra Old Mutual Life Insurance Ltd
products
For more information, please visit the Kotak Securities website

www.kotaksecurities.com
41
Kotak Mahindra Capital Company (KMCC)
 Kotak Investment Banking (KMCC) is a full-service

investment bank in India offering a wide suite of capital market and advisory
solutions to leading domestic and multinational corporations, banks, financial
institutions and government companies.
Our services encompass Equity & Debt Capital Markets, M&A Advisory,
Private Equity Advisory, Restructuring and Recapitalization services,
Structured Finance services and Infrastructure Advisory & Fund Mobilization.
For more information, please visit the Kotak Investment Banking website
www.kmcc.co.in
Kotak Mahindra Prime Ltd (KMPL)
 Kotak Mahindra Prime Ltd is among India's largest

dedicated passenger vehicle finance companies. KMPL offers loans for the
entire range of passenger cars, multi-utility vehicles and pre-owned cars. Also
on offer are inventory funding and infrastructure funding to car dealers with
strategic arrangements via various car manufacturers in India as their preferred
financier.
For more information, please visit the KMPL website http://carloan.kotak.com
Kotak International Business
 Kotak International Business specialises in providing a

range of services to overseas customers seeking to invest in India. For
institutions and high net worth individuals outside India, Kotak International
Business offers asset management through a range of offshore funds with
specific advisory and discretionary investment management services.
42
For more information, please visit the Kotak Mahindra International Business
website www.investindia.kotak.com
Kotak Mahindra Asset Management Company Ltd (KMAMC)
 Kotak Mahindra Asset Management Company offers a

complete bouquet of asset management products and services that are
designed to suit the diverse risk return profiles of each and every type of
investor. KMAMC and Kotak Mahindra Bank are the sponsors of Kotak
Mahindra Pension Fund Ltd, which has been appointed as one of six fund
managers to manage pension funds under the New Pension Scheme (NPS).
For more information, please visit the KMAMC website

www.kotakmutual.com/kmw/main.htm
Kotak Private Equity Group (KPEG)
 Kotak Private Equity Group helps nurture emerging

businesses and mid-size enterprises to evolve into tomorrow's industry leaders.
With a proven track record of helping build companies, KPEG also offers
expertise with a combination of equity capital, strategic support and value
added services. What differentiates KPEG is not merely funding companies,
but also having a close involvement in their growth as board members,
advisors, strategists and fund-raisers.
For more information, please visit the KPEG website

www.privateequityfund.kotak.com
Kotak Realty Fund
 Kotak Realty Fund deals with equity investments covering

sectors such as hotels, IT parks, residential townships, shopping centres,
43
industrial real estate, health care, retail, education and property management.
The investment focus here is on development projects and enterprise level
investments, both in real estate intensive businesses.
For more information, please visit the Kotak Realty Fund website
www.realtyfund.kotak.com
Senior Management-2018-15
Mr. Uday S. Kotak
Executive Vice Chairman and Managing Director
Mr. Uday Kotak, is the Executive Vice-Chairman and Managing Director of the
Bank, and its principal founder and promoter. Mr. Kotak is an alumnus of Jamnalal
Bajaj Institute of Management Studies.
In 1985, when he was still in his early twenties, Mr Kotak thought of setting up a
bank when private Indian banks were not even seen in the game. First Kotak Capital
Management Finance Ltd (which later became Kotak Mahindra Finance Ltd), and
then with Kotak Mahindra Finance Ltd, Kotak became the first non-banking finance
company in India's corporate history to be converted into a bank. Over the years,
Kotak Mahindra Group grew into several areas like stock broking and investment
banking to car finance, life insurance and mutual funds.
Among the many awards to Mr Kotak's credit are the CNBC TV18 Innovator of the
Year Award in 2006 and the Ernst & Young Entrepreneur of the Year Award in 2003.
He was featured as one of the Global Leaders for Tomorrow at the World Economic
Forum's annual meet at Davos in 1996. He was also featured among the Top Financial
Leaders for the 21st Century by Euromoney magazine. He was named as CNBC
TV18 India Business Leader of the Year 2008 and as the most valued CEO by
businessworld in 2014.
44
Mr. C Jayaram
Joint Managing Director
Mr. C. Jayaram, is a Joint Managing Director of the Bank and is currently in charge of
the Wealth Management Business of the Kotak Group. An alumnus of IIM Kolkata,
he has been with the Kotak Group since 1990 and member of the Kotak board in
October 1999. He also oversees the international subsidiaries and the alternate asset
management business of the group. He is the Director of the Financial Planning
Standards Board, India. He has varied experience of over 25 years in many areas of
finance and business, has built numerous businesses for the Group and was CEO of
Kotak Securities Ltd. An avid player and follower of tennis, he also has a keen
interest in psephology.
Mr. Dipak Gupta

Joint Managing Director
An electronics engineer and an alumnus of IIM Ahmedabad, Mr. Gupta has been with
the Kotak Group since 1992 and joined the board in October 1999.
He heads commercial banking, retail asset businesses and looks after group HR
function. Early on, he headed the finance function and was instrumental in the joint
venture between Kotak Mahindra and Ford Credit International. He was the first CEO
of the resulting entity, Kotak Mahindra Primus Ltd.
Awards
Recent achievements
At Kotak Mahindra Group we take a client-centric view and constantly innovate to

provide you with the best of services and infrastructure. We have regularly received
accolades that stand testimony to our success in this endeavour. Some of our recent
achievements are:
45
 Won ‘Gold Award for Best Innovation – World’s first socially powered bank
account’ and ‘Gold Award for Best App developed – World’s first banking
application using Twitter’ awards at the Indian Digital Media Awards 2018 for
Kotak Jifi
 Recognised as Highest Fundraising Company in Corporate Challenge category
in Standard Chartered Mumbai Marathon 2018
 Kotak Mahindra Bank was ranked 292nd among India's most trusted brands
according to the Brand Trust Report 2016, a study conducted by Trust
Research Advisory. In the Brand Trust Report 2017, Kotak Mahindra Bank
was ranked 861st among India's most trusted brands and subsequently,
according to the Brand Trust Report 2018, Kotak Mahindra Bank was ranked
158th among India's most trusted brands.
 Adjudged Best Bank among Emerging Banks at Outlook Money Awards 2017
Banking
 Euromoney
Best Private Banking Services (India), 2018.
 ICAI Award
Excellence in Financial Reporting under Category 1 - Banking Sector for the
year ending 31st March, 2016
 Asiamoney
Best Local Cash Management Bank 2016
 IDG India
Kotak won the CIO 140 'The Agile 140' award 2015
 IDRBT
Banking Technology Excellence Awards Best Bank Award in IT Framework
and Governance Among Other Banks' - 2014
Banking Technology Award for IT Governance and Value Delivery, 2008
 IR Global Rankings
Best Corporate Governance Practices - Ranked among the top 5 companies in
Asia Pacific, 2013
 FinanceAsia
Best Private Bank in India, for Wealth Management business, 2013
46
 Kotak Royal Signature Credit Card
Was chosen "Product of the Year" in a survey conducted by Nielsen in 2013
 IBA Banking Technology Awards
Best Customer Relationship Achievement - Winner 2008 & 2013
Best overall winner, 2007
Best IT Team of the Year, 4 years in a row from 2006 to 2013
Best IT Security Policies & Practices, 2007
 Euromoney
Best Private Banking Services (overall), 2013
 Emerson Uptime Champion Awards
Technology Senate Emerson Uptime Championship Award in the BFSI
category, 2008
Miscellaneous
 Best Local Trade Bank in India

The UK based Trade & Forfaiting Review awarded Kotak Mahindra Bank
Ltd. the Bronze Award in the category of Best Local Trade Bank in India at
the TFR Awards 2015.
 LACP Vision Awards 2014 for Annual Report 2014-15
Platinum Award - Best among Banking Category, APAC
Gold Award - Most Creative Report, APAC
Ranked No. 21 among Top 50 Reports, APAC
Ranked No. 87 among the World's Top 140 Annual Reports
 Businessworld
'Most Valuable CEO' overall, 2014 awarded to Mr. Uday Kotak, Executive
Vice Chairman & Managing Director
 CNBCTV 18
'Best Performing CFO in the Banking/Financial Services sector by CNBCTV
18 CFO Awards 2014 awarded to Mr. Jaimin Bhatt
 GIREM
GIREM awarded Kotak Realty Funds Group, the "Investor of the Year"
Award for 2013
47
 IBA Banking Technology Awards
Best Use of Business Intelligence - up, 2008
Best Enterprise Risk Management - Runner up, 2008
 The Great Places to Work Institute, India
Best Workplaces in India, 2008
 Hewitt
14th Best Employer in India, 2007, 2008 & 2013
 Financial Insights Innovation Award
Best Innovation in Enterprise Security Management in the Asia Pacific
Region, 2013
 Frost & Sullivan
Best Passenger Vehicle Finance Company in India, 2006
 CNBC TV 18
Indian Business Leader of the Year, 2008 awarded to Uday Kotak, Executive
Vice Chairman & Managing Director
Banking information
The Bank publishes the standalone and consolidated results on a quarterly basis. The
standalone results is subjected to "Limited Review" by the auditors of the Bank. The
same are also reviewed by the Audit Committee before submission to the Board.
Along with the quarterly results, an earnings update is also prepared and posted on the
website of the Bank. Every quarter, the Executive Vice-Chairman and Managing
Director and the Executive Director(s) participate on a call with the analysts /
shareholders, the transcripts of which are posted on the website of the Bank. The
Bank also has dedicated personnel to respond to queries from investors.
Financial Calendar:For each calendar quarter, the financial results are reviewed and
taken on record by the Board during the last week of the month subsequent to the
quarter ending. The audited annual accounts as at 31st March are approved by the
Board, after a review thereof by the Audit Committee. The Annual General Meeting
to consider such annual accounts is held in the second quarter of the financial year.
Stock Exchanges on which listed:
48
Sr.No Name & Address of Stock Exchange Market Scrip Code
The Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers
1 500247
Dalal Street, Fort,
Mumbai 400 023
National Stock Exchange of India Limited

Exchange Plaza, 5th Floor,
2 KOTAKBANK
Bandra-Kurla Complex,
Bandra, Mumbai 400 051
Luxembourg Stock Exchange BP 165, L-2015

3
Luxembourg
Trading of shares to be in compulsorily dematerialized form:The equity shares of

the Bank have been activated for dematerialisation with the National Securities
Depository Limited and with the Central Depository Services (India) Limited vide
ISIN INE237A01428.
Share Transfer System: Applications for transfers, transmission and transposition

are received by the Bank at its Registered Office or at the office(s) of its Registrars &
Share Transfer Agents. As the shares of the Bank are in dematerialised form, the
transfers are duly processed by NSDL/CDSL in electronic form through the
respective depository participants. Shares which are in physical form are processed by
the Registrars & Share Transfer Agents, Karvy Computershare Private Limited, on a
regular basis and the certificates despatched directly to the investors.
Investor Helpdesk:Share transfers, dividend payments and all other investor related
activities are attended to and processed at the office of our Registrars & Share
Transfer Agents. For lodgement of Transfer Deeds and any other documents or for
any grievances/complaints, kindly contact Karvy Computershare Private Limited,
contact details of which are provided elsewhere in the Report.
For the convenience of the investors, transfers and complaints from the investors are
accepted at the Registered Office between 9:30 a.m. to 5:30 p.m. from Monday to
Friday except on bank holidays:
49
Corporate Responsibility
Community investment and development

Kotak Mahindra views Corporate Social Responsibility as an investment in society
and in its own future. Kotak uses the power of its human and financial capital to help
in transforming communities into vibrant, desirable places for people to live. The
group leverages its core competencies in three areas:
 Sustainability
An integral part of all Kotak Mahindra Group activities is to be consistently
responsible to shareholders, clients, employees, society and the environment.
 Economic Development
By helping people achieve their financial goals, Kotak strengthens the fabric
of communities and helps them overcome unemployment and poverty to help
them shape their future.
 Doing My Bit
A growing number of employees are committed to civic leadership and
responsibility with the support and encouragement of the Kotak Group. A
number of employees have been involved in strengthening communities
through voluntary work, payroll giving and management inputs.
For any CSR related queries, please contact:
Group CSR
Kotak Mahindra Bank Ltd
Tel. Board +91 22 6720 6720
Email: cr@kotak.com
50
CHAPTER-IV
DATA ANALYSES AND
INTERPRETATION
51
Working capital Of Kotak Mahindra limited
Implementing an effective working capital management system is an excellent way

for many companies to improve their earnings. The two main aspects of working
capital management are ratio analysis and management of individual components of
working capital.
Working capital turnover ratio 2017-2018

Working capital turnover ratio 2017 2018
Total current Assets
71839.39 71,967.91
Sundry Debtors
2207.90 2,948.23
Cash and Balances with RBI
1881.26 3,031.66
Balance with Bank
48468.98 53,027.63
Advances
163597.53 170,975.43
Total
Total Current Liabilities
Borrowings 20414.62 16,895.58

Other Liabilities 2789.81 3,333.82
Contingent Liabilities 42157.47 46,903.54
65317.90 63172.94
Total
58279.63 67,842.49
Net working capital
Increase\decrease in net working capital 9562.86
52
140000
120000
100000
80000
60000
40000
Series1
20000
0 Series2
Working capital…
Working capital…
Cash and Balances…
Increase\decrease in…
Sundry Debtors
Balance with Bank

Advances
Total
Other Liabilities
Contingent Liabilities
Total
Net working capital

Borrowings
Series3
Interpretation:
The networking capital of Kotak Mahindra has been increased to 9562.86 Cr the
financial position i.e. the performance of Kotak Mahindra has increased and the
current assets defects its current liability.
53
Calculation of operating profit for the period (2017-2018)
Particulars Amount Amount

(Cr) (Cr)
2018 2017
Net profit 14166.83 9203.15
Add: depreciation 165.18 172.53
Gross cash generated 14332.01 9335.68
Less: taxation for the year 8.69 7.29
Net cash generated 14323.32 9328.39
STATEMENT OF SOURCES AND APPLICATION OF CASH

For the period (2017-18)
Sources Rs Applications Rs
Secured loans 1554.68 Increase in Gross Block

357.48
Unsecured loans 7041.62 Secured loans paid

307.62
Cash from operation 3031.66 Net increases in

9562.86
Working Capital
14227.96
14227.96
54
Interpretation
From the above table it is observed that the net working capital of the
company shows increasing trend. The current assets of the company have
increased from Rs.53027.63 to Rs.48468.98 in 2017-2018. The liability of
the company showing increasing trend from Rs.87585.35 in 2017-2018. The
net capital company stood at Rs.385.16 in 2017-2018. And it is increased to.
The increasing working capital is recorded as Rs.9562.86.
It is evident from the above table that the total cash flow during the
period from 2017-2018. Amount Rs.67842.49. In the total cash flow 28.67%
was received from cash from operation, 29.67% received from secured loans
and 39.67% was received from unsecured loans.
Regarding the application of cash 15.57% used for repayment of

secured loans and 34.57% used for purchase of fixed assets and cash used
for working capital constitution 40.24% respectively.
Conclusion:
It is concluded that during the period 2017-18 16.54% secured loans,
22.58% unsecured loans, 2.57% cash for operation. Increasing gross block
net increasing working capital, 69.64% secured loans paid.
55
Working capital Of Kotak Mahindra limited
Working capital turnover ratio 2017

55172.04 71839.39
Sundry Debtors
2016.49 2207.90
618.06 1881.26
Balance with Bank
39079.23 48468.98
Advances
96845.82 163597.53
Total
Borrowings 16595.52 20414.62

Other Liabilities 2553.67 2789.81
Contingent Liabilities 17319.52 42157.47
36468.71 65317.90
Total
60377.15 58279.63
Net working capital
56
140000
120000
100000
80000
60000
40000
Series1
20000
0 Series2
Working capital…
Working capital…
Cash and Balances…
Increase\decrease in…
Sundry Debtors
Balance with Bank

Advances
Total
Other Liabilities
Contingent Liabilities
Total
Net working capital

Borrowings
Series3
Interpretation:
The networking capital of Kotak Mahindra has been decreased to 2137.48 Cr the
57

(Cr) (Cr)
2017 2016
Net profit 9203.15 7028.66


2016.49
Unsecured loans 2041.62 Secured loans paid

39134.14
Cash from operation 1881.26 Net increases in

2137.48
Working Capital
43208.07
43208.07
58
Interpretation
increased from Rs.48468.98 to Rs.39079.23 in 2016-2017. The current
liability of the company showing increasing trend from Rs.9389.75 in 2016-
2017. The net capital company stood at Rs.449.96 in 2016-2017. And it is
increased to. The increasing working capital is recorded as Rs.2137.48.

Conclusion:
net increasing working capital, 34.57% secured loans paid.
59
41384.92 55172.04
Sundry Debtors
2147.72 2016.49
363.26 618.06
Balance with Bank
29329.31 39079.23
Advances
72785.21 96845.82
Total
Borrowings 15723.95 16595.52

27047.61 36468.71
Total
45737.6 60377.15
Net working capital
120000
100000
80000
60000
40000
20000
0
60
Interpretation:

(Cr) (Cr)
2016 2015
Net profit 7028.66 4815.16
61

2016.49
Unsecured loans 16595.52

Secured loans paid
39134.14
Cash from operation 618.06 Net increase in

18639.51
Working Capital
55750.14
55750.14
Interpretation
liability of the company showing decreasing trend from Rs.29329.31 in
2015-2016. The net capital company stood at Rs.449.96 in 2015-2016. And
it is increased to. The increasing working capital is recorded as Rs.18639.65.
62
Conclusion:
62.34%, 34.87% net increasing working capital, 69.67% secured loans paid.
63

30026.98 41384.92
Sundry Debtors
2085.67 2147.72
218.59 363.26
Balance with Bank
20775.05 29329.31
Advances
53142.29 72785.21
Total
Borrowings 6180.51 15723.95

17166.08 27047.61
Total
39936.21 45737.6
Net working capital
Increase\decrease in net working
capital 5801.39
80000
70000
60000
50000
40000
30000
20000
10000
0
64
Interpretation:

(Cr) (Cr)
2015 2014
Net profit 4815.16 3676.59

Less: taxation for the year 4.37 -----
65

2147.72
Unsecured loans 15723.95

Secured loans paid
33439.07
Cash from operation 363.26 Net increase in

5801.39
Working Capital
41748.18
41748.18
Interpretation
liability of the company showing decreasing trend from Rs.5875.67 in 2014-
2015. The net capital company stood at Rs.4879.65 in 2014-2015. And it is
increased to. The decreasing working capital is recorded as Rs.6369.65.
66
Conclusion:
64.02%, 34.70% net increasing working capital, 5.64% secured loans paid.
67

21549.00 30026.98
Sundry Debtors
995.35 2085.67
185.32 218.59
Balance with Bank
16625.34 20775.05
Advances
39315.01 53142.29
Total
Borrowings 5904.07 6180.51

17647.69 17166.08
Total
25667.32 39936.21
Net working capital
Increase\decrease in net working
capital 18268.89
68
60000
50000
40000
30000
20000
10000
0
Interpretation:
The networking capital of Kotak Mahindra has been increased to 39936.21Cr the
69
Calculation of operating profit

(Cr) (Cr)
2014 2013
Net profit 3676.59 3222.70
Less: taxation for the year 1.86
FOR THE PERIOD (2013-2014)
SOURCES AMOUNT APPLICATIONS

AMOUNT
SECURED LOANS 23886.47 SALES UNSECURED-LOANS

2085.67
SECURED LOAN VEHICLE 6180.51 GROSS BLOCK

17887.06
CASH FROM OPERATION 218.59 INCREASE IN WORKING

18268.84
WORKING CAPITAL
30241.57 30241.57
70
INTERPRETATION:
From the above table it is observed that the net working capital of
the company shows increased From Rs. 483.96 to Rs. 453.44 in 2013-.14
The net working capital of the company Rs. 83.96 in 2013-2014. And it is
increased. The increasing Working capital is recorded as Rs. 657.43.
It is evident from the above table the total cash flow during the
period from 2013-14. Amount Rs 83.73. In the total cash flow 53.40%
was received from cash operation and 45.44% was received from
unsecured loans (vehicles) and 1.15% was received from secured loans.

unsecured loans and 81.16% used for purchase of fixed assets and cash
used for working capital constitution 18.85% respective.
CONCLUSION:
It is concluded that during the period 2013-14 more than 53.4% of

the cash came trading activities 1.16% used in secured loans, 45 the
application of cash around 81.16% of the cash utilized for investing in
fixed assets. And 3.99% used for repayment of unsecured loans.
71
NET INCREASES IN WORKING CAPITAL
YEAR INCREASE / AMOUNT

DECREASE
2013-2014 INCREASE 18268.89
2014-2015 DECREASE 5801.39
2015-2016 INCREASE 18639.51
2016-2017 INCREASE 2137.48
2017-2018 INCREASE 9562.86
AMOUNT
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000 AMOUNT
0
INCREASE
DECREASE
INCREASE
INCREASE
INCREASE
2013- 2014- 2015- 2016- 2017-

2014 2015 2016 2017 2018
The above table observed that the working capital Increased. In year 2013 – 14 the
working capital has been increased. In the year 2017-18 the working capital is
Rs.9562.86 Due to the decrease in current liabilities the net working capital is
increased.
72
Changes in cash from operations
YEAR AMOUNT
2013-2014 218.59
2014-2015 363.26
2015-2016 618.06
2016-2017 1881.26
2017-2018 3031.66
AMOUNT
3500
3000
2500
2000
1500
AMOUNT
1000
500
0
The above table explains that continuous fluctuations in flow of cash

from operation.
In the year 2013-14 the cash from operation is increased .The cash from
operation in the years & it has increased. In the year 2017-18. The cash from
operation in the year 2017-18 is Rs. 3031.66.
73
USES & APPLICATION OF CASH
APPLICA 2013-14 2014-15 2015-16 2016-17 2017-18

TION
Increase in 2085.67 2147.72 2016.40 2207.90 2948.23

Gross
Block
Secured
loans paid 17887.06 33439.07 39134.14 48468.98 53027.63
Unsecured 6180.51 15723.95 16595.52 20414.62 16895.58

loans
The above table shows that Gross block has increased to Rs. 2948.23
in 2017-18. & Rs. 2207.90 in 2016-17. The secured loans paid Rs.17887.06
in 2013–14 &Rs.53027.63 in 2017-18. The unsecured loans paid Rs.6180.51
in the year 2013-14. year Rs.16895.58 in 2017-18.
74
CHAPTER-V
 FINDINGS
 CONCLUSIONS
 SUGGESTIONS
75
FINDINGS
 During the period 2014-2018 more than 74% of the cash came from
trading activities. In the application of cash around 68% utilized for
investing in fixed assets.
 During the period 2013-2014 to 2017-2018 more than 55.68% of the

cash came from trading activities. In the application of the cash around
81.17% of the cash are utilized for investing in fixed assets.

cash came trading activities. In the application of the cash 32.32% of
the cash are utilized for investing in fixed assets.

cash came trading activities. In the application of the cash 71.64% of
the cash are utilized for investing in fixed assets.
 During the period 2015-15 to 2015-16 more than 54.25% of the cash
came trading activities. In the application of the cash 71.64% of the
cash are utilize for the investing in fixed assets.
 During the period 2013-2014 to 2017-2018 more than 58.96 % of the

cash came trading activities. In the application of the cash 75.61 % of
the cash are utilize for the investing in fixed assets.
76
CONCLUSIONS
1. The Kotak Mahindra Net Profit is showing negative profit in the year 2017-
2018. These event is an expected one because since from the previous two
years it is showing the decline stage in Net Profit.
2. Profit Margin of Kotak Mahindra is decreasing and showing negative profit
because there is increase in the price.
3. The Kotak Mahindra Net Working Capital Ratio is satisfactory.
4. The Kotak Mahindra return on Total Assets shows a negative sign in the year
2008-13
5. The Operating Ratio of Kotak Mahindra increase in the year 2013-14, in the
year 2014-15 and reached in the year 2017-18 so the company has to reduce
its operating costs.
6. The Operating cash of Kotak Mahindra satisfactory. Due to increase in cost of
production, this ratio is decreasing. So the has to reduce its office
administration expenses
77
SUGGESTIONS
- For the improving the financial performance of the company the

following suggestions are made.
- In order to reduce the outside borrowings in the company has to acquire.
The capital from equity sources. Keeping in view the debt equity the
proportion as normal.
- The liquidity of the company should be improved by maintaining the
optimum current assets and liquid assets according to standard norms.
- The quantum of the sales generated should be improved impressively in

order to attain higher return on investment. To improve the financial health
of the company and maximizing the time between the source mobilization
and utilization the management must introduce the new cost saving
techniques.
78
BIBLIOGRAPHY
 FINANCIAL MANAGEMENT - I.M. Panday
 FINANCIAL MANAGEMENT - Prasanna Chandra
 FINANCIAL MANAGEMENT - M.Y. Khan & P.K.

Jain
 PRINCIPLES OF MANAGEMENT - Man Mohan & Goyal

S.N.
 FINANCIAL MANAGEMENT - Maheswari S.N.
www.googlefinance.com
www.financeindia.com
www.cashflowstatement.com
www.kotak.com
79

Cash Flow Statement - Kotak Mahindra

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A

KOTAK MAHINDRA LIMITED

PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

MASTER OF BUSINESS ADMINISTRATION

H.T. NO: 142017672047

UNDER THE GUIDANCE OF

VIVEK VARDHINI SCHOOL OF BUSINESS MANAGEMENT

SCHOOL OF BUSINESS MANAGEMENT

This is to certify that the Project Report titled CASH

This has not been submitted to any other University

SIGNATURE OF GUIDE Principal

SCHOOL OF BUSINESS MANAGEMENT

I, hereby declare that, this project report entitled “CASH

FLOW STATEMENT” at KOTAK MAHINDRA LIMITED has been

prepared by me during the year 2017-19, under the Guidance of

I also declare that this project is the result of my own

efforts and it has not been submitted to another University for

the award of any Degree or Diploma.

Date : SUNAINA SHARMA

I owe my sincere thanks to MUTHUSWAMY S of KOTAK

MAHINDRA LIMITED Hyderabad, who are helped me to bringing

I express my deep sense of gratitude and thank to SHAILA

I have to express my special thanks to all Lecturers who

Roll No. 142017672047

Motivation is one of the most vital factors of human resource development. In

The study aims at to focus on motivation of employees in private sector, so as

They occur when the person motives themselves(after external motivation

Chapter No. Name of the concept Page No.

Objectives of the study

Need and scope of the Study

Limitations of the study

II Review of Literature 8-18

III Industry & Company profile 19-42

IV Data analysis and interpretation 43-66

V Findings, Suggestion & Conclusions 67-70

People and groups interested in cash flow statements include:

 Accounting personnel, who need to know whether the organization will be

The balance sheet is a snapshot of a firm's financial resources and obligations at a

1. provide additional information for evaluating changes in assets, liabilities and

2) Status Report on Kotak Mahindra Group. (Formerly Kotak Mahindra bank

NEED AND IMPORTENCE OF STUDY

SCOPE OF THE STUDY:

 To know the flow of cash in the organization Kotak Mahindra

The limitations of present study are as follows:

1. The study cover a period of FIVE years from 2014-2018.

Difference between Cash Flow Statement and

Cash Flow Statement Income Statement

1. The Statements narrates the item of

2. Income Statement helps the

3. Cash raised are matched with cash

Cash Flow Statement Position Statement

4. It is a analytical statement analyzing form 4. It is not a analytical statement hence not

Importance of cash flow statement:

Uses of cash flow statement:

Cash flow statement of a company is of great value to management share

 Informative value:- The financial consequence of business operation are

1. Where have the profit gone.

 Forecasting value:- A projected cash flow statement can be prepared and

STATEMENT OF CHANGES IN WORKING CAPITAL

PARTICULARS Previous Current

Total current assets *********** *********

Totalurrent liabilities *********** *********

Total current assets *** *

Totalurrent liabilities *** *