Kotak Securities Limited 0

KOTAK SECURITIES LIMITED
ANNUAL REPORT 2011-12
VALUE CREATION WITH STABILITY
FINANCIAL STATEMENTS
REPORTS DIRECTORS REPORT
BOARD OF DIRECTORS : Mr. Uday S. Kotak Chairman, Mr. D. Kannan Managing Director, Mr. Narayan S.A. Director, Mr. C. Jayaram Director, Ms. Falguni Nayar Director
Directors Report
To the Members of KOTAK SECURITIES LIMITED Your Directors are pleased to present the 18th Annual Report and the Audited Accounts for the year ended 31st March 2012. FINANCIAL HIGHLIGHTS (` in Lakhs except per share data) 31st March 2012 Gross Income Profit / (Loss) before Depreciation and Tax Depreciation Profit / (Loss) before Tax Provision for Tax Profit / (Loss) After Tax Transfer from Debenture Redemption Reserve Balance brought forward from previous year Amount available for appropriation Transfer to Debenture Redemption Reserve Profit / (Loss) carried forward to the Balance Sheet Earnings per share on equity shares of Rs. 10 each (Basic and Diluted) DIVIDEND In order to further consolidate your companys position, your Board proposes to employ the surplus resources to augment capital requirements, and does not recommend a dividend for the financial year 2011-2012 (hereinafter referred to as current financial year). OPERATIONS The downward trajectory of market indices continued from the latter half of the previous financial year. The issues which raised concerns and affected the markets continued in the current financial year. The continuing economic situation in Europe and the events which panned out in Greece led to the fall of yet another large company in the financial services space MF Global. Towards the latter half of the financial year, the build-up of tensions between Iran and United States of America and others only added to an increase in Crude oil prices affecting oil importing countries. Overall it was not a conducive environment for equity investments. The Sensex which closed at 19,445 at the end of the financial year 2010-11 (hereinafter referred to as previous financial year) closed at 17,404 at the end of the current financial year with a high of 19,811 and low of 15,136. Similarly, the benchmark Nifty which closed at 5,834 at the end of the previous financial year closed at 5,296 at the end of the current financial year with a high of 5,944 and low of 4,531. The average daily volumes decreased to Rs. 16,437 crores from Rs. 18,630 crores in the previous financial year for the Cash Segment, after being below the levels of last year for most parts of the year and increased to Rs. 126,871 crores from Rs. 116,437 crores in the previous financial year for Derivatives Segment. For large part of the financial year, the skew in the market volumes towards derivatives volumes increased before reversing the trend in the last quarter. Retail Segment Events unfolding on the domestic and global front did not augur well for investments in a higher risk asset class like equities. Participation of the Retail investor in the Cash and Futures Segment reduced as evidenced by lower Average Daily Traded volumes in that Segment. The retail investor preferred liquid investments like bank deposits and gold. In such an environment, your Company enhanced its focus on controlling costs. Consolidation of the Network was of prime focus with branch and sub broker rationalization. Customer acquisition resulted in an addition of about 88,000 new customers. The total outlets stood at 1,365 as against 1,413 at the end of the previous financial year. The number of registered sub brokers/ authorized persons stood at 2,080 for NSE and 1,561 for BSE. Institutional Equities The equity market remained volatile and the BSE-30 Index fell 11% during the year. Institutional equity volumes saw a 16% fall. The year saw a continued shift of market activities from equity to derivatives segment, predominantly towards the options segment. The market registered a significant increase in algorithmic and Direct Market Access trading across equity and derivative segments. Kotak Institutional Equities enhanced its client base, both globally and locally, on the strength of its strong product offering, excellent servicing and superior technology platform. Its research division, which comprehensively covers macro-economic, industry and company research continued to win client recognition for its in-depth research, investment insights and width of coverage and improved its Asiamoney Broker Poll 2011 rankings to 2nd position. ANNUAL REPORT 2011-12 60,970.45 20,609.29 1460.37 19,148.92 6,566.75 12,582.17 149,602.62 162,184.79 162,184.79 786.39 31st March 2011 73,755.35 28,942.49 1,785.23 27,157.26 8,963.47 18,193.79 7,836.25 127,386.34 153,416.38 3,813.76 149,602.62 1,137.11
Primary Market Post listing performance of IPOs, have by and large, been disappointing. The performance has not been able to attract retail investors. Some issuers have shifted to debt offerings. In the current financial year, your Company was associated with the distribution of 30 Equity Public Offer Issues and 17 Debt Public Offer Issues. The Regulator also introduced an avenue for Promoters of listed companies, to divest part of their holdings through a bid process on electronic platforms of Stock Exchanges. The Government of India was the first to use this to divest its holding in Oil and Natural Gas Corporation Limited. Portfolio Management Services With Equity as an investment class not finding too much favour amongst the retail investors, Clients for Portfolio Management Services (PMS) were also not easily forth coming. SEBI has increased the threshold levels for individual clients and now the minimum amount of investment by a single client has been enhanced from Rs. 5 lakh to Rs.25 lakh. The total equity Assets under management as on 31st March, 2012 was around Rs. 1,287 crores. AWARDS AND RECOGNITIONS Your Company has received following awards during current financial year for its performance a) Kotak Securities - Institutional Equities jointly bagged the Top Broker honour at the Starmine Analyst Award organized by ET Now Thomson Reuters for 2011-12. Kotak Institutional Equities was ranked #2 for Best Overall Country Research and #3 for Best Overall Sales Services in the Asiamoney Brokers Poll for 2011, in addition to being voted the Best Local Brokerage (for the 6th year in a row) Kotak Institutional Equities was ranked #2 by Institutional Investor in the inaugural All-India Research Team survey 2011.
b)
c)
FUTURE OUTLOOK The benchmark Index, NIFTY and Sensex have closed below the levels of 31st March, 2011. While there was optimism at the end of the last financial year, in the words of the Finance Minister during the Budget Speech on 16th March, 2012, Though we have been able to limit the adverse impact of this slowdown on our economy, this years performance has been disappointing. These comments sum up a year for the large part of which inflation was at high levels leading to tight monetary policy which in turn affected investment and consumption. In addition, crude oil prices have been higher than expected and unexpected adverse spurt in Rupee/US Dollar rate has impacted the current account. The agriculture sector seems to be growing in line with expectations and there are some signs of revival in core sectors which have an impact on the Economy. Once again in the words of Finance Minister Indian manufacturing appears to be on the cusp of a revival. Gross Domestic Product is estimated to grow by 6.9 per cent in 2011-12, however in any cross-country comparison, India ranks amongst the front runners. The events are likely to have its impact on corporate earnings for the year ended 31st March, 2012 and the first quarter of the next financial year. On the global scenario, economic data from the US seems to be better than expected. There is a renewed optimism with some of US stock indices touching record highs. There are renewed tensions between Iran on one side and United States and others. This has had an adverse impact on the price of Crude Oil which has increased the oil subsidy in India. The Cash segment volumes continued to fall as proportion to the overall market volumes, but have seen some pick up in the last quarter of the previous financial year. Similarly the retail market average daily volumes as a proportion of the overall market average daily volumes reduced significantly during the period from August 2011 to January 2012. Gold and Bank deposits on the back of higher interest rates seem to be the alternate asset class for retail investors. Securities and Exchange Board of India has made far reaching changes in the Account Opening process, simplifying the same. It has also taken steps for a single client registration process across all Capital Market Segments. Some steps introduced in the Budget 2012-13 would also encourage the small retail investor to access the capital markets. Your company continues to focus on constantly improving the quality of Customer Service. Pressure on realization rates has been incessant. Attracting and retaining the retail investor continues to remain a challenge. There appears to be over capacity in the industry which would lead to consolidation, either through exit by some smaller players or through mergers/ acquisitions among others. Your company will continue its focus on market share while maintaining a tight control on costs. DIRECTORS Mr. Uday Kotak retires by rotation at the ensuing Annual General Meeting and he is eligible for re-appointment.
REPORTS DIRECTORS REPORT
COMMITTEES Audit Committee The Committee consists of Mr. Uday Kotak, Mr. C. Jayaram and Mr. Narayan S.A. as its members with Mr. Uday Kotak as the Chairman. During the year two meetings were held and all the members attended the meeting. Routine & Administrative Function (RAF) Committee : The Committee consists of Mr. Narayan S.A., Mr. D. Kannan and Ms. Falguni Nayar as its members with Mr. Narayan S.A. as the Chairman. During the year seventeen meetings were held and Mr. D. Kannan attended all the meeting, Mr. Narayan S.A attended fifteen meetings and Ms. Falguni Nayar attended fourteen meetings. First Tier Audit Committee (FTAC) The Committee consists of Mr. C. Jayaram, Mr. Narayan S.A, Mr. D. Kannan, Ms. Falguni Nayar, and Mr. Jaimin Bhatt as its members with Mr. C. Jayaram as the Chairman. During the year three meetings were held and Mr. C. Jayaram, Mr. Narayan S.A and Mr. D. Kannan attended all the meetings, Mr. Jamin Bhatt attended two meeting and leave of absence was granted to Ms. Falguni Nayar for all the meetings. Nomination Committee The Committee consists of Mr. Narayan S.A, Mr. D. Kannan, Ms. Falguni Nayar, as its members with Mr. Narayan S.A. as the Chairman. During the year one meeting was held and all the members attended the meeting. Risk Management Committee (Board) The Committee consists of Mr. Narayan S.A, Mr. D. Kannan, Mr. C. Jayaram, as its members with Mr. C. Jayaram as the Chairman. During the year two meetings were held and all the members attended the meeting. Risk Management Committee (Operations) The committee consists of Mr. D. Kannan, Mr. Trivikram Kamath and Mr. Mukul Rathi, as its members with Mr. D. Kannan as the Chairman. During the year three meetings were held and all the members attended the meeting. AUDITORS The companys auditors, M/s Price Waterhouse, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and are eligible for re-appointment. STATUTORY INFORMATION The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, is given in the Annexure appended hereto and forms part of this Report. During the year under review, your Company did not accept any deposits from the public. Foreign exchange earnings and outgo during the current financial year were Rs. 409.92 Lacs (Rs. 306.39 Lacs in previous financial year) and Rs. 1,321.46 Lacs (Rs. 800.04Lacs in previous financial year) respectively. The other particulars under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable since your Company is not a manufacturing company. DIRECTORS RESPONSIBILITY STATEMENT Based on representations from the management, the Directors state, in pursuance of Section 217 (2AA) of the Companies Act, 1956, that: i) ii) the Company has, in the preparation of the annual accounts for the year ended 31st March 2012, followed the applicable accounting standards along with proper explanations relating to material departures, if any; the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and of the profit of the Company for the financial year ended 31st March 2012. the Directors have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and the Directors have prepared the annual accounts on a going concern basis.
iii)
iv)
ACKNOWLEDGEMENTS The Directors wish to thank Securities and Exchange Board of India, the Stock Exchanges, the Depositories and the Companys Bankers for their support. The Directors commend the employees of the Company for their dedicated efforts. For and on behalf of the Board of Directors Uday S. Kotak Chairman Place: Mumbai Dated: 27th April, 2012 ANNUAL REPORT 2011-12
Auditors Report
to the Members of KOTAK SECURITIES LIMITED 1. We have audited the attached Balance Sheet of Kotak Securities Limited (the Compan}~) as at March 31, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of`The Companies Act, 1956' of India (the `Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) (b) We have obtained all thee information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from a branch not visited by us. The Branch Auditors report has been forwarded to us and have been appropriately dealt with; The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of subsection (t) of Section 274 of the Act; In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) (ii) (iii) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants Vivek Prasad Partner Membership Number F104941
2.
3.
4.
(c) (d) (e)
(f)
Place: Mumbai Dated: 27th April 2012
REPORTS BALANCE SHEET AND P&L A/c
Balance Sheet as at 31st March, 2012

Notes EQUITY AND LIABILITIES Shareholders Funds Share Capital Reserves and Surplus Non-Current Liabilities Other Long-Term Liabilities Long-Term Provisions Current Liabilities Short-Term Borrowings Trade Payables Other Current Liabilities Short-Term Provisions Total ASSETS Non-current assets Fixed Assets Tangible Assets Intangible Assets Non - Current Investments Deferred Tax Asset (Net) Long Term Loans and Advances Other Non Current Assets Current Assets Current Investments Stock in Trade (Securities) Trade Receivables Cash and Bank Balances Short-Term Loans and Advances Other Current Assets Total Significant Accounting Policies The Notes to the financial statement form an intergral part of the Financial Statements This is the Balance Sheet referred to in our report of even date For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants Uday S. Kotak Chairman Vivek Prasad Partner Membership Number: F104941 Mumbai, Narayan S. A. Director For and on behalf of the Board of Directors 1 15 16 17 18 19 20 25,753.85 44,882.33 56,308.48 6,050.18 1,870.04 268,231.13 5,496.51 2,777.91 37,578.70 53,321.58 10,002.36 2,176.59 283,703.52 11 12 13 14 10 6,908.44 131.55 80,630.60 2,160.07 1,346.30 42,189.29 7,015.41 308.54 71,731.24 3,265.59 1,482.60 88,546.49 6 7 8 9 1,887.88 76,970.18 2,245.81 2,387.08 268,231.13 9,348.80 80,584.50 18,762.10 2,104.01 283,703.52 4 5 2,054.41 708.69 1,909.73 1,599.47 2 3 160.00 181,817.08 160.00 169,234.91 31st March 2012 ` in Lacs 31st March 2011 ` in Lacs
D. Kannan Managing Director Trivikram Kamath Executive Vice President Mumbai,
C. Jayaram Director Sandeep Chordia Company Secretary
Statement of Profit and Loss Account for the year ended 31st March 2012
Schedule 31st March 2012 ` in Lacs 31st March 2011 ` in Lacs
INCOME Revenue from Operations Other Income Total Income EXPENSES Employee Benefit Expenses Interest and Other Financial Costs Depreciation and Amortisation Expense Other Expenses Total Expenses Profit Before Tax Tax Expenses Current Tax [Includes provision for taxation relating to earlier years Rs. 7.92 lacs (net) (Previous Year write back of excess provision for taxation relating to earlier years Rs. 57.20 Lacs (net)] Deferred Tax Profit For The Year Earnings per Share on Equity Shares of Rs.10 each Basic and Diluted (In `) (Refer Note 41) Significant Accounting Policies The Notes to the financial statement form an intergral part of the Financial Statements This is the statement of Profit and Loss referred to in our report of even date 1 786.39 1,137.11 5,461.23 1,105.52 12,582.17 8,506.09 457.38 18,193.79 25 23 24 19,829.40 809.27 1,460.37 19,722.49 41,821.53 19,148.92 23,560.85 1,987.72 1,785.23 19,264.29 46,598.09 27,157.26 21 22 44,408.76 16,561.69 60,970.45 57,012.91 16,742.44 73,755.35
This is the Profit and Loss Account referred to in our report of even date For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants Uday S. Kotak Chairman Vivek Prasad Partner Membership Number: F104941 Mumbai, Narayan S. A. Director For and on behalf of the Board of Directors
D. Kannan Managing Director Trivikram Kamath Executive Vice President Mumbai,
REPORTS CASH FLOW STATEMENT
Cash Flow Statement for the year ended 31st March 2012
31st March 2012 ` in Lacs Cash flow from operating activities Profit before tax Add adjustments for : Depreciation / amortisation Interest and other financial costs Interest income Dividend income Provision for doubtful debts/ (write back) Provision for contingencies written back (net) (Profit)/loss on sale of fixed assets (net) (Profit)/loss on sale of investments (net) (Profit)/loss on buyback of debentures (net) Provision for diminution in value of Investments/ (write back) Operating profit before working capital changes Adjustments for changes in working capital : - Other long term liabilities - Trade payables - Provisions- long term and short term - Other current liabilities - Loans and advances- long term and short term - Other non current assets -Trade receivables - Stock in trade - Other current assets Cash generated from operations - Taxes paid including fringe benefits tax (net of refunds) Net cash from operating activities (A) 144.68 (3,614.32) (1,079.05) (4,977.58) 3,522.73 46,357.20 (7,367.77) (22,975.94) 552.18 17,048.24 (3,906.71) 13,141.53 (24,019.67) (552.85) (220.25) (2,179.72) (2,674.11) 16,070.40 (851.09) 13,453.65 14,085.94 (9,064.82) 5,021.12 1,460.37 578.06 (14,035.23) (72.25) 64.13 (517.42) (6.81) (324.36) 190.70 6,486.11 1,785.23 1,643.90 (12,883.17) (72.25) (144.61) (1,214.28) 29.81 (1,160.90) (6.68) (74.73) 15,059.58 19,148.92 27,157.26 31st March 2011 ` in Lacs
Cash Flow Statement for the year ended 31st March 2012 (Contd.)
31st March 2012 ` in Lacs Cash flow from investing activities: Purchase of fixed assets (including capital advances) Proceeds from sale of fixed assets Sale of investments - current and non-current Purchase of investments - current and non-current Interest received Dividend on investments Net cash from / (used in) investing activities (B) Cash flow from financing activities: Proceeds /(repayments) from /of borrowings (net) Interest and other finance charges paid Net cash used in financing activities (C) Net Increase in Cash and cash equivalents (A)+(B)+(C) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Cash and cash equivalents comprise of Cash on hand Balances with scheduled banks TOTAL Notes to the Financial Statements 1. The above Cash Flow Statement has been prepared under the Indirect Method as set out in Accounting Standard - 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. This is the Cash Flow Statement referred to in our report of even date 8.12 4,273.76 4,281.88 18.31 724.49 742.80 (18,483.97) (1,093.72) (19,577.69) 3,539.08 742.80 4,281.88 247.96 (1,461.50) (1,213.54) (4,371.80) 5,114.60 742.80 (1,252.29) 82.69 787,170.87 (790,440.06) 14,341.78 72.25 9,975.24 (1,958.29) 107.41 794,588.36 (813,203.22) 12,214.11 72.25 (8,179.38) 31st March 2011 ` in Lacs
This is the Cash Flow Statement referred to in our report of even date or Price Waterhouse Firm Registration Number: 301112E Chartered Accountants Uday S. Kotak Chairman Vivek Prasad Partner Membership Number: F104941 Mumbai, Narayan S. A. Director For and on behalf of the Board of Directors
D. Kannan Managing Director Trivikram Kamath Executive Vice President Mumbai, 28th April 2012
REPORTS ACCOUNTING POLICIES & NOTES
Notes to the Financial Statements for the year ended 31st March 2012
31st March 2012 ` in Lacs NOTES 2: SHARE CAPITAL Authorised 1,000,000 Preference Shares of `100 each 6,000,000 Equity Shares of `10 each Issued and Subscribed 1,600,000 Equity Shares of `10 each fully paid up {Of the above 1,199,990 shares are held by Kotak Mahindra Bank Limited, the Holding Company and its nominees and 400,010 shares held by Kotak Mahindra Capital Company Limited, Subsidiary of the holding company.} TOTAL Reconciliation of number of shares and equity share capital 31st March, 2012 31st March, 2011 Particulars No. of shares ` in Lacs No. of shares ` in Lacs Opening Balance at the beginning of the year 1,600,000 160.00 1,600,000 160.00 Add : Issued during the year Less : Buy back during the year Closing Balance at the end of the year 1,600,000 160.00 1,600,000 160.00 Equity Shares: The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amount, in proportion to their shareholding. List of Shareholders holding more than 5 % of equity share capital 31st March, 2012 31st March, 2011 Particulars No. of shares ` in Lacs No. of shares ` in Lacs Kotak Mahindra Bank Limited and its nominees 1,199,990 75 1,199,990 75 Kotak Mahindra Capital Company 400,010 25 400,010 25 31st March 2012 ` in Lacs NOTE 3: RESERVES AND SURPLUS Securities Premium Account Balance as at the beginning and end of the year Debenture Redemption Reserve Balance as at the beginning of the year Add: Amount transferred from Surplus in Statement of Profit and Loss during the year Less: Amount transferred to Surplus in Statement of Profit and Loss during the year Less: Amount transferred to General Reserve Balance as at the end of the year General Reserve Balance as at the beginning of the year Add: Amount transferred from Debenture Redemption Reserve Balance as at the end of the year Surplus in Statement of Profit and Loss Balance at the beginning of the year Profit for the year Appropriations Add: Amount transferred from Debenture Redemption Reserve Less: Amount transferred to Debenture Redemption Reserve Balance as at the end of the year TOTAL 2,350.35 10,995.43 10,995.43 6,286.51 10,995.43 17,281.94 149,602.62 12,582.17 162,184.79 181,817.08 2,350.35 15,017.92 3,813.76 7,836.25 10,995.43 6,286.51 6,286.51 127,386.34 18,193.79 7,836.25 3,813.76 149,602.62 169,234.91 31st March 2012 ` in Lacs 160.00 160.00 160.00 160.00 1,000.00 600.00 1,600.00 1,000.00 600.00 1,600.00 31st March 2012 ` in Lacs
Notes to the Financial Statements for the year ended 31st March 2012 (Contd.)
31st March 2012 ` in Lacs NOTE 4: OTHER LONG TERM LIABILITIES Sundry Creditors (Refer Note 39 (b)) Others TOTAL NOTE 5 : LONG-TERM PROVISIONS Provision for employee benefits Gratuity (Refer Note 29 (a)) Leave Encashment and Compensated Absenses TOTAL NOTE 6: SHORT TERM BORROWINGS Secured Overdraft from Banks- repayable on demand (Secured by a pari passu first charge on the stock in trade and trade receivables) Unsecured Commercial Paper Less : Discount not Written off (Maximum amount oustanding during the year Rs 8,000 Lacs (Previous Year Rs 50,000 Lacs)) 1,887.88 NOTE 7: TRADE PAYABLES Trade Payables Sundry Creditors * TOTAL 71,181.44 5,788.74 76,970.18 71,350.16 9,234.34 80,584.50 8,000.00 (319.94) 7,680.06 9,348.80 1,887.88 1,668.74 708.69 708.69 733.20 866.27 1,599.47 236.08 1,818.33 2,054.41 1,909.73 1,909.73 31st March 2011 ` in Lacs
* There are no delays in payments to micro and small enterprises as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006. The above information regarding micro and small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.
10
Particulars NOTE 8: OTHER CURRENT LIABILITIES Current Maturities of Long-Term Borrowings (Refer Note 26) Interest Accured but not due on Borrowings Income Received in Advance Book Overdraft from Banks Security Deposits Statutory Dues Equity Index/Stock Option Premium (Refer Note 1 K 2 ( b ) ) Add/(Less):Unrealised Loss/(Gain) (Refer Note 1 K 1 ) Embedded Option Value Other Liabilities TOTAL NOTE 9: SHORT-TERM PROVISIONS (a) Provision for Employee Benefits Gratuity (Refer Note 29 (a)) Leave Encashment and Compensated Absenses (b) Others Provision for Tax (Net of Advance Tax and Fringe Benefits Tax - Rs. 54,882.40 Lacs) Contingencies (Refer Note 34) TOTAL 988.76 1,264.34 2,387.08 1,804.91 2,104.01 133.98 146.94 152.16 438.09 2,245.81 688.56 425.91 18,762.10 (328.70) 372.41 1,048.35 4,904.73 701.11 649.73 15.54 282.22 487.82 3,856.38 11,023.05 515.66 566.36 3.52 281.22 353.09 31st March, 2012 ` in Lacs ` in Lacs 31st March, 2011 ` in Lacs ` in Lacs
11
12
` in Lacs GROSS BLOCK Additions for the year On As At Ddisposals 31st March 2012 As At 31st March 2012 As at 31st March 2011 Disposals for the year As At 31st March 2012 As at Depreciation 1st April, charges for 2011 the year DEPRECIATION/AMORTISATION NET BLOCK 348.44 18.19 438.21 157.07 273.11 1,235.02 17.27 17.27 1,252.29 1,791.37 481.97 18,973.70 10,209.27 1,785.23 1,020.64 19,205.35 11,649.75 1,460.37 944.76 344.75 2,322.78 1,996.97 194.26 2,322.78 1,996.97 194.26 2,191.23 2,191.23 12,165.36 11,649.75 1,020.64 16,882.57 9,652.78 1,266.11 944.76 9,974.13 144.53 854.64 331.77 183.90 110.42 405.25 208.04 2,737.29 2,302.26 244.50 187.95 2,358.81 378.48 449.39 6,908.44 131.55 131.55 7,039.99 7,323.95 134.18 6,088.32 4,997.09 497.37 130.42 5,364.04 724.28 46.09 258.30 268.09 23.75 44.98 246.86 11.44 5,168.79 155.17 84.25 239.42 4,929.37 487.80 1,775.23 1,598.40 232.34 470.99 1,359.75 415.48 316.19 5,013.62 18.11 787.20 486.00 394.29 7,015.41 308.54 308.54 7,323.95 -
NOTES 10 : FIXED ASSETS
DESCRIPTIONS
As at 1st April, 2011
TANGIBLE ASSETS
Leasehold Improvements
1,914.59
Premises (a) & (b)
5,168.79
Furniture and Fixtures
286.20
Computers
5,784.29
Office Equipments ( c)
2,788.26
Motor Vehicles
726.06
TOTAL TANGIBLE ASSETS
16,668.19
INTANGIBLE ASSETS
Software (d)
2,305.51
TOTAL INTANGIBLE ASSETS
2,305.51
Capital Work In Progress
TOTAL FIXED ASSETS
18,973.70
Previous year
17,664.30
a)
Includes value of shares in the co-operative society , aggregating to ` 4.00 Lacs (Previous Year ` 4.00 Lacs) registered in the name of the Company. The depreciation for the year is ` 0.06 Lacs (Previous Year ` 0.06 Lacs) and the written down value of the asset as on 31st March, 2012 is ` 3.08 Lacs (Previous Year ` 3.14 Lacs)
b)
Includes asset given on operating lease aggregating to ` 2,305.97 Lacs (Previous Year ` Nil).The depreciation for the year is ` 37.59 Lacs (Previous Year ` 37.59 Lacs) and the written down value of the asset as on 31st March,2012 is ` 2,199.76 Lacs (Previous Year ` Nil )
c)
Includes assets given on operating lease aggregating to ` 358.74 Lacs (Previous Year ` 397.75 Lacs). The depreciation for the year is ` 12.67 Lacs (Previous Year ` 34.76 Lacs) and the written down value of the assets as on 31st March, 2012 is ` 4.00 Lacs (Previous Year ` 20.33 Lacs).
d)
Includes asset given on operating lease aggregating to ` 177.35 Lacs (Previous Year ` 177.35 Lacs). The depreciation for the year is ` Nil (Previous Year ` Nil Lacs) and the written down value of the asset as on 31st March, 2012 is ` Nil (Previous Year ` Nil )
NOTE 11: NON-CURRENT INVESTMENTS Particulars Face Value ` 31st March 2012 Quantity 31st March 2012 ` in Lacs 31st March 2011 Quantity 31st March 2011 ` in Lacs
Long Term Investments (Other than Trade) (At Cost, less diminution other than temporary in nature) Quoted Debentures (fully paid) Investment in Fellow Subsidiary 9.50%,Unsecured Non Convertible Debentures of Kotak Mahindra Prime Limited (Date of Redemption on 30th August, 2017) 1,000,000 10.50%,Unsecured Non Convertible Debentures of Kotak Mahindra Prime Limited (Date of Redemption on 23rd April, 2021) 11.00%,Unsecured Non Convertible Debentures of Kotak Mahindra Prime Limited (Date of Redemption on 23rd September, 2021) 11.25%,Unsecured Non Convertible Debentures of Kotak Mahindra Prime Limited (Date of Redemption on 28th September, 2021) Sub Total: (a) Unquoted Equity Shares (fully paid) Investment in Subsidiary: Kotak Mahindra Financial Services Limited incorporated in USD 1 Dubai, U.A.E. Investment in Fellow subsidiary Kotak Mahindra Capital Company Limited Kotak Mahindra Prime Limited Kotak Forex Brokerage Limited Less : Provision for Diminution in Value of Investment Others Bombay Stock Exchange Limited Preference Shares (fully paid) Investment in Fellow subsidiary 8.5%,Cumulative Preference Share of Kotak Mahindra Asset Management Company Limited Units of Venture Capital Fund: Kotak Alternate Opportunities India Fund Kotak India Growth Fund II (partly paid up) Less : Provision for Diminution in Value of Investment Sub Total: (b) Total Long-Term Investments (a+b): Aggregate Value of Quoted Investments At Book Value At Market Value (Value of debentures which are not traded have been taken at Book Value) Aggregate Value of Unquoted Investments At Book Value 10 1 10 10 10
500
5,000.00
500
5,000.00
1,000,000
1,500
15,000.00
1,500
15,000.00
1,000,000
500
5,000.00
1,000,000
400 2,900
4,000.00 29,000.00
2,000
20,000.00
1,214,000
572.24
950,000
443.38
990,015 1,712,600 1,989,706 260,000
21,000.00 27,080.69 198.97 (180.00) 262.75
990,015 1,712,600 1,989,706 260,000
21,000.00 27,080.69 198.97 262.75
8,500,000
850.00
8,500,000
850.00
14,666,321 14,669,221
1,749.65 107.00 (10.70) 51,630.60 80,630.60 29,000.00 29,000.00 51,630.60 190.70
14,402,321 14,404,321
1,895.45 51,731.24 71,731.24 20,000.00 20,000.00 51,731.24 -
Aggregate provison for diminution in value of Investment
13
31st March 2012 ` in Lacs NOTE 12: DEFERRED TAX ASSET Provision for Doubtful Debts and Contingencies Provision for Gratuity Provision for Leave Encashment Depreciation Interest on Debentures Others TOTAL NOTE 13: LONG TERM LOANS AND ADVANCES Unsecured, Considered Good Advances Recoverable in Cash or Kind or for Value to be Received Capital Advances Deposits with Exchanges/Depositories Deposits -Others TOTAL NOTE 14: OTHER NON CURRENT ASSETS Long-Term Trade Recievables : Unsecured Considered Doubtful (Refer Note 33) Less : Provision for Doubtful Debts 2,067.18 2,067.18 Other Bank Balances Fixed Deposits (with maturity of more than 12 months)* TOTAL 42,189.29 42,189.29 88,546.49 88,546.49 2,003.05 2,003.05 307.16 10.77 303.15 725.22 1,346.30 194.14 218.38 287.00 783.08 1,482.60 992.97 273.40 580.60 313.10 2,160.07 1,147.54 285.56 330.43 636.90 497.52 367.64 3,265.59 31st March 2012 ` in Lacs
* Fixed deposits include Rs. 33,881.03 Lacs (Previous Year Rs. 79,817.42 Lacs) which is under the lien of National Securities Clearing Corporation Limited and Rs. 7,748.30 Lacs (Previous Year Rs. 7,709.11 Lacs) which is under the lien of Bombay Stock Exchange Limited and Rs. 559.96 Lacs (Previous year Rs. 1,026.46 Lacs) which is under the lien of Multi Commodity Exchange Limited
14
(At cost or fair value, whichever is lower) Face Value ` NOTE 15: CURRENT INVESTMENTS (OTHER THAN TRADE) Quoted Debentures (fully paid) Investment in Fellow Subsidiary 8.15%,Unsecured Non Convertible Debentures of Kotak Mahindra Prime Limited (Date of Redemption on 23rd November, 2011) Unquoted Debentures (fully paid) Investment in Fellow Subsidiary 9.40%, Unsecured Non Convertible Debentures of Kotak Mahindra Investments Limited, (Date of Redemption on 3rd August, 2011) 8.5%,Unsecured Fully Convertible Debentures of Kotak Forex Brokerage Limited, convertible into equity shares of Rs.10 each on 26th March 2012 31st March 2012 Quantity 31st March 2012 ` in Lacs 31st March 2011 Quantity 31st March 2011 ` in Lacs
1,000,000
300
3,000.00
1,000,000
250
2,486.51
100,000
10
10.00
Aggregate Value of Quoted Investments - At Book Value - At Market Value ( Value of debentures which are not traded have been taken at Book Value) Aggregate Value of Unquoted Investments - At Book Value NOTE 16: STOCK IN TRADE (SECURITIES) Face Value Equity Shares 3i Infotech Limited Aditya Birla Nuvo Limited Ahlcon Parenterals (India) Limited Alfa-Laval (India) Limited Allahabad Bank Amtek Auto Limited Apollo Tyres Limited Arvind Mills Limited Asian Paints Limited Bajaj Auto Limited Bajaj Electricals Limited Bajaj Holdings and Investments Limited Balkrishna Industries Limited Balmer Lawrie Investments Limited Bank of Baroda Berger Paints (India) Limited Bharti Airtel Limited Birla Corporation Limited Cadila Healthcare Limited Carol Info Services Limited Central Bank of India Century Textiles and Industries Limited CESC Limited Chambal Fertilisers and Chemicals Limited Coal India Limited 31st March 2012 Quantity 12,000 56,126 28,000 1 944,000 52,000 4,750 40,695 500 628,000 12,779 50,000 12,000 15,000 1,855,851
560
5,496.51 3,000.00 3,000.00 2,496.51
31st March 2012 ` in Lacs 106.24 235.55 52.09 733.74 42.16 77.69 61.43 3.87 2,122.01 36.40 175.35 32.60 11.49 3,690.62
31st March 2011 Quantity 31,000 6,000 1 4,251 20,000 3,000 54,071 100,100 33,066 11,337 28,323 19,000 14,814 40,100 365,063
31st March 2011 ` in Lacs 13.56 73.93 107.37 44.29 22.94 67.56 84.73 112.02 86.73 38.66 26.70 50.52 135.13 864.14
10 10 10 10 10 2 1 10 10 10 2 10 2 10 10 2 5 10 5 10 10 10 10 10 10
15
NOTE 16: STOCK IN TRADE (SECURITIES) (contd.) Face Value Corporation Bank CRISIL Limited Crompton Greaves Limited Cummins India Limited Dabur India Limited DLF Limited DQ Entertainment (International) Limited. Dr Reddys Laboratories Limited Educomp Solutions Limited EIH Limited Escorts India Limited Fortis Healthcare Limited Godrej Consumer Products Limited Godrej Industries Limited Goodyear India Limited Grasim Industries Limited Greaves Cotton Limited Gujarat State Fertilizers and Chemicals Limited GVK Power and Infrastructure Limited Hathway Cable and Datacom Limited Havells India Limited HCL Technologies Limited HDFC Bank Hindalco Industries Limited Hindustan Petroleum Corporation Limited Hindustan Unilever Limited Housing Development Finance Corporation Limited I. F. B. Industries India Motor Parts and Accessories Limited Indian Bank Indian Oil Corporation Limited IndusInd Bank Limited Infosys Technologies Limited Ingersoll-Rand (India) Limited ITC Limited Jaiprakash Associates Limited Karur Vysya Bank Limited Kolar Biotech Limited Lanco Infratech Limited Larsen and Toubro Limited LIC Housing Finance Limited Mahindra and Mahindra Financial Services Limited Maruti Suzuki India Limited Multi Commodity Exchange of India Limited Nagarjuna Construction Company Limited National Mineral Development Corporation Limited National Thermal Power Corp Oil and Natural Gas Corpn Limited Pantaloon Retail (India) Limited Petronet LNG Limited Polaris Financial Technology Limited Power Finance Corporation Limited Power Grid Corporation of India Limited Prestige Estates Projects Limited Punj Lloyd Limited Rane Holdings Limited 10 1 2 2 1 2 10 5 2 2 10 10 1 1 10 10 10 10 1 10 5 2 2 1 10 1 2 10 10 10 10 10 5 10 1 2 10 1 1 2 2 10 5 10 2 1 10 5 2 10 5 10 10 10 2 10 31st March 2012 Quantity 3,000 10,000 100,000 100,000 48,000 5,000 3,000 25,000 12,000 2,000 10,000 10,000 22,000 3,000 2,000 35,000 60,012 1,804,000 67,000 20,000 15,000 65,000 5,000 35,000 11,000 64,000 12,000 1,052,000 80,000 40,000 10,000 500,000 3,000 2,000 15,000 15,000 96,000 23,000 844,000 359,000 531,000 36,000 28,319 312,000 80,000 16,000 17,000 6,607,331 31st March 2012 Rs. in Lacs 12.74 44.88 105.51 198.39 11.57 82.99 5.68 21.39 8.23 1.95 40.81 24.39 69.71 78.81 8.10 57.73 311.97 2,334.38 188.68 76.86 99.80 51.58 11.11 90.11 34.31 1,818.36 51.34 2,137.20 62.71 148.98 86.55 38.91 5.09 100.56 190.54 49.72 36.25 1,372.45 917.28 812.70 58.23 46.50 547.60 80.16 8.76 34.62 12,576.19 31st March 2011 Quantity 516 69,000 18,500 50,000 20,000 20,000 70,000 13,000 200,000 40,000 40,000 36,000 14,046 108 22,000 6,125 10,000 1,250 30,000 30,000 205 13,000 703,750 31st March 2011 Rs. in Lacs 30.47 183.77 121.94 47.91 23.38 52.62 51.28 44.43 51.80 38.84 144.98 171.35 39.92 0.73 49.94 193.98 14.65 77.60 55.85 0.20 24.60 1,420.24
16
Face Value Reliance Communications Limited Reliance Industries Limited Reliance Infrastructure Limited Reliance Power Limited Sadbhav Engineering Limited SBI Home Finance Limited Sesa Goa Limited Siemens Limited Sobha Developers Limited Standard Chartered PLC IDR23 State Bank of India Sterlite Industries (India) Limited Sun Pharmaceuticals Industries Limited Tata Communications Limited Tata Consultancy Services Limited Tata Global Beverages Limited Thermax Limited UB Engineering Limited Union Bank of India United Phosphorus Limited United Spirits Limited Zee Entertainment Ent. Limited Zuari Industries Limited Sub total for equity shares (A) Exchange Traded Fund Kotak Mahindra Mutual Fund-Gold Exchange Traded Fund Kotak Mahindra Mutual Fund - PSU Bank Exchange Traded Fund Kotak Mahindra Mutual Fund-Kotak Sensex Exchange Traded Fund Kotak Mahindra Mutual Fund-Kotak Nifty Exchange Traded Fund Sub total for exchange traded fund (B) Equity Warrants HDFC-WARRANT-23AUG2012 Sub total for equity warrants (C) TOTAL (A+B+C) (Refer Note 30 and 31) Aggregate Value of Stock-In-Trade At Book Value At Market Value 25,753.85 26,278.34 2,777.91 2,882.01 0.05 100 10 10 10 5 10 10 10 1 10 1 2 10 10 1 1 10 1 1 2 10 10 2 10 1 10 31st March 2012 Quantity 1,948,000 604,500 4,000 12,000 300 280,000 8,000 26,000 250,000 5,000 1,222,000 5,000 10,000 5,000 30,000 7,500 18,000 33,000 240,000 2,000 13,173,482 1,434 5,893 9,273 1,968 18,568 185,900 185,900 13,377,950 31st March 2012 Rs. in Lacs 1,637.29 4,537.38 22.72 13.83 526.84 60.76 71.46 222.58 103.31 1,349.40 28.45 22.29 58.14 33.37 34.84 23.42 195.79 298.19 9.74 25,516.61 38.45 20.95 16.27 10.53 86.20 151.04 151.04 25,753.85 31st March 2011 Quantity 10,000 50,000 300 30,000 10,000 18,000 10,000 1,197,113 4,898 6,328 4,469 8,570 24,265 900 900 1,222,278 31st March 2011 Rs. in Lacs 103.00 57.65 50.62 44.18 16.28 34.73 2,590.82 98.98 29.27 8.32 49.84 186.41 0.68 0.68 2,777.91
17
Notes to the Financial Statements for the year ended 31st March, 2012 (Contd.)
NOTE 17: TRADE RECEIVABLES 31st March 2012 ` in Lacs Sundry Debtors : Considered Good * Over Six Months Others ** TOTAL (Refer note 33) * Sundry debtors - considered good include secured debtors Rs. 37,915.43 Lacs (Previous Year Rs.35,205.51 Lacs) ** Due from Directors Rs. Nil (Previous Year Rs. Nil Lacs), maximum amount outstanding during the year from Directors Rs. 14.38 Lacs (Previous Year Rs. 5.47 Lacs) NOTE 18: CASH AND BANK BALANCES Cash and Cash Equivalents Cash on Hand Balances with Banks in : Current Account Fixed Deposits (with original maturity less than 3 months) Other Bank Balances Fixed Deposits (with maturity of less than 12 months) * Fixed Deposits (with maturity of more than 12 months) TOTAL 43,795.85 8,230.75 56,308.48 35,808.46 16,770.32 53,321.58 258.51 4,015.25 373.81 350.68 8.12 18.31 953.58 43,928.75 44,882.33 1,070.05 36,508.65 37,578.70 31st March 2011 ` in Lacs
* Fixed deposits include Rs. 30,022.08 Lacs (Previous Year Rs. 24,794.78 Lacs) which is under the lien of National Securities Clearing Corporation Limited and Rs. 1,104.25 Lacs (Previous Year Rs. 2,845.85 Lacs) which is under of Bombay Stock Exchange Limited and Rs. 1,077.22 Lacs (Previous year Rs. 27.45 Lacs) which is under the lien of Multi Commodity Exchange Limited. NOTE 19: SHORT TERM LOANS AND ADVANCES ` in Lacs Unsecured, Considered Good Loans Advances Recoverable in Cash or Kind or for Value to be Received Deposits -Others Initial Margin - Equity Derivative Instrument ( Refer Note 1 K 2 (a) ) Mark-to-Market Margin - Equity Index/Stock Futures Less: Provision for Loss ( Refer Note 1 K 1 ) Equity Index/Stock Option Premium ( Refer Note 1 K 2 (b) ) Less: Provision for Loss ( Refer Note 1 K 1 ) Advance Tax (Net of Provision for Current Taxation and Fringe Benefit Tax Rs Nil (Previous Year Rs 50,667.35 Lacs)) Other Advances 38.79 6,050.18 10,002.36 384.73 (384.73) 431.96 (231.88) 200.08 143.52 875.33 263.72 4,528.74 196.97 (196.97) 1,971.74 1,971.74 565.76 127.30 753.59 296.33 6,287.64 31st March 2012 ` in Lacs ` in Lacs 31st March 2011 ` in Lacs
18
Notes to the Financial Statements for the year ended 31st March, 2012 (Contd.)
NOTE 20: OTHER CURRENT ASSETS ` in Lacs Interest Accrued on Fixed Deposits Interest Accured on Debentures Dividend Accrued on Preference Shares TOTAL NOTE 21: REVENUE FROM OPERATIONS (A) Revenue From Operations Income from Brokerage {(Net of brokerage Income pertaining to earlier years written off Rs. 36.19 Lacs (Previous Year Rs. 1.67 Lacs)} Less : Sub Brokerage/Referral Fees and Expenses Fee Income - Gross (Refer Note 35) Less : Referral Fees Interest Income- Margin Funding (B) Revenue From Other Financial Services Interest Income- Others (Net of interest Income pertaining to earlier years written off Rs. 60.30 Lacs (Previous Year Rs. 66.87 Lacs)) Profit on Trading in Securities (net) (Refer Note 31) TOTAL 2,649.78 4,607.08 7,256.86 44,408.76 3,501.64 4,787.61 8,289.25 57,012.91 7,540.17 33,300.11 3,321.50 97.78 3,223.72 628.07 628.07 6,451.07 43,072.87 4,514.05 97.97 4,416.08 1,234.71 1,234.71 40,840.28 49,523.94 31st March 2012 ` in Lacs 977.16 820.63 72.25 1,870.04 ` in Lacs 31st March 2011 ` in Lacs 1,632.24 472.10 72.25 2,176.59
NOTE 22: OTHER INCOME Interest on Bank Deposits Interest on Staff Loans Interest on Debentures Liabilities Written Back as no Longer Required (Refer Note 38) Provision for Contingencies Written Back (net) Profit on Sale of Fixed Assets (net) Provision on Compensated Absences Written Back (net) Provision on Doubtful Debts Written Back (net) Profit on Buyback of Debentures Dividend Income (Refer Note 36) Provision of Diminution in Value of Investments written back as No Longer Required Add: Profit on sale of Investments (Refer Note 37) Rent Miscellaneous Income TOTAL 324.36 324.36 240.60 948.89 16,561.69 913.69 16,742.44 ANNUAL REPORT 2011-12 11,220.71 9.43 2,805.09 237.27 517.42 6.81 119.64 131.47 74.73 1,160.90 1,235.63 144.61 6.68 158.23 12,219.17 6.51 664.00 179.64 1,214.28 -
19
Notes forming part of the Profit and Loss Account

31st March 2011 ` in Lacs NOTE 23: EMPLOYEE BENEFIT EXPENSES Salaries, Allowances and Bonus (Refer Note 39) Contribution to Provident and Other Funds (Refer Note 29(b)) Compensated Absences and Leave Encashment Gratuity Staff Welfare Total: Less : Recovery of Expenses (Refer Note 40) TOTAL NOTE 24: INTEREST AND OTHER FINANCIAL COSTS Interest on Inter Corporate Deposits Interest on Debentures Interest/Discount on Term Loan/Other Fixed Loans Interest on Bank Overdraft Bank Guarantee Commission and Other Charges Interest-Other TOTAL NOTE 25: OTHER EXPENSES Travelling, Conveyance and Motor Car Professional and Legal Auditors Remuneration Audit Fees In Other Capacity Out of Pocket Expense Loss on Sale / Disposal of Fixed Assets (net) Provision for Doubtful Debts Commission to Director Provision for Diminution in Investments Repairs and Maintenance - Others Office Communication Printing and Stationery Stock Exchanges Expenses Electricity Membership and Subscription Rent Rates and Taxes Advertising, Business Promotion and Entertainment Securities Transaction Tax on Proprietory Trades Bad Debts Written Off Service Charges Common Establishment Expenses-Reimbursement Depository Charges Stamp/ Turnover / Transaction Charges (net of recovery) Insurance Loss on Account of Trades Not Confirmed by Clients, Error Trades and Other Settlements Cost (net) Miscellaneous Total Less : Recovery of Expenses (Refer Note 40) TOTAL 18,500.72 968.37 293.15 309.48 20,071.72 242.32 19,829.40 239.11 319.94 8.83 10.18 231.21 809.27 1,011.36 2,487.95 60.50 2.00 0.79 64.13 190.70 1,246.62 344.38 1,778.89 443.66 40.26 764.10 707.57 2,872.09 669.69 737.77 724.83 117.19 760.18 3,615.51 162.19 202.58 196.30 112.99 431.55 19,745.78 23.29 19,722.49 31st March 2010 ` in Lacs 21,694.83 933.40 372.68 484.50 315.54 23,800.95 240.10 23,560.85 53.08 983.49 574.04 17.10 16.19 343.82 1,987.72 1,048.85 1,648.79 57.00 1.00 0.42 29.81 75.00 944.93 398.86 2,115.10 706.83 39.24 785.66 697.74 2,886.24 342.22 1,118.18 869.10 143.29 407.82 3,641.26 257.05 436.02 151.57 178.78 307.50 19,288.26 23.97 19,264.29
20
Notes to the Financial Statements for the year ended 31st March, 2012
NOTE 26: CURRENT MATURITIES OF LONG TERM BORROWINGS 31st March 2012 ` in Lacs Unsecured 0, (Previous Year -49) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 16th October, 2011*. (Convertible into 0 (Previous Year 980),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -44) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 12th September, 2011*. (Convertible into 0 (Previous Year 880),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -78) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 6th September, 2011*. (Convertible into 0 (Previous Year 1,560),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -51) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 26th August, 2011*. (Convertible into 0 (Previous Year 1,020),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -149) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 23rd August, 2011*. (Convertible into 0 (Previous Year 2,980),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -51) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 25th July, 2011*. (Convertible into 0 (Previous Year 1,020),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -34) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 30th June, 2011*. (Convertible into 0 (Previous Year 680) ,35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -242) 20% Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 26th May, 2011**. (Convertible into 0 (Previous Year 4,840),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 0, (Previous Year -425) 20% Optionally Convertible Debentures of Rs.1,000,000 each. Date of redemption 2nd May, 2011**. (Convertible into 0 (Previous Year 8,500),35% Redeemable Non Cumulative Non Convertible Preference Shares of Rs.100 each at a premium of Rs.49,900 per share.) 31st March 2011 ` in Lacs 490.00
440.00
780.00
510.00
1,490.00
510.00
340.00
2,420.00
4,250.00
11,230.00 Less: Discount Accreted TOTAL * The Debentures can be redemed at the option of the Company contigent on future events ** The Debentures can be redemed at the option of the Investor contigent on future events 206.95 11,023.05
21
1. SIGNIFICANT ACCOUNTING POLICIES:

A. BASIS OF ACCOUNTING The Financial Statements have been prepared on historical cost basis of accounting. The company adopts the accrual system of accounting and the financial statements conform with the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006, the generally accepted accounting principles prevailing in India and the relevant provisions of the Companies Act, 1956. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reported period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of the services and the time between the provision of services and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities. B. REVENUE RECOGNITION Revenue is recognized when there is reasonable certainty of its ultimate realization / collection. 1. 2. Placement and other fee based income are accounted for on the basis of the progress of the assignment. Brokerage Income (net of service tax) on fixed deposit is accounted on completion of the transaction. on primary market subscription mobilisation is accounted on allotment after intimation received by the Company. on secondary market transaction is recognised on the date of the transaction. 3. 4. 5. Interest Income is accounted on accrual basis. Incentive on primary market subscription mobilisation is accounted on the basis of intimation received by the Company. Depository Fees (net of service tax) Transaction fees are recognised on completion of the transaction. Account maintenance charges are recognised on time basis over the period of the contract. 6. (i) Portfolio management fees are accounted on accrual basis as follows: (a) (b) (c) (ii) C. In case of fee based on fixed percentage of the corpus/ fixed amount, income is accrued over the period of the agreement. In case of fee based on the returns of the portfolio, income is accounted on the termination of the portfolio agreement / on each anniversary as per the agreement, whichever is earlier. In case of an upfront non-refundable fee, income is accounted in the year of receipt.
Funds received from Portfolio Management Services (PMS) Investors and corresponding Investments made on their behalf are not forming part of these financial statements.
DEBENTURE REDEMPTION RESERVE In terms of Section 117C of the Companies Act, 1956, amounts equivalent to the principal value of the debentures and accrued interest thereon is transferred to Debenture Redemption Reserve proportionately over the term of the debentures.
D.
DISCOUNTED INSTRUMENTS The liability is recognised at face value at the time of issuance of discounted instruments. The discount on the issue is amortised over the tenure of the instrument.
E.
STRUCTURED LIABILITIES The Company has issued structured liabilities wherein the return on these liabilities is linked to non-interest benchmarks. Such structured liabilities have an embedded derivative which is the non-interest related return component. The embedded derivative is separated from the host contract and accounted separately (Refer accounting policy on derivatives as per K below). The resultant debt component of such structured liabilities is recognised in the Balance Sheet under the head Unsecured Loans and is measured at amortised cost using yield to maturity basis.
F.
FIXED ASSETS TANGIBLE AND INTANGIBLE ASSETS 1. 2. Fixed assets are stated at cost inclusive of incidental expenses less accumulated depreciation. The Company adopts the Straight Line Method of depreciation so as to write off 100% of the cost of the assets at rates equal to or higher than those prescribed under Schedule XIV to the Companies Act, 1956 based on the Managements estimate of the useful lives of all the assets. Estimated useful lives over which assets are depreciated are as follows:
22
Leasehold Improvements Premises Furniture and Fixtures Computers Office Equipments Motor Vehicles Software (intangible) 3. 4. G.
Over the period of lease subject to a maximum of 6 years 58 years 6 years 3 years 5 years 4 years 3 years
Losses arising from the retirement of and gains or losses arising from disposal of fixed assets which are carried at cost, are recogonised in the Statement of Profit and Loss Fixed assets costing less than ` 5,000 are fully depreciated in the year of purchase/put to use.
INVESTMENTS Investments are classified into long term investments and current investments. Investments which are intended to be held for more than one year are classified as long term investments and investments which are intended to be held for less than one year are classified as current investments. Long term investments are accounted at cost and any decline in the carrying value other than temporary in nature is provided for. Current investments are valued at cost or market/fair value, whichever is lower. In case of investments in units of a mutual fund, the net asset value of units is considered as the market / fair value.
H.
CASH AND CASH EQUIVALENTS Cash and cash equivalents includes cash in hand, demand deposits with banks and other fixed deposits with bank with original maturities of three months or less.
I.
STOCK IN TRADE Securities acquired with the intention to trade are classified as stock- in- trade. Stock-in -trade is valued at cost, calculated by applying the weighted average cost method, or fair value whichever is lower. The profit or loss on sale of securities is recognised on trade date in the Statement of Profit and Loss.
J.
FOREIGN CURRENCY TRANSACTIONS Transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of the transaction. Exchange differences arising on settlement of revenue transactions are recognized in the Statement of Profit and Loss. Monetary assets and liabilities contracted in foreign currencies are restated at the rate of exchange ruling at the Balance Sheet date. Exchange differences arising on settlement of the transaction and on account of restatement of assets and liabilities are dealt with in the Statement of Profit and Loss. The financial statement of an integral foreign operations are translated using principle and procedures as if the transactions of the foreign operations are there of Company itself.
K.
DERIVATIVES 1 Outstanding derivative contracts, including embedded derivatives, are measured at fair value as at each Balance Sheet date. Fair value of derivatives is determined using quoted market prices in an actively traded market, for the instrument, wherever available, as the best evidence of fair value. In the absence of quoted market prices in an actively traded market, a valuation technique is used to determine the fair value. In most cases the valuation techniques use as input parameters, observable market data in order to ensure reliability of the fair value measure. The marked to market on derivative contracts is determined on a portfolio basis with net unrealized losses being recognised in the Statement of Profit and Loss. Net unrealized gains are not recognised in the Statement of Profit and Loss on grounds of prudence as enunciated in Accounting Standard 1, Disclosure of Accounting Policies. 2 (a) Initial Margin Equity Derivative Instrument representing the initial margin paid and /or additional margin paid over and above the initial margin, for entering into contracts for equity index/ stock futures and equity index/ stock options, which are released on final settlement / squaring up of the underlying contracts, are disclosed under Loans and Advances. Margin Deposits Equity Derivative Instrument representing the deposit paid in respect of mark to market margin is disclosed under Loans and Advances. Equity Index/ Stock Option Premium Account represents the premium paid or received for buying or selling the options, respectively. On final settlement or squaring up of contracts for equity index/ stock futures, the realised profit or loss after adjusting the unrealized loss already accounted, if any, is recognised in the Statement of Profit and Loss and shown as Profit / (Loss) on Trading in Options / Futures.
(b) (c)
On settlement or squaring up of equity index/ stock options before expiry, the premium prevailing in Equity Index/Stock Option Premium Account on that date is recognised in the Statement of Profit and Loss. ANNUAL REPORT 2011-12
23
When more than one contract in respect of the relevant series of equity index/ stock futures or equity index/ stock options contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the profit/loss on squaring-up. L. EMPLOYEE BENEFITS Long Term Employee Benefits (a) Defined Contribution Plan Contribution as required by the Statute made to the Government Provident Fund is debited to the statement of Profit and Loss. (b) Defined Benefit Plan The Company has a defined benefit plan for post employment bebefits in the form of gratuity. The Company has formed a Trust Kotak Securities Employees Gratuity Trust which has taken group gratuity policies with an insurance company which is funded. The Trust is recognised by the Income Tax Authorities and is administered through trustees and / or the insurance companies. The net present value of the Companys obligation towards the same is actuarially determined based on the projected unit credit method as at the Balance Sheet date. The fair value of assets available with the insurance companies is compared with the gratuity liability as per an independent actuarial valuation at the year end and shortfall, if any, is provided in the financial statements. Actuarial gains and losses are recognised in the Statement of Profit and Loss. (c) Other Long-term Employee Benefit The company accrues the liability for compensated absences based on the actuarial valuation as at the balance sheet date conducted by an independent actuary. The net present value of the companys obligation is determined based on the projected unit credit method as at the Balance Sheet date. Short Term Employee Benefits Other employee benefits The undiscounted amount of employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service. These benefits include performance incentives. M. EMPLOYEE STOCK APPRECIATION SCHEME Cash-settled transactions: The cost of cash-settled transactions (stock appreciation rights and employee stock option plan ) is measured initially using intrinsic value method at the grant date taking into account the terms and conditions upon which the instruments are granted. This intrinsic value is amortised on a straight-line basis over the vesting period with a recognition of corresponding liability. This liability is remeasured at each balance sheet date up to and including the settlement date with changes in intrinsic value recognised in statement of profit and loss in Salaries, Allowances and Bonus. N. TAXES ON INCOME The Income Tax expense comprises Current tax and Deferred tax. Current tax is measured at the amount expected to be paid in respect of taxable income for the year in accordance with the Income tax Act, 1961. Deferred tax adjustments comprises of changes in the deferred tax assets and liabilities. Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising mainly on account of carry forward losses and unabsorbed depreciation under tax laws are recognised only if there is virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted before the balance sheet date. Changes in deferred tax assets / liabilities on account of changes in enacted tax rates are given effect to in the statement of Profit and Loss in the period of the change. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. O. IMPAIRMENT OF ASSETS The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors in accordance with Accounting Standard 28, Impairement of Assets. The carrying amount is reduced to the recoverable amount and reduction is recognised as an impairement loss in the Statement of Profit and Loss. P. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS A provision is recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its
24
present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date and adjusted to reflect the current best estimate. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements. Q. OPERATING LEASE Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments/ receipts are recognised as an expense/ income in the Statement of Profit and Loss on a straight-line basis over the lease term. R. EARNINGS PER SHARE The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive. 27. Contingent Liabilities: (a) (b) (c) (d) 28. (a) Income tax matters in respect of which appeal is pending - ` 487.88 Lacs (Previous Year `. 55.32 Lacs). This is being disputed by the Company and hence not provided for. Service tax matters in respect of which appeal is pending - `101.71 Lacs (Previous Year ` 51.71 Lacs). This is being disputed by the Company and hence not provided for. Capital commitments (net of advances) - `159.28 Lacs (Previous Year ` 154.20 Lacs) Claims against the Company not acknowledged as debt by the Company ` 773.52 Lacs (Previous Year ` 772.22 Lacs) The Company has taken various offices, residential and godown premises under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 72 months (with a maximum lock-in period of 36 months). These leave and license agreements are generally renewable or cancellable at the option of the Company. Rent payments are recognised in the Statement of Profit and Loss under the head Rent in Schedule 19. The future minimum lease payments under non-cancellable operating lease not later than one year is `. 89.36 Lacs (Previous Year `. 638.09 Lacs) and later than one year but not later than five years is `145.47 Lac (Previous Year ` 990.67 Lacs).
(b) (c)
29. Employee Benefits:(a) Gratuity The Company has formed a Trust Kotak Securities Employees Gratuity Trust which has taken group gratuity policies with an insurance company which is funded. The amount funded is ` 1,072.66 Lacs. The Trust is recognised by the Income Tax Authorities and is administered through trustees and / or the insurance companies. (i) Reconciliation of opening and closing balances of the present value of the defined benefit obligation for gratuity benefits is given below. Particulars 31st March 2012 (` in Lacs) Change in Defined Benefit Obligation Opening Defined Benefit Obligation Current Service Cost Interest Cost Actuarial Losses / (Gain) Past Service Cost Liabilities Extinguished on Curtailment Liabilities Extinguished on Settlements Liabilities Assumed on Acquisition Benefits Paid Closing Defined Benefit Obligation 880.14 267.90 88.76 (57.81) 1.56 (153.41) 1,027.14 535.70 154.63 51.44 36.59 217.48 (10.57) (105.13) 880.14 31st March 2011 (` in Lacs)
25
(ii)
Reconciliation of Change in fair value of plan assets Particulars Opening fair value of assets Expected return on plan assets Actuarial gain/(loss) Contributions by employer Closing fair value of assets 31st March 2012 (` in Lacs) 13.15 1,072.66 1,085.81 31st March 2011 (` in Lacs) -
(iii)
Reconciliation of present value of the obligation and the fair value of the plan assets Particulars Present Value of Obligations as at year end Fair Value of Plan Assets Amount not recognised as an assetUnrealised Gain Net (Asset) / Liability Current Net (Asset) / Liability Non-Current 31st March 2012 (` in Lacs) 1,027.14 (1,085.81) -13.15 (45.52) 31st March 2011 (` in Lacs) 880.14 146.94 733.20
(iv)
Cost recognised for the year Particulars Current Service Cost Interest on Defined Benefit Obligation Expected Return on Plan Assets Net Actuarial Losses / (Gains) Recognized in Year Past Service Cost Losses / (Gains) on Curtailments and Settlements Others Total, Included in Schedule 17 Personnel Gratuity Actual Return on Plan Assets 31st March 2012 (` in Lacs) 267.90 88.76 (70.95) 7.44 293.15 13.15 31st March 2011 (` in Lacs) 154.63 51.44 36.59 217.48 24.36 484.50 -
(v)
Asset information Particulars Insurer managed funds 31st March 2012 100% 31st March 2011 -
(vi)
Principal actuarial assumption Particulars Discount Rate Salary Escalation Rate Assumptions in 31st March 2012 8.94% per annum 15% per annum for first 2 years, 10% per annum for the next 2 years and 6% per annum there after 6% per annum there after Assumptions in 31st March 2011 8.26% per annum 15% per annum for first 2 years, 10% per annum for the next 2 years and 6% per annum there after
26
(vii) Experience Adjustments for the current annual period and previous four periods. 31st March, 2012 (` in Lacs) Defined Benefit Obligation Plan Assets Surplus/ (Deficit) Experience Adjustment on Plan Liabilities Experience Adjustment on Plan Assets (b) 1,027.14 1,085.81 58.67 7.21 13.15 31st March, 2011 (` in Lacs) 880.14 880.14 14.96 31st March, 2010 (` in Lacs) 535.70 (535.70) 57.98 31st March, 31st March, 2009 2008 (` in Lacs) 468.75 (468.75) (143.00) (` in Lacs) 436.73 (436.73) 45.34 -
During the year, the Company has recognised the following amounts in the Statement of Profit and Loss:31st March 2012 (` in Lacs) Employers Contribution to Provident Fund Superannuation Fund Employees State Insurance Corporation Total 889.58 7.63 71.16 968.37 31st March 2011 (` in Lacs.) 853.65 8.00 71.75 933.40
30. Securities received from clients as collateral for margins are held by the Company in its own name in a fiduciary capacity. 31. Quantitative Information in Respect of Trading in Securities# 31st March 2012 Quantity Nos/Kgs. Opening Stock (A) Equity Shares TOTAL (A) Purchases Equity Shares Gold Bonds & Other Securities TOTAL (B) Sales Equity Shares Gold Bonds & Other Securities TOTAL (C) Closing Stock (D) Equity Shares TOTAL (D) Profit on Trading in Options/ Futures (Net) (E) Profit (D+C-B-A+E) 13,367,649 13,367,649 25,753.85 25,753.85 4,520.67 4,607.08 1,211,464 1,211,464 2,777.91 2,777.91 4,524.23 4,787.61 34,239,280 1,110 365,050 34,605,440 164,812.26 27,332.60 21,504.72 213,649.58 40,771,554 676 6,040 40,778,220 190,535.64 13,274.37 16,304.03 220,114.04 46,395,465 1,110 365,050 46,761,625 187,776.01 27,317.31 21,445.79 236,539.11 40,970,683 676 6,040 40,977,399 191,136.44 13,301.14 16,264.17 220,701.75 1,211,464 1,211,464 2,777.91 2,777.91 1,012,335 1,012,335 1,926.82 1,926.82 Value (` in Lacs) 31st March 2011 Quantity Nos/Kgs. Value (` in Lacs)
#Transactions and stocks on account of error trades / trades not confirmed by clients have not been considered.
27
32. (a)
Outstanding Future Contracts as on 31st March, 2012. (` in Lacs) Particulars Type of Derivative S&P CNX Nifty Futures Bank Nifty Stock Futures No. of Contracts 1,765 120 10,060 31st March 2012 No. of Units 88,250 3,000 12,110,000 Notional Amount 4,624.77 306.54 26,703.03 No. of Contract 3,894 160 970 31st March 2011 No. of Units 194,700 4,000 795,375 Notional Amount 11,209.89 476.21 2,595.14
The above contracts are held for trading purposes.
(b)
Outstanding Option Contracts as on 31st March, 2012. (` in Lacs) Particulars Type of Derivative No. of Contracts 31st March 2012 No. of Units Total Premium Carried Forward Net of Provision Made 427.22 700.12 4.74 0.99 No. of Contracts 31st March 2011 No. of Units Total Premium Carried Forward Net of Provision Made 1,971.74 4,904.73 -
S&P CNX NiftyOptions Long S&P CNX NiftyOptions Short Stock Options Long Stock Options Short
6,497 4,469 107 21
324,850 223,450 38,000 12,000
13,006 16,338 -
650,300 816,900 -
The above contracts are held for trading purposes.
(c)
Particulars of unhedged foreign currency exposures as at the reporting date. Particulars Investments (in US Dollars) Receivables (in Bahrain Dinars) Payables (in Bahrain Dinars) 31st March 2012 1,214,000 318,074 318,519 31st March 2011 950,000 305,374 308,240
33. The Company is a corporate member broker of the National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company is eligible to provide margin-trading facility to its clients in terms of the Securities and Exchange Board of India circular. Trade Receivables include ` 5,727.15 Lacs (Previous Year ` 6,204.74 Lacs) on account of loans granted under margin trading facility to clients against pledge of securities. 34. Provision for Contingencies: (` in Lacs) Nature of Liability Provision as on 1st April, 2011 1,804.91 1,804.91 3,019.19 Amount Used 23.15 23.15 Unused Amount Reversed 947.00 947.00 1,752.21 Provision as on 31st March, 2012 1,264.34 1,264.34 1,804.91
Addition 429.58 429.58 537.93
Stamp Duty on Trades Total Previous Year
Based on legal opinion, the Management is of the view that certain provisions for earlier years are no longer required and have reversed ` 947.00 Lacs (Previous Year ` 1,752.21 Lacs).
28
35. Fee Income: Particulars Client Money Management Services Depository Fees Loan Syndication and Arrangement Fees Advisory Fees Other Fees Total * Net of Income pertaining to earlier years written off ` 49.72 Lacs (Previous Year ` 272.58 Lacs) 36. Dividend income represents dividend on current investments (other than trade) ` 72.25 Lacs (Previous Year on long term investments (other than trade) ` 72.25 Lacs) and on stock in trade ` 59.22 Lacs (Previous Year ` 85.98 Lacs). 37. Profit on sale of investments represents profit on sale of current investments (other than trade) ` 301.36 Lacs (Previous Year ` 216.73 Lacs) and profit on sale of long term investments (other than trade) ` 23.00 Lacs (Previous Year ` 944.17 Lacs). 38. Liabilities written back comprises of provision no longer required in respect of sub brokerage ` 114.14 Lacs (Previous Year ` 156.96 Lacs) and expenses ` 123.13 Lacs (Previous Year ` 22.68 Lacs). 39. EMPLOYEE SHARE BASED PAYMENTS: (a) During the year the Company has paid ` 264.55 Lacs(Previous Year ` 495.45 Lacs) towards Kotak Mahindra Equity Option Plan of Kotak Mahindra Bank Limited, the Holding Company, in respect of stock options granted to its employees. This amount has been charged to the Statement of Profit and Loss and included under Note 23 Employee Benefit Expenses STOCK APPRECIATION RIGHTS The Holding Company has granted stock appreciation rights (SARs) to select employees of the Company which will be settled in cash. These options will vest on the respective due dates in a graded manner as per the terms and conditions of grant. The contractual life of the SARs range from 0.25 years to 2.75 years. The intrinsic value of SARs is measured at the grant date taking into account terms and conditions upon which the instruments are granted. Detail of activity under SARs is summarized below: No. of SARs Particulars Outstanding at the beginning of the year Granted during the year Exercised during the year Expired during the year Forfeited during the year Outstanding at the end of the year 31 Mar 2012 100,500 219,360 89,620 400 43,670 186,170 31 Mar 2011 190,320 54,270 35,550 100,500 31st March 2012 (` in Lacs) 395.75 2,205.67 284.70 435.38 3,321.50 31st March 2011 (` in Lacs) 1,235.62* 2,526.70 13.47 280.77 457.49 4,514.05
(b)
Effect of the employee share-based payment plans on the statement of profit and loss and on its financial position: Particulars Total Employee Compensation Cost pertaining to share-based payment plans Closing balance of liability for cash-settled options - Current Closing balance of liability for cash-settled options Non-Current 31 March 2012 (` in Lacs) 800.65 196.44 236.08 31 March 2011 (` in Lacs) 1,096.04 305.09 -
40. Recovery of expenses in Note 23 and Note 25 are amounts recovered from fellow subsidiaries towards the value of costs apportioned of the Companys employees and facilities in accordance with the agreements on allocation of expenses with holding company, fellow subsidiary and associate companies. ANNUAL REPORT 2011-12
29
41. Earnings per share (Face value ` 10) Earnings Profit for the year (in lacs) Weighted average number of shares (in lacs) Earnings per share (Basic and Diluted) in ` 42. (a) 2011-12 12,582.17 16 786.39 2010-11 18,193.79 16 1,137.11
Expenditure in Foreign Currency (on accrual basis): i. Travelling ` 14.69 Lacs (Previous Year ` 15.66 Lacs) ii. Membership and Subscription ` 86.30 Lacs (Previous Year ` 89.21 Lacs) iii. Conference and Meetings ` 17.40 Lac (Previous Year ` 30.53 Lacs) iv. Software ` 115.28 Lacs (Previous Year ` 75.68 Lacs) v. Business Promotion ` 171.04 Lacs (Previous Year ` 101.45 Lacs) vi. Common Establishment Expenses - Reimbursement ` 564.75 Lacs (Previous Year `256.87 Lacs) vii. Communication ` 160.03 Lacs (Previous Year ` 107.42 Lacs) viii. Data Processing Charges ` 16.15 Lacs ( Previous Year ` 18.52 Lacs) ix. Salary Rs. 86.87 Lacs (Previous Year ` 66.10 Lacs) x. Branch Expenses ` 40.75 Lacs (Previous Year ` 34.05 Lacs) xi. Others ` 8.69 Lacs (Previous Year ` 4.54 Lacs) xii. Professional Fees ` 39.51 Lacs (Previous Year ` Nil). Earnings in Foreign Currency (on accrual basis): i. Advisory Fees ` 347.98 Lacs (Previous Year ` 293.38 Lacs) ii. Interest Income ` 10.52 Lacs (Previous Year ` 13.01 Lacs) iii. Other Income ` 51.42 Lacs (Previous Year ` Nil). Remittance in Foreign Currency: Towards further capitalization of subsidiary ` 128.86 Lacs (Previous Year `139.30 Lacs)
(b)
(c)
43. Segment Information for the year ended 31st March, 2012 (a) Information about Primary Business Segments Particulars Segment Revenue Income from external customers Previous year Income from inter segments Previous year Liabilities written back as no longer required Previous year Total Previous year Segment result Previous year Income Tax Current, Deferred and Fringe Benefit Tax Previous year Net Profit Previous year Other Information Carrying amount of segment assets Previous year Carrying amount of segment liabilities Previous year Cost to acquire tangible fixed assets Previous year Depreciation / Amortisation Previous year Broking Trading and Principal 19,087.28 19,056.28 19,087.28 19,056.28 14,212.12 14,138.84 Unallocated Investments 548.06 1,234.60 59.43 22.68 607.49 1,257.28 557.66 667.59 6,566.75 8,963.47 Total 60,096.13 73,575.71 874.32 179.64 60,970.45 73,755.35 19,148.92 27,157.26 6,566.75 8,963.47 12,582.17 18,193.79 268,231.13 283,703.52 86,254.05 114,308.61 1,252.29 1,791.37 1,460.37 1,785.23
40,460.79 53,284.83 814.89 156.96 41,275.68 53,441.79 4,379.14 12,350.83 -
48,315.57 41,309.90 80,560.99 84,977.28 620.17 1,073.11 751.63 952.06
211,527.60 232,314.63 2,475.83 26,484.32 52.01 0.87 21.77 18.13
8,387.96 10,078.99 3,217.23 2,847.01 580.11 717.39 686.97 815.04
30
(b)
Notes: (i) The Company is organised into the following segments, namely Broking comprising of brokerage income earned on secondary market transactions done on behalf of clients, services rendered as depository participant and services rendered in connection with primary market subscription/ mobilisation and distribution of life insurance product. It also includes interest on delayed payments, incidental and consequential to secondary market related business received from clients. Trading and Principal Investments - comprising of proprietary trading in securities, interest on fixed deposits with banks and Income from investments.
(ii) (iii) (iv)
Unallocated revenue consists of Income from external customers ` 548.06 Lacs (Previous year ` 1234.60 Lacs) and Liabilities Written Back as no longer required ` 59.43 Lacs (Previous Year ` 22.68 Lacs) Unallocated expenses comprise of general administrative expenses and taxation provided at an enterprise level. Segment assets comprise mainly of, fixed assets, trade and other receivables, stock-in-trade, accrued income receivable and advances. Unallocated assets represent mainly fixed assets, deferred tax asset, loans and advances. Segment liabilities include loans, trade and other payables and sundry creditors. Unallocated liabilities mainly include deferred tax, retirement benefits, outstanding expenses and statutory liabilities. The company operates in single geographical segment, accordingly the reporting requirements of secondary segement disclosure prescribed under paragraph 39 to 51 of Accounting Standard 17 on Segment Reporting have not been provided in the financial statements.
(v)
44. Related party disclosures, as required by Accounting Standard 18, Related Party Disclosures issued by the Institute of Chartered Accountants of India are given below: 1. A. Related parties where control exists: Nature of relationship Holding Company Related Party Kotak Mahindra Bank Limited (KMBL) (Holds 74.99% of the equity share capital) Mr. Uday S. Kotak, along with relatives and companies controlled by him, holds 45.32% of the equity share capital of KMBL Kotak Mahindra Financial Services Limited Relationships (During the year):
Subsidiary B. Other Related Parties: (i) Fellow Subsidiaries:
Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Kotak Mr. Mr. Ms. Mr. Mr.
Mahindra Capital Company Limited Mahindra Prime Limited Mahindra Asset Management Company Limited Forex Brokerage Limited Mahindra Inc. Mahindra International Limited Mahindra Investments Limited Investment Advisors Limited Mahindra Old Mutual Life Insurance Company Limited Mahindra Trustee Company Limited Mahindra (Uk) Limited
(ii)
Key management personnel
Uday S. Kotak, Non Executive Chairman Narayan S. A., Non Executive Director Falguni Nayar, Non Executive Director C.Jayaram, Non Executive Director D. Kannan, Managing Director
(iII)
Relatives of key management Personnel
Mr. A.K.S.Mani Mrs. Rekha Narayan Mr. Sanjay Nayar Mrs. Rashmi Mehta Mr. Hemant Mehta Mr. Suresh Kotak Mrs. N Rajambal Mr. D G Subramanian Ms. Lakshmi S ANNUAL REPORT 2011-12
31
(iv)
Enterprises over which Director/ key management personnel/relatives of key management personnel have significant influence
Aero Agencies Limited Komaf Financial Services Limited Kotak Commodity Services Limited Infina Finance Private Limited ACE Derivatives and Commodity Exchange Limited (Formerly known as Ahmedabad Commodity Exchange Limited) Asian Machinery and Equipment Private Limited Kotak Mahindra Mutual Fund Managed by Kotak Mahindra Asset Management Company Limited Kotak Alternate Opportunities India Fund managed by Kotak Investment Advisors Limited Kotak India Growth Fund II Fund managed by Kotak Investment Advisors Limited
(v)
Mutual fund / venture capital fund managed by fellow subsidiary
45. Previous Year Figures:The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this years classifications. The adoption of Revised Schdeule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements except for accounting for dividend on investments in subsidiaries. The attached notes to the financial statements form an integral part of the financial statements. Signatures to the above notes to the financial statements. For Price Waterhouse Firm Registration Number: 301112E Chartered Accountants Uday S. Kotak Chairman Vivek Prasad Partner Membership Number: F104941 Place: Mumbai Date: April 27, 2012 Narayan S. A. Director For and on behalf of the Board of Directors
D. Kannan Managing Director Trivikram Kamath Executive Vice President Mumbai, Dated : 25th April 2012
32
concept, content and design at

Kotak Securities Limited 0

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Kotak Securities Limited 0

Enviado por

Direitos autorais:

Formatos disponíveis

KOTAK SECURITIES LIMITED

ANNUAL REPORT 2011-12

VALUE CREATION WITH STABILITY

REPORTS DIRECTORS REPORT