Independent Auditors’ Report - Kotak Mahindra Bank 201415 Annexure to Independent Auditors’...

ANNUAL REPORT 2014-156

Independent Auditors’ Report

TO THE MEMBERS OF KOTAK INVESTMENT ADVISORS LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Kotak Investment Advisors Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by ‘the Companies (Auditor’s Report) Order, 2015’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), 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 3 and 4 of the Order.

10. As required by Section 143 (3) of the Act, we report that:

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a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company does not have any pending litigations as at March 31, 2015 which would impact its financial position.

ii. The Company has long-term contracts including derivative contracts as at March 31, 2015 for which there were no material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2015

For Price WaterhouseFirm Registration Number: 301112E

Chartered Accountants

Vivek PrasadMumbai Partner

April 21, 2015 Membership Number 104941


Annexure to Independent Auditors’ Report Referred to in paragraph 9 of the Independent Auditors’ Report of even date to the members of Kotak Investment Advisors Limited on the financial statements for the year ended March 31, 2015

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the said Order are not applicable to the Company.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, wealth-tax, service-tax or value added tax or cess which have not been deposited on account of any dispute.

(c) There are no amounts required to be transferred by the Company to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company.

xi. The Company has not raised any term loans. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price WaterhouseFirm Registration Number: 301112E

Chartered Accountants

Vivek PrasadMumbai Partner

April 21, 2015 Membership Number 104941

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Balance Sheet as at 31st March, 2015

` in lakhs

Particulars Note No. 31st March 2015 31st March 2014

EQUITY AND LIABILITIESShareholders’ funds

Share capital 3 459.20 459.20

Reserves and surplus 4 26,167.50 23,564.93

Non-current liabilities

Long term provisions 6 185.52 158.49

Current liabilities

Trade payables 23 101.81 72.98

Other current liabilities 7 388.48 318.93

Short-term provisions 8 145.57 91.16

TOTAL 27,448.08 24,665.69

ASSETSNon-current assets

Fixed assets

Tangible assets 9 131.98 210.44

Intangible assets 11.38 11.97

Non-current investments 10 23,153.77 12,649.31

Deferred tax assets (net) 5 377.90 371.06

Long-term loans and advances 11 153.63 141.21

Current assets

Current investments 12 1,700.10 6,026.08

Trade receivables 13 2.75 20.33

Cash and Bank Balances 14 1,093.65 4,801.13

Short-term loans and advances 15 223.00 146.00

Other current assets 16 599.92 288.16

TOTAL 27,448.08 24,665.69 Significant Accounting Policies 2

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 For and on behalf of the Board of Directors

Firms Registration Number : 301112EChartered Accountants

Vivek Prasad C. Jayaram Shanti EkambaramPartner Director DirectorMembership No. 104941

Rajeev Saptarshi Deepak MukhijaChief Operating Officer Company Secretary

Place : MumbaiDated: April 21, 2015 Dated: April 20, 2015


Statement of Profit and Loss for the Year ended 31st March 2015

` in lakhs

Particulars Note No. 31st March 2015 31st March 2014

INCOME

Revenue from operations 17 4,891.82 6,371.74

Other income 18 3,161.91 1,892.95

Total Income 8,053.73 8,264.69

EXPENSES

Employee Benefit Expenses 19 3,070.97 2,841.62

Depreciation and amortization expenses 9 77.94 82.32

Other expenses 20 1,902.36 2,814.24

Total Expenses 5,051.27 5,738.18

Profit before tax 3,002.46 2,526.51

Tax expense

Current tax (MAT) 544.22 1,032.00

MAT Credit Entitlement (119.53) -

Provision for Prior Year Tax (17.96) 16.00

Deferred tax 5 (6.84) (257.63)

Profit for the year 2,602.57 1,736.14

Earnings per equity share:

Basic and Diluted (`) 28 56.68 37.81

Significant Accounting Policies 2

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.






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Cash Flow Statement For The Year ended 31st March 2015

` in lakhs

Particulars 31st March 2015 31st March 2014

CASH fLOw fROM OPERATINg ACTIVITIES

Net Profit before taxation 3,002.46 2,526.51

Adjustments for:

Depreciation 77.94 82.32

(Profit)/ Loss on sale of Current Investments (558.17) (521.15)

(Profit)/ Loss on sale of Non Current Investments (30.32) 65.61

(Profit) / Loss on disposal of Fixed assets (8.00) (10.73)

Dividend on Current Investments (329.10) (323.21)

Dividend on Non Current Investments (1,225.74) (495.13)

Diminution / (Write back) in value of Long Term Investments 21.96 1,164.40

Interest on Non Current investments (708.41) (382.29)

Interest on Current investments/Fixed deposit (301.38) (25.80)

Operating profit before working capital changes (58.76) 2,080.53

Adjustments for:

(Increase) / Decrease in Short term and Long term loans and advances (77.00) (18.46)

(Increase) / Decrease in Trade Receivable 17.58 33.45

(Increase) / Decrease in Other current assets (311.76) (71.89)

Increase / (Decrease) in Other current liabilities 69.55 (43.11)

Increase / (Decrease) in Trade Payables 28.83 21.94

Increase / (Decrease) in Short term and Long term provisions 9.80 (32.14)

Cash (used in) / generated from operations (321.76) 1,970.32

Direct taxes paid (net of refunds and Interest thereon) 347.53 825.69

Net cash flow (used in) from operating activities (A) (669.29) 1,144.63

Cash flow from investing activities

Purchase of fixed assets (31.94) (192.02)

Sale of fixed assets 41.05 32.62

Purchase of investments (33,869.16) (16,479.60)

Sale of investments 28,257.23 18,357.62

Interest / dividend received on "Investments" 2,564.63 1,226.42

Net cash flow (used in) / from investing activities (B) (3,038.19) 2,945.04


Cash Flow Statement For The Year ended 31st March 2015

` in lakhs

Particulars 31st March 2015 31st March 2014

Cash flow from financing activities - -

Net cash flow from financing activities (C) - -

Net Increase /(Decrease) In Cash And Cash Equivalents (A + B + C) (3,707.48) 4,089.67

Cash And Cash Equivalents At The Beginning Of The Year 4,801.13 711.46

Cash And Cash Equivalents At The End Of The Year 1,093.65 4,801.13

(3,707.48) 4,089.67

Notes:

1 The above Cash Flow statement has been prepared under the ‘Indirect Method’ as set out in Accounting Standard-3 “Cash Flow Statements” specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014

2 Cash and Bank Balance at the year end includes cash balance ̀ Nil (Previous year ̀ Nil) and bank balances ̀ 1,093.65 Lacs (Previous year ̀ 4,801.13 Lacs).

3 The corresponding amounts of previous year have been re-grouped, wherever necessary.

This is the Cash Flow Statement referred to in our report of even date.






Notes forming part of the financial statements for the year ended 31 March, 2015

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1. BACkgROUND

Kotak Investment Advisors Limited (“KIAL or Company”) is a public company domiciled in India. The Company acts as the investment manager to domestic venture capital and private equity funds operating in the alternate assets domain and also provides non-binding advisory services to offshore funds managed by Kotak Group’s international subsidiaries.

2. SIgNIfICANT ACCOUNTINg POLICIES

I) BASIS OF ACCOUNTING

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current based on assumption of operating cycle with duration of 12 months.

II) USE OF ESTIMATES

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 reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision in the accounting estimates is recognised prospectively.

III) REVENUE RECOGNITION

Revenue is recognised if it is measurable and reasonable certainty exists regarding its ultimate collection.

i. Management fee is recognized on accrual basis at the rates specified in the investment management agreement from the date of initial closing of funds under management.

ii. Advisory and establishment fees are recognized on accrual basis as per terms of contract.

iii. Interest Income is accounted on accrual basis.

iv. Dividend income is recognised when the right to receive dividend is established.

IV) TANGIBLE AND INTANGIBLE ASSETS, DEPRECIATION AND AMORTISATION

Tangible assets have been stated at cost inclusive of incidental expenses less accumulated depreciation/amortisation. Gain or losses arising from the retirement or disposal of a tangible / intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of assets and recognized as income or expense in the statement of Profit and Loss Account.

Intangible assets have been stated at cost less accumulated depreciation / amortisation.

Depreciation

Deprecation is provided on a pro-rata basis on a Straight Line Method over the estimated useful life of the assets at rates which are higher than the rates prescribed under Schedule II of the Companies Act, 2013 in order to reflect the actual usage of the assets. The estimates of useful lives of the assets, based on a technical evaluation, have not under gone a change on account of transition to the Companies Act, 2013. Estimated useful lives over which assets are depreciated / amortised are as follows:

Asset Type Useful life in yearsOffice equipment 5

Computers 3

Vehicles 4

Software (including development) expenditure 3

Assets costing less than ` 5,000 are fully depreciated in the year of purchase.

V) INVESTMENTS

Investments are classified into long term investments and current investments. Investments, which are intended to be held for more than one year from the date, on which the investments are made, are classified as long term investments and investments, which are intended to be held for less than one year from the date, on which the investments are made, are classified as current investments.



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Long term investments are carried at cost and provision for diminution in value is made to recognise a decline other than temporary in the value of investment, such reduction being determined and made for each investment individually. Current investments are valued at cost or market/fairvaluewhicheverislower.Incaseofinvestmentsinunitsofamutualfund,theNetAssetValueofunitsisconsideredasmarket/ fair value. Brokerage, stamping and additional charges paid are included in the cost of investments.

VI) 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 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 period.

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 realized.

Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively 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.

Deferred tax assets and deferred tax liabilities are off set when there is legally enforceable right to set-off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws. Current tax asset current tax liabilities are off set when there is legally enforceable right to set-off the amounts and there is intention to settle assets and liabilities on net basis.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss account as current tax. The company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward.

VII) FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of the transaction. 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.

VIII) EMPLOYEE BENEFITS

(a) Long Term Employee Benefits

Defined Contribution Plan

Contribution as required by the Statute made to the Government Provident Fund is debited to the Statement of Profit and Loss.

The Company contributes a sum equivalent to 15% of eligible employee’s salary subject to a maximum of ` 1 Lac per annum per employee to a Superannuation Fund administered by trustees and managed by Kotak Life Insurance Company. The Company recognises such contributions as an expense in the year they are incurred.

New Pension Scheme

The Company contributes up to 10% of eligible employees’ salary per annum, to the New Pension Fund administered by PFRDA appointed pension fund manager. The Company recognises such contributions as an expense in the year they are incurred.

Defined Benefit Plan

The Company has a defined benefit plan for post-employment benefits in the form of gratuity. The Company has formed a Trust “Kotak Investment Advisors Employees Gratuity Fund” which has taken group gratuity policies with an insurance company which is funded. The trust is recognized by the Income Tax Authorities and is administered through trustees and / or the insurance companies. The net present value of the Company’s obligation towards the same is actuarially determined based on the projected unit credit method as at the Balance Sheet date. The fair value of the assets available with the insurance companies is compared with the gratuity


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liability as per the independent actuarial valuation at the year end and shortfall, if any, is provided in the financial statements. Actuarial gains and losses are recognized in the Statement of Profit and Loss.

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 Company’s obligation is determined based on the projected unit credit method as at the Balance Sheet date.

Short Term Employee Benefits

Other Employee Benefits

As per the company policy, employees of the company are eligible for an award after completion of a specified number of year of service with the company. The obligation is measured at the Balance Sheet date on the basis of an actuarial valuation using the projected unit credit method conducted by actuary of Life Insurance subsidiary.

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee rendered the service. These benefits include performance incentives.

(b) Employee Stock Option Scheme

Cash-settled scheme

The cost of cash-settled scheme (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 were granted. This intrinsic value is amortised on a straight-line basis over the vesting period with 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 bonuses under Note 19.

IX) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognised when there is a present obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

X) EARNING PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

XI) CASH AND CASH EQUIVALENTS

Cash and cash equivalent includes cash in hand, demand deposits with banks and other fixed deposits with bank with original maturities of three months or less.

XII) 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.

XIII) OPERATING LEASES

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 recognized as an expense/income in the Statement of Profit and Loss on a straight-line basis over the lease term.



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` in lacs

31st March 2015 31st March 2014

3 Share Capital

Authorised

5,000,000 Equity Shares of ` 10 each 500.00 500.00

Issued, Subscribed and Paid up

4,592,000 Equity Shares of ` 10 each 459.20 459.20

Total 459.20 459.20

a Reconcilation of Number of Equity Shares

No of Shares No of Shares ` in lacs ` in lacs

31st March 2015 31st March 2014 31st March 2015 31st March 2014

Shares outstanding at the beginning of the year 4,592,000 4,592,000 459.20 459.20

Shares outstanding at the end of the year 4,592,000 4,592,000 459.20 459.20

b Rights, Preferences and restrictions attached to Shares

Equity Shares: The Company has one class of equity shares having a par value of ` 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

c Equity shares held by holding company and subsidiary of holding company


No of Share % of Holding No of Share % of Holding

Kotak Mahindra Bank Limited 2,341,930 51.00 2,341,930 51.00

Kotak Mahindra Capital Company Limited (60 Shares are held jointly with its nominees)

2,250,070 49.00 2,250,070 49.00

d Details of Equity shares held by shareholders holding more than 5% of the aggregate shares in the company


No of Share % of Holding No of Share % of Holding

Kotak Mahindra Bank Limited 2,341,930 51.00 2,341,930 51.00

Kotak Mahindra Capital Company Limited (60 Shares are held jointly with its nominees)

2,250,070 49.00 2,250,070 49.00


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` in lacs


4 Reserves & Surplus

Capital Reserve

a. Capital Redemption Reserve

Balance as at the beginning of the year 55.00 55.00

Balance as at the end of the year 55.00 55.00

Revenue Reserve

b. Surplus in Statement of Profit and Loss

Balance as at the beginning of the year 23,509.93 21,773.79

Add: Amount transferred from Surplus in Statement of Profit and Loss during the year 2,602.57 1,736.14

Balance as at the end of the year 26,112.50 23,509.93

Total 26,167.50 23,564.93

5 Deferred Tax

Deferred tax asset

Provision for gratuity / Compensated Absenses 62.53 57.10

Depreciation 33.29 25.93

Deferred incentive 9.06 17.04

ProvisionforDiminutionintheValueoftheInvestment 272.32 263.85

Others 0.70 7.14

Total 377.90 371.06

Net Deferred Tax (Liability) / Asset 377.90 371.06

6 Long Term Provisions

Provision for employee benefits

Gratuity (Refer note 24) 6.58 3.42

Compensated Absenses 161.47 146.95

Stock Appreciation Rights Scheme 17.47 8.12

Total 185.52 158.49

7 Other Current Liabilities

Statutory Liabilities

Statutory Dues 104.42 120.29

FBT on ESOP Collected-Liability 97.57 97.57

Employee benefits payable 186.49 101.07

Total 388.48 318.93



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` in lacs


8 Short Term Provision

(a) Provision for employee benefits

Compensated Absenses 20.74 21.03

Stock Appreciation Rights Scheme 25.21 42.00

Provision for Leave Travel Allowance - 0.15

(b) Others

Provision for Tax 99.62 27.98

(Net of Advance Tax ` 3,633.82 Lacs; Previous year ` 2,902.02 Lacs)

Total 145.57 91.16

9 Fixed Asset

` in lacs

Description Gross Block Depreciation / Amortization Net Block

1st April 2014

Additions Deductions 31st March 2015

1st April 2014

For the year

Deductions 31st March 2015

31st March 2015

31st March 2014

Tangible Asset Vehicles 302.37 16.69 71.58 247.48 107.67 61.53 38.53 130.67 116.81 194.70

Computers 51.80 9.63 12.79 48.64 39.17 9.06 12.79 35.44 13.20 12.63

Office Equipments 13.27 - - 13.27 10.16 1.14 - 11.30 1.97 3.11

Intangible Asset Software 22.09 5.62 - 27.71 10.12 6.21 - 16.33 11.38 11.97

TOTAL 389.53 31.94 84.37 337.10 167.12 77.94 51.32 193.74 143.36 222.41Previous Year 275.72 207.77 93.96 389.53 156.88 82.32 72.08 167.12 222.41 118.84

10 Non Current Investments

Face value 31st March 2015 31st March 2014 31st March 2015 31st March 2014 ` Quantity Quantity ` in lacs ` in lacs

Long term Invesmtment (Non Trade)(At cost, less dimunition other than temporary in nature)QuotedEquity SharesDiamond Power Infrastructure Limited 10 58,880 58,880 90.00 90.00

Minda Corporation Limited 10 330,080 33,008 132.03 132.03

INGVysyaBankLimited 10 - 23,078 - 79.59

Muthoot Finance Limited 10 160,106 160,106 212.94 212.94

Debentures in other Companies5.10% per quarter - Nirmal Lifestyle Limited - Secured Non-Convertible Redeemable Debentures

1,000,000 236 - 2,360.00 -

1.6042% monthly - SS Group Private Limited - Secured Redeemable Non-Convertible Debentures

1,000,000 114 - 1,129.49 -


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2.40% per quarter - Supertech Limited - Secured Non-Convertible Redeemable Debentures

1,000,000 137 - 1,370.00 -

3.50% per quarter - Lodha Buildcon Private Limited - Secured Non-Convertible Redeemable Debentures

1,000,000 493 - 4,930.00 -

10,224.46 514.56Less: Provision for Diminution in Value of Investment

(64.09) (61.65)

Sub Total (a) 10,160.37 452.91Unquoted Equity SharesIVRHotelsandResortsLimited 10 1,762 1,762 430.23 430.23

Lemon Tree Hotels Limited 10 713,286 118,881 219.37 219.37

BharatSerumsandVaccinesLimited 5 29,151 29,151 62.91 62.91

S H Mangalam Realty Private Limited - Class A Equity Shares

10 647 647 0.06 0.06

S H Mangalam Realty Private Limited - Class B Equity Shares

10 3,881 3,881 0.39 0.39

Matrix Business Services India Private Limited

10 13,255 13,255 29.81 29.81

Mahindra Aerospace Private Limited 10 1,013,309 816,390 198.00 159.52

Fortune Estate Developers Pvt Ltd - Class B Equity Shares

10 4,090 4,090 0.50 0.50

Native Buildcon Private Limited - Class A Equity Shares

10 408 408 0.04 0.04

Native Buildcon Private Limited - Class B Equity Shares

10 286 286 2.86 2.86

Prolifics Corporation Limited (Formerly known as Semantics Technologies Limited)

10 22,313 22,313 75.76 75.76

Prolifics Corporation Limited (Formerly Known as Semantics Technologies Limited) - Series A1 Equity Shares with DifferentialVotingRights

10 10 10 0.03 0.03

Samson Maritime Limited 10 39,762 39,762 202.93 202.93

Samson Maritime Limited - Class A Equity ShareswithDifferentialVotingRight

10 9 9 0.04 0.04

NSL Renewable Power Private Limited 10 102,000 102,000 182.50 182.50

Meriton Infotech Private Limited 10 2,873,169 - 2,815.74 -

Preference Shares in Companies under the same managementKotak Mahindra Prime Limited - Redeemable Non-cumulative Non-convertible Preference Shares

10 250,000 250,000 2,500.00 2,500.00

Preference Shares in other Companies BharatSerumandVaccinesLimited-Convertible Redeemable Preference Shares

5 26,938 26,938 83.14 83.14



20


Samson Maritime Limited - Series A Compulsorily Convertible Cumulative Preference Share

10 671,431 671,431 100.72 100.72

Prolifics Corporation Limited - Series B Redeemable Optionally Convertible Cumulative Participatory Preference Share

10 18,644 18,644 18.64 18.64

Meriton Infotech Private Limited 10 89,726 - 84.21 -

Debentures14.75% Fortune Estate Developers Private Limited - Series A Redeemable Optionally Convertible Debentures

100 77,623 266,994 77.62 266.99

14.75% Fortune Estate Developers Private Limited - Series B Redeemable Optionally Convertible Debentures

100 179,979 179,979 179.98 179.98

0.01% S H Mangalam Realty Private Limited - Series A Optionally Convertible Reedemable Debenture

10 1,292,788 1,292,788 129.28 129.28

17.75% Native Buildcon Private Limited - Compulsorily Convertible Debentures

1,000 84,709 84,709 847.09 847.09

In Units of Venture Capital FundsKotak India Growth Fund II Class A Units 76,795 4,000 4,000 2,891.81 3,196.86

(FVon31/03/2014-84,421.48)

SBI Macquarie Infrastructure Trust 10 7,000,000 7,000,000 629.01 545.66

KotakIndiaRealEstateFundIVClassAUnits

1,000 68,931 215,794 708.77 2,218.87

KotakIndiaRealEstateFundIVClassCUnits

1 152,115 500,000 1.52 5.00

KotakIndiaRealEstateFund-VClassCUnits

1 500,000 500,000 5.00 5.00

KotakIndiaVentureFund-I 328 125,000 125,000 679.06 837.44

LICHFL Urban Development Fund - Class A Units

9,395 10,000 10,000 314.54 287.00

(FVon31/03/2014-10,000)

13,471.56 12,588.62Less: Provision for Diminution in Value of Investment

(478.16) (392.22)

Sub Total (b) 12,993.40 12,196.40

Total (a+b) 23,153.77 12,649.31AggregateValueofQuotedInvestments BookValue 10,224.46 514.56

MarketValue(ValueofdebentureswhicharenottradedhavebeentakenatbookValue)

10,450.90 582.29

AggregateValueofUnquotedInvestments BookValue 13,471.56 12,588.62

Aggregate provision for diminution in value of investment

542.25 453.87


21

11 Long-term loans and advances

` in lacs


Advance Fringe Benefit tax 86.43 86.43

(Net of Provision for Tax ` 72.15 Lacs ; Previous year ` 72.15 Lacs)

Advance tax and Tax Deducted at Source

(Net of Provision for Tax ` 1,033.85 Lacs; Previous year ` 2,753.64 Lacs) 67.20 52.17

Wealth Tax - 2.61 Total 153.63 141.21

12 Current Investment

(At cost or market / fair value whichever is lower)


Current maturities of long term Investment In Units of Venture Capital Funds Kotak India Real Estate Fund-I Class A Units

100,000 416.86 710.10 372.95 634.22

India Growth Fund Class A Units 1,000 211,361.84 226,940.49 1,723.25 1,850.27

2,096.20 2,484.49 Less:ProvisionforDiminutioninValueofInvestment

(866.14) (932.56)

Sub Total (a) 1,230.06 1,551.93 Quoted Debentures in other Companies 20.40% Secured Redeemable Non-Convertible Debentures of Total Environment Living Spaces Private Limited (FVon31/03/2014-2,00,000)

200,000 - 2 - 4.03

16.50% Secured Redeemable Non-Convertible Debentures of EMAAR MGF LandLimited(FVon31/03/2014-100)

100 - 67 - 0.08

6.00% Quarterly Secured Redeemable Non-Convertible Debentures of Century Real Estate Holdings Private Limited

1,000,000

47 47 470.04 470.04

Investments in Mutual FundsKotak Fmp Series 100 - Growth 10 - 40,000,000 - 4,000.00

Sub Total (b) 470.04 4,474.15 Total (a + b) 1,700.10 6,026.08 AggregateValueofQuotedInvestments BookValue 470.04 4,474.15

MarketValue(ValueofdebentureswhicharenottradedhavebeentakenatbookValue)

470.04 4,836.59

AggregateValueofUnquotedInvestments

BookValue 2,096.20 2,484.49

Aggregate provision for diminution in value of investment

866.14 932.56



22

` in lacs


13 Trade Receivables

Considered Good

Outstanding for a period more than six months from the date they are due for payment - 1.99

Outstanding for a period less than six months from the date they are due for payment 2.75 18.34

Total 2.75 20.33

14 Cash and Bank Balances

Cash and Cash Equivalents

Fixed Deposit 1,050.00 -

Balances with Banks in -

- Current Accounts 41.46 4,801.13

Cheques in hand 2.19 -

Total 1,093.65 4,801.13

15 Short Term Loan and Advances

Unsecured considered good

Advances recoverable in cash or in kind or for value to be received 97.98 146.00

Capital Advance 5.49 -

MAT Credit Entitlement 119.53 -

Total 223.00 146.00

16 Other Current Assets

Unsecured considered good

Interest accrued on debentures 599.92 288.16

Total 599.92 288.16

17 Revenue from Operations

Management and Advisory Fees 4,891.82 6,371.74

Total 4,891.82 6,371.74


23

` in lacs


18 Other Income

Interest Income

- Fixed Deposits 0.30 102.33

(Tax deducted at source ` 0.03 Lacs (Previous year ` 10.23 Lacs )

- Non Current Investment 708.41 382.29

(Tax deducted at source ` 15.04 Lacs (Previous year ` 14.77 Lacs )

- Current Investments 301.08 25.80

Dividend on current investments 329.10 323.21

Dividend on non current investments 1,225.74 495.13

Profit on sale of current investment 558.17 536.19

Profit on sale of non current investment 30.32 -

Other Income 0.79 17.27

Profit on disposal of fixed assets 8.00 10.73

Total 3,161.91 1,892.95

19 Employee benefit expenses

Salaries, allowances and bonus 2,877.73 2,669.32

Reimbursement of Expense on ESOP Scheme (Refer Note 22) 0.42 1.35

Gratuity and leave encashment (Refer Note 24) 24.32 10.06

Staff Welfare 22.96 16.11

Contribution to provident and other funds (Refer Note 24) 145.54 144.78

Total 3,070.97 2,841.62

20 Other Expenses

Rent 802.68 476.87

Common Establishment Expenses 391.10 335.90

Advisory / Referral Fees - 23.53

Advertisement, Marketing and Business Promotion 86.84 145.00

Rates and Taxes 3.02 1.98

Repairs and Maintenance others 15.05 9.46

Travel and Conveyance 164.64 221.23

Membership, subscription and conference 98.41 94.37

Auditors' remuneration

Audit fees 10.50 9.50

Out of pocket expenses 0.20 0.19

Legal and Professional charges 110.84 89.19

Insurance 15.83 17.59

Loss on sale current investments - 15.04

Loss on sale Non Current investments - 65.61

Provision for dimunition in value of long term investments (Net) 21.96 1,164.40

Expenditure on Corporate Social Responsibility 10.00 -

Office and Other Expenses 171.29 144.38

Total 1,902.36 2,814.24



24

21 Contingent Liabilities

The Company has the following contingent liabilities:

i. calls on 4,000 partly paid units of Kotak India Growth Fund II aggregating ` 180 Lacs (Previous year ` 180 Lacs),

ii. calls on 7,000,000 partly paid units of SBI Macquarie Infrastructure Trust aggregating ` 70.99 Lacs (Previous year ` 154.34 Lacs)

iii. calls on 10,000 partly paid units of LICHFL Urban Development Fund aggregating ` 625 Lacs (Previous year ` 713 Lacs)

iv. The Company is contingently liable in respect of future investment commitment to Nirmal Lifesytle Limited. of ` 340 Lacs ((Previous year ` NIL Lacs)

v. The Company is contingently liable in respect of future investment commitment to Mahindra Aerospace Private Limited. of ` Nil (Previous year ` 50.48 Lacs)

22 Equity Settled Options

At the General Meetings of the holding Company, Kotak Mahindra Bank Limited, (“the Bank”) the shareholders of the Bank had unanimously passed Special Resolutions on 5th July, 2007 and 21st August, 2007, to grant options to the Eligible Employees of the Bank and its subsidiaries companies. Pursuant to these resolutions, Kotak Mahindra Equity Option Scheme 2007 had been formulated and adopted.

Consequent to the above, the Bank has granted stock options to employees of the Company. In accordance with the SEBI Guidelines and the guidance note on “Accounting for Employee Share based payments”, the excess, if any, of the market price of the share, preceding the date of grant of the option under ESOPs over the exercise price of the option is amortised on a straight-line basis over the vesting period. The Company has reimbursed the Bank ` 0.42 Lacs (Previous year ` 1.35 Lacs) during the year on account of such costs and the same is forming part of Employee costs and included under the head “Reimbursement of expense on ESOP Scheme” under Note Employee Cost (Refer Note No 19).

Stock appreciation rights (SARs)

During the year, the management had approved (SARs) to be granted to eligible employees as and when deemed fit. The SARs are to be settled in cash and will vest in the manner as provided in the scheme / grant letters to employees.

The contractual life (which is equivalent to the vesting period) of the SARs ranges from 1.40 years to 3.65 years.

Detail of activity under SARs is summarized below:

Number of SARs

Year Ended 31 st Mar 2015


Outstanding at the beginning of the year 9,611 17,471

Granted during the year 16,090 17,366

Exercised during the year 20,174 14,708

Transfer in Nil 4,357

Transfer out Nil 1,127

Expired during the year Nil NIL

Forfeited during the year Nil 13,748

Outstanding at the end of the year 5,527 9,611

Effect of grant of SARs to employees on the Statement of Profit and Loss and on its financial position

` in Lacs



Total Employee Compensation Cost pertaining to share-based payment plans 214.88 80.06

Closing balance of liability for cash-settled options 42.67 50.12


25

Impact of Equity settled options and SARs.

HadthecompanyrecordedthecompensationcostcomputedonthebasisofFairValuationmethodinsteadofintrinsicvaluemethod,employeecompensation cost would have been higher by ̀ 36.22 Lacs, (Previous year ̀ 13.33 Lacs) and the profit after tax would have been lower by ̀ 23.91 Lacs (Previous year ` 9.01 Lacs). Consequently the basic and diluted EPS would have been ` 56.16 (Previous Year ` 37.89).

23 The Company has not received any intimation from “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the yearend together with interest paid / payable as required under the said Act have not been given.

24 Employee benefits (Refer note 2 (viii))

a) The Company has recognised the following amounts in the Statement of Profit and Loss towards contributions to Provident Fund and Other Funds.

Provident Fund ` 144.54 Lacs (Previous Year ` 143.78 Lacs)

Superannuation Fund ` 1 lac (Previous Year ` 1 lac)

New Pension Fund ` 55.23 Lacs (Previous Year ` 41.62 Lacs)

b) Gratuity

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

` in Lacs

As on 31st March, 2015


Funded Funded

Change in benefit obligations

Liability at the beginning of the year 111.75 115.03

Current Service cost 10.38 9.28

Interest cost 10.79 9.70

Actuarial (gain)/loss on obligations 14.08 (3.62)

Past Service cost - -

Actuarial (gain)/loss due to curtailment - -

Liability assumed on transfer of employees 2.51 2.24

Benefits paid (15.85) (20.87)

Liability at the end of the year 133.67 111.76

Change in plan assets

Fair value of plan assets at the beginning of the year 108.33 104.80

Expected return on plan assets 8.00 7.55

Actuarial Gain 23.18 6.31

Benefits paid (15.85) (20.87)

Employer contributions 3.42 10.54

Fair value of plan assets as at the end of the year 127.09 108.33



26

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

` in Lacs



Funded Funded

Fair value of plan assets as at the end of the year 127.09 (108.33)

Liability at the end of the year 133.67 111.76

Net Asset/ (Liabilities) included in Other Assets/ Liabilities (6.58) (3.42)

Expenses recognised for the period

Current service cost 10.38 9.28

Interest cost 10.79 9.70

Expected return on plan assets (8.00) (7.55)

Actuarial (gain)/loss (9.10) (9.92)

Actuarial (gain)/loss due to curtailment - -

Past Service cost - -

Net gratuity expense included in Employee benefit expenses under Note 19 4.07 1.50

Actual return on plan assets 31.19 13.86

The plan assets are invested 100% in Kotak Group Balanced Fund – an insurer managed fund.

Actuarial assumptions used



Interest rate 7.98%p.a 9.34% p.a.

Salary escalation rate 8.50%p.a 8.50% p.a

Expected rate of return on plan assets 7.50%p.a 7.50% p.a

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

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

Experience adjustments

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

` in Lacs

Gratuity 2015 2014 2013 2012 2011

Defined benefit obligation 133.67 111.76 115.03 101.63 96.24

Plan assets 127.09 108.33 104.80 107.32 -

Surplus / (deficit) (6.58) (3.42) (10.23) 5.69 (96.24)

Experience adjustments on plan liabilities 0.20 7.04 0.23 8.55 1.80

Experience adjustments on plan assets 23.18 6.30 1.62 1.37 -

The Company expects to contribute ` 10 Lacs (Previous Year ` 10 lacs) to gratuity fund in financial year 2015-2016.


27

c) Investment details of plan assets

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

` in Lacs

Category 31st March 2015 Amount 31st March 2014 Amount

Equity 56.00% 71.17 53.97% 58.46

Government securities 37.00% 47.02 24.53% 26.57

Bonds, debentures and other fixed income instruments

- - 10.02% 10.85

Money market instruments 7.00% 8.90 11.49% 12.44

127.09 108.33

d) Compensated absences

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

` in Lacs



Total actuarial liability 182.21 167.98

Assumptions:

Discount rate 7.98%p.a 9.34% p.a.

Salary escalation rate 8.50%p.a 8.50% p.a.

25 Related parties disclosures

(i) Relationships (During the year)

Related parties where control exists:

Nature of relationship Related Party

Holding Company Kotak Mahindra Bank Limited

(Holds 51% of the equity share capital)

Uday S. Kotak along with relatives and entities controlled by him holds 39.95% of the equity share capital of Kotak Mahindra Bank Limited as on March 31, 2015.

Kotak Mahindra Capital Company Limited

(holds 49% of the equity share capital)

Other Related parties:-

(a) Fellow Subsidiaries Kotak Securities Limited

Kotak Mahindra Asset Management Company Limited

Kotak Mahindra Prime Limited

Kotak Mahindra Investments Limited

Kotak Mahindra (International) Limited

Kotak Mahindra INC

Kotak Mahindra (UK) Limited

Kotak Mahindra Old Mutual Life Insurance Company Limited (Kotak Life)



28

Nature of relationship Related Party

(b) Funds managed by the Company Kotak SEAF India Fund and its scheme

India Growth Fund

Kotak Mahindra Realty Fund and its schemes

Kotak India Real Estate Fund – I

KotakIndiaRealEstateFund-IV

KotakIndiaRealEstateFund–V

Kotak Alternate Opportunities (India) Fund

KotakIndiaVentureFundI

Kotak India Growth Fund II

(c) Key management personnel Mr. Nitin Deshmukh, Whole-time Director

(resigned w.e.f from 9th August 2014)

Mr. Sriniwasan Subramanian, Whole-time Director

(resigned w.e.f from 9th August 2014)

Mr. C. Jayaram, Director

Mr. Jaimin Bhatt, Director

Ms. Shanti Ekambaram, Director

(ii) The following transactions were carried out with related parties in the ordinary course of business.

Nature of Transactions Holding Company

Fellow Subsidiary Companies ` in lacs

Kotak Mahindra

Bank Limited

Kotak Mahindra (International)

Limited

Kotak Mahindra

INC

Kotak Mahindra

Capital Company Limited

Kotak Securities Limited

Kotak Mahindra

Prime Limited

Kotak Mahindra

(UK) Limited

Kotak Life Kotak Mahindra Asset Management

Company Limited

Total

Finance

Interest paid - - - - - - - - -

- - - - - - - - -

Fixed deposit placed 1,050.00 - - - - - - - 1,050.00

(10,000.00) - - - - - - - (10,000.00)

Fixed deposit withdrawn - - - - - - - - - -

(10,000.00) - - - - - - - (10,000.00)

Interest received 0.30 - - - - - - - 0.30

(102.33) - - - - - - - (102.33)

Outstanding

Bank balance

- Fixed deposit account 1,050.00 - - - - - - - 1,050.00

- - - - - - - - -

- Current account 40.97 - - - - - - - 40.97

(4,789.64) - - - - - - - (4,789.64)

Interest accrued on fixed deposits / interest accrued on debenture

0.27 - - - - - - - 0.27

- - - - - - - - -


29

Nature of Transactions Holding Company

Fellow Subsidiary Companies ` in lacs

Kotak Mahindra

Bank Limited

Kotak Mahindra (International)

Limited

Kotak Mahindra

INC

Kotak Mahindra

Capital Company Limited

Kotak Securities Limited

Kotak Mahindra

Prime Limited

Kotak Mahindra

(UK) Limited

Kotak Life Kotak Mahindra Asset Management

Company Limited

Total

Investments

Purchase / subscription - - - - - - - - -

- - - - - - - - -

Sale / redemption - - - - - - - - -

- - - - - - - - -

Tranferred / Sale - - - - - - - - -

- - - - - - - - -

Other Receipts and Payments

Purchase of Fixed Assets - - 4.11 - - - - - 4.11

- - - - - - - - -

Sale of Fixed Assets - - - - - - - - -

- - - - - - - - -

Reimbursement of expenses from other companies

- - - - - - - - - -

- - - - - - - - - -

Service / other expenses / Reimbursement of expenses paid / payable to other Companies

1,405.68 22.76 0.96 25.91 0.40 - - - 1.23 1,456.94

(1,035.80) (2.34) - (19.82) (0.04) - - (2.71) (2.87) (1,063.58)

Brokerage Paid / Payable on Purchase & Sale of Securities

- - - - - - - - -

- - - - - - - - -

Dividend Received / Profit & Loss (net) - - - - 2.50 - - - 2.50

- - - - (2.50) - - - (2.50)

Management Fees / Advisory Fees - 1,170.00 - - - 340.00 - - 1,510.00

- (890.00) - - - (280.00) - - (1,170.00)

Receivables - - - - - - - - -

- - - - - - - - -

Payables 18.98 12.86 0.12 0.01 - - - - 31.97

(4.46) (2.34) (0.53) (0.01) - - - (0.27) (7.61)

(ii) The following transactions were carried out with related parties in the ordinary course of business

Nature of Transactions Funds managed by the Company ` in lacs

Kotak SEAF India Fund and it's Scheme India Growth Fund

Kotak India

Venture Fund I


Kotak Mahindra Realty Fund it's

Scheme Kotak India Real Estate Fund I


Scheme Kotak India Real Estate Fund IV


Scheme Kotak India Real Estate Fund V

Kotak Alternate

Opportunities (India) Fund

Total

Finance

Interest paid - - - - - - - -

- - - - - - - -

Fixed deposit placed - - - - - - - -

- - - - - - - -

Fixed deposit withdrawn - - - - - - - -

- - - - - - - -

Interest received - - - - - - - -

- - - - - - - -



30

Nature of Transactions Funds managed by the Company ` in lacs

Kotak SEAF India Fund and it's Scheme India Growth Fund

Kotak India

Venture Fund I



Scheme Kotak India Real Estate Fund I


Scheme Kotak India Real Estate Fund IV


Scheme Kotak India Real Estate Fund V

Kotak Alternate

Opportunities (India) Fund

Total

Outstanding

Bank balance

- Fixed deposit account - - - - - - - -

- - - - - - - -

- Current account - - - - - - - -

- - - - - - - -

Interest accrued on fixed deposits / interest accrued on debenture

- - - - - - - -

- - - - - - - -

Investments

Purchase / subscription - - - - - - - -

- - (1,500.00) - - - - (1,500.00)

Sale / redemption 127.01 158.37 305.05 261.27 1,513.58 - - 2,365.28

(160.67) (157.44) (328.47) - (111.13) - - (757.71)

Tranferred / Sale - - - - - - - -

- - - - - - - -

Other Receipts and Payments

Purchase of Fixed Assets - - - - - - - -

- - - - - - - -

Sale of Fixed Assets - - - - - - - -

- - - - - - - -

Reimbursement of expenses / Other exps from other companies

35.16 0.03 0.23 42.81 4.93 0.70 48.03 131.89

(76.29) (0.03) (5.25) (18.59) (14.58) (1.29) (60.08) (176.11)

Service / other expenses / Reimbursement of expenses paid / payable to other Companies

- - - - - - - -

- - - - - - - -

Brokerage Paid / Payable on Purchase & Sale of Securities

- - - - - - - -

- - - - - - - -

Dividend Received / Profit & Loss (net) 61.45 226.33 413.92 33.76 404.44 - - 1,139.90

(241.34) (6.40) (174.36) - (209.98) - - (632.08)

Management Fees / Advisory Fees - 174.65 1,486.29 - 422.25 62.43 1,232.97 3,378.59

(33.01) (192.72) (1,482.27) - (646.49) (80.88) (2,265.53) (4,700.90)

Receivables 2.68 0.00 0.04 0.01 - - - 2.73

- - - (18.34) - (1.99) - (20.33)

Payables - - - - - - - -

- - - - - - - -

Remuneration to key management personnel*

Nitin Deshmukh - - - - - 76.47

- - - - - (235.47)

S. Sriniwasan - - - - - 76.49

- - - - - (271.16)

Figures in brackets relates to the previous year.

* The above excludes current year incentive and provision for gratuity.


31

26 (Income) / Expenditure in foreign currency

` in Lacs

31st March, 2015 31st March, 2014

Travel, Conveyance and car hire 6.64 3.09

Management Fees Sharing 0.00 22.92

Membership and subscription 17.90 15.00

Advisory Fees (339.95) (277.96)

Others 37.94 20.06

27 Segmental Information

The Company operations predominantly relate to providing investment management/advisory services to private equity and venture capital funds.

As the Company is engaged only in one business segment and there are no geographical segments, the segmental reporting disclosure as required by Accounting Standard 17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India has not been made.

28 Earnings Per Share (EPS)

The numerators and denominators used to calculate basic and diluted earnings per share:

31st March, 2015 31st March, 2014

Profit attributable to equity shareholders (` in Lacs) 2,602.57 1,736.14

Weighted/ Basic number of equity shares outstanding during the year 4,592,000 4,592,000

Earnings per share (basic and diluted) (`) 56.68 37.81

Nominal value of equity shares (`) 10.00 10.00

29 Corporate Social Responsibility (CSR)

As per the provisions of the Section 135 of the Companies Act, 2013 the Company is required to contribute ` 73.41 lacs. The Company has contributed ` 10 lacs to the Kotak Education Foundation in the current financial year. The Company’s CSR program is associated with the CSR initiatives of Kotak Mahindra Bank Limited (KMBL), its holding Company. KMBL is building its CSR capabilities on a sustainable basis and the Company is committed to gradually increase its CSR spend in the coming years.

30 Previous year figures have been reclassified to conform to this year’s classification.

The attached notes to the financial statements form an integral part of the financial statements.

Signatures to the above notes to the financial statements.






Independent Auditors’ Report - Kotak Mahindra Bank 201415 Annexure to Independent Auditors’...

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