kotak mahindra pension fund...

ANNUAL REPORT2010-11Its grt 2b 25

KOTAK MAHINDRA PENSION FUND LIMITED

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Directors’ Report

To the Members ofKOTAK MAHINDRA PENSION FUND LIMITED

The Directors present their Second Annual Report together with the audited accounts of your Company for the year ended 31st March 2011.

FINANCIAL RESULTS

(`)

2010-2011 2009- 2010

Gross income 390,274 376,843

Profit / (Loss) before Depreciation and Tax (5,724,680) (6,217,970)

Depreciation — —

Profit / (Loss) before Tax (5,724,680) (6,217,970)

Provision after Tax — —

Balance of Profit/(Loss) from previous years (6,217,970) —

Loss carried forward to the Balance Sheet (11,942,650) (6,217,970)

DIVIDEND

Your Directors do not recommend any dividend on equity shares for this financial year.

OPERATIONS

Your company was appointed as a Pension Fund Manager (PFM) by the Pension Fund Regulatory and Development Authority (“PFRDA”), on30th April 2009 for a period of three years ending 30th April 2012 for managing the funds under New Pension System (NPS), as per the terms of theInvestment Management Agreement dated 30th April 2009.

As per the terms of the appointment your Company manages the funds received in the Trustee Bank (Bank of India) and as per the pension fundsubscription information provided by the Central record keeping agency (National Securities Depository Limited). The assets are under the custodyof the NPS Trustee appointed custodian viz., Stock Holding Corporation of India Limited.

Your Company manages seven schemes, and the combined assets under management on 31st March 2011 were ` 330.09 Lakhs. PFRDA has,during the year, introduced new scheme “NPS LITE” to promote small savings specifically targeting the weaker and economically disadvantagedsections of the society.

The scheme wise assets under management as on 31st March 2011 is given below:

Scheme Aum as on 31st March 2011(`.in Lakhs)

NPS Trust A/c Kotak Pension Fund Scheme E 117.14

NPS Trust A/c Kotak Pension Fund Scheme C 82.87

NPS Trust A/c Kotak Pension Fund Scheme G 91.16

NPS Trust A/c Kotak Pension Fund Scheme E Tier II 17.34

NPS Trust A/c Kotak Pension Fund Scheme C Tier II 11.30

NPS Trust A/c Kotak Pension Fund Scheme G Tier II 10.28

NPS Trust A/c – Kotak Mahindra Pension Fund Limited –NPS Lite Scheme – Govt Pattern —

330.09

The pension fund management business is currently at a nascent stage and considering the low rates of management fees, the revenue generatedfor the year ended 31st March 2011 is ` 164 (Previous year - `16). Your company has made a net loss of ` 5,724,680 for the financial year.

DIRECTORS

During the year, Mr. Narayan S. A., resigned as a Director of the Company. The Directors placed on record their sincere appreciation of the valuableservice rendered by Mr. Narayan, during his tenure as a Director.

Mr. Gaurang Shah, had been appointed as Additional Director on the Board of the Company w.e.f. 1st May 2010. He was elected as a Director atthe Annual General Meeting held on 10th June 2010.

We report with profound grief and sorrow, the demise of our Director Mr. Anirudha Barwe. The inputs and guidance provided by Mr. Anirudha

Barwe were invaluable.

Mr. Balan Wasudeo, was appointed as a Director on the Board of the Company on 31st March 2011 in the casual vacancy caused by the demise of

Mr. Anirudha Barwe.

BOARD OF DIRECTORS : MR. JAIMIN BHATT, MR. RAGHUNATH T. V, MR. GAURANG SHAH, MR. TUSHAR MAVANI, MR. BALAN

WASUDEO, MR. SHIVAJI DAM

Its grt 2b 25 Financial Statements Reports

Directors’ Report

Kotak Mahindra Pension Fund Limited Annual Report 2010-112

In accordance with the Articles of Association, Mr. Tushar Mavani and Mr. Shivaji Dam retire by rotation from the Board at the forthcoming Annualgeneral Meeting and being eligible have offered their candidature for re-appointment.

The Board met four times during the year.

AUDIT COMMITTEE

In view of the sad demise of Mr. Anirudha Barwe, the Audit Committee was re-constituted at the Board Meeting held on 31st March 2011 andpresently consists of Mr. Tushar Mavani, Mr. Jaimin Bhatt and Mr. Balan Wasudeo.

The Committee met four times during the year to review the operations and internal controls.

APPOINTMENT COMMITTEE

As per the directives of Reserve Bank of India (RBI), your company has constituted an Appointment Committee consisting of Mr. Jaimin Bhatt andMr. Gaurang Shah. The scope of the Committee is to ensure that ‘fit & proper’ persons are appointed as Directors and Senior ManagementPersonnel of the organization.

RISK COMMITTEE

Pursuant to the Investment Management Agreement with PFRDA, your company has constituted a Risk Committee consisting of Mr. Tushar Mavani,Mr. Gaurang Shah and Mr. V.R. Narasimhan. The scope of the Risk Committee is to analyse and review the risk associated with managing thePension Fund business and risk mitigants put in place.. The Risk Committee met twice during the year.

INVESTMENT MANAGEMENT COMMITTEE

Pursuant to the Investment Management Agreement with PFRDA, your company has constituted an Investment Management Committee. In viewof the sad demise of Mr. Anirudha Barwe, the Investment Management Committee was reconstituted at the Board Meeting held on31st March 2011 and presently consists of Mr. Jaimin Bhatt, Mr. Gaurang Shah, Mr. Shivaji Dam, Mr. Balan Wasudeo and Mr. V.R. Narasimhan. Thescope of the Investment Management Committee is the ensure that all investments are carried out as per the provisions of PFRDA Guidelines/directions. The Investment Management Committee met twice during the year.

AUDITORS

The Auditors of your Company M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual GeneralMeeting and being eligible, offer themselves for re-appointment on such remuneration as may be fixed by the Board of the Directors of your Company.

STATUTORY INFORMATION

Your Company did not have any employees falling within the scope of sub-section (2A) of Section 217 of the Companies Act, 1956, nor did it acceptany deposits during the year. It had no foreign exchange earnings or outgo. The other particulars prescribed under the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988 are not applicable since your Company is not a manufacturing company.

EMPLOYEES/HUMAN RESOURCES

Mr. Krishnan Ramchandran resigned as the Chief Executive Officer of the Company effective 1st October 2010 and Mr. V. R. Narasimhan has beenappointed in his place. Ms. Darshana Baliya has been appointed as the Company Secretary of the 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. Your Company has, in the preparation of the annual accounts for the year ended 31st March 2011, followed the applicable accountingstandards 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 andprudent so as to give a true and fair view of the state of affairs of your Company as at 31st March 2011 and of Profit and Loss of your Companyfor the financial year ended 31st March 2011;

iii. The Directors have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud andother irregularities; and

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

ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the valuable guidance and support received from the Pension Fund Regulatory andDevelopment Authority and other Government and Regulatory agencies.

For and on behalf of the Board of Directors

Jaimin Bhatt

Chairman

Place: Mumbai

Dated: 21st April 2011

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Auditors’ Report

To the members of

KOTAK MAHINDRA PENSION FUND LIMITED

1. We have audited the attached Balance Sheet of KOTAK MAHINDRA PENSION FUND LIMITED ("the Company") as at 31st March 2011,

the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto.

These financial statements are the responsibility of the Company's 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 misstatements.

An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit

also includes assessing the accounting principles used and the significant estimates made by the 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 (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of

the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our

examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the

books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in

compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the

information required by the Companies Act, 1956 in the manner so required 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 31st March 2011;

(ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and

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

5. On the basis of the written representations received from the Directors as on 31st March 2011 taken on record by the Board of

Directors, none of the Directors is disqualified as on 31st March 2011 from being appointed as a director in terms of Section 274(1)(g)

of the Companies Act, 1956.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Nalin M. Shah

Partner

(Membership No.15860)

Place: Mumbai

Dated: 21st April 2011.

NMS /VP

Financial Statements Reports

Auditors’ Report


Annexure to the Auditors' Report

(Referred to in paragraph 3 of our report of even date)

1. (i) Having regard to the nature of the Company's business / activities / transactions, etc., clauses (i), (ii), (viii), (x), (xi), (xii), (xiii), (xiv),

(xv), (xvi), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) The Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or other parties listed in

the Register maintained under Section 301 of the Companies Act, 1956.

(iii) 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 sale of services. During the course of

our audit, we have not observed any major weakness in such internal control system.

(iv) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts

or arrangements that needed to be entered in the Register maintained under Section 301 of the Companies Act, 1956.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public within

the meaning of Sections 58A and 58AA of the Companies Act, 1956.

(vi) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed dues, including Provident Fund, Income-tax, Cess and other

material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income Tax, Cess and other material statutory dues in arrears as at

31st March 2011 for a period of more than six months from the date they became payable.

(c) There were no disputed tax demands which remained to be deposited with the appropriate authorities.

(viii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance

Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(ix) To the best of our knowledge and according to the information and explanations given to us, no fraud by or on the Company

has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS


(Registration No. 117366W)

Nalin M. Shah

Partner

(Membership No.15860)

Mumbai, 21st April 2011

NMS /VP

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Balance Sheet as at 31st March 2011 (`)

As at As at

Schedule 31st March 2011 31st March 2010

Sources of Funds

Shareholders’ Funds

Share Capital 1 120,000,000 120,000,000

Total 120,000,000 120,000,000

Application of Funds

Investments 2 105,010,742 105,010,742

Current Assets, Loans and Advances

Cash & Bank balance 3 6,221,088 9,785,334

Sundry Debtors 4 264 16

Loans and Advances 5 203,622 148,692

6,424,974 9,934,042

Less: Current Liabilities and Provisions 6

Current Liabilities 2,759,941 957,694

Provisions 618,424 205,060

3,378,365 1,162,754

Net Current Assets 3,046,608 8,771,288

Deficit as per Profit and Loss Account 11,942,650 6,217,970

Total 120,000,000 120,000,000

Notes to Accounts 7

The Schedules referred to above & notes to accounts form an integral part of the Balance Sheet

In terms of our report attached

For DELOITTE HASKINS & SELLS For and on behalf of the Board of Directors


Nalin M. Shah A. Vinod Jaimin Bhatt Tushar Mavani

Partner Manager Director Director



Balance Sheet and P&L A/c


Profit and Loss Account for the year ended 31st March 2011 (`)

For the For the

Year Ended Year Ended


Income

Investment Management fees 164 16

Dividend on current investments 388,384 325,286

Interest on Fixed Deposits - Gross ( Tax deducted at

source ` 173, Previous Year - 10,617) 1,726 51,541

Total 390,274 376,843

Expenditure

Payments to and provisions for Employees

Salaries, Allowances and Incentives 3,593,751 1,726,302

Contribution to Provident Fund 148,642 83,317

Provision for Gratuity (Refer Schedule 7 Note II A) 14,211 26,572

Provision for Compensated Absences 139,538 64,214

Operating and Other Expenses

Membership & Subscription 333,863 1,259,205

I T Expenses 551,526 1,103,000

Directors’ sitting fees 210,000 180,000

Rates and taxes 118,544 10,200

Printing and Stationery 17 96,372

Travel Expenses 61,937 71,094

Legal and Professional Fees 200,644 180,480

Auditors’ Remuneration:

Audit Fees 150,000 150,000

Company Law Matters — 15,000

Service Tax 15,450 165,450 16,995 181,995

Filing Fees 12,329 1,176,780

Reimbursement of common administrative costs 509,359 424,655

Miscellaneous Expenditure 55,143 10,627

Total 6,114,954 6,594,813

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Profit and Loss Account for the year ended 31st March 2011 (Contd.) (`)

For the For the

Year Ended Year Ended


Net Loss Before Tax (5,724,680) (6,217,970)

Net Loss After Tax (5,724,680) (6,217,970)

PROFIT / (LOSS) (5,724,680) (6,217,970)

Previous Year C/F loss (6,217,970)

Net Loss carried forward to the Balance Sheet (11,942,650) (6,217,970)

Earnings per share - Basic and Diluted (0.48) (0.70)

(Equity Shares, par value of ` 10/- each fully paid up)

(Refer Schedule 7 - Note II B)

Notes to Accounts 7

The Schedules referred to above & notes to accounts form an integral part of the Profit and Loss Account








Balance Sheet and P&L A/c


CASH FLOW FROM OPERATING ACTIVITIES

Loss Before Tax (5,724,680) (6,217,970)

Adjustments for:

Dividend income (388,384) (325,286)

Provision for Employee Benefits 153,749 90,786

Interest on Fixed Deposits (1,726) (51,541)

OPERATING LOSS BEFORE WORKING CAPITAL CHANGES (5,961,041) (6,504,011)

Increase in Sundry debtors (248) (16)

Increase in Loans and Advances (54,757) (138,075)

Increase in Current Liabilities and Provisions 2,061,862 1,071,968

2,006,858 933,877

CASH USED IN OPERATIONS (3,954,183) (5,570,134)

Direct Taxes Paid (173) (10,617)

NET CASH USED IN OPERATING ACTIVITIES (A) (3,954,356) (5,580,751)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments (net) — (105,010,742)

Interest received on Fixed Deposits 1,726 51,541

Dividend received 388,384 325,286

NET CASH USED IN INVESTING ACTIVITIES (B) 390,110 (104,633,915)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of Share Capital — 120,000,000

CASH FLOWS FROM FINANCING ACTIVITIES (C) — 120,000,000

NET INCREASE IN CASH AND CASH EQUIVALENTS (A + B + C) (3,564,246) 9,785,334

CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE YEAR 9,785,334 —

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6,221,088 9,785,334

(3,564,246)







Cash Flow Statement for the year ended 31st March 2011 (`)

Year Ended Period Ended

31st March 2011 31st March 2010

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Schedules forming part of Balance Sheet (`)

As at As at


Schedule 1 - Share Capital

Authorised

15,000,000 equity shares of ` 10 each 150,000,000 150,000,000

Issued, Subscribed and Paid up

12,000,000 equity shares of Rs 10 each, fully paid up 120,000,000 120,000,000

(Of the above 10,799,940 shares are held by Kotak Mahindra

Asset Management Company Ltd. The ulimate holding company

is Kotak Mahindra Bank Ltd.)

Total 120,000,000 120,000,000

Schedule 2 - Investments

Current Investments

(At Cost or Market Value whichever is lower)

Non Trade, Unquoted

Kotak Floater Long Term Scheme - Growth Option & Daily Dividend 105,010,742 105,010,742

Total 105,010,742 105,010,742

Notes:

i) Following investments were purchased

and sold during the year:

982,452.08 units (Previous Year - 1,221,705.18 units)

of Kotak Floater Long Term Scheme -

Daily Dividend Option 9,902,920 12,314,544

782937.23 units (Previous Year - Nil units) of Kotak

Floater Short Term Scheme - Daily Dividend Option 7,920,349 —

Nil units (Previous Year - 981,434.28 units) of

Kotak Liquid Institutional Scheme - Daily Dividend Option — 12,001,077

32,714.37 units (Previous Year - 8,587,658.10 units)

of Kotak Liquid Institutional Premium Scheme -

Daily Dividend Option 400,034 105,010,742

ii) Aggregate amount of mutual fund investments

at Net Asset Value 115,954,475 108,711,227

iii) Aggregate amount of unquoted investments at cost 105,010,742 105,010,742

Schedule 3 - Cash & Bank Balance

Balance with Scheduled Bank in Current Accounts 221,088 9,785,334

Balance with Scheduled Bank in Fixed Deposits 6,000,000 —

6,221,088 9,785,334


Schedules


Schedule 4 - Sundry Debtors (Unsecured, considered good)

Debts outstanding for a period Less than six months 264 16

Total 264 16

Schedule 5 - Loans and Advances (Unsecured, considered good)

Advances recoverable in cash or in kind or for value to be received 192,832 138,075

Tax Deducted At Source 10,790 10,617

Total 203,622 148,692

Schedule 6 - Current Liabilites and Provisions

A. Current Liabilities

Sundry Creditors (Other Than Micro,Small and Meduim Enterprises) 2,061,986 620,176

Amount Payable to Kotak Mahindra Asset Management Company Ltd. — 272,992

Amount Payable to Kotak Mahindra Bank Ltd. 458,461 —

Other Liabilities 239,494 64,526

2,759,941 957,694

B. Provisions

Gratuity 343,132 69,306

Compensated Absenses 275,292 135,754

618,424 205,060

Schedules forming part of Balance Sheet as at 31st March 2011 (Contd.) (`)

As at As at


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Schedule 7 - Significant Accounting Policies and Notes to the Accounts

I. 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

Standards) 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 of the date of the financial statements, the reported income

and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial

statements are prudent and reasonable. Actual results could differ from these estimates and assumptions.

B. REVENUE RECOGNITION

Investment Management Fee is recognised at specific rates agreed with the relevant schemes, applied on the average

monthly net assets managed.

Dividend income is accounted when the right to receive dividend is established.

Revenue is recognised only when it is reasonably certain that the ultimate collection will be made.

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 market 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 funds, the net asset value of units is considered as the market value.

D. EMPLOYEE BENEFITS

Defined contribution scheme

a. The contributions as required by the statute to Government Provident Fund are charged to the Profit and Loss account when due.

Defined Benefit Plan

b. The Company accounts for the liability for future gratuity benefits based on an independent actuarial valuation. 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.

c. Actuarial gains/losses are immediately recognised in the Profit and Loss Account and are not deferred.

Other Long -term Employee Benefits

d. The Company accrues the liability for compensated absences based on an 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.

Other Employee Benefits

e. 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.

E. TAXES ON INCOME

The Income Tax expense comprises Current tax, 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 comprise of

changes in the deferred tax assets and liabilities. Deferred tax assets and liabilities are recognised for the future tax consequences

Schedules forming part of the Balance Sheet and Profit and Loss Account


Schedules


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 on account of 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. In situations where the Company has unabsorbed depreciation or carried forward losses,

deferred tax assets are recognised only if there is virtual certainity supported by convincing evidence that the same can be realised

against future taxable profits. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been

substantially enacted before the Balance Sheet date. Changes in deferred tax assets / liabilities on account of changes in enacted

tax rates are given effect to in the Profit and Loss Account in the period of the change. 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.

II. NOTES TO THE ACCOUNTS

A. Employee Benefits

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

(`)

As at As at


Change in Unfunded benefit obligations

Present value of unfunded benefit obligations, at the beginning of the year 69,306 —

Current Service cost 34,653 69,306

Interest cost 8,076 —

Actuarial (gain)/loss on obligations (95,248) —

Past Service Cost 66,730 —

Liabilities assumed 2,59,615 —

Benefits paid — —

Present value of unfunded benefit obligations as at year end 3,43,132 69,306

Cost recognised for the year/period Year Ended Period Ended


Current service cost 34,653 69,306

Amount transferred from Holding Company — (42,734)

Interest cost 8,076 —

Expected return on plan assets — —

Actuarial (gain)/loss (95,248) —

Past Service Cost 66,730 —

Net gratuity cost 14,211 26,572

Actuarial assumptions used

Particulars Year Ended Period Ended


Discount rate 8.26% p.a. 8.01% p.a.

Salary escalation rate 15% p.a. for first the year, 15% p.a. for first 2 years,

10% p.a. for next 2 years 10% p.a. for next 2 years

& 6% p.a. thereafter & 6% p.a. thereafter

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.

B. Earnings Per Share (‘EPS’) – The numerators and denominators used to calculate Basic and Diluted Earnings Per Share:

Year ended Period ended


(a) Nominal Value of an Equity Share (`) 10 10

(b) Net loss available to Equity Shareholders (`) 5,724,680 6,217,970

(c) Weighted average number of shares outstanding 12,000,000 8,906,986

(d) Basic and Diluted Loss Per Shares (`) = (b) / (c) 0.48 0.70

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C. Segmental Reporting

The Company’s operations predominantly relate to providing investment management services to the Pension Fund Schemes of the New

Pension System Trust and hence there are no separate reportable business / geographic segments.

D. Related Party Disclosures

Parties where control exist:

Holding Company Kotak Mahindra Asset Management Company Limited

Ultimate Holding Company Kotak Mahindra Bank Limited

Other related parties:

Fellow Subsidiaries with whom there are transactions. Kotak Mahindra Investments Limited

Key Management Personnel Narasimhan V.R.

Vinod A.N

Statement of Material Related Party Transactions. (`)

Particulars Year Ended Period Ended


Kotak Mahindra Asset Management Company Ltd

(Holding Company)

1. Payables Nil 272,992/-

2. Subscription towards Equity Shares Nil 108,000,000/-

3. Expenses Reimbursed 39,086/- 2,226,980/-

4. Reimbursement of common administrative cost 284,686/- 303,325/-

Kotak Mahindra Bank Limited (Ultimate Holding Company)

1. Payables 458,461/- Nil

2. Balance in Current Account 180,679/- 9,776,437/-

3. Subscription towards Equity Shares Nil 12,000,000/-

4. Fixed Deposits placed 6,000,000/- 119,500,000/-

5. Fixed Deposits Matured Nil 119,500,000/-

6. Interest income on Fixed Deposit 1,726/- 51,541/-

7. Reimbursement of common administrative cost. 588,960 Nil

Kotak Mahindra Investments Limited (Fellow Subsidiary)

1. Reimbursement of common administrative cost 66,180/- 121,330/-

Key Management Personnel

Particulars 2010-11 2009-10

Salaries, Bonus & Incentives 2,614,100/- Nil

Contribution to provident fund 98,500/- Nil

Note - As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole,

the amount pertaining to the key management personnel is not ascertainable and, therefore, not included above.

E. There are no amounts / interest payable to any vendors covered under the Micro, Small and Medium Enterprises

Development Act, 2006.

F. Previous period figures have been regrouped and reclassified wherever necessary to confirm with current year’s

classification.Previous period was the period from 23rd March 2009 (Date of Incorporation) to 31st March 2010.


A. Vinod Jaimin Bhatt Tushar Mavani

Mumbai, 21st April 2011. Manager Director Director


Schedules


L. Balance Sheet Abstract and Company's General Business Profile as per Part IV, Schedule VI of the Companies Act, 1956

I. Registration Details

Registration No. U 6 7 2 0 0 M H 2 0 0 9 P L C 1 9 1 1 4 4 State Code 1 1

Balance Sheet Date 3 1 3 2 0 1 1

II. Capital raised during the year: (Amount in `̀̀̀̀ Thousand)

Public Issue Rights Issue

Bonus Issue Private Placement

III. Position of mobilisation and deployment of funds: (Amount in `̀̀̀̀ Thousand)

Total Liabilities Total Assets

Source of Funds

Paid-up Capital Reserves and Surplus

Secured Loans Unsecured Loans

Application of Funds

Net Fixed Assets Investments

Deferred Tax Asset Net Current Assets

Miscellaneous Expenditure Accumulated Losses

IV. Performance of Company: (Amount in `̀̀̀̀ Thousand)

Turnover / Income Total Expenditure

+ / – Profit/(Loss) before Tax + / – Profit/(Loss) after Tax

(Please tick appropriate box + for profit, – for loss)

+ / – Earnings per Share (in `) Dividend Rate (%)

V. Generic names of three principal products, services of the Company (As per monetary terms):

Item Code No. (ITC Code)

Product Description


A. Vinod Jaimin Bhatt Tushar Mavani

Mumbai, 21st April 2011 Manager Director Director

N A

P E N S I O N F U N D C O M P A N Y

N I L

N I L

N I L

N I L

1 2 0 0 0 0 1 2 0 0 0 0

1 2 0 0 0 0 N I L

N I L N I L

N I L 1 0 5 0 1 1

N I L 3 0 4 6

3 9 0 6 1 1 5

– 5 7 2 5 – 5 7 2 5

– 0 . 4 8 0 0

N I L 1 1 9 4 3

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