Kotak Securities Limited 0

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ANNUAL

REPORT

2011-12

KOTAK SECURITIES

LIMITED


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ANNUAL REPORT 2011-12

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

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 31st March 2011

Gross Income 60,970.45 73,755.35

Profit / (Loss) before Depreciation and Tax 20,609.29 28,942.49

Depreciation 1460.37 1,785.23

Profit / (Loss) before Tax 19,148.92 27,157.26

Provision for Tax 6,566.75 8,963.47

Profit / (Loss) After Tax 12,582.17 18,193.79Transfer from Debenture Redemption Reserve - 7,836.25

Balance brought forward from previous year 149,602.62 127,386.34

Amount available for appropriation 162,184.79 153,416.38

Transfer to Debenture Redemption Reserve - 3,813.76

Profit / (Loss) carried forward to the Balance Sheet 162,184.79 149,602.62

Earnings per share on equity shares of Rs. 10 each (Basic and Diluted) 786.39 1,137.11

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 retailinvestor 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.

VALUE CREATION WITH STABILITY FINANCIAL STATEMENTS REPORTS

DIRECTORS REPORT


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KOTAK SECURITIES LIMITED2

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 oftheir 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 31 st 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.

b) 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)

c) Kotak Institutional Equities was ranked #2 by Institutional Investor in the inaugural All-India Research Team survey 2011.

FUTURE OUTLOOK

The benchmark Index, NIFTY and Sensex have closed below the levels of 31 st 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 16 th 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.


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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) 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;

ii) 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 31 st March 2012 and of the

profit of the Company for the financial year ended 31st March 2012.

iii) 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 pre venting and

detecting fraud and other irregularities; and

iv) the Directors have prepared the annual accounts on a going concern basis.

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


DIRECTORS REPORT


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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.

2. 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.

3. 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 accordingto 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.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) 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;

(b) 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;

(c) 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;

(d) 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;(e) 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 sub-

section (t) of Section 274 of the Act;

(f) 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) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For Price WaterhouseFirm Registration Number: 301112E

Chartered Accountants

Vivek Prasad

Place: Mumbai Partner

Dated: 27th April 2012 Membership Number F104941

Auditors Report


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Balance Sheet as at 31st March, 2012

31st March 2012 31st March 2011Notes ` in Lacs ` in Lacs

EQUITY AND LIABILITIES

Shareholders Funds

Share Capital 2 160.00 160.00

Reserves and Surplus 3 181,817.08 169,234.91

Non-Current Liabilities

Other Long-Term Liabilities 4 2,054.41 1,909.73

Long-Term Provisions 5 708.69 1,599.47

Current Liabilities

Short-Term Borrowings 6 1,887.88 9,348.80

Trade Payables 7 76,970.18 80,584.50

Other Current Liabilities 8 2,245.81 18,762.10

Short-Term Provisions 9 2,387.08 2,104.01

Total 268,231.13 283,703.52

ASSETS

Non-current assets

Fixed Assets 10

Tangible Assets 6,908.44 7,015.41

Intangible Assets 131.55 308.54

Non - Current Investments 11 80,630.60 71,731.24

Deferred Tax Asset (Net) 12 2,160.07 3,265.59

Long Term Loans and Advances 13 1,346.30 1,482.60

Other Non Current Assets 14 42,189.29 88,546.49

Current Assets

Current Investments 15 - 5,496.51

Stock in Trade (Securities) 16 25,753.85 2,777.91

Trade Receivables 17 44,882.33 37,578.70

Cash and Bank Balances 18 56,308.48 53,321.58

Short-Term Loans and Advances 19 6,050.18 10,002.36

Other Current Assets 20 1,870.04 2,176.59

Total 268,231.13 283,703.52

Significant Accounting Policies 1

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 DirectorsFirm Registration Number: 301112E


Uday S. Kotak D. Kannan C. Jayaram

Chairman Managing Director Director

Vivek Prasad Narayan S. A. Trivikram Kamath Sandeep ChordiaPartner Director Executive Company Secretary

Membership Number: F104941 Vice President

Mumbai, Mumbai,


BALANCE SHEET AND P&L A/c


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Statement of Profit and Loss Account for the year ended 31st March 2012

Schedule 31st March 2012 31st March 2011` in Lacs ` in Lacs

INCOME

Revenue from Operations 21 44,408.76 57,012.91

Other Income 22 16,561.69 16,742.44

Total Income 60,970.45 73,755.35

EXPENSES

Employee Benefit Expenses 23 19,829.40 23,560.85

Interest and Other Financial Costs 24 809.27 1,987.72

Depreciation and Amortisation Expense 1,460.37 1,785.23

Other Expenses 25 19,722.49 19,264.29

Total Expenses 41,821.53 46,598.09

Profit Before Tax 19,148.92 27,157.26

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)] 5,461.23 8,506.09

Deferred Tax 1,105.52 457.38

Profit For The Year 12,582.17 18,193.79

Earnings per Share on Equity Shares of Rs.10 each

Basic and Diluted (In `) 786.39 1,137.11

(Refer Note 41)

Significant Accounting Policies 1

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

This is the Profit and Loss Account referred to in our report of even date

For Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number: 301112E


Uday S. Kotak D. Kannan C. JayaramChairman Managing Director Director



Mumbai, Mumbai,


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Cash flow from operating activities

Profit before tax 19,148.92 27,157.26

Add adjustments for :

Depreciation / amortisation 1,460.37 1,785.23

Interest and other financial costs 578.06 1,643.90

Interest income (14,035.23) (12,883.17)

Dividend income (72.25) (72.25)

Provision for doubtful debts/ (write back) 64.13 (144.61)

Provision for contingencies written back (net) (517.42) (1,214.28)

(Profit)/loss on sale of fixed assets (net) (6.81) 29.81

(Profit)/loss on sale of investments (net) (324.36) (1,160.90)

(Profit)/loss on buyback of debentures (net) - (6.68)

Provision for diminution in value of Investments/ (write back) 190.70 (74.73)

Operating profit before working capital changes 6,486.11 15,059.58

Adjustments for changes in working capital :

- Other long term liabilities 144.68 -

- Trade payables (3,614.32) (24,019.67)

- Provisions- long term and short term (1,079.05) (552.85)

- Other current liabilities (4,977.58) (220.25)

- Loans and advances- long term and short term 3,522.73 (2,179.72)

- Other non current assets 46,357.20 (2,674.11)

-Trade receivables (7,367.77) 16,070.40

- Stock in trade (22,975.94) (851.09)

- Other current assets 552.18 13,453.65

Cash generated from operations 17,048.24 14,085.94

- Taxes paid including fringe benefits tax (net of refunds) (3,906.71) (9,064.82)

Net cash from operating activities (A) 13,141.53 5,021.12

Cash Flow Statementfor the year ended 31st March 2012

31st March 2012 31st March 2011` in Lacs ` in Lacs


CASH FLOW STATEMENT


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Cash flow from investing activities:

Purchase of fixed assets (including capital advances) (1,252.29) (1,958.29)

Proceeds from sale of fixed assets 82.69 107.41

Sale of investments - current and non-current 787,170.87 794,588.36

Purchase of investments - current and non-current (790,440.06) (813,203.22)

Interest received 14,341.78 12,214.11

Dividend on investments 72.25 72.25

Net cash from / (used in) investing activities (B) 9,975.24 (8,179.38)

Cash flow from financing activities:

Proceeds /(repayments) from /of borrowings (net) (18,483.97) 247.96

Interest and other finance charges paid (1,093.72) (1,461.50)

Net cash used in financing activities (C) (19,577.69) (1,213.54)

Net Increase in Cash and cash equivalents (A)+(B)+(C) 3,539.08 (4,371.80)

Cash and cash equivalents at the beginning of the year 742.80 5,114.60

Cash and cash equivalents at the end of the year 4,281.88 742.80

Cash and cash equivalents comprise of

Cash on hand 8.12 18.31

Balances with scheduled banks 4,273.76 724.49

TOTAL 4,281.88 742.80

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

Cash Flow Statement for the year ended 31st March 2012 (Contd.)


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

or Price Waterhouse For and on behalf of the Board of DirectorsFirm Registration Number: 301112E


Uday S. Kotak D. Kannan C. JayaramChairman Managing Director Director



Mumbai, Mumbai, 28th April 2012


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Notes to the Financial Statements for the year ended 31st March 2012


NOTES 2: SHARE CAPITAL

Authorised

1,000,000 Preference Shares of `100 each 1,000.00 1,000.00

6,000,000 Equity Shares of `10 each 600.00 600.00

1,600.00 1,600.00

Issued and Subscribed

1,600,000 Equity Shares of `10 each fully paid up 160.00 160.00

{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 KotakMahindra Capital Company Limited, Subsidiary of the holding company.}

TOTAL 160.00 160.00

Reconciliation of number of shares and equity share capital

31st March, 2012 31st March, 2011Particulars 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 pershare 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 companyafter 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, 2011Particulars 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 2531st March 2012 31st March 2012

` in Lacs ` in Lacs

NOTE 3: RESERVES AND SURPLUS

Securities Premium Account

Balance as at the beginning and end of the year 2,350.35 2,350.35

Debenture Redemption Reserve

Balance as at the beginning of the year 10,995.43 15,017.92

Add: Amount transferred from Surplus in Statement of Profit and Loss during the year - 3,813.76

Less: Amount transferred to Surplus in Statement of Profit and Loss during the year - 7,836.25

Less: Amount transferred to General Reserve 10,995.43

Balance as at the end of the year - 10,995.43

General Reserve

Balance as at the beginning of the year 6,286.51 6,286.51

Add: Amount transferred from Debenture Redemption Reserve 10,995.43 -

Balance as at the end of the year 17,281.94 6,286.51

Surplus in Statement of Profit and Loss

Balance at the beginning of the year 149,602.62 127,386.34

Profit for the year 12,582.17 18,193.79

Appropriations -

Add: Amount transferred from Debenture Redemption Reserve - 7,836.25

Less: Amount transferred to Debenture Redemption Reserve - 3,813.76

Balance as at the end of the year 162,184.79 149,602.62

TOTAL 181,817.08 169,234.91


ACCOUNTING POLICIES & NOTES


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Notes to the Financial Statements for the year ended 31st March 2012 (Contd.)


NOTE 4: OTHER LONG TERM LIABILITIES

Sundry Creditors (Refer Note 39 (b)) 236.08 -

Others 1,818.33 1,909.73

TOTAL 2,054.41 1,909.73

NOTE 5 : LONG-TERM PROVISIONS

Provision for employee benefits

Gratuity (Refer Note 29 (a)) - 733.20

Leave Encashment and Compensated Absenses 708.69 866.27

TOTAL 708.69 1,599.47

NOTE 6: SHORT TERM BORROWINGS

Secured

Overdraft from Banks- repayable on demand 1,887.88 1,668.74

(Secured by a pari passu first charge on the stock in trade and trade receivables)

Unsecured

Commercial Paper - 8,000.00

Less : Discount not Written off (319.94)

(Maximum amount oustanding during the year Rs 8,000 Lacs (Previous Year Rs 50,000 Lacs)) - 7,680.06

1,887.88 9,348.80

NOTE 7: TRADE PAYABLES

Trade Payables 71,181.44 71,350.16

Sundry Creditors * 5,788.74 9,234.34

TOTAL 76,970.18 80,584.50

* 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.


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NOTE 8: OTHER CURRENT LIABILITIES

Current Maturities of Long-Term Borrowings (Refer Note 26) - 11,023.05

Interest Accured but not due on Borrowings - 515.66

Income Received in Advance 649.73 566.36

Book Overdraft from Banks 15.54 3.52

Security Deposits 282.22 281.22

Statutory Dues 487.82 353.09

Equity Index/Stock Option Premium 701.11 3,856.38

(Refer Note 1 K 2 ( b ) )

Add/(Less):Unrealised Loss/(Gain) (328.70) 372.41 1,048.35 4,904.73

(Refer Note 1 K 1 )

Embedded Option Value - 688.56

Other Liabilities 438.09 425.91

TOTAL 2,245.81 18,762.10

NOTE 9: SHORT-TERM PROVISIONS

(a) Provision for Employee Benefits

Gratuity (Refer Note 29 (a)) - 146.94

Leave Encashment and Compensated Absenses 133.98 152.16

(b) Others

Provision for Tax (Net of Advance Tax and Fringe

Benefits Tax - Rs. 54,882.40 Lacs) 988.76 -

Contingencies (Refer Note 34) 1,264.34 1,804.91

TOTAL 2,387.08 2,104.01


31st March, 2012 31st March, 2011Particulars ` in Lacs ` in Lacs ` in Lacs ` in Lacs




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NOTES10:FIXEDASSETS

`in

Lacs

GROSSBLOCK

DEPRECIATION/AMORTISATION

NETBLOCK

DESCRIPTIONS

Asat

Additions

Disposals

AsAt

Asat

Depreciation

On

AsAt

AsAt

Asat

1stApril,

forthe

forthe

31stMarch

1stApril,

chargesfor

Ddispo

sals

31stMarch

31stMarch

31stM

arch

2011

year

year

2012

2011

theyear

2012

2012

2011

TANGIBLEASSETS

LeaseholdImprovements

1,9

14.59

348.4

4

487.8

0

1,775.23

1,5

98.4

0

232.3

4

470.9

9

1,359.75

415.48

316.1

9

Premises(a)&

(b)

5,1

68.79

-

-

5,168.79

155.1

7

84.2

5

-

239.42

4,929.37

5,0

13.6

2

FurnitureandFixtures

286.20

18.1

9

46.0

9

258.30

268.0

9

23.7

5

44.9

8

246.86

11.44

18.1

1

Computers

5,7

84.29

438.2

1

134.1

8

6,088.32

4,9

97.0

9

497.3

7

130.4

2

5,364.04

724.28

787.2

0

OfficeEquipments(c)

2,7

88.26

157.0

7

208.0

4

2,737.29

2,3

02.2

6

244.5

0

187.9

5

2,358.81

378.48

486.0

0

MotorVehicles

726.06

273.1

1

144.5

3

854.64

331.7

7

183.9

0

110.4

2

405.25

449.39

394.2

9

TOTALTANGIBLE

ASSETS

16,6

68.19

1,2

35.0

2

1,0

20.6

4

16,882.57

9,6

52.7

8

1,2

66.1

1

944.7

6

9,974.13

6,908.44

7,0

15.4

1

INTANGIBLEASSETS

Software(d)

2,3

05.51

17.2

7

-

2,322.78

1,9

96.9

7

194.2

6

-

2,191.23

131.55

308.5

4

TOTALINTANGIBLE

ASSETS

2,3

05.51

17.2

7

-

2,322.78

1,9

96.9

7

194.2

6

-

2,191.23

131.55

308.5

4

CapitalWorkIn

Progress

-

-

-

-

-

-

-

-

-

-

TOTALFIXEDASSETS

18,9

73.70

1,2

52.2

9

1,0

20.6

4

19,205.35

11,649.75

1,460.37

944.76

12,165.36

7,039.99

7,3

23.9

5

Previousyear

17,6

64.30

1,7

91.3

7

481.9

7

18,9

73.70

10,2

09.2

7

1,7

85.2

3

344.7

5

11,6

49.7

5

7,3

23.9

5

-

a)

Includesvalueofsharesintheco

-operativesociety,aggregatingto`

4.0

0La

cs(PreviousYear`4.0

0Lacs)registeredinthenameoftheCompany.

Thedepreciation

forthe

yearis`0.0

6Lacs(PreviousYear`

0.0

6Lacs)andthewrittendownvalueo

ftheassetason31stMarch,

2012is`

3.0

8Lacs(PreviousYear`3.1

4Lacs)

b)

Includesassetgivenonoperating

leaseaggregatingto`

2,3

05.9

7Lacs(Previo

usYear`N

il).Thedepreciationfortheyearis`3

7.5

9Lacs(PreviousYear`

37.5

9Lacs)a

ndthe

writtendownvalueoftheassetason31stMarch,2

012is`2,1

99.7

6Lacs(PreviousYear`N

il)

c)

Includesassetsgivenonoperating

leaseaggregatingto`3

58.7

4Lacs(Previou

sYear`3

97.7

5Lacs).

Thedepreciationfort

heyearis`1

2.6

7Lacs(PreviousYear`3

4.7

6Lacs)

andthewrittendownvalueoftheassetsason31stMarch,

2012is`4.0


0.3

3Lacs).

d)

Includesassetgivenonoperatin

gleaseaggregatingto`1

77.3


77.3

5Lacs).

Thedepreciation

fortheyearis`N

il(PreviousYear`N

ilLacs)and

thewrittendownvalueoftheassetason31stMarch,

2012is`N

il(PreviousYear`

Nil)


14/34



NOTE 11: NON-CURRENT INVESTMENTS

Face 31st March 31st March 31st March 31st March

Particulars Value 2012 2012 2011 2011` Quantity `in Lacs Quantity ` in Lacs

Long Term Investments (Other than Trade)(At Cost, less diminution other than temporary in nature)

QuotedDebentures (fully paid)Investment in Fellow Subsidiary9.50%,Unsecured Non Convertible Debentures of

Kotak Mahindra Prime Limited (Date of Redemption

on 30th August, 2017) 1,000,000 500 5,000.00 500 5,000.00

10.50%,Unsecured Non Convertible Debentures of


on 23rd April, 2021) 1,000,000 1,500 15,000.00 1,500 15,000.00

11.00%,Unsecured Non Convertible Debentures ofKotak Mahindra Prime Limited (Date of Redemption

on 23rd September, 2021) 1,000,000 500 5,000.00 - -

11.25%,Unsecured Non Convertible Debentures of


on 28th September, 2021) 1,000,000 400 4,000.00 - -

Sub Total: (a) 2,900 29,000.00 2,000 20,000.00

UnquotedEquity Shares (fully paid)Investment in Subsidiary:Kotak Mahindra Financial Services Limited incorporated in USD 1 1,214,000 572.24 950,000 443.38Dubai, U.A.E.

Investment in Fellow subsidiary

Kotak Mahindra Capital Company Limited 10 990,015 21,000.00 990,015 21,000.00Kotak Mahindra Prime Limited 10 1,712,600 27,080.69 1,712,600 27,080.69

Kotak Forex Brokerage Limited 10 1,989,706 198.97 1,989,706 198.97

Less : Provision for Diminution in Value of Investment - (180.00) - -

Others

Bombay Stock Exchange Limited 1 260,000 262.75 260,000 262.75

Preference Shares (fully paid)

Investment in Fellow subsidiary

8.5%,Cumulative Preference Share of Kotak Mahindra Asset 10 8,500,000 850.00 8,500,000 850.00

Management Company Limited

Units of Venture Capital Fund:

Kotak Alternate Opportunities India Fund - 1,749.65 - 1,895.45

Kotak India Growth Fund II (partly paid up) - 107.00 - -Less : Provision for Diminution in Value of Investment - (10.70) - -

Sub Total: (b) 14,666,321 51,630.60 14,402,321 51,731.24

Total Long-Term Investments (a+b): 14,669,221 80,630.60 14,404,321 71,731.24

Aggregate Value of Quoted Investments

- At Book Value 29,000.00 20,000.00

- At Market Value (Value of debentures which are not

traded have been taken at Book Value) 29,000.00 20,000.00

Aggregate Value of Unquoted Investments

- At Book Value 51,630.60 51,731.24

Aggregate provison for diminution in value of Investment 190.70 -




15/34




NOTE 12: DEFERRED TAX ASSET

Provision for Doubtful Debts and Contingencies 992.97 1,147.54

Provision for Gratuity - 285.56

Provision for Leave Encashment 273.40 330.43

Depreciation 580.60 636.90

Interest on Debentures - 497.52

Others 313.10 367.64

TOTAL 2,160.07 3,265.59

NOTE 13: LONG TERM LOANS AND ADVANCES

Unsecured, Considered Good

Advances Recoverable in Cash or Kind or for Value to be Received 307.16 194.14

Capital Advances 10.77 218.38

Deposits with Exchanges/Depositories 303.15 287.00

Deposits -Others 725.22 783.08

TOTAL 1,346.30 1,482.60

NOTE 14: OTHER NON CURRENT ASSETS

Long-Term Trade Recievables :

Unsecured

Considered Doubtful (Refer Note 33) 2,067.18 2,003.05

Less : Provision for Doubtful Debts 2,067.18 2,003.05

- -

Other Bank Balances

Fixed Deposits (with maturity of more than 12 months)* 42,189.29 88,546.49

TOTAL 42,189.29 88,546.49

* 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


16/34


(At cost or fair value, whichever is lower)


Value 2012 2012 2011 2011` Quantity ` in Lacs Quantity ` in Lacs

NOTE 15: CURRENT INVESTMENTS (OTHER THAN TRADE)

QuotedDebentures (fully paid)Investment in Fellow Subsidiary8.15%,Unsecured Non Convertible Debentures of Kotak 1,000,000 - - 300 3,000.00Mahindra Prime Limited (Date of Redemption on23rd November, 2011)UnquotedDebentures (fully paid)Investment in Fellow Subsidiary9.40%, Unsecured Non Convertible Debentures of Kotak 1,000,000 - - 250 2,486.51Mahindra Investments Limited, (Date of Redemption on3rd August, 2011)

8.5%,Unsecured Fully Convertible Debentures of Kotak 100,000 - - 10 10.00Forex Brokerage Limited, convertible into equity shares ofRs.10 each on 26th March 2012

- - 560 5,496.51

Aggregate Value of Quoted Investments- At Book Value - 3,000.00- At Market Value ( Value of debentures which are

not traded have been taken at Book Value) - 3,000.00Aggregate Value of Unquoted Investments- At Book Value - 2,496.51

NOTE 16: STOCK IN TRADE (SECURITIES)

Face 31st March 31st March 31st March 31st MarchValue 2012 2012 2011 2011

Quantity ` in Lacs Quantity ` in Lacs

Equity Shares3i Infotech Limited 10 - - 31,000 13.56Aditya Birla Nuvo Limited 10 12,000 106.24 - -Ahlcon Parenterals (India) Limited 10 56,126 235.55 - -Alfa-Laval (India) Limited 10 - - 6,000 73.93Allahabad Bank 10 28,000 52.09 - -Amtek Auto Limited 2 1 - 1 -Apollo Tyres Limited 1 944,000 733.74 - -Arvind Mills Limited 10 52,000 42.16 - -Asian Paints Limited 10 - - 4,251 107.37Bajaj Auto Limited 10 4,750 77.69 - -Bajaj Electricals Limited 2 - - 20,000 44.29Bajaj Holdings and Investments Limited 10 - - 3,000 22.94Balkrishna Industries Limited 2 - - 54,071 67.56Balmer Lawrie Investments Limited 10 40,695 61.43 - -Bank of Baroda 10 500 3.87 - -Berger Paints (India) Limited 2 - - 100,100 84.73Bharti Airtel Limited 5 628,000 2,122.01 - -Birla Corporation Limited 10 12,779 36.40 33,066 112.02Cadila Healthcare Limited 5 - - 11,337 86.73Carol Info Services Limited 10 - - 28,323 38.66Central Bank of India 10 - - 19,000 26.70Century Textiles and Industries Limited 10 50,000 175.35 14,814 50.52CESC Limited 10 12,000 32.60 - -Chambal Fertilisers and Chemicals Limited 10 15,000 11.49 - -Coal India Limited 10 - - 40,100 135.13

1,855,851 3,690.62 365,063 864.14





17/34


NOTE 16: STOCK IN TRADE (SECURITIES) (contd.)


Value 2012 2012 2011 2011Quantity Rs. in Lacs Quantity Rs. in Lacs

Corporation Bank 10 3,000 12.74 - -CRISIL Limited 1 - - 516 30.47Crompton Greaves Limited 2 - - 69,000 183.77Cummins India Limited 2 10,000 44.88 18,500 121.94Dabur India Limited 1 100,000 105.51 50,000 47.91DLF Limited 2 100,000 198.39 - -DQ Entertainment (International) Limited. 10 48,000 11.57 - -Dr Reddys Laboratories Limited 5 5,000 82.99 - -Educomp Solutions Limited 2 3,000 5.68 - -EIH Limited 2 25,000 21.39 - -Escorts India Limited 10 12,000 8.23 20,000 23.38Fortis Healthcare Limited 10 2,000 1.95 - -Godrej Consumer Products Limited 1 10,000 40.81 - -

Godrej Industries Limited 1 10,000 24.39 - -Goodyear India Limited 10 22,000 69.71 20,000 52.62Grasim Industries Limited 10 3,000 78.81 - -Greaves Cotton Limited 10 - - 70,000 51.28Gujarat State Fertilizers and Chemicals Limited 10 2,000 8.10 13,000 44.43GVK Power and Infrastructure Limited 1 - - 200,000 51.80Hathway Cable and Datacom Limited 10 35,000 57.73 40,000 38.84Havells India Limited 5 - - 40,000 144.98HCL Technologies Limited 2 - - 36,000 171.35HDFC Bank 2 60,012 311.97 - -Hindalco Industries Limited 1 1,804,000 2,334.38 - -Hindustan Petroleum Corporation Limited 10 67,000 188.68 - -Hindustan Unilever Limited 1 20,000 76.86 14,046 39.92Housing Development Finance Corporation Limited 2 15,000 99.80 - -I. F. B. Industries 10 65,000 51.58 - -India Motor Parts and Accessories Limited 10 - - 108 0.73Indian Bank 10 5,000 11.11 22,000 49.94Indian Oil Corporation Limited 10 35,000 90.11 - -IndusInd Bank Limited 10 11,000 34.31 - -Infosys Technologies Limited 5 64,000 1,818.36 6,125 193.98Ingersoll-Rand (India) Limited 10 12,000 51.34 - -ITC Limited 1 1,052,000 2,137.20 - -Jaiprakash Associates Limited 2 80,000 62.71 - -Karur Vysya Bank Limited 10 40,000 148.98 - -Kolar Biotech Limited 1 10,000 - 10,000 -Lanco Infratech Limited 1 500,000 86.55 - -Larsen and Toubro Limited 2 3,000 38.91 - -LIC Housing Finance Limited 2 2,000 5.09 - -Mahindra and Mahindra Financial Services Limited 10 15,000 100.56 - -Maruti Suzuki India Limited 5 - - 1,250 14.65Multi Commodity Exchange of India Limited 10 15,000 190.54 - -

Nagarjuna Construction Company Limited 2 96,000 49.72 - -National Mineral Development Corporation Limited 1 23,000 36.25 - -National Thermal Power Corp 10 844,000 1,372.45 - -Oil and Natural Gas Corpn Limited 5 359,000 917.28 - -Pantaloon Retail (India) Limited 2 531,000 812.70 30,000 77.60Petronet LNG Limited 10 36,000 58.23 - -Polaris Financial Technology Limited 5 28,319 46.50 30,000 55.85Power Finance Corporation Limited 10 312,000 547.60 - -Power Grid Corporation of India Limited 10 - - 205 0.20Prestige Estates Projects Limited 10 80,000 80.16 - -Punj Lloyd Limited 2 16,000 8.76 - -Rane Holdings Limited 10 17,000 34.62 13,000 24.60

6,607,331 12,576.19 703,750 1,420.24



18/34


Reliance Communications Limited 5 1,948,000 1,637.29 - -

Reliance Industries Limited 10 604,500 4,537.38 10,000 103.00

Reliance Infrastructure Limited 10 4,000 22.72 - -

Reliance Power Limited 10 12,000 13.83 - -

Sadbhav Engineering Limited 1 - - 50,000 57.65

SBI Home Finance Limited 10 300 - 300 -

Sesa Goa Limited 1 280,000 526.84 - -

Siemens Limited 2 8,000 60.76 - -

Sobha Developers Limited 10 26,000 71.46 - -

Standard Chartered PLC IDR23 - 250,000 222.58 - -

State Bank of India 10 5,000 103.31 - -

Sterlite Industries (India) Limited 1 1,222,000 1,349.40 30,000 50.62

Sun Pharmaceuticals Industries Limited 1 5,000 28.45 10,000 44.18Tata Communications Limited 10 10,000 22.29 - -

Tata Consultancy Services Limited 1 5,000 58.14 - -

Tata Global Beverages Limited 1 30,000 33.37 - -

Thermax Limited 2 7,500 34.84 - -

UB Engineering Limited 10 - - 18,000 16.28

Union Bank of India 10 - - 10,000 34.73

United Phosphorus Limited 2 18,000 23.42 - -

United Spirits Limited 10 33,000 195.79 - -

Zee Entertainment Ent. Limited 1 240,000 298.19 - -

Zuari Industries Limited 10 2,000 9.74 - -

Sub total for equity shares (A) 13,173,482 25,516.61 1,197,113 2,590.82

Exchange Traded Fund

Kotak Mahindra Mutual Fund-Gold Exchange Traded Fund 100 1,434 38.45 4,898 98.98Kotak Mahindra Mutual Fund - PSU Bank Exchange Traded Fund 10 5,893 20.95 6,328 29.27

Kotak Mahindra Mutual Fund-Kotak Sensex Exchange Traded Fund 10 9,273 16.27 4,469 8.32

Kotak Mahindra Mutual Fund-Kotak Nifty Exchange Traded Fund 10 1,968 10.53 8,570 49.84

Sub total for exchange traded fund (B) 18,568 86.20 24,265 186.41

Equity Warrants

HDFC-WARRANT-23AUG2012 0.05 185,900 151.04 900 0.68

Sub total for equity warrants (C) 185,900 151.04 900 0.68

TOTAL (A+B+C) 13,377,950 25,753.85 1,222,278 2,777.91

(Refer Note 30 and 31)

Aggregate Value of Stock-In-Trade

- At Book Value 25,753.85 2,777.91

- At Market Value 26,278.34 2,882.01



Value 2012 2012 2011 2011Quantity Rs. in Lacs Quantity Rs. in Lacs




19/34


31st March 31st March

2012 2011` in Lacs ` in Lacs

Sundry Debtors :

Considered Good *

Over Six Months 953.58 1,070.05

Others ** 43,928.75 36,508.65

TOTAL 44,882.33 37,578.70

(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 8.12 18.31

Balances with Banks in :

Current Account 258.51 373.81

Fixed Deposits (with original maturity less than 3 months) 4,015.25 350.68

Other Bank Balances

Fixed Deposits (with maturity of less than 12 months) * 43,795.85 35,808.46

Fixed Deposits (with maturity of more than 12 months) 8,230.75 16,770.32

TOTAL 56,308.48 53,321.58

* 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.

Notes to the Financial Statements for the year ended 31st March, 2012 (Contd.)

NOTE 17: TRADE RECEIVABLES

NOTE 19: SHORT TERM LOANS AND ADVANCES

31st March 2012 31st March 2011` in Lacs ` in Lacs ` in Lacs ` in Lacs

Unsecured, Considered Good

Loans 143.52 127.30

Advances Recoverable in Cash or Kind or for Value to be Received 875.33 753.59

Deposits -Others 263.72 296.33

Initial Margin - Equity Derivative Instrument ( Refer Note 1 K 2 (a) ) 4,528.74 6,287.64

Mark-to-Market Margin - Equity Index/Stock Futures 384.73 196.97

Less: Provision for Loss ( Refer Note 1 K 1 ) (384.73) - (196.97) -

Equity Index/Stock Option Premium ( Refer Note 1 K 2 (b) ) 431.96 1,971.74

Less: Provision for Loss ( Refer Note 1 K 1 ) (231.88) 200.08 - 1,971.74

Advance Tax (Net of Provision for Current Taxation and Fringe - 565.76

Benefit Tax Rs Nil (Previous Year Rs 50,667.35 Lacs))

Other Advances 38.79 -

6,050.18 10,002.36


20/34


Interest Accrued on Fixed Deposits 977.16 1,632.24

Interest Accured on Debentures 820.63 472.10

Dividend Accrued on Preference Shares 72.25 72.25

TOTAL 1,870.04 2,176.59

NOTE 21: REVENUE FROM OPERATIONS

(A) Revenue From Operations

Income from Brokerage {(Net of brokerage Income pertaining

to earlier years written off 40,840.28 49,523.94

Rs. 36.19 Lacs (Previous Year Rs. 1.67 Lacs)}

Less : Sub Brokerage/Referral Fees and Expenses 7,540.17 6,451.07

33,300.11 43,072.87

Fee Income - Gross (Refer Note 35) 3,321.50 4,514.05

Less : Referral Fees 97.78 97.97

3,223.72 4,416.08

Interest Income- Margin Funding 628.07 1,234.71

628.07 1,234.71

(B) Revenue From Other Financial Services

Interest Income- Others (Net of interest Income pertaining to

earlier years written off 2,649.78 3,501.64Rs. 60.30 Lacs (Previous Year Rs. 66.87 Lacs))

Profit on Trading in Securities (net) (Refer Note 31) 4,607.08 4,787.617,256.86 8,289.25

TOTAL 44,408.76 57,012.91

NOTE 22: OTHER INCOME

Interest on Bank Deposits 11,220.71 12,219.17

Interest on Staff Loans 9.43 6.51

Interest on Debentures 2,805.09 664.00

Liabilities Written Back as no Longer Required (Refer Note 38) 237.27 179.64

Provision for Contingencies Written Back (net) 517.42 1,214.28

Profit on Sale of Fixed Assets (net) 6.81 -

Provision on Compensated Absences Written Back (net) 119.64

Provision on Doubtful Debts Written Back (net) - 144.61

Profit on Buyback of Debentures - 6.68

Dividend Income (Refer Note 36) 131.47 158.23

Provision of Diminution in Value of Investments written back as

No Longer Required - 74.73

Add: Profit on sale of Investments (Refer Note 37) 324.36 324.36 1,160.90 1,235.63

Rent 240.60

Miscellaneous Income 948.89 913.69

TOTAL 16,561.69 16,742.44

Notes to the Financial Statements for the year ended 31st March, 2012 (Contd.)

NOTE 20: OTHER CURRENT ASSETS


` in Lacs ` in Lacs ` in Lacs ` in Lacs




21/34


Notes forming part of the Profit and Loss Account

31st March 31st March2011 2010

` in Lacs ` in Lacs

NOTE 23: EMPLOYEE BENEFIT EXPENSES

Salaries, Allowances and Bonus (Refer Note 39) 18,500.72 21,694.83

Contribution to Provident and Other Funds (Refer Note 29(b)) 968.37 933.40

Compensated Absences and Leave Encashment - 372.68

Gratuity 293.15 484.50

Staff Welfare 309.48 315.54

Total: 20,071.72 23,800.95

Less : Recovery of Expenses (Refer Note 40) 242.32 240.10

TOTAL 19,829.40 23,560.85

NOTE 24: INTEREST AND OTHER FINANCIAL COSTS

Interest on Inter Corporate Deposits - 53.08

Interest on Debentures 239.11 983.49

Interest/Discount on Term Loan/Other Fixed Loans 319.94 574.04Interest on Bank Overdraft 8.83 17.10

Bank Guarantee Commission and Other Charges 10.18 16.19

Interest-Other 231.21 343.82

TOTAL 809.27 1,987.72

NOTE 25: OTHER EXPENSES

Travelling, Conveyance and Motor Car 1,011.36 1,048.85

Professional and Legal 2,487.95 1,648.79

Auditors Remuneration

Audit Fees 60.50 57.00

In Other Capacity 2.00 1.00

Out of Pocket Expense 0.79 0.42

Loss on Sale / Disposal of Fixed Assets (net) - 29.81

Provision for Doubtful Debts 64.13 -Commission to Director - 75.00

Provision for Diminution in Investments 190.70 -

Repairs and Maintenance - Others 1,246.62 944.93

Office 344.38 398.86

Communication 1,778.89 2,115.10

Printing and Stationery 443.66 706.83

Stock Exchanges Expenses 40.26 39.24

Electricity 764.10 785.66

Membership and Subscription 707.57 697.74

Rent 2,872.09 2,886.24

Rates and Taxes 669.69 342.22

Advertising, Business Promotion and Entertainment 737.77 1,118.18

Securities Transaction Tax on Proprietory Trades 724.83 869.10

Bad Debts Written Off 117.19 143.29Service Charges 760.18 407.82

Common Establishment Expenses-Reimbursement 3,615.51 3,641.26

Depository Charges 162.19 257.05

Stamp/ Turnover / Transaction Charges (net of recovery) 202.58 436.02

Insurance 196.30 151.57

Loss on Account of Trades Not Confirmed by Clients, Error Tradesand Other Settlements Cost (net) 112.99 178.78

Miscellaneous 431.55 307.50

Total 19,745.78 19,288.26

Less : Recovery of Expenses (Refer Note 40) 23.29 23.97

TOTAL 19,722.49 19,264.29


22/34


Notes to the Financial Statements for the year ended 31st March, 2012

NOTE 26: CURRENT MATURITIES OF LONG TERM BORROWINGS

31st March 31st March

2012 2011` in Lacs ` in Lacs

Unsecured0, (Previous Year -49) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. - 490.00Date 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. - 440.00

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. - 780.00Date 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 ofRs.49,900 per share.)

0, (Previous Year -51) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. - 510.00Date of redemption 26th August, 2011*. (Convertible into 0 (Previous Year 1,020),35% Redeemable


per share.)

0, (Previous Year -149) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. - 1,490.00Date of redemption 23rd August, 2011*. (Convertible into 0 (Previous Year 2,980),35% Redeemable


per share.)

0, (Previous Year -51) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. - 510.00Date of redemption 25th July, 2011*. (Convertible into 0 (Previous Year 1,020),35% Redeemable


per share.)

0, (Previous Year -34) Nifty Linked Optionally Convertible Debentures of Rs.1,000,000 each. - 340.00Date of redemption 30th June, 2011*. (Convertible into 0 (Previous Year 680) ,35% Redeemable


per share.)

0, (Previous Year -242) 20% Optionally Convertible Debentures of Rs.1,000,000 each. - 2,420.00Date of redemption 26th May, 2011**. (Convertible into 0 (Previous Year 4,840),35% Redeemable


per share.)

0, (Previous Year -425) 20% Optionally Convertible Debentures of Rs.1,000,000 each. - 4,250.00Date of redemption 2nd May, 2011**. (Convertible into 0 (Previous Year 8,500),35% Redeemable


per share.)

11,230.00

Less: Discount Accreted 206.95

TOTAL - 11,023.05

* 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




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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. Placement and other fee based income are accounted for on the basis of the progress of the assignment.

2. 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. Interest Income is accounted on accrual basis.

4. Incentive on primary market subscription mobilisation is accounted on the basis of intimation received by the Company.

5. 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) In case of fee based on fixed percentage of the corpus/ fixed amount, income is accrued over the period of the

agreement.

(b) 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.

(c) In case of an upfront non-refundable fee, income is accounted in the year of receipt.

(ii) Funds received from Portfolio Management Services (PMS) Investors and corresponding Investments made on their behalf

are not forming part of these financial statements.

C. 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. Fixed assets are stated at cost inclusive of incidental expenses less accumulated depreciation.

2. 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:


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Leasehold Improvements Over the period of lease subject to a maximum of 6 years

Premises 58 years

Furniture and Fixtures 6 years

Computers 3 yearsOffice Equipments 5 years

Motor Vehicles 4 years

Software (intangible) 3 years

3. 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

4. Fixed assets costing less than ` 5,000 are fully depreciated in the year of purchase/put to use.

G. 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 andLoss.

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 overand 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.

(b) Equity Index/ Stock Option Premium Account represents the premium paid or received for buying or selling the options,

respectively.

(c) 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.

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.




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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 remeasuredat 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 aregiven 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


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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) 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.

(b) 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.

(c) Capital commitments (net of advances) - `159.28 Lacs (Previous Year ` 154.20 Lacs)

(d) Claims against the Company not acknowledged as debt by the Company ` 773.52 Lacs (Previous Year ` 772.22 Lacs)

28. (a) 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.

(b) Rent payments are recognised in the Statement of Profit and Loss under the head Rent in Schedule 19.

(c) 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).

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 31st March 2011

(` in Lacs) (` in Lacs)

Change in Defined Benefit Obligation

Opening Defined Benefit Obligation 880.14 535.70

Current Service Cost 267.90 154.63

Interest Cost 88.76 51.44

Actuarial Losses / (Gain) (57.81) 36.59

Past Service Cost - 217.48

Liabilities Extinguished on Curtailment - -

Liabilities Extinguished on Settlements - -

Liabilities Assumed on Acquisition 1.56 (10.57)

Benefits Paid (153.41) (105.13)

Closing Defined Benefit Obligation 1,027.14 880.14




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(ii) Reconciliation of Change in fair value of plan assets

Particulars 31st March 2012 31st March 2011(` in Lacs) (` in Lacs)

Opening fair value of assets - -

Expected return on plan assets - -

Actuarial gain/(loss) 13.15 -

Contributions by employer 1,072.66 -

Closing fair value of assets 1,085.81 -

(iii) Reconciliation of present value of the obligation and the fair value of the plan assets


Present Value of Obligations as at year end 1,027.14 880.14

Fair Value of Plan Assets (1,085.81) -

Amount not recognised as an assetUnrealised Gain -13.15

Net (Asset) / Liability Current (45.52) 146.94

Net (Asset) / Liability Non-Current - 733.20

(iv) Cost recognised for the year


Current Service Cost 267.90 154.63

Interest on Defined Benefit Obligation 88.76 51.44

Expected Return on Plan Assets - -

Net Actuarial Losses / (Gains) Recognized in Year (70.95) 36.59

Past Service Cost - 217.48

Losses / (Gains) on Curtailments and Settlements - 24.36

Others 7.44 -

Total, Included in Schedule 17 Personnel Gratuity 293.15 484.50

Actual Return on Plan Assets 13.15 -

(v) Asset information


Insurer managed funds 100% -

(vi) Principal actuarial assumption

Particulars Assumptions in 31st March 2012 Assumptions in 31st March 2011

Discount Rate 8.94% per annum 8.26% per annum

Salary Escalation Rate 15% per annum for first 2 years, 15% per annum for first 2 years,

10% per annum for the next 2 years and 10% per annum for the next 2 years and

6% per annum there after 6% per annum there after 6% per annum there after


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(vii) Experience Adjustments for the current annual period and previous four periods.

31st March, 31st March, 31st March, 31st March, 31st March,

2012 2011 2010 2009 2008

(` in Lacs) (` in Lacs) (` in Lacs) (` in Lacs) (` in Lacs)

Defined Benefit Obligation 1,027.14 880.14 535.70 468.75 436.73

Plan Assets 1,085.81 - - - -

Surplus/ (Deficit) 58.67 880.14 (535.70) (468.75) (436.73)

Experience Adjustment on Plan Liabilities 7.21 14.96 57.98 (143.00) 45.34

Experience Adjustment on Plan Assets 13.15 - - - -

(b) During the year, the Company has recognised the following amounts in the Statement of Profit and Loss:-

31st March 2012 31st March 2011(` in Lacs) (` in Lacs.)

Employers Contribution to Provident Fund 889.58 853.65

Superannuation Fund 7.63 8.00

Employees State Insurance Corporation 71.16 71.75

Total 968.37 933.40

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#


Quantity Value Quantity Value

Nos/Kgs. (` in Lacs) Nos/Kgs. (` in Lacs)

Opening Stock (A)

Equity Shares 1,211,464 2,777.91 1,012,335 1,926.82

TOTAL (A) 1,211,464 2,777.91 1,012,335 1,926.82

Purchases

Equity Shares 46,395,465 187,776.01 40,970,683 191,136.44

Gold 1,110 27,317.31 676 13,301.14

Bonds & Other Securities 365,050 21,445.79 6,040 16,264.17

TOTAL (B) 46,761,625 236,539.11 40,977,399 220,701.75

Sales

Equity Shares 34,239,280 164,812.26 40,771,554 190,535.64

Gold 1,110 27,332.60 676 13,274.37

Bonds & Other Securities 365,050 21,504.72 6,040 16,304.03

TOTAL (C) 34,605,440 213,649.58 40,778,220 220,114.04

Closing Stock (D)

Equity Shares 13,367,649 25,753.85 1,211,464 2,777.91

TOTAL (D) 13,367,649 25,753.85 1,211,464 2,777.91

Profit on Trading in Options/ Futures (Net) (E) - 4,520.67 - 4,524.23

Profit (D+C-B-A+E) 4,607.08 4,787.61

#Transactions and stocks on account of error trades / trades not confirmed by clients have not been considered.




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32. (a) Outstanding Future Contracts as on 31st March, 2012.

(` in Lacs)


Type of Derivative No. of No. of Units Notional No. of No. of Units NotionalContracts Amount Contract Amount

S&P CNX Nifty Futures 1,765 88,250 4,624.77 3,894 194,700 11,209.89

Bank Nifty 120 3,000 306.54 160 4,000 476.21

Stock Futures 10,060 12,110,000 26,703.03 970 795,375 2,595.14

The above contracts are held for trading purposes.

(b) Outstanding Option Contracts as on 31st March, 2012.

(` in Lacs)


Type of Derivative No. of No. of Total Premium No. of No. of Total PremiumContracts Units Carried Forward Contracts Units Carried Forward

Net of Provision Net of ProvisionMade Made

S&P CNX NiftyOptions Long 6,497 324,850 427.22 13,006 650,300 1,971.74

S&P CNX NiftyOptions Short 4,469 223,450 700.12 16,338 816,900 4,904.73

Stock Options Long 107 38,000 4.74 - - -

Stock Options Short 21 12,000 0.99 - - -

The above contracts are held for trading purposes.

(c) Particulars of unhedged foreign currency exposures as at the reporting date.


Investments (in US Dollars) 1,214,000 950,000

Receivables (in Bahrain Dinars) 318,074 305,374

Payables (in Bahrain Dinars) 318,519 308,240

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 Amount Unused Provision1st April, 2011 Addition Used Amount as on 31st

Reversed March, 2012

Stamp Duty on Trades 1,804.91 429.58 23.15 947.00 1,264.34

Total 1,804.91 429.58 23.15 947.00 1,264.34

Previous Year 3,019.19 537.93 - 1,752.21 1,804.91

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).


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35. Fee Income:


Client Money Management Services 395.75 1,235.62*

Depository Fees 2,205.67 2,526.70

Loan Syndication and Arrangement Fees - 13.47

Advisory Fees 284.70 280.77

Other Fees 435.38 457.49

Total 3,321.50 4,514.05

* 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

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Kotak Securities Limited 0