|
Report Date : |
23.12.2013 |
IDENTIFICATION DETAILS
|
Name : |
KOTAK MAHINDRA FINANCIAL SERVICES LIMITED |
|
|
|
|
Office : |
36-38A, 3rd Floor, Nariman Bhavan, 227, Nariman Point, Mumbai
– 400021, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2013 |
|
|
|
|
Date of
Incorporation : |
17.11.2009 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 72.298 Millions |
|
|
|
|
Reg. No.: |
0888 |
|
|
|
|
Legal Form : |
Foreign Registered Company |
|
|
|
|
Line of Business
: |
Subject is engaged in “arranging credit or deals in
investments”, “advising on financial products or credit” and “arranging
custody” as per provisions of the DFSA Prudential Rulebooks. |
|
|
|
|
No. of Employees
: |
Information declined by management |
RATING & COMMENTS
|
MIRA’s Rating : |
B (34) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 230000 |
|
|
|
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is well-established and repurted foreign registered company
company having a moderate track record. There appears accumulated loss recorded by the company. However, trade relations are fair. Business is active. Payments are
reported to be slow but correct. In view of strong holdings, the company can be considered for business
dealing with some caution. |
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
MANAGEMENT NON-COOPERATIVE (Tel. No.: 91-22-66260500)
LOCATIONS
|
Registered
Office : |
Office 3, Al Fattan Currency House, Office Tower -2, Level 7, Sheikh
Zayed Road, DIFC Street, P.O. Box 16498, Dubai, United Arab Emirates |
|
Tel. No.: |
971 4 3544455 |
|
Fax No.: |
Not Available |
|
|
|
|
Office: |
36-38A, 3rd Floor, Nariman Bhavan, 227, Nariman Point,
Mumbai – 400021, Maharashtra, India |
|
Tel. No.: |
91-22-66581100 |
|
Fax No.: |
91-22-22855577 |
|
E-Mail : |
DIRECTORS
As on 31.03.2013
|
Name : |
Mr. KVS Manian |
|
Designation : |
Director |
|
|
|
|
Name : |
Somer Ajoy Massey |
|
Designation : |
Director & SEO |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2013
|
Names of Shareholders |
|
No. of Shares |
|
Kotak Securities Limited |
|
1239000 |
|
Kotak Mahindra (International) Limited |
|
250000 |
|
Total |
|
1489000 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in “arranging credit or deals in investments”,
“advising on financial products or credit” and “arranging custody” as per
provisions of the DFSA Prudential Rulebooks. |
GENERAL INFORMATION
|
No. of Employees : |
Information declined by management |
|
|
|
|
Bankers : |
Not Divulged |
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
V.C. Shah and Company Chartered Accountants |
|
Address : |
Mumbai, Maharashtra, India |
|
|
|
|
Ultimate Holding
Company: |
Kotak Mahindra Bank Limited |
CAPITAL STRUCTURE
As on 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
2000000 |
Equity Shares |
USD 1/- each |
$ 2000000 |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1489000 |
Equity Shares |
USD 1/- each |
Rs. 72.298 Millions |
|
|
|
|
|
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 |
72.298 |
57.224 |
44.338 |
|
(b) Reserves & Surplus |
(49.059) |
(34.630) |
(18.876) |
|
(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) |
23.239 |
22.594 |
25.462 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
16.285 |
15.263 |
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 |
0.870 |
0.448 |
0.000 |
|
Total Non-current Liabilities (3) |
17.155 |
15.711 |
0.000 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
11.891 |
13.946 |
10.918 |
|
(b) Trade payables |
0.000 |
0.000 |
0.000 |
|
(c) Other current
liabilities |
0.799 |
0.084 |
0.000 |
|
(d) Short-term provisions |
5.859 |
4.567 |
0.219 |
|
Total Current Liabilities (4) |
18.549 |
18.597 |
11.137 |
|
|
|
|
|
|
TOTAL |
58.943 |
56.902 |
36.599 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
4.856 |
6.598 |
0.407 |
|
(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 |
0.000 |
0.000 |
0.000 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
3.692 |
3.502 |
5.591 |
|
(e) Other Non-current assets |
0.000 |
0.000 |
0.000 |
|
Total Non-Current Assets |
8.548 |
10.100 |
5.998 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
0.000 |
0.000 |
0.000 |
|
(c) Trade receivables |
8.553 |
8.153 |
14.505 |
|
(d) Cash and cash
equivalents |
27.727 |
24.576 |
10.194 |
|
(e) Short-term loans and
advances |
7.655 |
7.290 |
4.718 |
|
(f) Other current assets |
6.460 |
6.783 |
1.184 |
|
Total Current Assets |
50.395 |
46.802 |
30.601 |
|
|
|
|
|
|
TOTAL |
58.943 |
56.902 |
36.599 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
79.452 |
65.936 |
78.267 |
|
|
|
Other Income |
0.061 |
0.054 |
0.000 |
|
|
|
TOTAL (A) |
79.513 |
65.990 |
78.267 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Employee cost |
80.787 |
73.562 |
78.328 |
|
|
|
Other expenses |
11.518 |
9.198 |
15.714 |
|
|
|
TOTAL (B) |
92.305 |
82.760 |
94.042 |
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION (A-B) (C) |
(12.792) |
(16.770) |
(15.775) |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
0.800 |
0.200 |
0.036 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
(13.592) |
(16.970) |
(15.811) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
2.238 |
1.757 |
1.461 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
(15.830) |
(18.727) |
(17.272) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-H) (I) |
(15.830) |
(18.727) |
(17.272) |
|
|
|
|
|
|
|
|
|
|
Earnings / (Loss)
Per Share (Rs.) |
(12.26) |
(17.51) |
(22.23) |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
PAT / Total Income |
(%) |
(19.91)
|
(28.38) |
(22.07) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(19.92)
|
(28.40) |
(22.07) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(26.86)
|
(32.91) |
(47.19) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.68)
|
(0.83) |
(0.68) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
1.21
|
1.29 |
0.43 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.72
|
2.52 |
2.75 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
No |
|
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 |
No |
|
10] |
Designation of contact
person |
No |
|
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 |
No |
|
24] |
Banking facility details |
No |
|
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 |
CURRENT MATURITIES OF
LONG TERM DEBTS: NOT AVAILABLE
INDEX OF CHARGES: NOT
AVAILABLE
ORGANISATION AND
NATURE OF BUSINESS
The Company is a Company limited by shares registered and incorporated in the Dubai International Financial Centre in Dubai, United Arab Emirates. The Company’s shareholder is Kotak Securities Limited (“shareholder” or “parent”), an entity incorporated in India and its ultimate holding Company is Kotak Mahindra Bank Limited, an entity incorporated in India and publicly listed on the Bombay Stock Exchange (BSE), National Stock Exchange of India (NSE) and the Luxembourg Stock Exchange. The Company has been granted a prudential “category 4” license by the Dubai Financial Services Authority (DFSA) and is engaged in “arranging credit or deals in investments”, “advising on financial products or credit” and “arranging custody” as per provisions of the DFSA Prudential Rulebooks.
REVIEW OF OPERATIONS
The Company is mainly in the business of Investment advisory services. The Company is registered with the DIFC and has got a Category IV license, and is governed by the rules/Bye laws of the DFSA (being the regulatory body of the DIFC). The Company advises its clients on investments in various financial instruments after assessing their risk profile and arranges for these investments to be made with various Fund houses/ Financial Institutions.
While focus has been on advising clients on investments in various financial instruments, events which unfolded during the year resulted in clients preferring investments in low risk assets. Further the depreciation of the Rupee against the United States Dollar, led to a large set of clients preferring investments in low risk fixed income products in India, having an adverse effect on the company’s performance.
During the period, the Company earned an Income of USD 1.46 Mn. the expenses were at USD 1.76 Mn. The Loss for the year ended 31st March 2013 was at USD 0.30 Mn.
BUSINESS OUTLOOK
UAE is a key financial market in the GCC region and has roughly an expatriate population of 88.5% across various nationalities with highest percentage of Indian expatriates. Their business model therefore suits the best interests of NRIs based in UAE, as they gain access both to Indian banking/financial services and the international basket of investment products.
By virtue of their presence in the DIFC they are competing with some of the market leaders in the private banking space offering a much wider suite of financial services. Their strategy is therefore to match them in terms of international product basket and provide additional benefit in terms of India specific solutions. In addition as part of their strategy, they are building partnerships with leading international banks to increase their offerings covering multi currency deposits and credit products.
Their focus remains NRIs (Non-Resident Indians) in UAE as they offer their clients a distict advantage of having access to India coupled with global investment advisory. The interest rates in India in rupee terms remain attractive and they see continued flow of funds into India across fixed income products. A number of policy actions have been announced by the government of India to boost the economy and to try and bridge the current account deficit but given that India faces general elections in 2014, equity markets in India could remain volatile. While the FII flows in India are quite encouraging, domestic individual investors in India are still shying away.
Internationally fixed income space (Bonds) seems to be overpriced and subject to risk emanating from Euro Zone and therefore clients may invest very selectively in short duration bonds of funds. Globally, there seems to be uncertainty across asset classes, case in point is the sharp correction in Gold prices.
Their endeavor has always been to cater to a wider sectiron of clients seamlessly and introduce products that meet their diverse financial needs. To take a step further this year they plant to upgrade their license and increase the scope of activities. This should create new opportunities for them both in terms their reach as well as the suit of products and services offered.
They are planning to increase their manpower to meet the growing demands of business and with the local economy also picking up, they feel general confidence level of clients is rising to look at further investments.
They continue to carefully monitor suitability assessment of investment products for their clients and keep them regulary updated and engaged on market develpments across geographies and sectors.
They are keeping a close watch on things and their business strategy flexible to quickly adapt to the dynamic market environment that they all operate in.
FIXED ASSETS
v
Tangible
Assets
Office
equipment
Furniture
and Fixtures
Leasehold
Improvements
Computers
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts,
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.61.99 |
|
|
1 |
Rs.101.37 |
|
Euro |
1 |
Rs.84.82 |
INFORMATION DETAILS
|
Information
Gathered by : |
HTL |
|
|
|
|
Report Prepared
by : |
MRI |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
34 |
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 |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.