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A N N U A L R E P O R T 2 0 1 4 - 1 5

Kotak Forex Brokerage Limited

#KonaKonaKotak

1

To the Members ofKOTAK FOREX BROKERAGE LIMITED

The Directors to present their Twenty Seventh Annual Report together with the audited accounts of the Company for the year ended 31st March 2015.

FINANCIAL RESULTS AND OPERATIONS

During the year under review, the total income of the Company was ` 53,84,141/- as compared to ` 62,36,286/- in the previous year. The Company incurred a loss of ` 28,20,703/- in the year as compared to loss of ` 8,23,421/- in the previous year.

DIVIDEND

In view of the losses, no dividend is recommended.

OPERATIONS

The Company continues its efforts to improve its revenue.

DIRECTORS

Directors retiring by rotation during the year

Mr. Uday Kotak (DIN: 00007467) retires by rotation and being eligible, offers himself for re-appointment.

Director resigned during the year

Mr. Mohan Shenoi resigned as a Director of the Company with effect from 16th January 2015. Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr. Shenoi during his tenure as a Director of the Company.

Director appointed during the year

Mr. K.V.S. Manian (DIN: 00031794) was appointed as an Additional Director of the Company with effect from 16th January 2015. Mr. K.V.S. Manian holds office up to the date of the ensuing Annual General Meeting of the Company and is eligible to be appointed as Directors. In terms of Section 160 of the Companies Act, 2013, the Company has received notice in writing from a member along with requisite deposit of `1,00,000 proposing the candidature of Mr. K.V.S. Manian for his appointment as Director.

Mr. K.V.S. Manian, electrical engineer from IIT (BHU) - Varanasi, Post Graduate in Financial Management from Jamnalal Bajaj Institute of Management Studies and a Cost and Works Accountant, aged 53 years is currently the President – Corporate, Institutional and Investment Banking of Kotak Mahindra Bank Limited and has 30 years of rich experience in areas like Financial Accounting and Control, Management Accounting, Project Management, Operations, Investment Banking, Corporate Banking and Consumer Banking.

Number of Board Meetings

During the year, 4 meetings of the Board of Directors were held.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Companies Act, 2013.

All Related Party Transactions as required under Accounting Standards AS18 are reported in Notes to Accounts under clause no.26.

WHISTLE BLOWER POLICY & VIGIL MECHANISM

Your Company has also put in place the Whistle Blower Policy to raise concerns internally and to disclose information, which the individual believes shows malpractice, serious irregularities, fraud, unethical business conduct, abuse or wrong doing or violation of any Indian law.

PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS U/S 186

During the year the company has not given any loans, guarantees or has made investment which attracts the provisions of Section 186 of Companies Act, 2013.

Directors’ Report

2 ANNUAL REPORT 2014-15

AUDITORS

The shareholders of the Company at the 26th Annual General Meeting held on 30th July, 2014 re-appointed Messrs. V. C. Shah & Co., Chartered Accountants, Mumbai, (Firm Registration No. 109818W) as Statutory Auditors of the Company for a period of five years, to hold office from the conclusion of the 26th Annual General Meeting till the conclusion of the 31st Annual General Meeting of the Company.

Pursuant to the provisions of Rule 3 (7) of the Companies (Audit and Auditors) Rules, 2014 your approval is requested to ratify their appointment from the conclusion of the 27th Annual General Meeting till the conclusion of the 28th Annual General Meeting.

EMPLOYEES

The Company did not have any employees falling within the scope as mentioned under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DEPOSIT

The Company did not accept any deposits from the public during the year. Also there are no deposits due and outstanding as on 31st March 2015.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions pertaining to the Conservation of Energy and Technology Absorption are not applicable to your Company.

During the year, the Company had foreign exchange inflow of ` NIL (Previous Year: Nil) while the outgo of foreign exchange was ` NIL (Previous Year: Nil).

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors, based on the representations received from the management, confirm in pursuance of Section 134(5) of the Companies Act, 2013 that:

i) the Company has, in the preparation of the annual accounts, 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 31st March 2015 and of the profit of the Company for the financial year ended 31st March 2015;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ANNEXURES

Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of Companies (Management and Administration) Rules, 2014 is annexed.

For and on behalf of the Board of Directors

Dipak Gupta K.V.S. Manian Director DirectorPlace: MumbaiDated: 24th April 2015

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Form No. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31st March 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i. CIN U65910MH1988PLC048450

ii. Registration Date 10th August 1988

iii. Name of the Company Kotak Forex Brokerage Limited

iv. Category / Sub-Category of the Company Forex Broking

v. Address of the Registered office and contact details Bakhtawar, 1st Floor, 229, Nariman Point, Mumbai 400021.Tel No. : (022) 66596022Fax No.: (022) 22853181

vi Whether listed company Yes / No No

vii Name, Address and Contact details of Registrar and Transfer Agent, if any

N.A.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sr. No.

Name and Description of main products / services

NIC Code of the Product/ service % to total turnover of the company

1 Forex Broking 66190 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

Sr.No

Name and Address of the Company CIN/GLN Holding / Subsidiary /

Associate

% of shares held Applicable Section

1 Kotak Mahindra Bank Ltd.27BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051

L65110MH1985PLC038137 Holding 100.00 2(87)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year

No. of Shares held at the end of the year % Change during the

yearDemat Physical Total % of Total

Shares

Demat Physical Total % of Total

Shares

A. Promoters

1) Indian

a) Individual / HUF - - - - - - - - -

b) Central Govt - - - - - - - - -

c) State Govt(s) - - - - - - - - -





Shares


Shares

d) Bodies Corp - - - - - - - - -

e) Banks/FI - 4,100,000 4,100,000 100.00 - 4,100,000 4,100,000 100.00 -

f) Any Other - - - - - - - - -

Sub total (A) (1) - 4,100,000 4,100,000 100.00 - 4,100,000 4,100,000 100.00 -

2) Foreign -

a) NRIs - Individuals - - - - - - - - -

b) Other – Individuals - - - - - - - - -

c) Bodies Corp. - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other…. - - - - - - - - -

Sub total (A) (2) - - - - - - - - -

Total shareholding of Promoter (A) = (A)(1)+(A)(2)

- 4,100,000 4,100,000 100.00 - 4,100,000 4,100,000 100.00 -

B. Public Shareholding as per classification given by Depository

1. Institutions

a) Mutual Funds - - - - - - - - -

b) Banks / FI - - - - - - - - -

c) Central Govt - - - - - - - - -

d) State Govt(s) - - - - - - - - -

e) Venture Capital Funds

- - - - - - - - -

f) Insurance Companies - - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Qualified Foreign Investor

- - - - - - - - -

Sub-total (B)(1):- - - - - - - - - -

2. Non-Institutions

a) Bodies Corp.

i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

b) Individuals

5




Shares


Shares

i) Individual shareholders holding nominal share capital upto ` 1 lakh

- - - - - - - - -

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

- - - - - - - - -

c) Others (specify) - - - - - - - - -

Sub-total(B)(2):-Total Public Shareholding (B)=(B)(1)+ (B)(2)

- - - - - - - - -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) - 4,100,000 4,100,000 100.00 - 4,100,000 4,100,000 100.00 -

(ii) Shareholding of Promoters

Sr No.

Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

% change in shareholding

during the year

1 KOTAK MAHINDRA BANK LTD.

4,099,940 100.00 0 4,099,940 100.00 0.00 0.00

2 NOMINEES OF KOTAK MAHINDRA BANK LTD. (JOINTLY HOLDING WITH KOTAK MAHINDRA BANK LTD.)

Mr. T.V. Raghunath 10 0.00 0 10 0.00 0.00 0.00

Mr. K.V.S. Manian 10 0.00 0 10 0.00 0.00 0.00

Mr. R. Sundarraman 10 0.00 0 10 0.00 0.00 0.00

Ms. Cynthia Gomes 10 0.00 0 10 0.00 0.00 0.00

Mr. Dipak Gupta 10 0.00 0 10 0.00 0.00 0.00

Mr. Jaimin Bhatt 10 0.00 0 10 0.00 0.00 0.00

Total 4,100,000 100.00 0 4,100,000 100.00 0.00 0.00


(iii) Change in Promoters’ Shareholding (please specify, if there is no change) : NO CHANGE

Sr No.

Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of shares % of total shares of the company

No. of shares % of total shares of the company

At the beginning of the year - - - -

Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat etc.)

- - - -

At the end of the year - - - -

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl No.

Name of the Share Holder Shareholding at the beginning of the year

Increase/Decrease in Shareholding during the year

Date of change

Cumulative Shareholding during the year

No. of share

% of total shares of the

company

No. of shares -

Decrease

No. of shares - Increase

Reason No. of shares


companyNIL

(v) Shareholding of Directors and Key Managerial Personnel:

Sl No.

Name of the Share Holder Shareholding at the beginning of the year

Increase/Decrease in Shareholding during the year

Date of change

Cumulative Shareholding during the year

No. of share


company

No. of shares -

Decrease

No. of shares - Increase

Reason No. of shares


companyDIRECTORS (Holding shares as nominee of Kotak Mahindra Bank Ltd. jointly with Kotak Mahindra Bank Ltd.)

1 Dipak Gupta 10 0.00 - - - - 10 0.00

2 K.V.S. Manian 10 0.00 - - - - 10 0.00

KEY MANAGERIAL PERSONNEL NIL

7

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

(` in Lacs)

Secured Loans excluding

deposits

UnsecuredLoans @

Deposits @@ TotalIndebtedness

Indebtedness at the beginning of the financial yeari) Principal Amountii) Interest due but not paid iii) Interest accrued but not due

---

10.00-

1.97

---

---

Total (i+ii+iii) - 11.97 - -

Change in Indebtedness during the financial year--

0.99-

--

--

Net Change - 0.99 - -

Indebtedness at the end of the financial yeari) Principal Amountii) Interest due but not paidiii) Interest accrued but not due

---

10.00-

2.96

---

---

Total (i+ii+iii) - 12.96 - -

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: NIL

(` in Lacs)

Sr. No.

Particulars of Remuneration Name of MD/WTD/ Manager

Total Amount

1 Gross salary*(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 @(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

---

---

2 Stock Option - -

3 Sweat Equity - -

4 Commission- as % of profit- others, specify…

--

--

5 Others, please specify - -

Total (A) - -

Ceiling as per the Act ** - -


B. Remuneration to other directors:

Sr. No.

Particulars of Remuneration Name of Directors Total Amount

1 Independent Directors NILFee for attending board / committee meetings

Commission

Others, please specify

Total (1)2 Other Non-Executive Directors NIL

Fee for attending board / committee meetings

Commission

Others - Remuneration

Total (2)Total (B)=(1+2)Total Managerial RemunerationOverall Ceiling as per the Act

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD - NIL

(` in Lacs)

Sr. No.

Particulars of Remuneration Key Managerial Personnel Total AmountCS CFO

1 Gross salary*(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

---

---

---

2 Stock Option@ - - -

3 Sweat Equity - - -

4 Commission - as % of profit - others, specify…

--

--

--

5 Others, please specify - - -

Total - - -

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies

Act

Brief Description Details of Penalty / Punishment / Compounding fees imposed

Authority [RD / NCLT / COURT]

Appeal made, if any (give Details)

A. COMPANY NILPenalty - - - - -Punishment - - - - -Compounding - - - - -B. DIRECTORS NILPenalty - - - - -Punishment - - - - -Compounding - - - - -C. OTHER OFFICERS IN DEFAULT NILPenalty - - - - -Punishment - - - - -Compounding - - - - -

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Independent Auditor’s Report

To the members of

Kotak Forex Brokerage Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Kotak Forex Brokerage Limited (the “Company”), which comprise the Balance Sheet as at 31st March, 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, which we have signed under reference to this report.

Management’s Responsibility for the Financial Statements

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 that 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 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, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

Auditors’ Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards 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.

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 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.

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

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 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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.


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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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 written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For V.C.Shah & Co. Chartered Accountants Firm Registration No.109818W

V.C.Shah PartnerMumbai, 24th April, 2015. Membership No.: 10360

11

(Referred to in paragraph under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date to the members of Kotak Forex Brokerage Limited for the period ended 31st March, 2015)

i. (a) The Company has maintained 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 at reasonable intervals and according to the information and explanations given to us, no material discrepancies were noticed on such verification.

ii. The Company, being engaged in foreign exchange broking business, does not have any inventory. Hence, the requirements of sub-clauses (a), (b) and (c) of clause (ii) paragraph 3 of the Order, are not applicable.

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. Hence, clause (iii) of paragraph 3 of the Order is not applicable to the Company during the period under report.

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 with regard to services rendered. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

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

vi. The provisions of section 148 (1) of the Act, in respect of maintenance of cost records as may be prescribed by the Central Government, are not applicable to the Company.

vii. (a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, if any, applicable to it.

According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues in arrears as at 31stMarch, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except as follows:

Name of Statute Nature of dues Amount ` Assessment Year Forum where dispute is pending

The Income Tax Act, 1961 Income Tax 3,901 2011-12 Commissioner of Income Tax (Appeals)

(c) According to the information and explanations given to us, the company is not required to transfer any amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. In our opinion, the accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash loss of ` 27,97,135/- in the current financial year and ` 7,87,849/- in the immediately preceding financial year;

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to debenture holders. There were no dues payable by the Company to financial institutions or banks during the period.

x. According to the information and explanations given to us, during the year the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xi. In our opinion and according to the information and explanation given to us, the Company has not availed of any term loans during the year. Hence, clause (xi) of paragraph 3 of the Order is not applicable.

xii. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under report.

For V.C.Shah & Co. Chartered Accountants Firm Registration No.109818W

V.C.Shah PartnerMumbai, 24th April, 2015. Membership No.: 10360

Annexure to Independent Auditors’ Report


Balance Sheet as at 31st March, 2015

Particulars Note No. As at 31st March, 2015

As at 31st March, 2014

Amount in ` Amount in `

I. EQUITY AND LIABILITIES 1 Shareholders’ funds (a) Share capital 4 48,000,000 48,000,000

(b) Reserves and surplus 5 -40,487,503 -37,666,800

2 Non-current liabilities (a) Long-term borrowings 6 1,000,000 1,000,000

(b) Other long term liabilities 7 296,042 197,042

(c) Long-term provisions 8 1,243,297 834,013

3 Current liabilities (a) Trade payables 520,249 238,506

(b) Other current liabilities 9 598,168 678,648

(c) Short-term provisions 10 70,396 58,349

TOTAL 11,240,649 13,339,758

II. ASSETS Non-current assets 1 (a) Fixed assets 11

(i) Tangible assets 19,655 43,223

(ii) Intangible assets - -

(b) Non-current investments 12 1 1

(c) Long-term loans and advances 13 1,964,857 1,948,998

(d) Other non-current assets 14 - 5,139,562

2 Current assets (a) Trade receivables 15 847,930 933,274

(b) Cash and bank balance 16 6,025,518 3,503,021

(c) Short-term loans and advances 17 338,110 272,920

(d) Other current assets 18 2,044,578 1,498,759

TOTAL 11,240,649 13,339,758See accompanying notes to the financial statements

As per our attached report of even date For and on behalf of the Board of Directors

For V. C. Shah & Co.Chartered Accountants

V. C. Shah Dipak Gupta KVS ManianPartner Director Director

Membership No. 10360

Place : Mumbai

Dated: 24th April, 2015

13

Statement of Profit and loss for the year ended 31st March 2015

Particulars Note No. Year ended 31st March, 2015

Year ended 31st March, 2014


I. Revenue Revenue from operations 19 4,663,728 5,393,590

Other Income 20 720,413 842,696

Total Revenue 5,384,141 6,236,286

II. Expenses: Employee Benefits Expense 21 4,556,836 3,515,191

Finance Costs 22 110,000 109,082

Depreciation and Amortization Expense 23,568 35,572

Other expenses 23 3,502,986 3,399,862

Total expenses 8,193,390 7,059,707

III. Profit/(Loss) before tax -2,809,249 -823,421

IV. Tax expense:

(1) Current tax - -

(2) Current tax relating to prior years 11,454 -

(3) Deferred tax - -

V. Profit/(Loss) for the Year (2,820,703) (823,421)

VI. Earnings per equity share:

Basic and Diluted earnings per share -0.69 -0.20

(Refer Note no.27)

See accompanying notes to the financial statements





Place : Mumbai



Cash Flow statement for the year ended 31st March, 2015

Particulars Year ended 31st March, 2015 Year ended 31st March, 2014

Amount in ` Amount in ` Amount in ` Amount in `

CASH FLOW FROM OPERATING ACTIVITIES

Net Loss after taxation (2,820,703) (823,421)

Adjustments for :

Depreciation 23,568 35,572

Interest on Debentures 110,000 109,082

Profit on sale of fixed assets - (500)

Interest on fixed deposits (617,142) (779,194)

Operating Profit/(Loss) Before Working Capital Changes (3,304,277) (1,458,461)

Adjustments for :

(Increase)/Decrease in Trade Receivables 85,344 139,722

Increase / (Decrease) in Trade Payables 281,743 (98,154)

Increase / (Decrease) in Other Current Liabilities (80,480) 312,662

Increase / (Decrease) in Provisions 421,331 86,459

(Increase) / Decrease in Short term Loans & Advances (65,190) (54,280)

Increase / (Decrease) in Other Long term liabilities 99,000 98,174

(Increase)/ Decrease in Other Current Assets (545,819) 430,187

Cash flow Used In Operations (3,108,348) (543,691)

Income Taxes paid /(Refund Received) (15,859) (223,349)

Net Cash flow Used in Operating Activities (A) (3,124,207) (767,040)

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets - (24,135)

Proceeds from sale of Fixed assets - 500

Fixed Deposits (Placed) / Redeemed 1,717,037 860,438

Interest on fixed deposits 617,142 779,194

Net Cash flow from Investing Activities (B) 2,334,179 1,615,997

CASH FLOW FROM FINANCING ACTIVITIES

Interest on Debentures (110,000) (109,082)

Net Cash flow Used in Financing Activities (C) (110,000) (109,082)

15

Cash Flow statement for the year ended 31st March, 2015

Particulars Year ended 31st March, 2015 Year ended 31st March, 2014

Amount in ` Amount in ` Amount in ` Amount in `

NET INCREASE/( DECREASE) IN CASH & CASH EQUIVALENTS (A + B + C)

-900,028 739,875

CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 953,021 213,146

CASH & CASH EQUIVALENTS AT THE END OF THE YEAR 52,993 953,021

-900,028 739,875

Notes :

1. Cash and cash equivalents include :

Balances with bank in current account 52,993 953,021

Total cash and cash equivalents 52,993 953,021

2. The Cash Flow statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard -3 on Cash Flow Statement specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014

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





Place : Mumbai



Notes Forming Part of the Financial Statements for the Year Ended 31st March, 2015

1. CORPORATE INFORMATION

Kotak Forex Brokerage Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company is engaged in foreign exchange broking services.

2. BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

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”) / Companies Act, 1956 (“the 1956 Act”), as applicable. 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.

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 of 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.

3. SIGNIFICANT ACCOUNTING POLICIES

A. REVENUE RECOGNITION

Revenue is recognised if it is measurable and no uncertainty exists regarding its ultimate collection.

a. Brokerage is recognized as income on accrual basis.

b. Interest Income is accounted on accrual basis.

B. FIXED ASSETS

a. Fixed assets including Intangible 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 fixed asset / 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.

b. Depreciation/Amortization Policy

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. A rebuttable presumption that the useful life of an Intangible asset will not exceed 10 years from the date the asset is available for use is considered by the Management.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 YearsComputers 3Office Equipment 5Furniture & Fixture 6Forex Broking Business Rights 10Goodwill 5

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

C. 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 value, other than temporary is provided for. Current investments are valued at cost (calculated by applying weighted average cost method) or fair value whichever is lower. Brokerage, stamping and additional charges paid are included in the cost of investments. In case of investments in units of mutual fund, the net asset value is considered as the fair value.

17


D. EMPLOYEE BENEFITS

i. Provident Fund – Defined Contribution Plan:

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

ii. Gratuity – Defined Benefit Plan:

The Company accounts for the liability for future gratuity benefits based on an actuarial valuation conducted by an independent actuary. The gratuity obligation is wholly unfunded. 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.

iii. Actuarial gains/losses are recognised immediately in the Statement of Profit and Loss and are not deferred.

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

v. Compensated Absences - Other Long-Term Employee Benefits:

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.

vi. Long Service Award - Other Long-Term Employee Benefits:

As per the Company policy, employees of the Company are eligible for an award after completion of a specified number of years 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 fellow subsidiary.

E. 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 at 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 realised.

F. BORROWING COST

Borrowing costs are recognised as an expense in the period in which they areincurred.

G. SEGMENTAL ACCOUNTING

a. Segment revenue includes income directly attributable / allocable to the segment.

b. Expenses that are directly attributable / allocable to segments are considered for determining the Segment Results. The expenses which relate to the Company as a whole and are not allocable to segments are included under Un-allocable expenses.

c. Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment. Unallocated assets mainly comprise of Advance payment of taxes and tax deducted at source (net of provision for taxation).



H. EARNINGS 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.

I. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but disclosed in the notes. Contingent assets are neither recognised nor disclosed in financial statements.

J. 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. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

19


As at 31st March 2015



Note 4 - Share CapitalAuthorised41,50,000 Equity Shares of ` 10/- each 41,500,000 41,500,000

14 7.5% Preference Shares of ` 5,00,000/- each 7,000,000 7,000,000

48,500,000 48,500,000

Issued, Subscribed and fully Paid up41,00,000 Equity Shares of ` 10/- each 41,000,000 41,000,000

14 7.5% Non-Cummulative Redeemable Preference Shares of ` 5,00,000/- each 7,000,000 7,000,000

Total 48,000,000 48,000,000

a. Equity shares

Reconciliation of number of shares and equity share capital As at 31st March 2015 As at 31st March 2014

No. of shares Amount in ` No. of shares Amount in `

Outstanding at the beginning of the year 4,100,000 41,000,000 4,100,000 41,000,000

Add: Issued during the year - - - -

Less: Bought back during the year - - - -

Outstanding at the end of the year 4,100,000 41,000,000 4,100,000 41,000,000

b. Preference shares

Reconciliation of number of shares and equity share capital As at 31st March 2015 As at 31st March 2014

No. of shares Amount in ` No. of shares Amount in `

Outstanding at the beginning of the year 14 7,000,000 14 7,000,000

Add: Issued during the period - - - -

Less: Bought back during the year - - - -

Outstanding at the end of the year 14 7,000,000 14 7,000,000

c. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d. Terms/rights attached to preference shares

The Company had issued one class of preference shares of ` 5,00,000/- each fully paid up, redeemable at par at the end of 10 years with a Put / Call option to redeem them earlier, after completion of 3 years from the date of issue being 31st December 2012. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. Each holder of the preference shares is entitled to one vote per share only on the resolution placed before the company which directly affect the rights attached to Preference Shares.

e. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

Out of shares issued by the company, shares held by its holding company, ultimate holding company and their subsidiaries are as below:

Number of Shares As at 31st March 2015


Kotak Mahindra Bank Limited, the holding company :

Equity Shares of ` 10/- each 4,100,000 4,100,000

Preference shares of ` 5,00,000/- each 14 14



f. Details of Equity shareholders holding more than 5% shares in the company

Equity shares of ` 10 fully paid up

As at 31st March 2015 As at 31st March 2014

No. of shares % holding No. of shares % holding

Kotak Mahindra Bank Limited, holding company 4,100,000 100 4,100,000 100

Details of Preference shareholders holding more than 5% shares in the company

Preference shares of ` 5,00,000/- fully paid up

As at 31st March 2015 As at 31st March 2014

No. of shares % holding No. of shares % holding

Kotak Mahindra Bank Limited 14 100 14 100




Note 5 - Reserves and Surplusa. Capital Redemption Reserve Balance as at the beginning and the end of the year 1,900,000 1,900,000

b. Debenture Redemption Reserve Balance as at the beginning of the year 250,347 250,347

Add: Amount transferred from Profit of the current year - -

Balance as at the end of the year 250,347 250,347

c. Deficit in the Statement of Profit and Loss Balance as at the beginning of the year -39,817,147 -38,993,726

Add: Net Profilt / (Loss) for the current year -2,820,703 -823,421

Less:Amount transferred to Debenture Redemption Reserve - -

Balance as at the end of the year -42,637,850 -39,817,147Total -40,487,503 -37,666,800

Note 6 - Long Term BorrowingsUnsecured2 (P.Y. 2) Debentures fully paid, privately placed 1,000,000 1,000,000

Total 1,000,000 1,000,000Notes:The Company had issued 2 Non - Convertible Debentures of ` 5,00,000/- each fully paid up, at Kotak Mahindra Bank Limited Base rate plus 1% (Currently 10% +1%) (Redeemable at par on or before 23rd March 2018, at the exercise of put or call option exercisable after 1 year from the date of allotment after giving 15 days notice, being 23rd March 2013).

Note 7 - Other Long Term LiabilitiesOthersInterest accrued but not due on borrowings 296,042 197,042

Total 296,042 197,042

Note 8 - Long Term Provisions(a) Provision for employee benefits Provision for Gratuity 952,548 655,002

Provision for Compensated absences 230,174 179,011

Provision for Long Service Awards 60,575 -

Total 1,243,297 834,013

21





Note 9 - Other current liabilitiesBook Overdraft with Banks 263,390 -

Other liabilities including statutory dues 334,778 678,648

Total 598,168 678,648

Note 10 - Short-term ProvisionsProvision for Gratuity 39,431 32,850

Provision for Compensated Absences 30,965 25,499

Total 70,396 58,349

Note 11 - Fixed Assets

DESCRIPTION GROSS BLOCK DEPRECIATION NET BLOCK

Balance as at 1st April

2014

Additions during

the year

Disposals during

the year

Balance as at 31st

March 2015

Balance as at 1st April

2014

Depreciation Charge for

the year

On Disposals

Balance as at 31st

March 2015

As at 31st March

2015


a Tangible Assets Furniture and Fixtures 85,355 - - 85,355 85,355 - - 85,355 - -

Office equipment 978,271 - - 978,271 954,548 10,080 - 964,628 13,643 23,723

Computers 314,376 - - 314,376 294,876 13,488 - 308,364 6,012 19,500

Total (A) 1,378,002 - - 1,378,002 1,334,779 23,568 - 1,358,347 19,655 43,223b Intangible Assets - -

Goodwill 18,840,000 - - 18,840,000 18,840,000 - - 18,840,000 - -

Forex Broking Business Rights 38,300,000 - - 38,300,000 38,300,000 - - 38,300,000 - -

Total (B) 57,140,000 - 57,140,000 57,140,000 - - 57,140,000 - -Total (A+B) 58,518,002 - - 58,518,002 58,474,779 23,568 - 58,498,347 19,655 43,223Previous Year 58,507,267 24,135 13,400 58,518,002 58,452,607 35,572 13,400 58,474,779 43,223 54,660




Note 12 - Non Current Investments

Investments in debentures: (Non-trade, at cost)

Unquoted and fully paid up debentures

1,567 Debuntures of Kitply Industries Ltd. (Face Value ` 10,000) 1 1

Total 1 1

Aggregate amount of unquoted investments - at cost 1 1

Note 13 - Long term Loans and Advances

Security Deposit

Unsecured, considered good 94,500 94,500

Other loans and advances

Advance Taxes paid and tax deducted at source 1,870,357 1,854,498

(Net of Provision for Taxes ` Nil (P.Y. ` 83,128))

Total 1,964,857 1,948,998






Note 14 - Other Non-Current Assets

Other Bank Balances

Fixed Deposits (with residual maturity of more than 12 months)* - 5,139,562

Total - 5,139,562

*Fixed Deposits with scheduled banks include Nil (Previous year ` 50,00,000/-) which is under lien of Foreign Exchange Dealers Association of India.

Note 15 - Trade Receivables

Unsecured, considered good

- Outstanding for a period of more than six months - 13,803

- Others 847,930 919,471

Total 847,930 933,274

Note 16 - Cash and cash equivalents

Cash and cash equivalents

Balances with banks:

In current accounts 52,993 953,021

Other bank balances

Deposits with residual maturity of less than 12 months 5,972,525 2,550,000

Total 6,025,518 3,503,021

* Fixed Deposits with scheduled banks include ` 50,00,000/- (Previous year ` Nil) which is under lien of Foreign Exchange Dealers Association of India.

Notes 17 - Short-term loans and advances

Other loans and advances

Unsecured, considered good 194,128 260,629

Cenvat credit receivable

(Unsecured, considered good) 143,982 12,291

Total 338,110 272,920

Note 18 - Other current assets

Unsecured, considered good

Interest accrued on Fixed Deposits 7,508 49,233

Unbilled Revenue 2,037,070 1,449,526

Total 2,044,578 1,498,759

23


For the year ended 31st March 2015



Note 19 - Revenue from Operations

Brokerage Income (Gross) 9,052,708 7,288,526

Less: Sub-brokerage and discounts (4,388,980) (1,894,936)

Total 4,663,728 5,393,590

Note 20 - Other Income

Interest on Employee loans 13,078 13,124

Interest on Tax refunds 86,118 49,868

Interest income on fixed deposits 617,142 779,194

Miscalleneous Income 4,075 510

Total 720,413 842,696

Note 21 - Employee Benefits Expense

Salaries, allowances and bonus 4,272,023 3,222,395

Contribution to provident fund and other funds 216,930 178,435

Reimbursement of Expense on Employee Stock Option Scheme 13,498 38,196

Staff welfare expenses 54,385 76,165

Total 4,556,836 3,515,191

Note 22 - Finance Costs

Interest on Debentures 110,000 109,082

Total 110,000 109,082

Note 23 - Other expenses

Rent 1,440,000 1,440,000

Rates and taxes 44,947 16,540

Communication expenses 188,572 181,962

Business Promotion 218,483 103,222

Membership and Subscription 1,061,475 1,068,422

Repairs and maintenance - others 143,116 134,414

Travelling and Conveyance 22,922 26,160

Electricity 71,611 180,095

Legal and Professional charges 110,501 90,842

Payments to the Auditors:

as Statutory audit fees 60,000 60,000

as Tax audit fees 25,000 25,000

for Certification Work 3,500 4,760

for Reimbursement of Expenses 3,821 5,338

Filing Fees 26,000 4,022

Common Establishment Expenses - Reimbursements 36,996 30,996

Miscellaneous expenses 46,041 28,089

Total 3,502,985 3,399,862



24. CONTINGENT LIABILITIES AND COMMITMENTS:

Contingent Liabilities:

Contingent Liability in respect of demands from Income Tax authorities of ` 3,901 (P.Y. ` 3,901).

25. Employee Benefits

Gratuity

In accordance with Payment of Gratuity Act, the Company provides for gratuity, a defined benefit retirement plan covering all employees. The plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee’s salary and the years of employment with the Company subject to maximum of ` 10.00 lakhs.

The gratuity benefit is provided through unfunded plan. Under the scheme, the settlement obligation remains with the Company.

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

As of 31st March, 2015

As of 31st March, 2014


Change in Unfunded defined benefit obligationsPresent value of unfunded benefit obligations, 1st April 2013 687,852 599,657

Current Service cost 61,215 58,388

Interest cost 68,429 53,137

Benefits paid - -

Actuarial (gain)/loss on obligations 174,483 (23,330)

Present Value of unfunded benefits obligations 991,979 687,852Reconciliation of present value of the obligation and the fair value of the plan assetsFair value of plan assets

Present value of unfunded benefit obligations 991,979 687,852

Net liability 991,979 687,852Cost recognised for the period

Current service cost 61,215 58,388

Interest cost 68,429 53,137

Benefits Paid - -

Actuarial (gain)/loss 174,483 (23,330)

Net gratuity cost 304,127 88,195Actuarial assumptions usedDiscount rate 7.98% 9.34%

Salary escalation rate 8.50% 8.50%

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Experience adjustments

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

Gratuity

Year ended 31st March,

2015 2014 2013 2012 2011

Defined benefit obligation 991,979 687,852 599,657 501,701 461,812

Plan assets - - - - -

Surplus / (deficit) (991,979) (687,852) (599,657) (501,701) (461,812)

Experience adjustments on plan liabilities 90,190 34,377 (25,326) (36,200) 14,063

Experience adjustments on plan assets - - - - -

25


Provident fund

In accordance with Indian regulations, employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan, in which, both the employee and the Company contribute monthly at a determined rate. These contributions are made to a recognized provident and administered by a Board of Trustees. The employee contributes 12% of his or her basic salary and the Company contributes an equal amount. The investments of the funds are made according to rules prescribed by the Government of India.

Accumulated Compensated Absences

The Company provides for accumulated compensated absences as at the balance sheet date on the basis of an actuarial valuation.

Long Service Award

The Company provides for long service awards as at the balance sheet date on the basis of an actuarial valuationusing the projected unit credit method conducted by actuary of Life Insurance fellow subsidiary.

26. Related Party Disclosures:

Parties where control exists:

Nature of relationship Related Party

Holding Company Kotak Mahindra Bank Limited holds 100% ( P.Y. 100%) of the equity share capital along with its nominees

Uday S. Kotak along with relatives and entities controlled by him holds 39.95% (P.Y.43.58%) of the equity share capital of Kotak Mahindra Bank Limited as on 31st March, 2015.

Other related parties:

Fellow Subsidiary Kotak Mahindra Capital Company Limited

The following transactions were carried out with the related parties in the ordinary course of business:

Amount in `

Nature of Transaction Holding Company Fellow Subsidiary

Shares issued

Kotak Mahindra Bank Limited 48,000,000

(48,000,000)

BorrowingsDebentures outstanding

Kotak Mahindra Capital Company Limited 1,000,000

(1,000,000)

Liabilities Outstandings payable 5,636

(12,110)

Interest accrued but not due 296,042

Kotak Mahindra Capital Company Limited (197,042)

Term DepositsTerm Deposits placed/renewed 1,000,000

(6,500,000)

Term Deposits redeemed 2,150,000

(11,000,000)

OutstandingsBalance in Current accounts 6,798

(899,409)

Term Deposit 400,000

(2,550,000)

Interest receivable onTerm Deposits placed 7,508

(49,233)



Amount in `

Nature of Transaction Holding Company Fellow SubsidiaryIncomeInterest on Fixed Deposits 136,072

(633,924)

Brokerage Income 577,050

(76,200)

ExpensesRent Paid 1,440,000

(1,440,000)

Demat Charges 1,100

(850)

Interest on DebenturesKotak Mahindra Capital Company Limited 110,000

(109,082)

Other TransactionsExpense Reimbursements to companies 307,646

(304,155)

Figures in bracket indicate previous year figures.

27. Earnings Per Share (EPS)

The numerators and denominators used to calculate Basic and Diluted Earnings Per Share:

Particulars For the year ended 31st March 2015


Profit/ (Loss) attributable to the Equity Shareholders (`) (A) (2,820,766) (823,421)

Weighted average number of equity shares outstanding during the period (B) 4,100,000 4,100,000

Nominal Value of Equity Share (`) (C ) 10 10

Basic and Diluted Earnings Per Share (`) D = (A) / (B ) (0.69) (0.20)

28. Segment Reporting

In accordance with Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standard) Rules, 2006 “as amended”, the Company has determined one geographical segment, i.e. India and one business segments with principal activity as of Broking in Forex Markets and other related activities.

29. The Company has taken office premise under operating lease.The same is cancellable and renewable by mutual consent on mutually agreeable terms. Lease payments recognized in the Statement of Profit and Loss under the head ‘Rent Expenses’ ` 14,40,000/-(P.Y. ` 14,40,000/-).

30. 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 subsidiary 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 SEBIGuidelines 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 ESOSs over the exercise price of option is amortized on a straight-line basis over the vesting period. The Company has reimbursed the Bank ` 13,498(Previous year ` 38,196) during the year on account of such costs and the same is forming part of employee cost and included under the head “Reimbursement of Expense on Employee Stock Option Scheme” under Note 21 “Employee Benefits Expense”.

Had the company recorded the compensation cost computed on the basis of fair valuation method instead of intrinsic value method, employee compensation cost would have been higher by ` 6,315(Previous year ` 16,642) and the Lossafter tax would have been higher by ` 6,315(Previous year Lossafter tax would have been higherby ` 16,642). Consequently the basic and diluted EPS would have been ` (0.69)(Previous year ` (0.20))

27


31. 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 year end together with interest paid/payable as required under the said Act have not been given.

32. There was no expenditure and/ or earnings in foreign currency during the year.

33. Previous year’s figures have been regrouped / reclassified wherever necessary to conform to figures of the current year.





Place : Mumbai


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