kotak securities limited

8/6/2019 Kotak Securities Limited

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Kotak Securities Limited


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Kotak Securit ies L imited 1

Directors Report

To the Members o

Kotak Securities Limited

Your Directors are pleased to present the 16th Annual Report and the Audited Accounts or the year ended 31st March 2010.

I. FINANCIAL HIGHLIGHTS

(Rupees in Lakhs except per share data)

31st March, 2010 31st March, 2009

Gross Income 83,786.39 71,987.44

Prot / (Loss) beore Depreciation and Tax 42,345.93 19,305.84

Depreciation 1,958.31 2,628.50

Prot / (Loss) beore Tax 40,387.62 16,677.34

Provision or Tax 14,377.58 6,028.96

Prot / (Loss) Ater Tax 26,010.04 10,648.38

Transer rom Debenture Redemption Reserve 8,828.04 25,143.73

Balance brought orward rom previous year 99,812.93 77,161.02

Amount available or appropriation 1,34,651.01 1,12,953.13

Transer to Debenture Redemption Reserve 7,264.67 13,140.20

Prot / (Loss) carried orward to the Balance Sheet 1,27,386.34 99,812.93

Earnings per share on equity shares o Rs. 10 each (Basic and Diluted) 1,625.63 665.52

II. DIVIDEND

In order to urther consolidate your Companys position, your Board proposes to employ the surplus resources to augment capital requirements,

and does not recommend a dividend or the nancial year 2009-2010 (hereinater reerred to as current nancial year).

III. OPERATIONS

The current nancial year started with the general elections around the corner. The results, in May 2009, with the UPA getting a clear majority

were welcomed by the capital markets. This resulted in renewed appetite or Equity and the Sensex which closed at 9708 at the end o the

nancial year 2008-09 (hereinater reerred to as previous nancial year) started moving up to close at 17528 at the end o the current nancial

year. Similarly, the benchmark Nity which closed at 2523 at the end o the previous nancial year closed at 5249 at the end o the current

nancial year. The average daily volumes went up to Rs. 22,784 crores rom Rs. 16,135 crores in the previous nancial year or the Cash Segment

and to Rs. 72,938 crores rom Rs. 45,687 crores in the previous nancial year or Derivatives Segment. The year also saw a shit in the market

volumes with a skew towards derivatives volumes towards the end o the current nancial year.

RETAIL SEGMENT

The year had begun with a cautious approach. With the change in the environment post the general elections, there was a need to relook at the

plan or the current nancial year. Branches were opened on a selective basis and the ocus to increase the Sub broker network continued. The

total outlets have gone up to 1113 rom 783 at the end o the previous nancial year. The number o registered sub brokers stood at 1312 or

NSE and 1105 or BSE. Customer acquisition has been stepped up. The number o customers added during the current nancial year was around

66000. Most o the centralized unctions o your Company have moved to a new state o the art oce at Malad (E), in Mumbai. The premises

have capacity to take care o your Companys growth and expansion plans over the medium term.

INSTITUTIONAL EQUITIES

Kotak Institutional Equities (KIE), a division o Kotak Securities maintained its leading position in institutional segment o the broking business.

Institutional volumes gained momentum post the General elections with increased participation by Foreign Institutional Investors (FIIs) and

Domestic Institutional Investors (DII) alike. The division outperormed other syndicate members in marketing o several Indian equity oerings

(IPOs, FPOs & QIPs) to FIIs & DIIs During the year, KIE expanded its ootprint and provided its clients with comprehensive execution services

including direct market access and algorithmic trading. KIE research continued to be recognized or its in-depth modeling, width o coverage and

investment insights, winning valuable votes rom its clients.

BOARD OF DIRECTORS: MR. UDAY KOTAK (C), MR. D. KANNAN (MD), MR. NARAYAN S. A. (D), MS. FALGUNI NAYAR (D), MR. C. JAYARAM (D),

MR. VIKRAM SUD (D)


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2 Kotak Securit ies L imited

PRIMARY MARKET

With the change in the capital market environment, corporates are back to raising equity capital through QIPs and Public Oerings. The

Government o India has also accessed the capital markets or disinvestment o its stake in some PSUs. Retail participation in the primary capital

markets is however let wanting. In the current nancial year, your Company was syndicate/sub syndicate member in 44 Public Oer Issues,

including some PSU disinvestment and a Reverse Book Building or Buyback.

PORTFOLIO MANAGEMENT SERVICES

The events o previous nancial year continued to have an impact on this line o business. Fresh infows were let wanting with the retail

investors preerring to wait and watch. Some interest is seen returning in this asset class with a rise in valuations. The total equity Assets under

management as on 31st March, 2010 was around Rs. 2302 crores.

IV. AWARDS AND RECOGNITIONS

Your Company has received ollowing awards during current nancial year or its perormance:

a. Voted as the Best Local Brokerage rm by Asiamoney Brokers Poll or 2009 (or the 4th year in a row). KIE was also adjudged as No. 2 in

Country Research, Sales Services and Sales Trading across domestic and international brokerages by Asiamoney.

b. Awarded Best Perorming Equity Broker (National) by UTI MF CNBC TV18 or 2009.

c. Awarded Best Broker in India by Finance Asia or 2009.

V. FUTURE OUTLOOK

Following the turmoil in global nancial markets in the previous nancial year, the current nancial year was a year or the world to take steps

or a recovery and condence building. These steps seem to have paid o or Corporate India with companies declaring good results. FII interest

in India is back resulting in the easing o the US dollar which had appreciated signicantly. Infation which had begun to rise is near its peak. On

the global ront there are still doubts on the economic scene with news o inability to service/ repay sovereign debt by certain countries coming in

rom time to time.

With a stable Government at the Centre, activity levels in the Indian capital markets have increased signicantly and the benchmark Sensex and

Nity have gained signicantly crossing 18000 and 5300 respectively. Market volumes have also seen an increase during this period.

The retail segment has still some concern on direct Equity as an asset class. This is visible in day to day traded volumes on Stock Exchanges as well

as in the participation o public oerings in the primary markets. Full participation rom this segment will result in enhanced business or yourCompany and your Company is ocused in this direction.

There are a host o changes in regulations being introduced by the Securities and Exchange Board o India with special emphasis on investor

service and protection. Your Company has always been ocused on customer service and would be able to comply with these requirements.

Competition has intensied with margins coming under severe pressure. Your Company is taking all necessary steps to meet these challenges

among others to maintain its leadership position in the industry.

VI. DIRECTORS

Mr. Narayan S. A. and Mr. C. Jayaram retire by rotation at the ensuing Annual General Meeting and are eligible or re-appointment.

VII. COMMITTEES

The Company has Routine and Administrative Functions Committee, First Tier Audit Committee and the Audit Committee. The constitutions o

the said Committees are as ollows:

Routine and Administrative Functions Committee

1. Mr. Uday Kotak

2. Mr. Narayan S. A.

3. Mr. C. Jayaram

First Tier Audit Committee

1. Mr. C. Jayaram

2. Mr. Narayan S. A.


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3. Mr. Vikram Sud

4. Mr. D. Kannan

5. Mr. Falguni Nayar

6. Mr. Jaimin Bhatt

Audit Committee

1. Mr. Uday Kotak

2. Mr. C. Jayaram

3. Mr. Vikram Sud

VIII. AUDITORS

The Companys auditors, M/s Price Waterhouse, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and are eligible

or re-appointment.

IX. STATUTORY INFORMATION

The inormation required under Section 217(2A) o the Companies Act, 1956 read with the Companies (Particulars o Employees) Rules, 1975 as

amended, is given in the Annexure appended hereto and orms part o this Report.

During the year under review, your Company did not accept any deposits rom the public.

Foreign exchange earnings and outgo during the current nancial year were Rs. 155.31 Lacs (Rs. 422.97 Lacs in previous nancial year) and

Rs. 1103.49 Lacs (Rs. 1853.30 Lacs in previous nancial year) respectively. The other particulars under the Companies (Disclosure o Particulars in

the Report o Board o Directors) Rules, 1988, are not applicable since your Company is not a manuacturing Company.

X. DIRECTORS RESPONSIBILITY STATEMENT

Based on representations rom the management, the Directors state, in pursuance o Section 217 (2AA) o the Companies Act, 1956, that:

(i) the Company has, in the preparation o the annual accounts or the year ended 31st March 2010, ollowed the applicable accounting

standards along with proper explanations relating to material departures, i any;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonableand prudent so as to give a true and air view o the state o aairs o the Company as at 31st March 2010 and o the prot o the

Company or the nancial year ended 31st March 2010.

(iii) the Directors have taken proper and sucient care to the best o their knowledge and ability, or the maintenance o adequate accounting

records in accordance with the provisions o the Act or saeguarding the assets o the Company and or preventing and detecting raud

and other irregularities; and

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

XI. ACKNOWLEDGEMENTS

The Directors wish to thank Securities and Exchange Board o India, the Stock Exchanges, the Depositories and the Companys Bankers or their

support. The Directors commend the employees o the Company or their dedicated eorts.

For and on behal o the Board o Directors

UDAY S. KOTAK Place : Mumbai

Chairman Dated : 28th April, 2010


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Auditors Report to the Members o Kotak Securities Limited

1. We have audited the attached Balance Sheet o Kotak Securities Limited (the Company) as at March 31, 2010, and the related Prot and Loss

Account and Cash Flow Statement or the year ended on that date annexed thereto, which we have signed under reerence to this report. These

nancial statements are the responsibility o the Companys Management. Our responsibility is to express an opinion on these nancial 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 perorm

the audit to obtain reasonable assurance about whether the nancial statements are ree o material misstatement. An audit includes examining,

on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting

principles used and signicant estimates made by Management, as well as evaluating the overall nancial statement presentation. We believe that

our audit provides a reasonable basis or 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 o India in terms o sub-section (4A) o Section 227 o The Companies Act, 1956 o

India (the Act) and on the basis o such checks o the books and records o the Company as we considered appropriate and according to the

inormation and explanations given to us, we give in the Annexure a statement on the matters specied in paragraphs 4 and 5 o the Order.

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

(a) We have obtained all the inormation and explanations which, to the best o our knowledge and belie, were necessary or the purposes o

our audit;

(b) In our opinion, proper books o account as required by law have been kept by the Company so ar as appears rom our examination o those

books and proper returns adequate or the purposes o our audit have been received rom a branch not visited by us. The Branch Auditors

Report has been orwarded to us and have been appropriately dealt with;

(c) The Balance Sheet, Prot and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books o account;

(d) In our opinion, the Balance Sheet, Prot and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting

standards reerred to in sub-section (3C) o Section 211 o the Act;

(e) On the basis o written representations received rom the directors, as on March 31, 2010 and taken on record by the Board o Directors,

none o the directors is disqualied as on March 31, 2010 rom being appointed as a director in terms o clause (g) o sub-section (1) o

Section 274 o the Act;

() In our opinion and to the best o our inormation and according to the explanations given to us, the said nancial statements together with

the notes thereon and attached thereto give, in the prescribed manner, the inormation required by the Act, and give a true and air view inconormity with the accounting principles generally accepted in India:

(i) in the case o the Balance Sheet, o the state o aairs o the Company as at March 31, 2010;

(ii) in the case o the Prot and Loss Account, o the prot or the year ended on that date; and

(iii) in the case o the Cash Flow Statement, o the cash fows or the year ended on that date.

For Price Waterhouse

Firm Registration Number: 301112E

Chartered Accountants

Vivek PrasadPartner Place : Mumbai

Membership Number: F104941 Date : May 3, 2010


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Reerred to in paragraph 3 o the Auditors Report o even date to the members o Kotak Securities Limited on the nancial statements or the year

ended March 31, 2010.

1. (a) The Company is maintaining proper records showing ull particulars, including quantitative details and situation, o xed assets.

(b) The xed assets are physically veried by the Management according to a phased programme designed to cover all the items over a period

o two years which, in our opinion, is reasonable having regard to the size o the Company and the nature o its assets. Pursuant to the

programme, a portion o the xed assets has been physically veried by the Management during the year and no material discrepancies

between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the inormation and explanations given to us, a substantial part o xed assets has not been disposed o by

the Company during the year.

2. (a) The securities held as stock in trade have been conrmed by the Management with the statement o holdings provided by the National

Securities Depository Limited (NSDL) at the nancial year end. In our opinion, the requency o conrmation is reasonable.

(b) In our opinion, the procedures o conrmation o securities held as stock in trade ollowed by the Management are reasonable and

adequate in relation to the size o the Company and the nature o its business.

(c) On the basis o our examination o the records o the Company, relating to securities held as stock in trade, in our opinion, the Company

has maintained proper records o stock in trade and no material discrepancies between the book records and the statement o holdings

provided by NSDL have been noticed.

3. (a) The Company has placed xed deposits with its holding company covered in the register maintained under Section 301 o the Act. The

maximum amount involved during the year and the year end balance o such xed deposits aggregates Rs. 16,733,769 (000s) and

Rs.15,612,724 (000s) respectively.

(b) In our opinion, the rate o interest and other terms and conditions o such xed deposits placed are not prima acie prejudicial to the interest

o the Company.

(c) In respect o the aoresaid xed deposits placed, the holding company is regular in repaying the principal amounts as stipulated and is also

regular in payment o interest.

(d) In respect o the aoresaid xed deposits, there is no overdue amount more than Rs. 100 (000s).

(e) The Company has taken secured overdrat acility rom its holding company and issued unsecured debentures to a director covered in

the register maintained under Section 301 o the Act. The overdrat acility available to the Company during the year aggregates

Rs. 1,000,000 (000s), the maximum loan amount due to the director was Rs. 3,000 (000s) and the year end balance o such loans

aggregates Rs. 87,103 (000s).

() In our opinion, the rate o interest and other terms and conditions o such loans are not prima acie prejudicial to the interest o the

Company.

(g) The repayment o principal amounts and payment o interest in case o the aoresaid overdrats and debentures is as per stipulations.

4. In our opinion and according to the inormation and explanations given to us, there is an adequate internal control system commensurate with

the size o the Company and the nature o its business or the purchase o securities held as stock in trade, xed assets and or the sale o

services. Further, on the basis o our examination o the books and records o the Company, and according to the inormation and explanationsgiven to us, we have neither come across nor have been inormed o any continuing ailure to correct major weaknesses in the aoresaid internal

control system.

5. (a) In our opinion and according to the inormation and explanations given to us, the particulars o contracts or arrangements reerred to in

Section 301 o the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the inormation and explanations given to us, the transactions made in pursuance o such contracts or

arrangements entered in the register in pursuance o Section 301 o the Act and exceeding the value o Rs. 500 (000s) in respect o any

party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time or

are considered to be o special nature or which no comparison o prices could be made as explained by the Management o the Company.

Annexure to Auditors Report


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6. The Company has not accepted any deposits rom the public within the meaning o Sections 58A and 58AA o the Act and the rules ramed

there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature o its business.

8. The Central Government o India has not prescribed the maintenance o cost records under clause (d) o sub-section (1) o Section 209 o the Act

or any o the products o the Company.

9. (a) According to the inormation and explanations given to us and the records o the Company examined by us, in our opinion, the Company is

generally regular in depositing the undisputed statutory dues including provident und, investor education and protection und, employees

state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable

with the appropriate authorities.

(b) According to the inormation and explanations given to us and the records o the Company examined by us, the particulars o dues o

income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess as applicable as at March 31, 2010 which have not been

deposited on account o a dispute, are as ollows:

Name o the statute Nature o dues Amount

(Rs. (000s))

Period to which the amount

relates

Forum where the dispute is

pending

The Income Tax Act, 1961 Income tax 2,215 Assessment Year 2002-2003 Income-Tax Appellate Tribunal



The Income Tax Act, 1961 Income tax 764 Assessment Year 2005-2006 Income-Tax Appellate Tribunal

The Central Excise Act, 1944 Service tax 3,258 2000-2001 Commissioner (Appeals)

The Central Excise Act, 1944 Service tax 1,913 2002-2005 Assistant Commissioner o

Service tax

10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the nancial year ended on that date or

in the immediately preceding nancial year.

11. According to the records o the Company examined by us and the inormation and explanation given to us, the Company has not deaulted in

repayment o dues to any nancial institution or bank or debenture holders as at the balance sheet date.

12. In our opinion, the Company has maintained adequate documents and records in the cases where the Company has granted loans and advances

on the basis o security by way o pledge o shares, debentures and other securities.

13. The provisions o any special statute applicable to chit und/nidhi/mutual benet und/societies are not applicable to the Company.

14. In our opinion, the Company has maintained proper records o transactions and contracts relating to dealing or trading in shares, securities,

debentures and other investments during the year and timely entries have been made therein. Further, such securities have been held by the

Company in its own name or are in the process o transer in its name, except to the extent o the exemption granted under Section 49 o

the Act.

15. In our opinion and according to the inormation and explanations given to us, the Company has not given any guarantee or loans taken by

others rom banks or nancial institutions during the year.

16. The Company has not obtained any term loans during the year.

17. On the basis o an overall examination o the balance sheet o the Company, in our opinion and according to the inormation and explanations

given to us, there are no unds raised on a short-term basis which have been used or long-term investment.

18. The Company has not made any preerential allotment o shares to parties and companies covered in the register maintained under Section 301

o the Act during the year.


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19. All debentures issued and outstanding at the year end are unsecured. Accordingly, the Company is not required to and has not created a charge

in respect o these debentures.

20. The Company has not raised any money by public issues during the year

21. During the course o our examination o the books and records o the Company, carried out in accordance with the generally accepted auditing

practices in India, and according to the inormation and explanations given to us, we have neither come across any instance o raud on or by the

Company, noticed or reported during the year, nor have we been inormed o such case by the Management.

For Price Waterhouse



Vivek Prasad

Partner Place : Mumbai

Membership Number: F104941 Date : May 3, 2010


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Balance Sheet as at 31st March, 2010

This is the Balance Sheet reerred to in our report o even dateFor Price Waterhouse For and on behal o the Board o Directors



Uday S. Kotak

Chairman

Narayan S. A.

Director

D. Kannan

Managing Director

Vivek Prasad Falguni Nayar Sandeep Chordia Trivikram KamathPartner Director Company Secretary Executive Vice President

Membership Number: F104941

Mumbai, Dated : May 3, 2010 Mumbai, Dated : April 28, 2010

Schedule

31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

SOURCES OF FUNDS

Shareholders Funds :

Capital 1 160.00 160.00

Reserves and Surplus 2 151,041.12 125,031.08

Loan Funds :

Secured Loans 3 841.03 977.24

Unsecured Loans 4 19,289.54 30,279.03

Total 171,331.69 156,447.35

APPLICATION OF FUNDS

Fixed Assets : 5

Gross Block 17,664.30 13,589.55

Less : Depreciation/Amortisation 10,209.27 10,006.51

Net Block 7,455.03 3,583.04

Investments 6 57,377.26 56,858.78

Deerred Tax (Reer Note 4 on Schedule 20)

Deerred Tax Asset 3,722.97 3,553.79

Current Assets, Loans and Advances :

Stock In Trade 7 1,926.82 1,670.52

Sundry Debtors 8 53,504.49 21,626.56

Cash and Bank Balances 9 157,019.71 139,332.11

Other Current Assets 10 1,507.53 2,112.07

Loans and Advances 11 9,665.36 18,017.90

223,623.91 182,759.16

Less : Current Liabilities and Provisions

Liabilities 12 116,591.15 86,446.86

Provisions 13 4,256.33 3,860.56

120,847.48 90,307.42

Net Current Assets 102,776.43 92,451.74

Total 171,331.69 156,447.35

Notes to the Financial Statements 20

Schedules reerred to above orm an integral part o the Balance Sheet


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Prot and Loss Account or the year ended 31st March, 2010

This is the Prot and Loss Account reerred to in our report o even dateFor Price Waterhouse For and on behal o the Board o Directors



Uday S. Kotak

Chairman

Narayan S. A.

Director

D. Kannan

Managing Director

Vivek Prasad Falguni Nayar Sandeep Chordia Trivikram KamathPartner Director Company Secretary Executive Vice President



Schedule

31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

INCOME

Income rom Services 14 52,892.16 44,421.28

Interest Income 15 19,155.99 22,060.46

Other Income 16 11,738.24 5,505.70

Total Income 83,786.39 71,987.44

EXPENDITURE

Personnel 17 20,639.78 19,313.03

Interest and Other Finance Charges 18 2,170.30 7,291.50

Other Expenses 19 18,630.38 24,641.09

Diminution in Value o Investments 1,435.98

Total Expenditure 41,440.46 52,681.60

Prot Beore Depreciation/Amortisation and Taxation 42,345.93 19,305.84

Depreciation/Amortisation 1,958.31 2,628.50

Prot beore Taxation 40,387.62 16,677.34

Provision or Taxation

Current Tax [Includes short provision or taxation relating to earlier years

Rs. 380.63 Lacs (net) (Previous Year short provision or taxation relating to

earlier years Rs. 70.21 Lacs (Net)]

14,546.76 5,956.97

Deerred Tax (Reer Note 4 on Schedule 20) (169.18) (143.01)

Fringe Benets Tax 215.00

Prot ater Taxation 26,010.04 10,648.38

Transer rom Debenture Redemption Reserve 8,828.04 25,143.73

Balance Brought Forward 99,812.93 77,161.02

134,651.01 112,953.13

APPROPRIATIONS

Transer to Debenture Redemption Reserve 7,264.67 13,140.20

Balance Carried Forward 127,386.34 99,812.93

134,651.01 112,953.13

Earnings per Share on Equity Shares o Rs. 10 each

Basic and Diluted (In Rupees)

(Reer Note 21 on Schedule 20)

1,625.63 665.52

Notes to the Financial Statements 20

Schedules reerred to above orm an integral part o the Prot and Loss Account


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10 Kotak Securi ties Limite d

Cash Flow Statement or the year ended 31st March, 2010

31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Cash fow rom operating activities

Net prot beore taxation 40,387.62 16,677.34

Add adjustments or :

Depreciation/amortisation 1,958.31 2,628.50

Interest and other nance charges 1,853.35 6,901.50

Interest income (19,155.99) (22,060.46)

Operating interest income 4,527.56 3,504.75

Provision or doubtul debts/(write back) 87.33 (2,131.66)

Provision or contingencies (net) 246.39 50.34

Dividend income (27.91)

(Prot)/loss on sale o xed assets (net) 107.77 77.53

(Prot)/loss on sale o investments (net) 272.14 (752.50)

(Prot)/loss on Buyback o debentures (net) (192.98)

Provision or diminution in value o Investments/(write back) (1,361.25) 1,435.98

Operating prot beore working capital changes 28,702.34 6,331.32

Adjustments or changes in working capital :

Trade and other receivables (31,965.26) 31,883.18

Stock in trade (256.30) 2,835.86

Loans and advances 1,252.06 (2,684.91)

Trade and other payables 30,548.27 (28,454.73)

Cash generated rom operations 28,281.11 9,910.72

Taxes paid including ringe benets tax (net o reunds) (12,843.40) (7,114.00)

Net cash rom operating activities (A) 15,437.71 2,796.72

Cash fow rom investing activities :

Purchase o xed assets (including capital advances) (1,095.10) (2,826.17)

Proceeds rom sale o xed assets 509.81 164.99

Sale o investments 1,153,526.80 1,673,816.72

Purchase o investments (1,152,956.16) (1,691,513.79)

Interest received 15,305.22 20,619.89

Net cash rom investing activities (B) 15,290.57 261.64


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31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Cash fow rom nancing activities :

Proceeds/(repayments) rom/o borrowings (net) (12,085.61) (147,427.73)

Interest and other nance charges paid (955.07) (8,625.13)

Net cash (used in)/rom nancing activities (C) (13,040.68) (156,052.86)

Net Increase/(Decrease) in Cash and cash equivalents (A)+(B)+(C) 17,687.60 (152,994.50)

Cash and cash equivalents at the beginning o the year 139,332.11 292,326.61

Cash and cash equivalents at the end o the year 157,019.71 139,332.11

Cash and cash equivalents comprise o :

Cash on hand 12.43 14.86

Balances with scheduled banks 157,007.28 139,317.25

Total 157,019.71 139,332.11

Notes to the Financial Statements Schedule - 20

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 o Chartered Accountants o India.

2. Balances with scheduled banks include xed deposits o Rs. 125,640.72 Lacs (Previous Year Rs. 92,565.78 Lacs) which is under the lien o National

Securities Clearing Corporation Limited and Rs. 11,891.45 Lacs (Previous Year Rs. 12,140.68 Lacs) which is under the lien o Bombay Stock

Exchange Limited.

This is the Cash Flow Statement reerred to in our report o even date

For Price Waterhouse For and on behal o the Board o Directors



Uday S. Kotak

Chairman

Narayan S. A.

Director

D. Kannan

Managing Director

Vivek Prasad Falguni Nayar Sandeep Chordia Trivikram Kamath

Partner Director Company Secretary Executive Vice President



Cash Flow Statement or the year ended 31st March, 2010 (Contd.)


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Schedules orming part o the Balance Sheet

31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 1 Capital

Authorised

1,000,000 Preerence Shares o Rs. 100 each 1,000.00 1,000.00

6,000,000 Equity Shares o Rs. 10 each 600.00 600.00

1,600.00 1,600.00

Issued and Subscribed

1,600,000 Equity Shares o Rs. 10 each ully paid up 160.00 160.00

{O the above 1,199,990 shares are held by Kotak Mahindra Bank Limited,

the Holding Company and its nominees}

Total 160.00 160.00

Schedule 2 Reserves and Surplus

Securities Premium Account

Balance as per last Balance Sheet 2,350.35 2,052.77

Add : Premium on Nity/Basket Linked Debentures 297.58

2,350.35 2,350.35

General Reserve


Add : Transer rom Prot and Loss Account

6,286.51 6,286.51

Debenture Redemption Reserve


Transer to Prot and Loss Account 8,828.04 25,143.73

7,753.25 3,441.09

Transer rom Prot and Loss Account 7,264.67 13,140.20

15,017.92 16,581.29

Prot and Loss Account 127,386.34 99,812.93

Total 151,041.12 125,031.08

Schedule 3 Secured Loans

Overdrat From Banks 841.03 977.24

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

Total 841.03 977.24


14/58


31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 4 Unsecured Loans

Loan rom Directors

3, (Previous Year 3) Nity Linked Optionally Convertible Debentures o Rs. 1,000,000 each.

Date o redemption 31st January, 2011*. (Convertible into 60, 35% Redeemable Non cumulative

Non Convertible Preerence Shares o Rs. 100 each at a premium o Rs. 49,900 per share.)

30.00 30.00

Loan rom Others

Nil, (Previous Year 40) 9.95% Optionally Convertible Debentures o Rs. 10,000,000 each. Date o

redemption 9th June, 2009. (Convertible into 8,000, 5% Redeemable Non Convertible Preerence

Shares o Rs. 100 each at a premium o Rs. 49,900 per share.)

4,000.00

Nil, (Previous Year 25) 9.15% Optionally Convertible Debentures o Rs. 10,000,000 each. Date o

redemption 6th April, 2009. (Convertible into 5,000, 5% Redeemable Non Convertible Preerence

Shares o Rs. 100 each at a premium o Rs. 49,900 per share.)

2,500.00


Date o redemption 17th May, 2010*. Redeemable at Rs. 10 Lacs (Convertible into 920 (Previous

Year 1,040), 35% Redeemable Non Cumulative Non Convertible Preerence Shares o Rs.100 each

at a premium o Rs. 49,900 per share.)

471.50 533.00

67, (Previous Year 68) Nity Linked Optionally Convertible Debentures o Rs. 1,000,000 each. Date

o redemption 18th June, 2010*. (Convertible into 1,340 (Previous Year 1,360), 35% Redeemable

Non Cumulative Non Convertible Preerence Shares o Rs. 100 each at a premium o Rs. 49,900

per share.)

670.00 680.00


Date o redemption 16th July, 2010*. (Convertible into 580 (Previous Year 780), 35% Redeemable


per share.)

290.00 390.00


Date o redemption 20th August, 2010*. (Convertible into 840 (Previous Year 880), 35%

Redeemable Non Cumulative Non Convertible Preerence Shares o Rs. 100 each at a premium o

Rs. 49,900 per share.)

420.00 440.00


o redemption 27th September, 2010*. (Convertible into 540, 35% Redeemable Non Cumulative


270.00 270.00

95, (Previous Year 95) 19% Optionally Convertible Debentures o Rs. 1,000,000 each. Date o

redemption 10th May, 2010**. (Convertible into 1,900, 35% Redeemable Non Cumulative


950.00 950.00


redemption 24th May, 2010**. (Convertible into 3,500 (Previous Year 8,960), 35% RedeemableNon Cumulative Non Convertible Preerence Shares o Rs. 100 each at a premium o Rs. 49,900

per share.)

1,750.00 4,480.00


o redemption 31st January, 2011*. (Convertible into 1,460, 35% Redeemable Non Cumulative


730.00 730.00


Date o redemption 28th January, 2011*. (Convertible into 2,000, 35% Redeemable Non Cumulative


1,000.00 1,000.00

Schedules orming part o the Balance Sheet (Contd.)


15/58



31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 4 Unsecured Loans (Contd.)

63, (Previous Year 65) 16% Optionally Convertible Debentures o Rs. 1,000,000 each. Date oredemption 27th May, 2010**. (Convertible into 1,260 (Previous Year 1,300), 35% Redeemable


per share.)

630.00 650.00

Nil, (Previous Year 105) Nity Linked Optionally Convertible Debentures o Rs. 1,000,000 each. 1,050.00


Date o redemption 7th March, 2011*. (Convertible into 2,760, 35% Redeemable Non Cumulative


1,380.00 1,380.00


Date o redemption 30th June, 2011*. (Convertible into 680, 35% Redeemable Non Cumulative


340.00 340.00


redemption 3rd May, 2010**. (Convertible into 8,900 (Previous Year 11,700), 35% RedeemableNon Cumulative Non Convertible Preerence Shares o Rs. 100 each at a premium o Rs. 49,900

per share.)

4,450.00 5,850.00


Date o redemption 25th July, 2011*. (Convertible into 1,020, 35% Redeemable Non Cumulative


510.00 510.00


o redemption 26th August, 2011*. (Convertible into 1,020, 35% Redeemable Non Cumulative


510.00 510.00


redemption 26th May, 2010**. (Convertible into 5,420 (Previous Year 6,120), 35% Redeemable


per share.)

2,710.00 3,060.00


Date o redemption 23rd August, 2011*. (Convertible into 3,000, 35% Redeemable Non Cumulative


1,500.00 1,500.00


o redemption 6th September, 2011*. (Convertible into 1,560, 35% Redeemable Non Cumulative


780.00 780.00


o redemption 12th September, 2011*. (Convertible into 880, 35% Redeemable Non Cumulative


440.00 440.00


Date o redemption 16th October, 2011*. (Convertible into 980, 35% Redeemable Non Cumulative


490.00 490.00

20,321.50 32,563.00

Less : Discount Accreted 1,031.96 2,283.97

Total 19,289.54 30,279.03

* The Debentures can be redemed at the option o the Company contingent on uture events.

**The Debentures can be redemed at the option o the Investor contingent on uture events.

During the year the maximum amount o Commercial paper outstanding was Rs. 45,000 Lacs (Previous Year Rs. 111,533 Lacs).


16/58


Schedule5FixedAssets

(Rs.inLacs)

GROSSBLOCK

DEPRECIATION/A

MORTISATION

NETBLO

CK

DESCRIPTIONS

Asat

1stApril,

2009

Additions

orthe

year

Deductions/

adjustments

ortheyear

Asat

3

1stMarch,

2010

Asat

1stApril,

2009

Forthe

year

On

De

ductions

Asat

31stMarch,

2010

Asat

31stMarch,

2010

Asat

31stMarch,

2009

TANGIBLE

LeaseholdImprovements

2,3

24.6

9

57.6

8

654.2

5

1,728.12

1,8

49.1

1

272.5

7

592.0

8

1,529.60

198.52

475.5

8

Premises(a)

4.0

0

5,1

64.7

9

5,168.79

0.7

4

70.1

8

70.92

5,097.87

3.2

6

FurnitureandFixtures

559.7

5

6.9

7

327.1

8

239.54

306.1

7

28.6

2

120.2

8

214.51

25.03

253.5

8

Computers

5,2

11.0

3

473.2

3

590.6

9

5,093.57

4,0

91.8

5

755.0

9

474.4

4

4,372.50

721.07

1,1

19.1

8

OfceEquipments(b)

3,0

89.1

3

53.4

5

479.6

6

2,662.92

2,0

11.2

4

422.7

1

360.6

9

2,073.26

589.66

1,0

77.8

9

MotorVehicles

664.8

4

314.6

2

314.5

2

664.94

318.7

7

137.9

4

205.3

1

251.40

413.54

346.0

7

INTANGIBLE

Sotware(c)

1,7

36.1

1

377.1

4

6.8

3

2,106.42

1,4

28.6

3

271.2

0

2.7

5

1,697.08

409.34

307.4

8

Total

13,5

89.5

5

6,4

47.8

8

2,3

73.1

3

17,664.30

10,0

06.5

1

1,9

58.3

1

1,7

55.5

5

10,209.27

7,455.03

3,5

83.0

4

PreviousYear

12,9

57.6

6

1,8

60.6

3

1,2

28.7

4

13,5

89.5

5

8,3

64.2

3

2,6

28.5

0

986.2

2

10,0

06.5

1

3,5

83.0

4

a

Includesvalueosharesintheco-operativesociety,aggregatingtoRs.4Lacs(PreviousYearRs.4Lacs)registeredinthenameotheCompany.Thedepreciation

ortheyear

isRs.0.0

6Lac(PreviousYear

Rs.0.0

6Lac)andthewrittendownvalueotheassetason31stMarch,

2010isRs.3.2

0Lacs(PreviousYearRs.3.2

6Lacs).

b

Includesassetsgivenonoper

atingleaseaggregatingtoRs.397.7

5Lacs(PreviousYearRs.379.9

8Lacs).ThedepreciationortheyearisRs.58.3

3Lacs(Previous

Year

Rs.67.4

7Lacs)andthewrittendownvalueotheassetsason31stMarch,

2010isRs.55.0

9Lacs(PreviousYearRs.

103.5

9Lacs).

c

Includesassetgivenonopera

tingleaseaggregatingtoRs.177.3

5Lacs(P

reviousYearRs.166.0

2Lacs).ThedepreciationortheyearisRs.0.5

6Lac(PreviousYear

Rs.21.7

1Lacs)andthewrittendownvalueotheassetsason31stMarch,

2010isRs.NilLac(PreviousYearRs.0.56Lac).



17/58



Particulars Face

Value

Rs.

31st March,

2010

Quantity

31st March,

2009

Quantity

31st March,

2010

Rs. in Lacs

31st March,

2009

Rs. in Lacs

Schedule 6 Investments

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

ING Vysya Bank Limited 10 548,386 548,386 824.02 824.02UnquotedEquity Shares

Bombay Stock Exchange Limited 1 260,000 260,000 262.75 262.75Companies under the same Management:Kotak Mahindra Capital Company Limited 10 990,015 990,015 21,000.00 21,000.00Kotak Mahindra Prime Limited 10 1,712,600 1,479,300 27,080.69 18,331.94Kotak Forex Brokerage Limited 10 1,650,000 1,250,000 165.00 125.00Investment in Subsidiary

Kotak Mahindra Financial Services Limited (650,000 Shares o

USD 1 each) incorporated in Dubai, U.A.E.

650,000 304.08

Preerence Shares

Companies under the same Management: 8.5% Preerence Share o Kotak Mahindra Asset Management

Company Limited

10 8,500,000 850.00

14,311,001 4,527,701 50,486.54 40,543.71Debentures

Companies under the same Management:8.5% Unsecured Fully Convertible Debentures o Kotak Forex

Brokerage Limited, convertible into equity shares o Rs. 10 each

on 26th March, 2012

100,000 70 125 70.00 125.00

Venture Capital Fund:Kotak Alternate Opportunities India Fund 1,395.45 940.00

70 125 1,465.45 1,065.00Total Long Term Investments 14,311,071 4,527,826 51,951.99 41,608.71Less : Provision or Diminution in Value o Investment (74.73) (98.73)

(A) 14,311,071 4,527,826 51,877.26 41,509.98

Current Investments (Other than Trade)(At cost or air value, whichever is lower)(Reer Note 8 on Schedule 20)

QuotedEquity SharesKPR Mill Limited 10 1,700,000 348.80Debentures8.15% Unsecured Non Convertible Debentures o Kotak Mahindra

Prime Limited (Date o Redemption on 23rd November, 2011)

1,000,000 300 3,000.00

7.10% Unsecured Non Convertible Debentures o Kotak Mahindra

Prime Limited (Date o Redemption on 22nd October, 2010)

1,000,000 250 2,500.00

UnquotedDebentures13.25% Unsecured Non Convertible Debentures o Kotak

Mahindra Prime Limited (Date o Redemption 26th November,

2009, 5th December, 2009 and 10th December, 2009)

1,000,000 1,000 10,000.00

9.75% Unsecured Non Convertible Debentures o Kotak Mahindra

Prime Limited (Date o Redemption on 23rd March, 2010)

1,000,000 500 5,000.00

(B) 550 1,701,500 5,500.00 15,348.80Total (A+B) 14,311,621 6,229,326 57,377.26 56,858.78

Aggregate Value o Quoted Investments At Book Value 6,324.02 1,172.82 At Market Value (Value o debentures which are not traded have

been taken at Book Value)

7,032.46 1,049.51

Aggregate Value o Unquoted Investments At Book Value 51,053.24 55,685.96


18/58



Face

Value

31st March,

2010

Quantity

31st March,

2009

Quantity

31st March,

2010

Rs. in Lacs

31st March,

2009

Rs. in Lacs

Schedule 7 Stock in Trade

(At cost or market value whichever is lower)Equity Shares

Ahluwalai Contracts India Limited 2 14,977 4.79

Amara Raja Batteries Limited 2 40,000 14.66

Amtek Auto Limited* 2 1 1

Aurobindo Pharma Limited 5 46,603 76.97

Axis Bank Limited 10 3,150 36.80

Bajaj Auto Limited 10 1,600 32.19

Bajaj Hindusthan Limited 1 5,700 7.73

Carborundum Universal Limited 2 13,000 18.99

Chennai Petroleum Corporation Limited 10 8,000 203,900 21.94 181.37

Cairn India Limited 10 19,300 30.19

Consolidated Consotorium o India 10 2,307 2.67

Coromandel International Limited 2 20,614 55.32

Entertainment Network (India) Limited 10 43,403 87.78

GMR Inrastructure Limited 2 7,500 4.67

GVK Power & Inrastructure Limited 1 356,250 67.50

Godawari Power And Ispat Limited 10 9,008 23.65

Grasim Industries Limited 10 176 4.95

Greaves Cotton Limited 10 40,366 110.46

Gujarat NRE Coke Limited 10 40,000 32.14

Hero Honda Motors Limited 2 200 3.88

Hindalco Industries Limited 1 13,900 20.63

Hindustan Construction Company Limited 1 42,000 56.32

Hindustan Oil Exploration Company Limited 10 239,085 142.49

Hindustan Zinc Limited 10 7,100 24.48

Housing Development Finance Corporation Limited 10 2,577 36.39

HDFC Bank Limited 10 2,200 42.12

ICICI Bank Limited 10 2,450 23.30

ICRA Limited 10 9,049 39.56Inrastructure Development Finance Company Limited 10 49,000 26.51

IFB Industries Limited 10 20,000 17.94

Inosys Technologies Limited 5 100 2,500 2.62 29.09

Indian Overseas Bank 10 71,227 31.53

ING Vysya Bank Limited 10 12,156 15.18

IRB Inrastructure Developers Limited 10 33,781 27.38

Jindal Steel & Power Limited 1 1,920 13.50

JSW Energy Limited 10 100,000 111.85

Kalpataru Power Transmission Limited 10 2,959 9.57

Kirloskar Oil Engines Limited 2 17,000 27.11

Kolar Biotech Limited 1 10,000 10,000

Larsen & Tourbo Limited 2 1,000 16.30

Maruti Suzuki India Limited 5 2,800 38.82

Mahindra & Mahindra Limited 10 624 2.97 Monnet Ispat Limited 10 10,704 45.57

Moser-Baer (India) Limited 10 29,700 21.68

Motherson Sumi Systems Limited 1 77,000 9,516 95.44 5.80

Mphasis Limited 10 127,386 241.90

Nagarjuna Agrichem Limited 10 5,500 14.29

Noida Toll Bridge Company Limited 10 246,074 52.61

Petronet LNG Limited 10 286,900 102.93

Piramal Healthcare Limited 2 1,600 3.13

Polaris Sotware Lab Limited 5 20,000 9.01

Subtotal 529,616 1,814,248 990.96 1,175.71


19/58



Face

Value

31st March,

2010

Quantity

31st March,

2009

Quantity

31st March,

2010

Rs. in Lacs

31st March,

2009

Rs. in Lacs

Schedule 7 Stock in Trade (Contd.)

(At cost or market value whichever is lower)

Prism Cement Limited 10 50,000 10.63

Punj Lloyd Limited 2 10,500 18.62

Punjab National Bank 10 1,800 18.10

Ranbaxy Laboratories Limited 5 47,200 221.62

Rane Holdings Limited 10 10,500 12.40

Reliance Communications Limited 5 8,400 14.25

Reliance Inrastructure Limited 10 552 5.51

Reliance Natural Resources Limited 5 3,576 2.23

Sadbhav Engineering Limited 10 12,014 38.23

Shanthi Gears Limited 1 7,319 1.88

Spicejet Limited 10 258,000 146.79

State Bank o India 10 264 5.45

Suzlon Energy Limited 2 30,000 21.56

SBI Home Finance Limited 10 300 300

Tamil Nadu Newsprint & Papers Limited 10 444 0.25

Tata Power Company Limited 10 3,600 24.30

Tata Steel Limited 10 24,448 154.52

Titan Industries Limited 10 3,000 53.57

The Phoenix Mills Limited 2 23,335 173,663 43.37 116.00

Torrent Pharmaceuticals Limited 5 2,762 12.16

Torrent Power Limited 10 49,500 34.58

Triveni Engineering & Industries Limited 1 11,550 15.77

Ultratech Cement Limited 10 28,609 144.11

Union Bank o India 10 10,588 30.95

Unitech Limited 2 9,000 6.55

United Spirits Limited 10 250 3.30

Wabco-Tvs (India) Limited 5 3,767 16.18

Subtotal or equity shares (A) 989,408 2,139,697 1,793.86 1,545.69

Exchange Traded Fund

Kotak Mutual Fund Gold Exchange Traded Fund 100 882 213 14.17 3.18

Kotak Mahindra Mutual Fund PSU Bank Exchange Traded Fund 10 9,793 3,043 33.21 4.76

Kotak Mahindra Mutual Fund Kotak Sensex ETF 10 9,285 120,502 16.23 116.89

Kotak Mahindra Mutual Fund Kotak Nity ETF 10 13,268 69.35

Subtotal or exchange traded und (B) 33,228 123,758 132.96 124.83

Total (A+B) 1,022,636 2,263,455 1,926.82 1,670.52

Aggregate Value o Stock-in-Trade

At Book Value 1,926.82 1,670.52

At Market Value 1,986.33 1,785.56

Reer Note 6 on Schedule 20

* Less than Rs. 0.01 Lac


20/58



31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 8 Sundry Debtors

Sundry Debtors:

Considered Good*

Over Six Months 881.54 1,749.50

Others** 52,622.95 19,877.06

Considered Good 53,504.49 21,626.56

Considered Doubtul

Over Six Months 1,651.80 1,825.74

Others 495.86 234.59

Considered Doubtul 2,147.66 2,060.33

Sundry Debtors 55,652.15 23,686.89

Less : Provision or Doubtul Debts 2,147.66 2,060.33

Total 53,504.49 21,626.56

(Reer note 11 on Schedule 20)

* Sundry debtors considered good include secured debtors Rs. 50,804.58 Lacs

(Previous Year Rs. 18,577.62 Lacs)

** Due rom Directors Rs. Nil (Previous Year Rs. Nil), maximum amount outstanding

during the year rom Directors Rs. 0.36 Lac (Previous Year Rs. 2.79 Lacs)

Schedule 9 Cash and Bank Balances

Cash on Hand 12.43 14.86

Balances with Scheduled Banks in:

Current Account 552.43 296.41

Fixed Deposit Account (Reer Note 12 on Schedule 20) 156,454.85 139,020.84

Total 157,019.71 139,332.11

Schedule 10 Other Current Assets

Interest Accrued on Fixed Deposits 1,255.64 1,652.87

Interest Accrued on Debentures 179.64 459.20

Dividend Accrued on Preerence Shares 72.25

Total 1,507.53 2,112.07


21/58



Rs. in Lacs

31st March, 2010

Rs. in Lacs Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 11 Loans and Advances

(Unsecured, unless otherwise stated, considered good)

Loans 47.14 54.54Advances Recoverable in Cash or Kind or or Value to be Received 848.56 937.30

Capital Advances 189.29 5,542.07

Deposits with Exchanges/Depositories 287.00 312.22

Deposits Others 818.01 1,337.21

Initial Margin Equity Derivative Instrument 2,621.10 3,467.99

(Reer Note 1 J 2(a) on Schedule 20)

Margin Deposits Equity Derivative Instrument 2,569.51 3,747.74

(Reer Note 1 J 2(a) on Schedule 20)

Mark-to-Market Margin Equity Index/Stock Futures 33.35 66.06

(Reer Note 1 J 1 on Schedule 20)

Less : Provision or Loss (Reer Note 1 J 1 on Schedule 20) 33.35 66.06

Equity Index/Stock Option Premium (Reer Note 1 J 2(b) on

Schedule 20)

2,450.03 952.91

Less : Provision or Loss 172.32 2,277.71 44.48 908.43

(Reer Note 1 J 1 on Schedule 20)

Advance Tax (Net o Provision or Current Taxation and 7.04 1,710.40

Fringe Benets Tax Rs. 41,660.45 Lacs (Previous Year

Rs. 48,967.01 Lacs))

Total 9,665.36 18,017.90

Schedule 12 Liabilities

Current Liabilities

Sundry Creditors (includes Trade Payables)*

Micro and Small enterprises (Reer Note 24 on Schedule 20) 11.65

Others 107,348.98 77,131.52

Income Received In Advance 212.41 176.97

Book Overdrat rom Banks 3.36

Security Deposits 2,327.76 1,757.42

Other Liabilities 211.31 399.86

Interest Accrued But Not Due 333.26 587.86

Equity Index/Stock Option Premium 3,521.87 2,909.33(Reer Note 1 J 2(b) on Schedule 20)

Add : Provision or Loss 589.48 4,111.35 2,909.33(Reer Note 1 J 1 on Schedule 20)

Mark-to-Market Margin Equity Index/Stock Futures 27.02 152.00(Reer Note 1 J 1 on Schedule 20)

Embedded Option Value 2,007.41 993.22

Mark to Market Embedded Option (Reer Note 1 J 1 on

Schedule 20) 2,335.32

Total 116,591.15 86,446.86

* There are no amounts due and outstanding to be credited to

Investor Education and Protection Fund.

Schedule 13 Provisions

Compensated Absences and Leave Encashment 701.44 619.02

Gratuity (Reer Note 5(a) on Schedule 20) 535.70 468.75

Contingencies (Reer Note 13 on Schedule 20) 3,019.19 2,772.79

Total 4,256.33 3,860.56


22/58


Schedules orming part o the Prot and Loss Account (Contd.)

Rs. in Lacs

31st March, 2010

Rs. in Lacs Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 14 Income rom Services

Income rom Brokerage Gross {(Net o brokerage Income

pertaining to earlier years written o Rs. 35.39 Lacs(Previous Year Rs. 97.54 Lacs)} 52,506.02 40,564.97

{Tax deducted at source Rs. 423.39 Lacs (Previous Year

Rs. 392.82 Lacs)}

Less : Sub Brokerage/Reerral Fees and Expenses 6,730.36 3,557.34

45,775.66 37,007.63

Fee Income Gross {Reer Note 15(a) on Schedule 20} 7,307.99 7,570.84


Rs. 63.61 Lacs)}

Less : Reerral Fees 191.49 157.19

7,116.50 7,413.65

Total 52,892.16 44,421.28

Schedule 15 Interest Income

Interest on Bank Deposits 12,843.40 18,104.87{Tax deducted at source Rs. 1,818.55 Lacs (Previous Year

Rs. 4,103.30 Lacs)}

Interest on Sta Loans 4.66 4.95

Interest on Debentures 1,785.03 448.70

Interest on Income Tax Reund 2.14

Interest Others {Net o interest Income pertaining to earlier

years written o Rs. 66.87 Lacs (Previous Year Rs. 97.88 Lacs)}

{Reer Note 15(b) on Schedule 20} 4,522.90 3,499.80


Rs. 20.09 Lacs)}

Total 19,155.99 22,060.46

Schedule 16 Other Income

Prot on Trading in Securities (net) (Reer Note 9 on Schedule 20) 8,720.64 Prot on Buyback o Debentures 192.98

Dividend Income (Reer Note 16 on Schedule 20) 82.47 20.15

Provision o Diminution in Value o Investments written back as

No Longer Required

1,361.25

Add/(Less) : Prot/(Loss) on sale o Investments (net)

(Reer Note 17 on Schedule 20) (272.14) 1,089.11 752.50 752.50

Liabilities Written Back as no Longer Required

(Reer Note 18 on Schedule 20)

161.71 2,249.14

Provision o Doubtul Debts Written Back as no Longer Required 2,131.66

Less : Bad Debts Written O 799.07 1,332.59

Prot on Foreign Exchange Transactions 33.08

Bad Debts Recovery 550.02

Miscellaneous Income 941.31 1,118.24

Total 11,738.24 5,505.70

Schedule 17 Personnel

Salaries, Allowances and Bonus (Reer Note 19 on Schedule 20) 19,541.98 18,207.77

Contribution to Provident and Other Funds 718.26 930.88

Compensated Absences and Leave Encashment 205.63 123.20

Gratuity 194.36 70.12

Sta Welare 217.56 321.31

Total 20,877.79 19,653.28

Less : Recovery o Expenses (Reer Note 20 on Schedule 20) 238.01 340.25

Total 20,639.78 19,313.03


23/58


Schedules orming part o the Prot and Loss Account (Contd.)

31st March, 2010

Rs. in Lacs

31st March, 2009

Rs. in Lacs

Schedule 18 Interest and other Finance Charges

Interest/Discount Accretion on Debentures 1,518.37 2,409.57

Interest/Discount on Term Loan/Other Fixed Loans 289.55 4,466.34

Interest on Bank Overdrat 18.09 11.71

Bank Guarantee Commission and Other Charges 27.34 13.88

Interest Other 316.95 390.00

Total 2,170.30 7,291.50

Schedule 19 Other Expenses

Travelling, Conveyance and Motor Car 809.15 1,074.51

Proessional and Legal 1,342.64 2,363.43

Auditors' Remuneration

Audit Fees 55.00 40.00

In Other Capacity 10.25

Out o Pocket Expenses 0.79 0.43

Loss on Sale/Disposal o Fixed Assets (net) 107.77 77.53

Provision or Doubtul Debts 87.33

Provision or Contingencies (net) (Reer Note 13 on Schedule 20) 246.39 50.34

Commission to Director 10.00 10.00

Loss on Trading in Securities (net) (Reer Note 9 on Schedule 20) 2,095.69

Repairs and Maintenance Others 830.08 785.01

Oce 257.72 273.08

Communication 1,819.23 2,361.99

Printing and Stationery 751.27 590.21

Stock Exchanges Expenses 15.01 78.82Electricity 713.00 838.57

Membership and Subscription 681.09 660.98

Rent 3,197.07 3,733.17

Rates and Taxes 211.17 368.61

Advertising, Business Promotion and Entertainment 1,027.00 741.60

Donation 5.26

Securities Transaction Tax on Proprietory Trades 576.75 496.03

Bad Debts Written O 148.76

Service Charges 334.08 643.17

Common Establishment Expenses Reimbursement 3,959.50 5,034.99

Depository Charges 330.43 324.89Stamp/Turnover/Transaction Charges (net o recovery) 517.82 1,261.07

Insurance 129.11 157.38

Loss on Account o Trades Not Conrmed by Clients, Error Trades (net) 110.83 267.07

Loss on Foreign Exchange Transactions 41.39

Miscellaneous 437.21 618.85

Total 18,752.85 24,957.67

Less : Recovery o Expenses (Reer Note 20 on Schedule 20) 122.47 316.58

Total 18,630.38 24,641.09


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Schedules orming part o the Balance Sheet and Prot and Loss Account

Schedule 20 Notes to the Financial Statements

1. Signicant Accounting Policies:

A. BASIS OF ACCOUNTING

The Financial Statements have been prepared on historical cost basis o accounting. The company adopts the accrual system o accounting

and the nancial statements conorm with the Accounting Standards notied under the Companies (Accounting Standard) Rules, 2006, the

generally accepted accounting principles prevailing in India and the relevant provisions o the Companies Act, 1956.

The preparation o nancial statements requires the Management to make estimates and assumptions considered in the reported amounts

o assets and liabilities (including contingent liabilities) as on the date o the nancial statements and the reported income and expenses

during the reported period. Management believes that the estimates used in preparation o the nancial statements are prudent and

reasonable. Actual results could dier rom these estimates.

B. REVENUE RECOGNITION

Revenue is recognised when there is reasonable certainty o its ultimate realization/collection.

1. Placement and other ee based income are accounted or on the basis o the progress o the assignment.

2. Brokerage Income (net o service tax)

On xed deposit is accounted on completion o the transaction.

On primary market subscription mobilisation is accounted on allotment ater intimation received by the Company.

On secondary market transaction is recognised on the date o the transaction.

3. Interest Income is accounted on accrual basis.

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

5. Depository Fees (net o service tax)

Transaction ees are recognised on completion o the transaction.

Account maintenance charges are recognised on time basis over the period o the contract.

6. (i) Portolio management ees are accounted on accrual basis as ollows:

(a) In case o ee based on xed percentage o the corpus/xed amount, income is accrued over the period o the agreement.

(b) In case o ee based on the returns o the portolio, income is accounted on the termination o the portolio agreement/oneach anniversary as per the agreement, whichever is earlier.

(c) In case o an upront non-reundable ee, income is accounted in the year o receipt.

(ii) Funds received rom Portolio Management Services (PMS) Investors and corresponding Investments made on their behal are not

orming part o these nancial statements.

C. DEBENTURE REDEMPTION RESERVE

In terms o Section 117C o the Companies Act, 1956, amounts equivalent to the principal value o the debentures and accrued interest

thereon is transerred to Debenture Redemption Reserve proportionately over the term o the debentures.

D. DISCOUNTED INSTRUMENTS

The liability is recognised at ace value at the time o issuance o discounted instruments. The discount on the issue is amortised over the

tenure o 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 rom the

host contract and accounted separately (Reer accounting policy on derivates as per J below).

The resultant debt component o 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 AND INTANGIBLE ASSETS

1. Fixed assets are stated at cost inclusive o incidental expenses less accumulated depreciation.


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Schedules orming part o the Balance Sheet and Prot and Loss Account (Contd.)

2. The Company adopts the Straight Line Method o depreciation so as to write o 100% o the cost o the assets at rates equal to or

higher than those prescribed under Schedule XIV to the Companies Act, 1956 based on the Managements estimate o the useul lives

o all the assets. Estimated useul lives over which assets are depreciated are as ollows:

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

Premises 58 yearsFurniture and Fixtures 6 years

Computers 3 years

Oce Equipments 5 years

Motor Vehicles 4 years

Sotware 3 years

3. Fixed assets costing less than Rs. 5,000 are ully depreciated in the year o purchase/put to use.

G. INVESTMENTS

Investments are classied into long term investments and current investments. Investments which are intended to be held or more than one

year are classied as long term investments and investments which are intended to be held or less than one year are classied as current

investments. Long term investments are accounted at cost and any decline in the carrying value other than temporary in nature is provided

or. Current investments are valued at cost or market/air value, whichever is lower. In case o investments in units o a mutual und, the net

asset value o units is considered as the market/air value.

H. STOCK IN TRADE

Securities acquired with the intention to trade are classied as stock-in-trade. Stock-in -trade is valued at cost, calculated by applying the

weighted average cost method, or air value whichever is lower.

I. FOREIGN CURRENCY TRANSACTIONS

Transactions in oreign currencies are recorded at the rate o exchange prevailing on the date o the transaction. Exchange dierences

arising on settlement o revenue transactions are recognized in the Prot and Loss account. Monetary assets and liabilities contracted in

oreign currencies are restated at the rate o exchange ruling at the Balance Sheet date. Exchange dierences arising on settlement o the

transaction and on account o restatement o assets and liabilities are dealt with in the Prot and Loss Account.

The transactions o the oreign operations that is integral to the operations o the company are translated at average oreign exchange rate

or the month.

J. DERIVATIVES

1. Outstanding derivative contracts, including embedded derivatives, are measured at air value as at each Balance Sheet date. Fair value

o derivatives is determined using quoted market prices in an actively traded market, or the instrument, wherever available, as the best

evidence o air value. In the absence o quoted market prices in an actively traded market, a valuation technique is used to determine

the air value. In most cases the valuation techniques use as input parameters, observable market data in order to ensure reliability o

the air value measure.

The marked to market on derivative contracts is determined on a portolio basis with net unrealized losses being recognised in the

Prot and Loss Account. Net unrealized gains are not recognised in the Prot and Loss Account on grounds o prudence as enunciated

in Accounting Standard 1, Disclosure o Accounting Policies.

2. (a) Initial Margin Equity Derivative Instrument representing the initial margin paid and/or additional margin paid over and above

the initial margin, or entering into contracts or equity index/stock utures and equity index/stock options, which are released on

nal settlement/squaring up o the underlying contracts, are disclosed under Loans and Advances. Margin Deposits Equity

Derivative Instrument representing the deposit paid in respect o mark to market margin is disclosed under Loans and Advances.

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

(c) On nal settlement or squaring up o contracts or equity index/stock utures, the realised prot or loss ater adjusting the

unrealized loss already accounted, i any, is recognised in the Prot and Loss Account and shown as Prot/(Loss) on Trading in

Options/Futures.

On settlement or squaring up o equity index/stock options beore expiry, the premium prevailing in Equity Index/Stock Option

Premium Account on that date is recognised in the Prot and Loss Account.

When more than one contract in respect o the relevant series o equity index/stock utures or equity index/stock options contract to

which the squared-up contract pertains is outstanding at the time o the squaring-up o the contract, the contract price o the contract

so squared-up is determined using the weighted average cost method or calculating the prot/loss on squaring-up.


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K. EMPLOYEE BENEFITS

Long Term Employee Benets

(a) Dened Contribution Plan

Contribution as required by the Statute made to the Government Provident Fund is debited to the Prot and Loss Account.

(b) Dened Benet Plan

The company accounts or the liability or uture gratuity benets based on an actuarial valuation conducted by an independent

actuary. The gratuity obligation is wholly ununded. The net present value o the companys obligation towards the same is actuarially

determined based on the projected unit credit method as at the Balance Sheet date. Actuarial gains/losses are immediately recognised

in the prot and loss account and are not deerred.

(c) Other Long-term Employee Benet

The company accrues the liability or compensated absences based on the actuarial valuation as at the balance sheet date conducted

by an independent actuary. The net present value o the companys obligation is determined based on the projected unit credit method

as at the Balance Sheet date.

Short Term Employee BenetsOther employee benets

The undiscounted amount o employee benets expected to be paid in exchange or the services rendered by employees is recognised

during the period when the employee renders the service. These benets include perormance incentives.

L. TAXES ON INCOME

The Income Tax expense comprises Current tax and Deerred tax. Current tax is measured at the amount expected to be paid in respect o

taxable income or the year in accordance with the Income tax Act, 1961.

Deerred tax adjustments comprises o changes in the deerred tax assets and liabilities. Deerred tax assets and liabilities are recognised

or the uture tax consequences o timing dierences being the dierence between the taxable income and the accounting income that

originate in one period and are capable o reversal in one or more subsequent periods. Deerred tax assets arising mainly on account o carry

orward losses and unabsorbed depreciation under tax laws are recognised only i there is virtual certainty o its realisation, supported by

convincing evidence. Deerred tax assets on account o other timing dierences are recognised only to the extent that there is reasonablecertainty that sucient uture taxable income will be available against which such deerred tax assets can be realised. Deerred tax assets

and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted beore the balance sheet date.

Changes in deerred tax assets/liabilities on account o changes in enacted tax rates are given eect to in the Prot and Loss Account in

the period o the change. The carrying amount o deerred tax assets are reviewed at each balance sheet date. The company writes-down

the carrying amount o a deerred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that

sucient uture taxable income will be available against which deerred tax asset can be realized.

M. IMPAIRMENT OF ASSETS

The carrying amounts o assets are reviewed at each balance sheet date i there is any indication o impairment based on internal/external

actors.

N. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

A provision is recognised when there is a present obligation as a result o a past event, it is probable that an outfow o resources will be

required to settle the obligation and in respect o which reliable estimate can be made. Provision is not discounted to its 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 refect the current best estimate. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are

neither recognised nor disclosed in the nancial statements.

O. OPERATING LEASE

Leases where the lessor eectively retains substantially all the risks and benets o ownership o the leased term, are classied as operating

leases. Operating lease payments/receipts are recognised as an expense/income in the Prot and Loss account on a straight-line basis over

the lease term.


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(ii) Reconciliation o present value o the obligation and the air value o the plan assets

Particulars 31st March 2010

(Rupees in Lacs)

31st March 2009

(Rupees in Lacs)

Present Value o Funded Obligations

Fair Value o Plan Assets

Present Value o Ununded Obligations 535.70 468.75

Unrecognized Past Service Cost

Net Liability 535.70 468.75

Amounts in the Balance Sheet:

Liabilities Provisions (Schedule 13) 535.70 468.75

Assets

Net Liability 535.70 468.75

(iii) Cost recognised or the year


(Rupees in Lacs)

31st March 2009

(Rupees in Lacs)

Current Service Cost 113.33 176.34

Interest on Dened Benet Obligation 37.71 46.35

Expected Return on Plan Assets

Net Actuarial Losses/(Gains) Recognized in Year 63.59 (152.57)

Past Service Cost

Losses/(Gains) on Curtailments and Settlements (20.27)

Losses/(Gains) on Acquisition and Divestiture

Total, Included in Schedule 17 Personnel Gratuity 194.36 70.12

Actual Return on Plan Assets

(iv) Principal actuarial assumption

Particulars Assumptions in 31st March 2010 Assumptions in 31st March 2009

Discount Rate 8.01% per annum 7.18% per annum

Salary Escalation Rate 15% per annum or rst 2 years, 0% per annum or rst year,

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

6% per annum there ater 6% per annum there ater

(v) Experience Adjustments or the current annual period and previous our periods

31st March 2010

(Rupees in Lacs)

31st March 2009

(Rupees in Lacs)

31st March 2008

(Rupees in Lacs)

31st March 2007

(Rupees in Lacs)

31st March 2006

(Rupees in Lacs)

Dened Benet Obligation 535.70 468.75 436.73 278.03 196.05

Plan Assets

Surplus/(Decit) (535.70) (468.75) (436.73) (278.03) (196.05)

Experience Adjustment on

Plan Liabilities

57.98 (143.00) 45.34 36.64

Experience Adjustment on

Plan Assets


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(b) During the year, the Company has recognised the ollowing amounts in the Prot and Loss Account:

31st March 2010

(Rupees in Lacs)

31st March 2009

(Rupees in Lacs)

Employers Contribution to Provident Fund 689.74 875.85Superannuation Fund 8.00 10.00

Employees State Insurance Corporation 20.52 45.03

Total 718.26 930.88

6. Securities, which are not registered in the name o the Company, are held by the Company with valid transer documents.

7. Securities received rom clients as collateral or margins are held by the Company in its own name in a duciary capacity.

8. Current Investments Purchased/Allotted and Sold/Redeemed during the year:

Face Value Purchased/

Allotted

Sold/

Redeemed

Mutual Fund Schemes:

Kotak Mahindra Mutual Fund Kotak Liquid (Institutional

Premium) Growth

10 4,864,766,927 4,864,766,927

Kotak Mahindra Mutual Fund Kotak Floater Long Term Growth 10 1,623,501,211 1,623,501,211

Non Convertible Debentures:

Shriram Transport Finance Company Limited 1,000 1,044,017 1,044,017

L&T Finance Limited 1,000 612,319 612,319

9. Quantitative Inormation in Respect o Trading in Securities#

31st March 2010 31st March 2009

Quantity

Nos./Kgs.

Value

(Rupees in Lacs)

Quantity

Nos./Kgs.

Value

(Rupees in Lacs)

Opening Stock (A)

Equity Shares 2,253,154 1,670.52 560,000 4,497.08

Total (A) 2,253,154 1,670.52 560,000 4,497.08

Purchases

Equity Shares 51,989,089 131,499.51 9,390,845 14,620.91

Gold 159 2,564.21 69 803.87

Bonds and Other Securities 3,165,002 3,211.38 4,295,023 3,967.38

Total (B) 55,154,250 137,275.10 13,685,937 19,392.16

Sales

Equity Shares 53,229,908 133,876.85 7,697,691 17,201.14

Gold 159 2,557.10 69 798.71

Bonds and Other Securities 3,165,002 3,217.99 4,295,023 3,979.48

Total (C) 56,395,069 139,651.94 11,992,783 21,979.33

Closing Stock (D)

Equity Shares 1,012,335 1,926.82 2,253,154 1,670.52

Total (D) 1,012,335 1,926.82 2,253,154 1,670.52

Prot/(Loss) on Trading in Options/

Futures (Net) (E)

6,087.50 (1,856.30)

Prot/(Loss) (D+C-B-A+E) 8,720.64 (2,095.69)

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


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10. (a) Outstanding Future Contracts as on 31st March 2010:

(Rupees in Lacs)

Particulars 31st March 2010 31st March 2009

Type o Derivative No. oContracts

No. oUnits

NotionalAmount

No. oContracts

No. oUnits

NotionalAmount

S&P CNX Nity Futures 2,007 100,350 5,284.88 2,478 123,900 3,819.74

Bank Nity Futures 140 7,000 286.52

Stock Futures 3,058 3,061,738 13,410.78 1,577 3,297,339 5,319.16

(b) Outstanding Option Contracts as on 31st March, 2010:

(Rupees in Lacs)

Particulars 31st March 2010 31st March 2009

Type o Derivative No. o

Contracts

No. o

Units

Total

PremiumCarried

Forward Net

o Provisions

Made

No. o

Contracts

No. o

Units

Total

PremiumCarried

Forward Net

o Provisions

Made

S&PCNX Nity Options Long 12,405 620,250 2,276.12 33,501 1,675,050 905.77

S&PCNX Nity Options Short 10,365 518,250 (4,108.69) 33,798 1,689,900 (2,906.44)

Stock Options Long 14 32,318 1.59 27 8,100 2.66

Stock Options Short 36 88,218 (2.66) 51 15,300 (2.89)

11. The Company is a corporate member broker o the National Stock Exchange o India Limited and Bombay Stock Exchange Limited. The Company

is eligible to provide margin-trading acility to its clients in terms o the Securities and Exchange Board o India circular. Sundry debtors include Rs.

5,652.58 Lacs (Previous Year Rs. 8,797.58 Lacs) on account o loans granted under margin trading acility to clients against pledge o securities.

12. Fixed deposits with scheduled banks include Rs. 125,640.72 Lacs (Previous Year Rs. 92,565.78 Lacs) which is under the lien o National Securities

Clearing Corporation Limited and Rs. 11,891.45 Lacs (Previous Year Rs. 12,140.68 Lacs) which is under the lien o Bombay Stock Exchange

Limited.

13. Provision or Contingencies:

(Rupees in Lacs)

Nature o Liability Provision as on

1st April 2009

Addition Amount

Used

Unused Amount

Reversed

Provision as on

31st March 2010

Stamp Duty on Trades 2,772.79 1,159.19 912.79 3,019.19

Total 2,772.79 1,159.19 912.79 3,019.19

Previous Year 2,722.45 776.86 726.52 2,772.79

Based on legal opinion, the Management is o the view that certain provisions or earlier years are no longer required and have reversed

Rs. 912.79 Lacs (Previous Year Rs. 726.52 Lacs).

14. Until 31 March 2008, the Company was recognising debenture liability at cost. The return on these debentures is linked to non interest

benchmark based on occurance o certain events. The interest on these debentures was accounted irrespective o the occurance o the said event.

From 1 April 2008, the Company has adopted an accounting policy in relation to structured liabilities. The derivative embedded in such structured

liabilities is separated and accounted or as per accounting policy in Note 1 E and 1 J. The probability o interest payout is considered in the

embedded derivative valuation.


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15. (a) Fee Income:-


(Rupees in Lacs)

31st March 2009

(Rupees in Lacs)

Client Money Management Services 3,954.04* 4,037.50

Depository Fees 2,759.63 2,324.95

Loan Syndication and Arrangement Fees 11.39 84.76

Advisory Fees 158.96 418.18

Other Fees 423.97 705.45

Total 7,307.99 7,570.84

* Net o Income pertaining to earlier years written o Rs. Nil (Previous Year Rs. 11.71 Lacs).

(b) Interest Income Others comprises interest on delayed payments rom clients.

16. Dividend income represents dividend on current investments (other than trade) Rs. 27.91 Lacs (Previous Year Rs. Nil) and on stock in tradeRs. 54.56 Lacs (Previous Year Rs. 20.15 Lacs).

17. Loss on sale o investments (net) represents loss on sale o current investments (net) (other than trade) Rs. 272.14 Lacs (Previous Year Prot (net)

o Rs. 752.50 Lacs).

18. Liabilities written back comprises o provision no longer required in respect o sub brokerage Rs. 48.99 Lacs (Previous Year Rs. 429.54 Lacs) and

expenses Rs. 112.72 Lacs (Previous Year Rs. 1,819.60 Lacs).

19. During the year the Company has paid Rs. 519.19 Lacs (Previous Year Rs. 1,534.40 Lacs) towards Kotak Mahindra Equity Option Plan o Kotak

Mahindra Bank Limited, the Holding Company, in respect o stock options granted to its employees. This amount has been charged to the Prot

and Loss Account and included under the head Salaries, Allowances and Bonus in Schedule 17.

20. Recovery o expenses in Schedule 17 and Schedule 19 are amounts recovered rom ellow subsidiaries towards the value o costs apportioned o

the Companys employees and acilities in accordance with the agreements on allocation o expenses with holding company, ellow subsidiary and

associate companies.

21. Earnings per share (Face value Rs. 10)

Earnings 2009-10 2008-09

Net prot or the year (Rupees in Lacs) 26,010.04 10,648.38

Weighted average number o shares (in Lacs) 16 16

Earnings per share (Basic and Diluted) in Rupees 1,625.63 665.52

22. (a) Managerial Remuneration:-

Particulars 2009-2010

(Rupees in Lacs)

2008-2009

(Rupees in Lacs)

Salaries and Incentives # 230.93 749.06

Contribution to Provident and Other Funds 11.28 11.28

Employee Stock Option Plan (

kotak securities limited

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