MIRA INFORM REPORT

 

 

Report Date :

24.12.2013

 

IDENTIFICATION DETAILS

           

Name :

KOTAK MAHINDRA (INTERNATIONAL) LIMITED

 

 

Office :

36-38A, 3rd Floor, Nariman Bhavan, 227, Nariman Point, Mumbai – 400 021, Maharashtra 

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

29.03.1994

 

 

Com. Reg. No.:

Not Available

 

 

Capital Investment / Paid-up Capital :

Rs.161.598 millions

 

 

Legal Form :

Foreign Registered Company

 

 

Line of Business :

Subject’s principal activity is to carry on business in financial services, corporate advisory services, underwriting services, investment in shares, bonds and other securities. It acts as distributor for schemes/products of various Kotak funds and is an investment manager of various Kotak funds.

 

 

No. of Employees :

Information declined by the management.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (49)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 10060000

 

 

Status :

Foreign Registered Company

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a foreign registered company having satisfactory track record.

 

External borrowing of the company has increased. However, company has performed well. Reserves of the company appears to be decent.

 

Trade relations are fair. Business is active. Payment terms are regular and as per commitment.

 

The company can be considered for business dealing at usual trade terms and condition.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

INDIAN ECONOMIC OVERVIEW

 

Uptick in agriculture and construction spread some cheer as the economy grew a higher-than-expected 4.8 % in the three months through September. Manufacturing rose an annual rate per cent during the quarter and mining fell by 0.4 %, government data showed while farm output rose 46%.

 

India has emerged as the most attractive investment destination, thanks to a relaxation in foreign direct investment norms, says a report. India is followed by Brazil and China in the ranking part of EY’s Capital Confidence Barometer report based on a survey across 70 nations. The US, France and Japan have emerged as the top three investors likely to invest in India.

 

India has been ranked 83rd globally in terms of talent competitiveness of its human capital.  Switzerland, Singapore, Denmark, Sweden and Luxembourg are the top five in the list of 103 nations compiled by INSEAD business school.

 

Tax rates for companies in India are among the highest in the world and the number of payments is also more than the global average putting the country at low, 158th rank on the Paying Taxes. 2014 list by the World Bank and PWC. However, the time taken for tax payments is relatively less in India which is rated ahead of China and Japan.

 

1 billion smartphone shipments in 2013, a 39.3 % growth over 2012. This was being driven by low cost computing in emerging markets. By 2017, total smartphone shipments are expected to approach 1.7 billion units, resulting in a compound annual growth rate of 18.4 % between 2013 and 2017, according to research from IDC.

 

20 % vacancy rate of office space in Mumbai and Delhi in the third quarter, the highest in Asia after Chengdu, in China. According to Cushman and Wakefield, six Indian cities are among the 10 office markets with the worst vacancies.

 

Foreign banks will not have to pay stamp duty and capital gains tax, if they convert their branch operations into a wholly owned subsidiary, according to the Reserve Bank of India.

 

The Reserve Bank of India is planning to launch CPI – indexed bonds aimed to protecting the savings of retail investors from the impact the price rise by December end.

 

Central Bureau of Investigation has booked State Bank of India, Deputy Managing Director Shyamal Acharya and others in a graft case related to distribution of a loan of over Rs 4000 mn. Gold and jewellery  worth Rs 6.7 mn have been recovered from the residence of Acharya.

 

RBI DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

 

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

 

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

 

INFORMATION DECLINED BY

 

Name :

Mr. Deepak Mukhija

Designation :

Head - Legal Department

Contact No.:

91-22-61660001

Date :

20.12.2013

 

 

LOCATIONS

 

Office :

36-38A, 3rd Floor, Nariman Bhavan, 227, Nariman Point, Mumbai – 400 021, Maharashtra, India

Tel. No.:

91-22-61660001

Fax No.:

Not Available

 

 

Mauritius Office :

4th Floor, Les Cascades Building, Edith Cavell Street, Port Louis, Mauritius

Tel. No.:

+230 212 9800

 

 

Representative Office :

Al Otaiba Building, 907, Hamdan Street, Behind KFC, PO Box 131394, Abu Dhabi, United Arab Emirates

Tel. No.:

+9712 622 9042

 

 

DIRECTORS

 

AS ON 31.03.2013

 

Name :

Mr. Louis Didier Merle

Designation :

Director

 

 

Name :

Mr. Sow Man Ah Yuk Shing

Designation :

Director

 

 

Name :

Mr. Somey Massey

Designation :

Director

 

 

Name :

Mr. Rajiv Gujjalu

Designation :

Director

 

 

Name :

Mr. Viswanathan Varadarajan

Designation :

Director

 

 

Name :

Mr. Bilal Ibrahim Sassa

Designation :

Director

 

 

Name :

Mr. Gijo Joseph

Designation :

Director

 

 

Name :

Mr. Deven Coopoosamy

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Deepak Mukhija

Designation :

Head - Legal Department

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 31.03.2013

 

Names of Shareholders

 

 

No. of Shares

Kotak Mahindra Bank Limited, Holding Company

2081650

51.00

Kotak Mahindra Capital Company Limited, subsidiary of Kotak Mahindra Bank Limited

2000000

49.00

Total

4081650

100.00

 

 

 

 

BUSINESS DETAILS

 

Line of Business :

Subject’s principal activity is to carry on business in financial services, corporate advisory services, underwriting services, investment in shares, bonds and other securities. It acts as distributor for schemes/products of various Kotak funds and is an investment manager of various Kotak funds.

 

 

GENERAL INFORMATION

 

No. of Employees :

Information declined by the management.

 

 

Bankers :

·         JP Morgan International Bank Limited

·         United Bank of Switzerland

 

 

Facilities :

Secured Loans

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

SHORT-TERM BORROWINGS

 

 

Banks

135.712

127.187

Total

135.712

127.187

 

Notes:

 

SHORT-TERM BORROWINGS

 

The loan from Kotak Mahindra Inc, with a term of 90 days, bears an interest rate of 2% to 3% per annum (Previous year between 2% to 3% per annum).

 

The Company has a banking facility of Rs.1519.980 millions (Previous year approx Rs.1424.500 millions) of which Rs.1357.125 millions (Previous year Rs.1271.875 millions) is against floating charge on the assets of the company. The assets that are subject to the floating charge shall have book value of at least 1.5 times of the total outstanding amounts at all times during the currency of any such borrowings by the Company from the bank. Interest is payable on the amounts drawn at LIBOR plus 1.0% to 2.5%. The amount outstanding as at 31st March 2013 was Rs.338.256 millions (2012: USD Nil).

 

The short term loans from JP Morgan International Bank Limited and United Bank of Switzerland are for a term of up to 30 days and bear an interest rate of 0.80% to 1% per annum (Previous year between 0.80% to 1.20% per annum).

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

V.C. Shah and Company

Chartered Accountants

Address :

Mumbai, Maharashtra, India

 

 

Holding Company :

Kotak Mahindra Bank Limited

Address: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai – 400 021, Maharashtra, India

 

 

Associate and Fellow Subsidiary

Kotak Mahindra (UK) Limited

 

 

Fellow Subsidiaries :

·         Kotak Investment Advisors Limited

·         Kotak Securities Limited

·         Kotak Mahindra, INC.

·         Kotak Mahindra Financials Services Limited

 

 

Investment Management Companies :

·         Kotak India Private Equity Fund

·         Kotak India Realty Fund

·         Kotak India Venture (Offshore) Limited

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2013

 

Authorised Capital :

No. of Shares

Type

Value

Amount

4081650

Equity Shares

USD 1 each

$4081650

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

4081650

Equity Shares

USD 1 each

Rs.161.598 millions

 

 

 

 

 

Reconciliation of the shares outstanding at the beginning and at the end of the reporting period:

 

Equity shares

As at 31st March, 2013

No. of Shares

Amount

(Rs. in millions)

Share capital outstanding at the beginning of the year

4081650

161.598

Issued during the period

--

--

Number of shares at the end

4 081650

161.598

 

Terms/rights attached to equity shares

 

The company has only one class of equity shares having a par value of USD 1 per share. Each holder of equity shares is entitled to one vote per share.

 

The company declares and pays dividends in USD. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

 

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

 

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

 

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

 

Particulars

 

31.03.2013

(No. of Shares)

Kotak Mahindra Bank Limited, the holding company

2081650

Kotak Mahindra Capital Company Limited, subsidiary of Kotak Mahindra Bank Limited

2000000

 

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

 

Equity shares of USD 1 fully paid up

 

Particulars

As at 31st March, 2013

No. of Shares

% holding

Kotak Mahindra Bank Limited, holding company

2081650

51.00

Kotak Mahindra Capital Company Limited, subsidiary of Kotak Mahindra Bank Limited

2000000

49.00

 

4081650

100.00

 


 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2013

31.03.2012

31.03.2011

I.        EQUITY AND LIABILITIES

 

 

 

(1) Shareholders' Funds

 

 

 

(a) Share Capital

161.598

161.598

161.598

(b) Reserves & Surplus

2353.492

1948.956

1721.694

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.000

Total Shareholders’ Funds (1) + (2)

2515.090

2110.554

1883.292

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) Long-term borrowings

0.000

0.000

0.000

(b) Deferred tax liabilities (Net)

0.000

0.000

0.000

(c) Other long term liabilities

0.000

0.000

0.000

(d) Long-term provisions

0.000

0.000

0.000

Total Non-current Liabilities (3)

0.000

0.000

0.000

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

4157.470

708.163

1810.949

(b) Trade payables

10.263

15.493

47.778

(c) Other current liabilities

2.355

2.912

2.421

(d) Short-term provisions

1.678

6.279

4.206

Total Current Liabilities (4)

4171.766

732.847

1865.354

 

 

 

 

TOTAL

6686.856

2843.401

3748.646

 

 

 

 

II.      ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

0.242

0.384

0.374

(ii) Intangible Assets

0.000

0.000

0.000

(iii) Capital work-in-progress

0.000

0.000

0.000

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

1790.768

443.579

902.033

(c) Deferred tax assets (net)

0.000

0.000

0.000

(d)  Long-term Loan and Advances

21.611

20.423

5.749

(e) Other Non-current assets

0.000

0.000

0.000

Total Non-Current Assets

1812.621

464.386

908.156

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

3927.265

1538.667

2568.885

(b) Inventories

0.000

0.000

0.000

(c) Trade receivables

189.940

98.895

107.399

(d) Cash and cash equivalents

687.100

721.792

130.461

(e) Short-term loans and advances

3.047

2.684

6.417

(f) Other current assets

66.883

16.977

27.328

Total Current Assets

4874.235

2379.015

2840.490

 

 

 

 

TOTAL

6686.856

2843.401

3748.646

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2013

31.03.2012

31.03.2011

 

SALES

 

 

 

 

 

Revenues from operations

 

 

 

 

 

(a) Income from Services (net)

208.174

204.408

327.989

 

 

(b) Income from Investments (net)

142.659

0.000

231.518

 

 

Other Income

14.948

80.035

2.895

 

 

TOTAL                                     (A)

365.781

284.443

562.402

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Employee cost

16.814

13.312

3.990

 

 

Other expenses

54.154

37.245

58.746

 

 

Loss on Investment (net)

0.000

235.496

0.000

 

 

TOTAL                                     (B)

70.968

286.053

62.736

 

 

 

 

 

Less

PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

294.813

(1.610)

499.666

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

20.694

25.006

26.775

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                (E)

274.119

(26.616)

472.891

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

0.182

0.145

0.110

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX (E-F)                (G)

273.937

(26.761)

472.781

 

 

 

 

 

Less

TAX                                                                  (H)

7.391

6.766

12.239

 

 

 

 

 

 

PROFIT / (LOSS) AFTER TAX (G-H)                  (I)

266.546

(33.527)

460.542

 

 

 

 

 

 

Earnings / (Loss) Per Share (Rs.)

65.30

(8.21)

112.83

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

31.03.2012

31.03.2011

PAT / Total Income

(%)

72.87

(11.79)

81.89

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

78.08

(13.09)

84.50

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

5.60

(1.12)

16.61

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

0.11

(0.01)

0.25

 

 

 

 

 

Debt Equity Ratio

(Total Debt/Networth)

 

1.65

0.34

0.96

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

1.17

3.25

1.52

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Details of Current Maturities of Long Term Debt: Not Available

 

Check List by Info Agents

Available in Report (Yes / No)

1) Year of Establishment

Yes

2) Locality of the firm

Yes

3) Constitutions of the firm

Yes

4) Premises details

No

5) Type of Business

Yes

6) Line of Business

Yes

7) Promoter’s background

No

8) No. of employees

No

9) Name of person contacted

Yes

10) Designation of contact person

Yes

11) Turnover of firm for last three years

Yes

12) Profitability for last three years

Yes

13) Reasons for variation <> 20%

--

14) Estimation for coming financial year

No

15) Capital in the business

Yes

16) Details of sister concerns

Yes

17) Major suppliers

No

18) Major customers

No

19) Payments terms

No

20) Export / Import details (if applicable)

No

21) Market information

--

22) Litigations that the firm / promoter involved in

--

23) Banking Details

Yes

24) Banking facility details

Yes

25) Conduct of the banking account

--

26) Buyer visit details

--

27) Financials, if provided

Yes

28) Incorporation details, if applicable

No

29) Last accounts filed at ROC

Yes

30) Major Shareholders, if available

Yes

31) Date of Birth of Proprietor/Partner/Director, if available

No

32) PAN of Proprietor/Partner/Director, if available

No

33) Voter ID No of Proprietor/Partner/Director, if available

No

34) External Agency Rating, if available

No

 


 

Unsecured Loans

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

SHORT-TERM BORROWINGS

 

 

Loan from fellow subsidiary

4021.758

580.976

Total

4021.758

580.976

 

 

ORGANISATION AND NATURE OF BUSINESS

 

The Company which was incorporated on 29th March 1994 in Mauritius as a private company with limited liability holds a Category 1 Global Business Licence and is regulated by the Financial Services Commission. The Company has by special resolution converted itself into a public company on 12th June 2007.

 

The Company’s principal activity is to carry on business in financial services, corporate advisory services, underwriting services, investment in shares, bonds and other securities. It acts as distributor for schemes/products of various Kotak funds and is an investment manager of various Kotak funds.

 

The Company operates a Representative office (the “Representative office”) in Abu Dhabi, United Arab Emirates and has an associate and fellow subsidiary in the United Kingdom, Kotak Mahindra (UK) Limited (“KMUK”).

 

CONTINGENT LIABILITY (AS ON 31.03.2013):

 

·         Guarantee secured against margin deposit in Dubai amounted to Rs.0.267 million. 

 

FIXED ASSETS:

 

Tangible Assets

·         Office Equipment

·         Computers

·         Vehicles

 

 


CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                              None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.62.24

UK Pound

1

Rs.101.81

Euro

1

Rs.84.88

 

 

INFORMATION DETAILS

 

Information Gathered by :

HNA

 

 

Report Prepared by :

SMN


 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

6

--RESERVES

1~10

6

--CREDIT LINES

1~10

5

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTERS

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

49

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 


 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.