MIRA INFORM REPORT

Report Date :

04.01.2014

IDENTIFICATION DETAILS

Name :	KOTAK COMMODITY SERVICES LIMITED KOTAK GINNING AND PRESSING INDUSTRIES (A DIVISION OF KOTAK COMMODITY SERVICES LIMITED)
Registered Office :	1^st Floor, Nirlon House, Dr. Annie Besant Road, Worli, Mumbai - 400025, Maharashtra
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	14.01.1987
Com. Reg. No.:	11-042230
Capital Investment / Paid-up Capital :	Rs. 24.307 Millions
CIN No.: [Company Identification No.]	U65910MH1987PLC042230
TAN No.: [Tax Deduction & Collection Account No.]	MUMK10755D
PAN No.: [Permanent Account No.]	AAACK1581D
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Providing Commodities Broking Services, Hedging Solutions and Arbitrage Desk and also Manufacturing, Trading including Exports of Cotton and other commodities.
No. of Employees :	Not Divulged

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 1288000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a part of Kotak Group. It is an established company having satisfactory track record. Company has performed well. Subject also gets good support from its group companies. Trade relations are reported to be fair. Business is active. Payment terms are reported to be regular and as per commitment. The company can be considered for business dealings at usual trade terms and conditions.

NOTES :

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

ECGC Country Risk Classification List – September 30, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

India’s current account deficit narrowed in the quarter ended September as government measures to curb imports, especially gold, kicked in.  The current account deficit, the excess of a country’s imports of goods and services over exports, narrowed to $ 5.2 billion from $ 21 billion in the year ago period, according to provisional Reserve Bank of India data. Finance Minister P. Chidambaram said the CAD for the year will be less than $ 60 billion or 3 per cent of GDP and the latest data suggests the government may achieve the target.

India was ranked 94^th among the world’s most corrupt nations list. Denmark and New Zealand topped as the cleanest while Somalia emerged as the most corrupt.

India’s services sector activity witnessed a moderate improvement in November over the previous month, even while indicating the fifth successive monthly contraction, according the HSBC survey.

$53 million estimated losses suffered by India due to phishing attacks during the third quarter, according to a study by RSA. India ranks fourth in the list of nations hit by phishing attacks. The US remained at the top of the charts. Phishing is the process of acquiring information such as user names, passwords and credit card details by sending e-mails disguised as official mails.

Rs.4080 million worth of mobile-phone-based transactions by July 2013 compared to Rs.260 million in September, 2012, according to Deloitte report. The number of transactions has shot up from 94000 to 701000.

India aims to earn Rs.400000 million from the bandwidth auction set for January. The merger and acquisition guidelines, cleared by a group of ministers, will be out before the auction begins so that players can make informed decisions on the auctions.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Short term bank Lines: A1+
Rating Explanation	Very string degree of safety and lowest credit risk.
Date	January 2013

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

(CONTACT NO.: 91-22-66528989)

LOCATIONS

Registered Office :	1^st Floor, Nirlon House, Dr. Annie Besant Road, Worli, Mumbai - 400025, Maharashtra, India
Tel. No.:	91-22-66528989/ 66528800/ 66528815
Fax No.:	91-22-24924696/ 24924689
E-Mail :	shripal.shah@kotakcommodities.com kcs.response@kotakcommodities.com
Website :	http://www.kotakcommodities.com
Branch Offices :	Located At: v Agra v Ahmedabad v Aurangabad v Bangalore v Bhopal v Bhiwara v Bhubaneswar v Baroda v Chennai v Chandigarh v Coimbatore v Cochin v Durgapur v Guntur v Hubli v Indore v Jaipur v Jalandhar v Jabalpur v Jodhpur v Karelibaug v Kolapur v Kanpur v Kolkata v Lucknow v Ludhiana v Meerut v Mumbai v Nagpur v Nellore v New Delhi v Ongole v Pune v Raipur v Secunderabad v Siliguri v Surat v Vishakapattanam v Varanasi v Vijaywada v Tirupur

DIRECTORS

AS ON 27.09.2013

Name :

Mr. Suresh Kotak Amritlal

Designation :

Director

Address :

Shakti Villa, 14, Laburnum Road, Gamdevi, Mumbai-400007, Maharashtra, India

Date of Birth/Age :

02.10.1933

Date of Appointment :

06.11.2003

PAN No.:

AABPK6548A

DIN No.:

00019333

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U34300MH1968PTC013997	ALLIED AUTO ACCESSORIES PRIVATE LIMITED	Director	27/04/1968	27/04/1968	-	Active	NO
2	U91110MH1921NPL000940	COTTON ASSOCIATION OF INDIA	Director	22/07/1985	22/07/1985	13/12/2008	Active	NO
3	U24100MH1968PLC014141	KOTAK CHEMICALS LIMITED	Director	07/04/1990	07/04/1990	-	Active	NO
4	U74999MH1969PLC014218	INDIAN MERCHANTS CHAMBER	Director	29/04/1993	29/04/1993	-	Active	NO
5	U51900MH1995PLC094071	KOTAK AND COMPANY LIMITED	Director	01/11/1995	01/11/1995	-	Active	NO
6	U74110MH1995PTC094748	KOTAK TRUSTEE COMPANY PRIVATE LIMITED	Director	23/11/1995	23/11/1995	-	Active	NO
7	U51900MH1959PTC011548	ASIAN MACHINERY AND EQUIPMENT PRIVATE LIMITED	Director	04/01/2000	04/01/2000	-	Active	NO
8	U17120MH1994PTC082794	KOTAK GINNING AND PRESSING INDUSTRIES PRIVATE LIMITED	Director	04/01/2000	04/01/2000	-	Active	NO
9	U67120MH2001PTC131527	INSUREKOT INVESTMENTS PRIVATE LIMITED	Director	09/04/2001	09/04/2001	-	Active	NO
10	U65910MH1987PLC045544	KOMAF FINANCIAL SERVICES LIMITED	Director	18/12/2002	18/12/2002	15/12/2006	Active	NO
11	L15420MH1931PLC001797	BAJAJ HINDUSTHAN LIMITED	Director	27/12/2002	27/12/2002	23/09/2008	Active	NO
12	U72900MH2000PLC129228	ESUGARINDIA LIMITED	Director	28/03/2003	28/03/2003	26/12/2008	Active	NO
13	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Director	06/11/2003	06/11/2003	-	Active	NO
14	U91990MH2004NPL144896	INSUREKOT RESEARCH FOUNDATION	Director	08/03/2004	08/03/2004	-	Active	NO
15	U67120MH1996PTC098584	INFINA FINANCE PRIVATE LIMITED	Director	19/01/2006	19/01/2006	-	Active	NO
16	U91990MH2004GAP147894	FEDERATION OF INDIAN COMMODITY EXCHANGES	Director	01/02/2006	01/02/2006	-	Active	NO
17	U99999MH1938GAP002843	THE BOMBAY COMMODITY EXCHANGE LIMITED	Director	04/09/2006	04/09/2006	-	Active	NO
18	U99999MH1996PTC098713	CUMULUS TRADING COMPANY PRIVATE LIMITED	Director	28/09/2007	15/12/2006	-	Active	NO
19	U17121MH2010NPL199093	INDIAN TECHNICAL TEXTILE ASSOCIATION	Director	16/04/2010	16/04/2010	-	Active	NO
20	U70102MH2007PTC176965	PUMA PROPERTIES PRIVATE LIMITED	Additional director	11/06/2012	11/06/2012	-	Active	NO

Name :

Mr. Rajesh Harkishandas Doshi

Designation :

Director

Address :

4, Rambaug, S.V. Patel Road, Borivali (West), Mumbai-400092, Maharashtra, India

Date of Birth/Age :

01.01.1959

Date of Appointment :

18.12.2002

DIN No.:

00019502

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U65910MH1987PLC045544	KOMAF FINANCIAL SERVICES LIMITED	Director	17/08/1994	17/08/1994	-	Active	NO
2	U99999MH1996PTC098713	CUMULUS TRADING COMPANY PRIVATE LIMITED	Director	18/12/2002	18/12/2002	15/12/2006	Active	NO
3	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Director	18/12/2002	18/12/2002	-	Active	NO
4	U51900MH1985PTC035419	HARISIDDHA TRADING AND FINANCE Private LIMITED	Director	28/09/2007	01/11/2006	11/07/2008	Active	NO
5	U67190MH2007PTC168303	PHOENIX ARC PRIVATE LIMITED	Director	02/03/2007	02/03/2007	29/06/2007	Active	NO

Name :

Mr. Devarajan Kannan

Designation :

Director

Address :

41, 4^th Floor, Shubhangan CTS, G/4, VP Road, Santacruz (West), Mumbai-400054, Maharashtra, India

Date of Birth/Age :

08.06.1961

Date of Appointment :

29.09.2009

DIN No.:

00498935

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U99999MH1994PLC134051	KOTAK SECURITIES LIMITED	Managing director	01/04/2012	11/08/2006	Active	NO
2	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Director	29/09/2009	05/08/2009	Active	NO

Name :

Mr. Sumanlal Babulal Shah

Designation :

Director

Address :

51, Solitaire, Central Avenue, Santacruz (West), Mumbai-400054, Maharashtra, India

Date of Birth/Age :

27.11.1949

Date of Appointment :

18.12.2002

PAN No.:

ABWPS5108C

DIN No.:

00019473

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U51900MH1995PLC094071	KOTAK AND COMPANY LIMITED	Director	22/02/2000	22/02/2000	-	Active	NO
2	L17119PN1990PLC058139	PRANAVADITYA SPINNING MILLS LIMITED	Director	27/11/2001	27/11/2001	24/07/2007	Active	NO
3	U65910MH1987PLC045544	KOMAF FINANCIAL SERVICES LIMITED	Director	18/12/2002	18/12/2002	22/09/2008	Active	NO
4	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Director	18/12/2002	18/12/2002	-	Active	NO
5	U67120MH1996PTC098584	INFINA FINANCE PRIVATE LIMITED	Director	30/06/2004	30/06/2004	-	Active	NO
6	U51900MH1985PTC035419	HARISIDDHA TRADING AND FINANCE Private LIMITED	Director	06/04/2005	06/04/2005	-	Active	NO
7	U74999MH2003PLC140009	KOTAK MAHINDRA ASSET RECONSTRUCTION COMPANY LIMITED	Director	30/06/2005	30/06/2005	-	Strike off	NO
8	U67190MH2007PTC168303	PHOENIX ARC PRIVATE LIMITED	Director	02/03/2007	02/03/2007	29/06/2007	Active	NO
9	U00000DL1970PLC100242	BUSINESS STANDARD LIMITED	Director	25/09/2008	23/08/2008	-	Active	NO

Name :

Mr. Shripal Parasmal Shah

Designation :

Whole-time director

Address :

B-601, Sahyadri Tower, Upper Govind Nagar, Near Upvan Tower, Malad, Mumbai-400097, Maharashtra, India

Date of Birth/Age :

01.01.1971

Date of Appointment :

01.12.2011

PAN No.:

AGVPS0349F

DIN No.:

03055553

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Whole-time director	01/12/2011	08/04/2010	Active	NO

Name :

Mr. Vinay Narottamdas Kotak

Designation :

Whole-time director

Address :

Seksaria House, 28, Babulnath Road, Mumbai-400007, Maharashtra, India

Date of Birth/Age :

20.05.1958

Date of Appointment :

01.07.2011

DIN No.:

00019439

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U17120MH1994PTC082794	KOTAK GINNING AND PRESSING INDUSTRIES PRIVATE LIMITED	Director	10/11/1994	10/11/1994	Active	NO
2	U51900MH1995PLC094071	KOTAK AND COMPANY LIMITED	Director	01/11/1995	01/11/1995	Active	NO
3	U51900MH1959PTC011548	ASIAN MACHINERY AND EQUIPMENT PRIVATE LIMITED	Director	04/01/2000	04/01/2000	Active	NO
4	U91110MH1921NPL000940	COTTON ASSOCIATION OF INDIA	Director	31/12/2008	31/12/2008	Active	NO
5	U65910MH1987PLC042230	KOTAK COMMODITY SERVICES LIMITED	Whole-time director	01/07/2011	01/07/2011	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 27.09.2013

Names of Equity Shareholders	No. of Shares
Cumulus Trading Company Private Limited, India	395843
Dipak B Gupta	10
Zuber A Kazi	10
Krishnan V Manian	10
Suresh Amritlal Kotak	31250
Total	427123

Names of Preference Shareholder	No. of Shares
Komaf Financial Services Limited, India	200000
Total	200000

AS ON 27.09.2013

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	92.74
Directors or relatives of directors	7.26
Total	100.00

BUSINESS DETAILS

Line of Business :

Providing Commodities Broking Services, Hedging Solutions and Arbitrage Desk and also Manufacturing, Trading including Exports of Cotton and other commodities.

Products/ Services :

ITC Code No.	Product Descriptions
52010012	Cotton

GENERAL INFORMATION

No. of Employees :

Not Divulged

Bankers :

v HDFC Bank Limited

HDFC Bank House, Senapati Bapat Marg, Lower Parel [West], Mumbai - 400013, Maharashtra, India

Facilities :

SECURED LOANS	31.03.2012 (Rs. In Millions)	31.03.2011 (Rs. In Millions)
SHORT TERM BORROWINGS
Term loans from banks	0.757	0.152
Total	0.757	0.152

Banking Relations :	--
Auditors :
Name :	V C Shah and Company Chartered Accountants
Address :	22, Rajgir Chambers, III Floor, 12-14, Shahid Bhagat Singh Road, Opposite Old Custom House, Mumbai – 400001, Maharashtra, India
Income-tax PAN of auditor or auditor's firm :	AADFV8088N
Holding company :	Cumulus Trading Company Private Limited [U99999MH1996PTC098713]
Fellow Subsidiary company :	v Komaf Financial Services Limited v Aero Agencies Limited v Kotak Ginning and Pressing Industries Limited
Associate :	v Infina Finance Private Limited v Allied Auto Accessories Private Limited v Kotak Mahindra Bank Limited v Kotak Securities Limited v Kotak & Company Limited v Asian Machinery & Equipment Private Limited v Kotak Mahindra Asset Management Company Limited v Kotak Mahindra Old Mutual Life Insurance Limited
Subsidiary company :	Kotak Commodity International FZE

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
1,150,000	Equity Shares	Rs. 10/- each	Rs. 11.500 Millions
220,000	Preference Shares	Rs. 100/- each	Rs. 22.000 Millions
1,650,000	Unclassified Shares	Rs. 10/- each	Rs. 16.500 Millions
	Total		Rs. 50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
430,704	Equity Shares	Rs. 10/- each	Rs. 4.307 Millions
200,000	Preference Shares	Rs. 100/- each	Rs. 20.000 Millions
	Total		Rs. 24.307 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	24.307	24.272
(b) Reserves & Surplus	297.798	106.611
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.036
Total Shareholders’ Funds (1) + (2)	322.105	130.919
(3) Non-Current Liabilities
(a) long-term borrowings	298.204	283.585
(b) Deferred tax liabilities (Net)	0.000	0.000
(c) Other long term liabilities	135.092	106.180
(d) long-term provisions	2.779	4.057
Total Non-current Liabilities (3)	436.075	393.822
(4) Current Liabilities
(a) Short term borrowings	724.673	128.588
(b) Trade payables	2439.402	1064.337
(c) Other current liabilities	25.677	14.333
(d) Short-term provisions	31.052	19.497
Total Current Liabilities (4)	3220.804	1226.755
TOTAL	3978.984	1751.496
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	18.093	13.362
(ii) Intangible Assets	18.447	23.864
(iii) Capital work-in-progress	0.000	0.000
(iv) Intangible assets under development	0.000	0.000
(b) Non-current Investments	0.033	0.033
(c) Deferred tax assets (net)	40.596	38.822
(d) Long-term Loan and Advances	10.052	5.867
(e) Other Non-current assets	764.986	493.800
Total Non-Current Assets	852.207	575.748
(2) Current assets
(a) Current investments	0.000	2.075
(b) Inventories	1321.027	304.489
(c) Trade receivables	716.199	304.700
(d) Cash and cash equivalents	803.342	445.222
(e) Short-term loans and advances	274.317	112.046
(f) Other current assets	11.892	7.216
Total Current Assets	3126.777	1175.748
TOTAL	3978.984	1751.496

SOURCES OF FUNDS		31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		24.272
2] Share Application Money		0.000
3] Reserves & Surplus		59.072
4] (Accumulated Losses)		0.000
NETWORTH		83.344
LOAN FUNDS
1] Secured Loans		0.074
2] Unsecured Loans		191.600
TOTAL BORROWING		191.674
DEFERRED TAX LIABILITIES		0.000
TOTAL		275.018
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4.288
Capital work-in-progress		0.000
INVESTMENT		1.248
DEFERREX TAX ASSETS		17.894
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	102.166
	Sundry Debtors	137.136
	Cash & Bank Balances	558.381
	Other Current Assets	3.584
	Loans & Advances	34.980
Total Current Assets		836.247
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	496.335
	Other Current Liabilities	74.368
	Provisions	13.956
Total Current Liabilities		584.659
Net Current Assets		251.588
MISCELLANEOUS EXPENSES		0.000
TOTAL		275.018

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Revenue from operations	411.569	156.756	98.752
		Interest Income	0.000	0.000	42.987
		Other Income	162.275	48.876	22.137
		TOTAL (A)	573.844	205.632	163.876
Less	EXPENSES
		Employee benefit expense	91.972	62.607	57.196
		Other expenses	125.089	70.059	54.331
		TOTAL (B)	217.061	132.666	111.527
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		356.783	72.966	52.349
Less	FINANCIAL EXPENSES (D)		84.223	27.651	11.527
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		272.560	45.315	40.822
Less/ Add	DEPRECIATION/ AMORTISATION (F)		11.104	7.710	6.287
	PROFIT BEFORE TAX (E-F) (G)		261.456	37.605	34.535
Less	TAX (H)		0.000	0.000	14.243
	PROFIT AFTER TAX (G-H) (I)		261.456	37.605	20.292
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	5.431	6.838	NA
	Earnings Per Share (Rs.)		414.55	104.84	44.30

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	45.56	18.29	12.38
Net Profit Margin (PBT/Sales)	(%)	63.53	23.99	34.97
Return on Total Assets (PBT/Total Assets}	(%)	6.64	2.20	4.11
Return on Investment (ROI) (PBT/Networth)		0.81	0.29	0.41
Debt Equity Ratio (Total Debt/Networth)		3.18	3.15	2.30
Current Ratio (Current Asset/Current Liability)		0.97	0.96	1.43

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	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	Yes
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	Yes
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	Yes
29]	Last accounts filed at ROC	No
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

LITIGATION DETAILS

HIGH COURT OF BOMBAY

CASE DETAILS

BENCH: BOMBAY

Presentation Date: 06.07.2013

Lodging No: ITXAL/1006/2013 Filing Date: 06.07.2013 Reg. No.: ITXA/1907/2013 Reg. Date: 09.10.2013

Petitioner: THE COMMISSIONER OF INCOME TAX-3 Respondent: KOTAK COMMODITY SERVICES LIMITED

Petn. Adv : PADMA DIVAKAR (0)

District: MUMBAI

Bench: DIVISION

Status: Pre-Admission Category: TAX APPEALS

Next Date: 04.02.2014 Stage:

Coram: ACCORDING TO SITTING LIST

ACCORDING TO SITTING LIST

Act: Income Tax Act, 1961 UNDER SECTION: 260 A

INDEX OF CHARGES

S.NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10463365	15/11/2013	60,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B90793142
2	10396168	28/01/2013 *	400,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B69008068
3	10385935	17/10/2012	100,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B61889812
4	10378307	13/09/2012	100,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B58840299
5	10333785	12/01/2012	50,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B31355787
6	10172643	27/09/2011 *	30,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	B25005059
7	10172460	25/06/2009	20,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI - 400013, MAHARASHTRA, INDIA	A67877019
8	10088575	27/12/2007	50,000,000.00	UNION BANK OF INDIA	CAPITAL MARKET CELL, 66/80, MUMBAI SAMACHAR MARG, FORT, MUMBAI - 400023, MAHARASHTRA, INDIA	A32652463

* Date of charge modification

UNSECURED LOANS

UNSECURED LOANS	31.03.2012 (Rs. In Millions)	31.03.2011 (Rs. In Millions)
LONG-TERM BORROWINGS
Debentures	298.204	283.585
SHORT TERM BORROWINGS
Intercorporate deposits	700.000	100.000
Deposits from directors	0.000	28.436
Commercial paper	23.916	0.000
Total	723.916	128.436

GENERAL INFORMATION

Subject is promoted by the Kotak family that has decades of experience in commodity trading. KCSL is a trading-cum-clearing member of the leading national commodity exchanges - MCX, NCDEX and ACE. It is also a member of NCDEX Spot Exchange. KCSL is also associated with All India Cottonseed Crushers Association, Cotton Association of India and The Solvent Extractors Association of India. Their offerings include Commodities Broking Services, Hedging Solutions and Arbitrage Desk to meet the requirements of all kinds of market participants.

They have an extensive network spread across the country through their branches and registered franchisees. The Commodities Broking Services cater to the retail private investor segment, while the Hedging Services are offered through their corporate desk to the producing/consuming firms that have either direct or economic exposure to the underlying commodity. Their offerings also include Arbitrage products that are backed by their experts. They also have a division carrying on the business of Manufacturing, Trading including Exports of Cotton and other commodities.

BUSINESS OPERATIONS:-

INDUSTRY SCENARIO

The financial crisis that hit the world economy in October 2008 continues to keep the world on the brink. The sovereign debt crisis in several European countries in the euro zone has serious implications. In these trying times India continues to be one of the fastest growing large economies. The nation registered a growth of 6.9% in 2011-12. India advantage has been its large consumer based economy. Consumption contributes to around 70% of total GDP, of which 60% of total GDP is private consumption and 10% is government consumption. And consumption of any kind is connected to commodities. Growth in GDP has a multiplier impact on rise in consumption.

Reflected in this growth is the growth of the commodity futures market. The increase in physical market volumes has increased the hedging requirements of industry players and concomitantly augmented the derivatives trading volumes. The trading volume in commodity futures in India has grown at healthy pace. As per data published by Forward Market Commission (FMC), total trading volume of commodity exchanges grew by 51% to Rs.181 Lac crore in 2011-12 from Rs. 119 Lac crore in 2010-11. However this turnover is estimated at only 3-4 times of the physical market volume compared to the global benchmark of 30-40 times. Today also around 45% of India's GDP is being contributed by commodities and the commodity future volume is set to grow manifold as the Indian economy grows and the market structure catches up with the developed world.

COMPANY BUSINESS

During the year, the company increased its branch network from 27 to 38 by adding 11 more branches and thereby increasing its geographical footprint. Company also continued its sustained push on franchisee business. The company continues to invest in technology platforms that will result into superior customer trading experience and improved customer service.

The Company has established its branch and franchisee business in all major cities in India and is set to expand further with the help of additional sales force being deputed at these locations.

In previous year, Pursuant to the scheme of arrangement (the scheme) of Kotak Ginning and Pressing industries Limited ('KGP') with the company, the domestic operations of trading and agency and ginning business was transferred to and vested in the company. The said arrangement has resulted in to more synergy and company has emerged as one of the major exporters of cotton from India. Total Sales recorded by KGP division have increased manifold from previous year. The division continues to enjoy a prominent position in the business of cotton and in current year it plans to expand its presence in other commodities as well.

During the year ICRA has assigned a highest rating of [ICRA] A1+ (pronounced ICRA A one plus) to the Rs 500.000 Millions (enhanced from Rs 150.000 Millions) of short term debt programme of Kotak Commodity Services Limited (KCSL). ICRA has also assigned the short term rating of [ICRA] A1+ to the Rs 1500.000 Millions short term bank lines of KCSL.

Total Revenue for the year increased to Rs. 573.844 Millions from Rs. 205.632 Millions in the previous year. The operating profit for the year increased to Rs. 261.456 Millions as against Rs. 37.605 Millions in the previous year. The profit after tax for the year increased to Rs. 192.931 Millions as against Rs. 46.533 Millions in previous year, registering a many fold jump.

FIXED ASSETS:

v Land

v Buildings

v Factory building

v Plant and equipment

v Factory equipments

v Furniture and fixtures

v Vehicles

v Motor vehicles

v Office equipment

v Computer equipments

v Other equipments

v Leasehold improvements

v Goodwill

v Computer software

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. 62.41
UK Pound	1	Rs. 102.54
Euro	1	Rs. 85.20

INFORMATION DETAILS

Information Gathered by :	NYA
Report Prepared by :	BVA

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	6
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		50

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.