A

PROJECT REPORT

ON

FUND FLOW STATEMENT

AT

KOTAK MAHINDRA LIMITED

PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

SUBMITED BY

D.R.RAGHUVEER

H.T. NO: 142017672054

UNDER THE GUIDANCE OF

Mrs. SHAILA DHAIPULE
ASSOCIATE PROFESSOR

VIVEK VARDHINI SCHOOL OF BUSINESS MANAGEMENT

(Affiliated to Osmania University)

1
 Vivek Vardhini Education Society’s
VIVEK VARDHINI

SCHOOL OF BUSINESS MANAGEMENT

(Approved by AICTE/Affiliated to Osmania University)
Jambagh, Hyderabad – 500 095.
Ph : 040-24601844/040-24617666

CERTIFICATION

This is to certify that the Project Report titled FUND FLOW

STATEMENT at KOTAK MAHINDRA LIMITED submitted in partial
fulfillment for the award of M.B.A. Programme of Department of
Business Management, O.U., Hyderabad, was carried out by
D.R.RAGHUVEER Roll No. 142017672054 under my guidance.

This has not been submitted to any other University or

Institution for the award of any Degree/Diploma/Certificate.

SIGNATURE OF GUIDE Principal

2
 Vivek Vardhini Education Society’s
VIVEK VARDHINI

SCHOOL OF BUSINESS MANAGEMENT

(Approved by AICTE/Affiliated to Osmania University)
Jambagh, Hyderabad – 500 095.
Ph : 040-24601844/040-24617666

DECLARATION

I, hereby declare that, this project report entitled “FUND FLOW

STATEMENT” at KOTAK MAHINDRA LIMITED has been prepared by

me during the year 2017-19, under the Guidance of SHAILA

DHAIPULE.

I also declare that this project is the result of my own efforts and

it has not been submitted to another University for the award of any

Degree or Diploma.

Date : D.R.RAGHUVEER
Place : Hyderabad. Roll No.142017672054

3
4
 ACKNOWLEDGEMENT

I owe my sincere thanks to MUTHUSWAMY S of KOTAK

MAHINDRA LIMITED Hyderabad, who are helped me to bringing this

report.

This report has been prepared with the able guidance and kind
co-operation of the faculty of Principle Prof. P.N. Reddy Sir “Vivek
Vardhini School of Business Management”

I express my deep sense of gratitude and thank to SHAILA

DHAIPULE (Assistant Professor) of Business Management, for her/his
co-operation and valuable guidance.

I have to express my special thanks to all Lecturers who has

given valuable suggestions in completing this Project Report.

D.R.RAGHUVEER

Roll No. 142017672054

5
 ABSTRACT

Motivation is one of the most vital factors of human resource development. In this
present context corporate companies show predominant concern for the motivation of their
employees, but the public sector lacks behind.

The study aims at to focus on motivation of employees in private sector, so as to

understand the motivational strategies, draw facts and suggestions for the better motivation
and to align the motivation with the organizational objectives.
Salary, benefits, working conditions, supervision, policy, safety, security, affiliation and
relationships are all externally motivated needs. These are the first three levels of “Hewlett
Hierarchy” when these needs are achieved; the person moves up to level four and five.
However, if levels one through three are not met, the person becomes dissatisfy with their
job. When satisfaction is not found, the person becomes less productive and eventually quits
or is fired. Achievements, advancement, recognition, growth, responsibility, and job nature or
internal motivators. These are the last two levels of “Hewlett Hierarchy”.

They occur when the person motives themselves(after external motivation needs are
met) an employer or leader that needs the needs on the “Hewlett Hierarchy” will see
motivated employees and see productivity increases. Understanding the definition of
motivation and then applying it, is one of the most prevalent challenges facing employers and
supervisors. Companies often spend thousands of dollars each year hiring outside firms just
to give motivation seminars.

6
 CONTENT

Chapter No. Name of the concept Page No.

Introduction

Objectives of the study

Need and scope of the Study

I 1-7

Methodology of the study

Limitations of the study

II Review of Literature 8-17

III Industry & Company profile 18-45

IV Data analysis and interpretation 46-67

V Findings, Suggestion & Conclusions 67-71

Bibliography 72

7
 CHAPTER-I
INTRODUCTION

8
FUNDS FLOW STATEMENT

INTRODUCTION

The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or
Income Statement of business reveals the net effect of various transactions on operational and
financial position of the company. The balance sheet gives a summary of the assets &
liabilities of an undertaking at a particular point of time.

There are many transactions that take place in an undertaking and which do not
operate Profit & Loss A/c. Thus another statement has to be prepared to show the change in
Assets & Liabilities from the end of one period of time to the end of another period of time.
The statement is called a statement of changes in financial position or a Funds Flow
Statement.

The Funds Flow Statement is a statement which shown the movement of funds and is
a report of financial operations of business undertaking. In simple words it is a statement of
source and application of funds.

MEANING & CONCEPT OF FUNDS

The term “Fund” has been defined and interpreted differing by different experts.
Broadly the term fund refers to all the financial resource of the company on the other extreme
fund has been understood as cash only. The most acceptance meaning of the “fund” is
“working capital”.

Working Capital is excess of current assents over current liability. The term fund has a
variety of meaning.

A) CASH FUND OR NARROW SENSE

In a narrow sense, funds mean only cash. ‘Cash flow statement portrays net effect of
various business transactions cash into account receipts & disbursement of cash.

9
 The concept of preparing funds from statement is not accepted, as there are many
such transactions that do not affect cash but represent the flow of fund.

For Ex:

Purchase of furniture on credit does not affect cash but there is flow of fund.

B) CAPITAL FUND (or) BROADER SENSE

Here funds means all financial resources used in business, whether in the form of
men, money, material, machine & others.

C). NET WORKING CAPITAL (or) POPULAR SENSE

Networking capital means differences between current assets & liabilities. A fund
generally refers to cash or cash equipment or to working capital.

In any business we cannot under estimate the flow of funds from two operations. The
business runs with funds but the organization knows how to flow of funds.

The Funds Flow Statement is concerned with sources and applications of

organization.

Statement of changes in working capital shows the increase or decrease in the

working capital.

“Funds from Operations” statement shows how much funds from operations.

10
NEED AND IMPORTENCE OF STUDY

Many business owners disregard the importance of Funds flow statements because they
unwittingly believe that their current financial standing can be construed from other financial
reports and projections. Unfortunately, however, a Funds flow statement is necessary to
adequately assess the incoming and outgoing flow of Funds and other resources in a business.

Not only will a business owner with a Funds flow system be more aware of his or her
financial standing, but it will also help investors to make educated decisions on future
investments. A business with regular and reliable Funds flow statements shows more
economic solvency, and is more attractive to investors.

A Funds flow statement documents the incoming and outgoing Funds in plain terms. Future
sales and sales made for credit (unless they have been paid off) are not included in the Funds
flow statement, and most of the data will come from core operations. Payables and
receivables should be expressly defined, as should depreciation of product value and
inventory that has not yet been moved.

This will allow a business owner to compare past periods with the current financial standing
and determine whether your receivables have increased or decreased.

This can also help to track your investments next to your receivables and payables. Are your
investments increasing or decreasing in value? And has your inventory moved at a steady
pace? New or expanding businesses can expect to see a decrease in Funds flow, but this
doesn’t mean that the business is going under. More stables businesses should see a steadily
increase in Funds flow over a period of several months or years.

There are typically five different sections in a Funds flow statement, though large businesses
might have more complex Funds flow systems as required.

11
OBJECTIVES OF THE STUDY

 To know the operational efficiency of KOTAK MAHINDRA LTD

 To show the manner in which the operations have been financed , and how the
financial resources have been used.

 To analyze the movement of funds between the dates of two balance sheets in period
of study.

 To identify the changes in the working capital in between above mentioned year.
 To improve the financial performance of the company.

 It focuses attention on resources available for capital investment.

 They provide usefull guide to creditors & lenders

12
SOURCES OF DATA

SECONDARY DATA
The secondary data was collected form already published sources such as annual
reports, returns and internal records.

THE DATA COLLECTION INCLUDES:

a. Data collected from annual reports of KOTAK MAHINDRA LTD).
b. Reference form JOURNALA AND PERIODICAL relating to financial management.

RESEARCH TOOLS: Funds Flow Statement

Tools of Analysis

Various statistical tools such as percentages averages were used to process the date, of
effectiveness of funds flow in organization & management in KOTAK MAHINDRA
LTDLTD (KOTAK).

Research Design: Analytical Study

Data Sources : Secondary Data

13
SCOPE OF THE STUDY:

Financial analysis consists of ratio analysis and funds flow analysis. To know funds
flow from one to one, as the time available is very limited and the subjects are very vast, the
study is continued to overall financial condition of a firm. This study is to know working
capital increase or decrease funds from operation, sources and application of funds of M/S
KOTAK MAHINDRA LTD.

Financial analysis consists of funds flow analysis. To know funds flow from one to
one, as the time available is very limited and study is continued to overall financial condition
of a firm. The study to know working capital increase or decrease, funds from operation,
source and application of funds

LIMITATIONS OF THE STUDY:

 The study is only pertaining to KOTAK MAHINDRA LTD.

 The period of study is of 5 years and the performance evaluation is also
limited to 5 years.
 The study is purely based on the data available the form of annual reports...
 Analysis is only means and not an end itself; different people interpret the
same analysis in different ways.
 The overall financial performance is taken into consideration without taking
into account the minute values or individual values.
This study is conducted within a short period. The time factor is also a limitation.

14
 CHAPTER-II
REVIEW OF LITERATURE

15
REVIEW OF LITERATURE

Ever since the evolution of the concept of working capital, several authors have
attempted to analyze the concept by defining it so that the components of working
capital are properly identified. In doing so, quantitative and qualitative characteristics of
working capital are also identified to make working capital analysis for meeting specific
needs. These efforts have offered further scope to the authors to approach this topic in
the context of management of components of working capital in many ways. Such
approaches have also facilitated evolution of techniques to manage working capital.
Each of these approaches has their own basis and justification. Views expressed by
various authors suggest further need to analyze working capital management issues.
Review of some of the studies carried out and suggestions offered by eminent authors
on the subject have helped in formulating the theme meaningfully and to carry out the
study in line with the objective and scope.
A sincere effort has been made for comprehensive review of literature on working
capital management in general and small enterprises in particular, reveal the following:

Diversity in Approaches to Working Capital Concepts

Various authors have formulated working capital theories with diverse

perceptions, using both gross working capital concept and net working capital concept.
The theories that used gross working capital concept were based on the patterns of
utilization of funds, in terms of investment in current assets. Thus by literal meaning, if
investment in fixed assets is to be regarded as fixed capital, investment in current
assets could be termed as working capital, since the current assets are considered as means
to utilize the fixed assets productively and profitably. Most of the authors have supported
this view and consider working capital as current assets only, treating the sources of
funds for investment in short term current assets as a distinct aspect.

16
Quantitative Definition of Working Capital

Mead Edward Field KennethBaker and Mallot have suggested for the quantitative
approach to define working capital. They have suggested that the whole of the current
assets help to earn profits and prudent financial management calls for efficient
utilization of total current assets and their contribution of fixed assets to device desired
profits. They have suggested that working capital should be considered as current assets only
because,
a. Both fixed assets and current assets help an enterprise make profits. While fixed
assets are means to produce, current assets are means to operate these fixed assets and
thus generate profits. While theoretically fixed assets are termed as fixed capital
investment, current assets therefore should be termed as working capital, and
b. The management is generally concerned with the total amount of finds available in
terms of current assets for meeting the operational requirements. The sources of funds
for such current assets are treated as a different aspect.
Adam Smith has supported this view. According to him "the goods of a merchant yield
him no revenue of profit till he sells them for money and the money yield him a little till it is
again exchanged for good. His capital is continuously going from him in one shape and
returning to him in another, and it is only by means of such circulation or successive
exchanges, that can yield him any profit. Such capital, therefore, may very
appropriately be called circulating capital (current assets)".4
William H. Husband and James C. Dockery have also supported the quantitative
definition of working capital on the grounds that "Despite the uncertainty of
quantitative concept of working capital, it provides more objective basis of determining the
type and the amount of financing".5

17
J. I. Bogen has considered that working capital is the total of current assets of an
enterprise which circulates from one form to another, for instance, from cash to
inventories, from inventories to receivables and from receivables to back into cash.
Thus, the capital that circulates, equal the total current assets of an enterprise. Hence,
working capital and current assets are interchangeable terms.6 C. W. Gesten Berg has
further supported the views of Professor Bogen and considered working capital as the
total of current assets of an enterprise which circulates from one from to another.7 Some
others, however, have used the net working capital concept indicating that
working capital comprises the sum of current assets and correspondingly, resources of
the enterprise for investment in such current assets will have to be necessarily
considered while assessing working capital in an enterprise.

Qualitative Definition of Working Capital

In Accountants' Handbook it has been stated that a statement of working capital (excess of
current assets over current liabilities) is designed to emphasize the current financial
position.8
Authorities like Lincon, Saliers and Stevens have suggested that:9,10,11
a. What matters in the long run is the surplus of current assets over current liabilities
and not the absolute quantum of current assets,
b. This concept of working capital helps the investors and creditors of an enterprise to
judge its financial soundness and margin of safety.
c. It is a dependable source to meet the contingencies since the enterprise has no
obligation to this amount, and
d. It is useful in assessing financial position of the enterprises possessing the same
amount of current assets.
According to Dr. Colin Park and Professor J. W. Gladson, working capital is defined as the
excess of current assets of business (cash, accounts receivables, inventories) over
current items owed to employees and others (such as salaries, wages, and accounts
payable, taxes owed to government).13
As defined by the National Council of Applied Economic Research, working capital is
taken as the total current assets or as the excess of current assets over current
liabilities.13

18
7 Gestern Berg C.W., "Financial Organization and Management", New York, Prentice Hall,
1959, p.282.
8 American Institute of Accountants, "Committee on Accounting Procedure", New York,
Restatement and
9 Revision Accounting Research Bulletin No.43, 1952.
10 Lincoln E.E., "Applied Business Finance", New York, McGraw Hill.
11 Saliers E.A., "Hand Book of Corpration Management and Procedure",
13 Stevens W.M., "Financial Organization and Administration", New York, McGraw Hill,
1934, p.84.
13 Park C. and Gladson J.W., "Working Capital", New York, The Macmillan, 1963.
14 National Council of Applied Economic Reseach, "Structure of Working Cpital", New
Delhi, 1966.

According to Harry G. Guthman and Herbert E. Dougall, "working capital is the excess of
current assets over current liabilities".14William H. Husband and James. Dockery have
suggested that, "working capital comprises the sum of current assets, and it takes into
consideration all the current
resources of the enterprise, and their application to the current and future activities".15
Some authors have, however, clarified that only that part of the long term source
of an enterprise which has been utilized for investment in current assets should be
termed as working capital. In the absence of any universally accepted concept of
working capital, earlier research studies were based on both these concepts. The gross
working capital concept was considered for studies on management of working capital
in an enterprise while the net working capital concept was considered for studies on
financial position of an enterprise with specific reference to liquidity.A sincere review of
theoretical concepts and research studies on working capital
management has helped to adopt the "Gross Working Capital Concept".
Review of Earlier Studies in Working Capital Management in Enterprises
Considerable numbers of studies have been done in the area of working capital
management in enterprises. The studies have considered overall management of
working capital as also the management of individual component of working capital.This
chapter highlights the review of previous literature and tries to provide
necessaryinformation about what is already known and what is unknown, also describe

19
shortcoming and strengths and in where they are agreed/disagreed. This study
emphasizes that prior to the initiation of this study other researchers in this areas have
been developed but this study will try to find out the new answers for the new
developed questions that have been described under the problem under the study.
Working Capital Management
Research studies on working capital management pertaining to small scale undertakings are
found to be very limited which pinpoints the very cant attention paid to this particular
area of financial management.Sagan's theory of working capital management has
advocated that working capital management should be linked with the objectives of
liquidity and profitability of the enterprise. He also has suggested that working capital
management should aim at stability and growth of the enterprise.However, Sagan's
theory has put emphasis on cash management, on the assumption that in an enterprise,
it is cash which is more liquid and difficult to manage than other components of working
capital i.e., inventories
and receivables. Sagan's theory also further stated that a high level of sales in an
enterprise calls for large cash balances.16 ABDE. L. Motall has observed that the largest
portion of a financial manager's time is utilized in the management of working capital.
He also has noticed that shortage of working capital so often advocated as the main
cause of failure of an enterprise, is nothing but the evidence of mismanagement of
working capital, which is so common.17 Earnest W. Walker in his study of nine
enterprises has indicated that the level of working capital and rate of return are not
directly related. It was more a change in working capital than its level that caused a
gain or loss to an enterprise. The study also has revealed that a decrease in working
capital resulted in an increase in the rate of return while an increase in working
capital generally has resulted in a decrease in the rate of return.18 Chadda (1964)
assessed inventory management practices of Indian companies. The application of
modern inventory control techniques like operations research has been suggested for the
advantage of companies. As far back as in 1966, the first and foremost study on working
capital management inrelation to Indian industry was compiled and published under the
caption —Structure of Working Capital“ by the National Council of Applied Economic
Research (NCAER,1966).The study was confined to the analysis of the composition of
working capital,19with special reference to three types of industries viz., Fertilizers,
Cement and Sugar.The principal objective of this study was to examine as to what
extent these three
20
industries controlled and utilized working capital components. The study has revealed
that there had been excessive working capital funds locked up in most of these
industries. It finally concluded that the need of the hour was to establish good
accounting and costing systems, including new techniques of inventory management in
each company of these three key industries.
16 John Sagan, "Towards a Theory of Working Capital Management", The Journal on
Finance, 1955, pp.134-139.
17 ABD E.L. Motall M.H.B., "Working Capital:its role in the short run liquidity policy of
industrial
concern, Accounting Research", Vol. IX, 1958.
18 Walker E.W., "Towards the theory of working capital, The Engineering Economist",
1964, pp.21-35.
19 National Council of Applied Economic Research, Structure of Working Capital, NCAER,
New Delhi,1966.
Jerome B. Cohen and Sydney M. Robbins have suggested that to assess an ideal level,20
Operating cycle method has been considered as an effective tool, through which the
flow of cash invested is identified throughout, from the stage of procurement of raw
material to finished goods and flow of cash back to business through cash sales or
collections from debtors. In practice, however, there may be subsidiary flows and
circuits existing alongside the mainstream of enterprise flows. Van Horne, in his study on
working capital during 1969, has observed that if the level of liquid assets in an
enterprise is reduced, its ability to meet the current obligations would also reduce.
Based on this, his study was an examination of liquid assets and the current obligations of
an enterprise as separate issues. The liquid assets considered forthe study were only cash
and marketable securities, for the purposes of ascertaining the liquidity. On this basis
Van Horne emphasized that the risk of an enterprise in meeting the current obligations
increases, when the liquid asset's position decreased.21 The welter study on the other
hand has focused more on the profitability goal of working capital management. A
unique feature of this study was to identify 'delay centers' located throughout the
production and marketing function, and work out thepossibility of reducing delays
occurring in various delay centers. Reduction in delays would eventually reduce working
capital investment by the firm.22

21
 Appavadhanulu in his study of working capital and choice of techniques has stated
that the period of production in an enterprise depends on technical factors. In view of
this, the techniques of production either increase or decrease the length of production, which
in turn, change the amount of working capital.23
20 Jerome B. Cohen and Syndney M. Robbins, "The Financial Manager", Harper and Row,
New York,
1968, p.307.
21 James C. Van Horne, "A risk-return analysis of a firm's working capital position, The
Engineering
Economist", 1969, pp.71-88.
22 Paul Welter, "How to calculate taxing possible through reduction of working capital,
Financial
Executive", 1970, pp.50-58.
23 Appavadhanulu, "Working Capital and choice of techniques, The Indian Economic
Journal", July- September,pp.34-41.
The study carried out by Chakraborthy has pointed out two issues, ViZ., the
relationship of return on capital employed to excessive or insufficient working capital
and estimation of working capital through relating operating cycle and operating expenses.24
Mishra‘s (1975) work was based on the case studies of working capital management in six
central public sector enterprises in India for the period 1960-61 to 1967-68. His study
has identified inventory, receivables, cash and working finance as the four
problem areas of working capital confronting public enterprises. The study has also
included large-scale units, promoted by the Central Government such as Fertilizer
Corporation of India Limited (FCI), Hindustan Steel Limited (HSL), Heavy Electrical
India Limited (HEI), National Coal Development Corporation Limited (NCDC) and
Instrumentation Limited (INS). After a thorough probe into the problems of working
capital management in these enterprises, he has pointed out the need for efficient and
effective utilization of working capital, as it was a neglected area hitherto affecting the
profitability.

22
 Smith has observed that working capital management is concerned with the
problems that arise in attempting to manage the current assets, the current liabilities and
the inter- relationship that exists between them.25
a basic study by Misra on problem of working capital in selected enterprises has
indicated that,
a. They have not been able to manage working capital efficiently,
b. Inventory constituted a major component in the current assets,
c. Inventory management and receivables management were inefficient, and
d. There were disproportionately high levels of cash due to improper planning
andcontrol.26

Weston and Brigham have stated that there are many aspects of working
capital management, which make it an important function of the financial manager.27 Gitman
has suggested that the goal of working capital management is to manage each of the firm's
current assets and current liabilities in such a way that an acceptable level of net
working capital is maintained.28

24 Economic and Political Weekly", August 1973, pp.1769-2776.

25 Smith K.V., "Management of working capital", New York, West Publishing Company,
1974, p.5.
26 Ram K. Misra, "Problems of working capital (with special reference to selected public
undertaking IN India)", Somaiya Publications (p) Ltd., Bombay, 1975.
27 Weston Fred j. and Eugene Brigham F. "Managerial Finance", New York, Dryden Press,
1975, pp.133-134.
28 Lawrence J. Gitman, "Principles of Managerial Finance", Harper and Row Publishers,
1976.

Salient Feature
1. The earlier studies on working capital management in small enterprises have not
been addressed to specific present issues but were related to small enterprises in
general.The present study has considered surveying the extent of inventory level
maintained by the sample units. The research has also included the study of various
inventory control technique used by samples units. All these and other allied questions
such as impact of
23
under-utilization of the available resources, unpredictable environmental situations, lack of
regular supply of materials, and lack of control on investment in inventories form the
subject matter of this study.
2. Working capital management in an enterprise depends upon a number of variables
like operating cycle, storage period of inventories, cash holding, credit period to
customers, credit period from suppliers etc. Only a few studies with particular reference to
small enterprises have highlighted such dependency by working capital on the
variables cited. Even those studies neither consider all the dependent variables of
working capital, nor the impact of dependency by working capital on such variables
analyzed in depth. The present study highlights the requirement by making quantitative
analysis of dependency of working capital on selected variables. Some variables are
considered for such analysis to focus the finding on more prominent variables.
Accordingly, the following variables are identified for statistical analysis:
• Application of the managerial skills for holding cash,
• Creation of the motivating behavior in manpower,
• Application of the economic order quantity,
• Use of the coordination on operations,
• Application of the credit policy,
• Effect on the business cycle,
• Effect on the assigned planning,
• Effect on the current decision making,
• Effect on the improper flows of operations,
• Attempt to reduce uncertainty,
• Delay in the product delivery,
• Irregular flows of the work,
• Reduction in the volume of output,
• Effect on the opportunity cost,
• Effect in the direct-indirect costs,
• Effect on the activities of sales, operating and financial, and

24
 CHAPTER-III

INDUSTRY PROFILE

&

COMPANY PROFILE

25
The Indian stock market turned out to be among the world's best performers in 2015-16 with
the Bombay Stock Exchange (BSE) Sensex rising 29% from 21,140 on January 1 to 27,312
on December 19. Most market players believe this stellar run will continue in 2015 on the
back of reforms, strong foreign fund inflows, revival of manufacturing, improvement in the
macro-economic situation and rise in corporate earnings growth.
Attractive Valuations
Despite the sharp rise, the valuation of the Indian stock market is still attractive. On
December 12, the Sensex was trading at a price-to-earnings (PE) ratio of 18.5, marginally
lower than the five-year average of 18.77.. One reason is that the return on equity of BSE 200
companies is bottoming out. "Revival of growth of Indian companies, which were facing
tough times for the past five years, is still at a nascent stage. Nifty 50 companies can see 16-
17% earnings growth in the next one year. Stocks that respond to interest rate moves, coupled
with select debt schemes, are likely to be the winners in 2015, with the Reserve Bank of India
expected to start easing its monetary policy Fund managers said economic prospects have
improved, but the New Year may be tougher for equity investors to make money as
valuations of many stocks are rich after the broad-based rally in 2014. Concern over interest
rate hike in the US and weak global crude oil prices may also keep investors on. India is
among the top-performing emerging markets in 2014. So far in 2014, the Sensex has gained
34%. Smaller companies have fared even better, with the BSE Mid Cap index surging 56%
and the BSE Small Cap Index jumping 75%.
Though the falling crude prices have improved the prospects of the Indian economy, India
may not be spared if there is an emerging market sell-off. "On the global front, oil exporting
nations could face problems, and there could be a global risk aversion.

Market participants consider probable interest rate cuts by the Reserve Bank of India (RBI) as
the biggest trigger for the economy and the markets. The extent of monetary policy easing
would determine the strength of rally in shares of the so-called interest rate-sensitive sectors
such as banks, auto, real estate and bonds.

26
Fund managers said debt funds could offer good returns in the coming year as a fall in
interest rates could lead to an appreciation in bond prices. With wholesale price inflation
coming at nil for November, expectations of interest rate cuts as early as in the March quarter
are high. "Shortterm rates can fall more than long-term rates. We expect consumer inflation
to be in the range of 5-5.5%, and expect RBI to cut interest rates by 50 basis points in 2015,"
said Dhawal Dalal, executive V-P and head (fixed income), DSP BlackRock Mutual Fund. If
interest rates fall by 50 basis points, investors could see a 5% capital appreciation on their
long-term gilt fund portfolio.
Measured by BSE Sensex, stock market has generated a positive return of about 9 per cent
for investors in 2013, while gold prices fell by about three per cent and its poorer cousin
silver plummeted close to 24 per cent.
After outperforming stock market for more than a decade, gold has been on back foot for two
consecutive years now vis-a-vis equities, shows an analysis of their price movements.
"Gold's under-performance was mainly due to prices falling in dollar terms amid anticipated
tapering over last several months combined with FII investment in Indian stocks.
"This movement has been equally true for global markets as 2013 saw gold losing its shine
and markets coming back with a bang," said Jayant Manglik, President Retail Distribution,
Religare Securities.
"As always, gold and stock prices follow opposite trends and this year was no different
except that both changed direction," he said.
Improvement in the world economy has brought the risk appetite back amongst retail
investors and this has drenched the liquidity from safe havens such as gold leading to its
under-performance, an expert said.
In 2012, the Sensex had gained over 25 per cent, which was nearly double the gain of about
12.95 per cent in gold. The appreciation in silver was at about 12.84 per last year.
According to Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio, "Markets have
particularly shown great strength post July-August 2013 when RBI took some strong
measures to control the steeply depreciating rupee."
"When the US Fed gave indications that it might taper its stimulus programme given the
economy shows improvement, a knee-jerk correction was seen in most risky assets, including
stocks in Indian markets. However, assurance by the Fed about planned and staggered
tapering in stimulus once again proved to be a catalyst for the markets."

27
"External factors affecting Indian stocks seem to be negative for the first half of 2014 due to
continued strength of the US dollar and benign in the second half. By that time, elections too
would have taken place. A combination of domestic and international factors point to a
bumper closing of Indian markets in 2014 with double-digit percentage growth," he said.
Stock market segment mid-cap and small-cap indices have fallen by about 10 per cent and 16
per cent, respectively, in 2013.
Foreign Institutional Investors have bought shares worth over Rs 1.1 lakh crore (nearly USD
20 billion) till December 19. In 2012, they had pumped in Rs 1.28 lakh crore (USD 24.37
billion).

Evolution

Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used
to be transacted towards the close of the eighteenth century.

By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.

The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.

In 1860-61 the American Civil War broke out and cotton supply from United States of
Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased
to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous
slump began (for example, Bank of Bombay Share which had touched Rs 2850 could only be
sold at Rs. 87).

28
At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in Bombay,
the "Native Share and Stock Brokers' Association" (which is alternatively known as " The
Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it
was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.

Other leading cities in stock market operations

Ahmadabad gained importance next to Bombay with respect to cotton textile industry. After
1880, many mills originated from Ahmadabad and rapidly forged ahead. As new mills were
floated, the need for a Stock Exchange at Ahmadabad was realized and in 1894 the brokers
formed "The Ahmadabad Share and Stock Brokers' Association".

What the cotton textile industry was to Bombay and Ahmadabad, the jute industry was to
Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta.
After the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which
was followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between
1904 and 1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange
Association".

In the beginning of the twentieth century, the industrial revolution was on the way in India
with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company
Limited in 1907, an important stage in industrial advancement under Indian enterprise was
reached.

Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally
enjoyed phenomenal prosperity, due to the First World War.

In 1920, the then demure city of Madras had the maiden thrill of a stock exchange
functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100
members. However, when boom faded, the number of members stood reduced from 100 to 3,
by 1923, and so it went out of existence.

29
In 1935, the stock market activity improved, especially in South India where there was a
rapid increase in the number of textile mills and many plantation companies were floated. In
1937, a stock exchange was once again organized in Madras - Madras Stock Exchange
Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange
Limited).

Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the
Punjab Stock Exchange Limited, which was incorporated in 1936.

Indian Stock Exchanges - An Umbrella Growth

The Second World War broke out in 1939. It gave a sharp boom which was followed by a
slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.

On account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were
anxious to join the trade and their number was swelled by numerous others. Many new
associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated.

The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940)
and Hyderabad Stock Exchange Limited (1944) were incorporated.

In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the
Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947,
amalgamated into the Delhi Stock Exchnage Association Limited.

Post-independence Scenario

Most of the exchanges suffered almost a total eclipse during depression. Lahore Exchange
was closed during partition of the country and later migrated to Delhi and merged with Delhi
Stock Exchange.

Bangalore Stock Exchange Limited was registered in 1957 and recognized in 1963.

30
Most of the other exchanges languished till 1957 when they applied to the Central
Government for recognition under the Securities Contracts (Regulation) Act, 1956. Only
Bombay, Calcutta, Madras, Ahmadabad, Delhi, Hyderabad and Indore, the well established
exchanges, were recognized under the Act. Some of the members of the other Associations
were required to be admitted by the recognized stock exchanges on a concessional basis, but
acting on the principle of unitary control, all these pseudo stock exchanges were refused
recognition by the Government of India and they thereupon ceased to function.

Thus, during early sixties there were eight recognized stock exchanges in India (mentioned
above). The number virtually remained unchanged, for nearly two decades. During eighties,
however, many stock exchanges were established: Cochin Stock Exchange (1980), Uttar
Pradesh Stock Exchange Association Limited (at Kanpur, 1982), and Pune Stock Exchange
Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock
Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh
Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989),
Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange
Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990) and recently
established exchanges - Coimbatore and Meerut. Thus, at present, there are totally twenty one
recognized stock exchanges in India excluding the Over The Counter Exchange of India
Limited (OTCEI) and the National Stock Exchange of India Limited (NSEIL).

The Table given below portrays the overall growth pattern of Indian stock markets since
independence. It is quite evident from the Table that Indian stock markets have not only
grown just in number of exchanges, but also in number of listed companies and in capital of
listed companies. The remarkable growth after 1985 can be clearly seen from the Table, and
this was due to the favouring government policies towards security market industry.

Trading Pattern of the Indian Stock Market

Trading in Indian stock exchanges are limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented
companies with a paid-up capital of atleast Rs.50 million and a market capitalization of
atleast Rs.100 million and having more than 20,000 shareholders are, normally, put in the
specified group and the balance in non-specified group.

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Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery
transactions "for delivery and payment within the time or on the date stipulated when
entering into the contract which shall not be more than 14 days following the date of the
contract" : and (b) forward transactions "delivery and payment can be extended by further
period of 14 days each so that the overall period does not exceed 90 days from the date of the
contract". The latter is permitted only in the case of specified shares. The brokers who carry
over the outstandings pay carry over charges (cantango or backwardation) which are usually
determined by the rates of interest prevailing.

A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only.

The nature of trading on Indian Stock Exchanges are that of age old conventional style of
face-to-face trading with bids and offers being made by open outcry. However, there is a
great amount of effort to modernize the Indian stock exchanges in the very recent times.

Over The Counter Exchange of India (OTCEI)

The traditional trading mechanism prevailed in the Indian stock markets gave way to many
functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long
settlement periods and benami transactions, which affected the small investors to a great
extent. To provide improved services to investors, the country's first ringless, scripless,
electronic stock exchange - OTCEI - was created in 1992 by country's premier financial
institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India,
Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation
of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.

32
Trading at OTCEI is done over the centres spread across the country. Securities traded on the
OTCEI are classified into:

 Listed Securities - The shares and debentures of the companies listed on the OTC can
be bought or sold at any OTC counter all over the country and they should not be
listed anywhere else

 Permitted Securities - Certain shares and debentures listed on other exchanges and
units of mutual funds are allowed to be traded

 Initiated debentures - Any equity holding atleast one lakh debentures of a particular
scrip can offer them for trading on the OTC.

OTC has a unique feature of trading compared to other traditional exchanges. That is,
certificates of listed securities and initiated debentures are not traded at OTC. The original
certificate will be safely with the custodian. But, a counter receipt is generated out at the
counter which substitutes the share certificate and is used for all transactions.

In the case of permitted securities, the system is similar to a traditional stock exchange. The
difference is that the delivery and payment procedure will be completed within 14 days.

Compared to the traditional Exchanges, OTC Exchange network has the following
advantages:

 OTCEI has widely dispersed trading mechanism across the country which provides
greater liquidity and lesser risk of intermediary charges.

 Greater transparency and accuracy of prices is obtained due to the screen-based

scripless trading.

 Since the exact price of the transaction is shown on the computer screen, the investor
gets to know the exact price at which s/he is trading.

 Faster settlement and transfer process compared to other exchanges.

33
  In the case of an OTC issue (new issue), the allotment procedure is completed in a
month and trading commences after a month of the issue closure, whereas it takes a
longer period for the same with respect to other exchanges.

Thus, with the superior trading mechanism coupled with information transparency investors
are gradually becoming aware of the manifold advantages of the OTCEI.

National Stock Exchange (NSE)

With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.

Trading at NSE can be classified under two broad categories:

(a) Wholesale debt market and

(b) Capital market.

Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper, certificate
of deposit, etc.

There are two kinds of players in NSE:

(a) trading members and

(b) participants.

Recognized members of NSE are called trading members who trade on behalf of themselves
and their clients. Participants include trading members and large players like banks who take
direct settlement responsibility.

34
Trading at NSE takes place through a fully automated screen-based trading mechanism which
adopts the principle of an order-driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a communication network. The prices at
which the buyer and seller are willing to transact will appear on the screen. When the prices
match the transaction will be completed and a confirmation slip will be printed at the office
of the trading member.

NSE has several advantages over the traditional trading exchanges. They are as follows:

 NSE brings an integrated stock market trading network across the nation.

 Investors can trade at the same price from anywhere in the country since inter-market
operations are streamlined coupled with the countrywide access to the securities.

 Delays in communication, late payments and the malpractice’s prevailing in the

traditional trading mechanism can be done away with greater operational efficiency
and informational transparency in the stock market operations, with the support of
total computerized network.

Unless stock markets provide professionalized service, small investors and foreign investors
will not be interested in capital market operations. And capital market being one of the major
source of long-term finance for industrial projects, India cannot afford to damage the capital
market path. In this regard NSE gains vital importance in the Indian capital market system.

Preamble

Often, in the economic literature we find the terms ‘development’ and ‘growth’ are used
interchangeably. However, there is a difference. Economic growth refers to the sustained
increase in per capita or total income, while the term economic development implies
sustained structural change, including all the complex effects of economic growth. In other
words, growth is associated with free enterprise, where as development requires some sort of
control and regulation of the forces affecting development. Thus, economic development is a
process and growth is a phenomenon.

Economic planning is very critical for a nation, especially a developing country like India to
take the country in the path of economic development to attain economic growth.

35
Why Economic Planning for India?

One of the major objective of planning in India is to increase the rate of economic
development, implying that increasing the rate of capital formation by raising the levels of
income, saving and investment. However, increasing the rate of capital formation in India is
beset with a number of difficulties. People are poverty ridden. Their capacity to save is
extremely low due to low levels of income and high propensity to consume. Therefor, the rate
of investment is low which leads to capital deficiency and low productivity. Low productivity
means low income and the vicious circle continues. Thus, to break this vicious economic
circle, planning is inevitable for India.

The market mechanism works imperfectly in developing nations due to the ignorance and
unfamiliarity with it. Therefore, to improve and strengthen market mechanism planning is
very vital. In India, a large portion of the economy is non-monitised; the product, factors of
production, money and capital markets is not organized properly. Thus the prevailing price
mechanism fails to bring about adjustments between aggregate demand and supply of goods
and services. Thus, to improve the economy, market imperfections has to be removed;
available resources has to be mobilized and utilized efficiently; and structural rigidities has to
be overcome. These can be attained only through planning.

In India, capital is scarce; and unemployment and disguised unemployment is prevalent.

Thus, where capital was being scarce and labour being abundant, providing useful
employment opportunities to an increasing labour force is a difficult exercise. Only a
centralized planning model can solve this macro problem of India.

Further, in a country like India where agricultural dependence is very high, one cannot ignore
this segment in the process of economic development. Therefore, an economic development
model has to consider a balanced approach to link both agriculture and industry and lead for a
paralleled growth. Not to mention, both agriculture and industry cannot develop without
adequate infrastructural facilities which only the state can provide and this is possible only
through a well carved out planning strategy. The government’s role in providing
infrastructure is unavoidable due to the fact that the role of private sector in infrastructural
development of India is very minimal since these infrastructure projects are considered as
unprofitable by the private sector.

36
Further, India is a clear case of income disparity. Thus, it is the duty of the state to reduce the
prevailing income inequalities. This is possible only through planning.

Planning History of India

The development of planning in India began prior to the first Five Year Plan of independent
India, long before independence even. The idea of central directions of resources to overcome
persistent poverty gradually, because one of the main policies advocated by nationalists early
in the century. The Congress Party worked out a program for economic advancement during
the 1920’s, and 1930’s and by the 1938 they formed a National Planning Committee under
the chairmanship of future Prime Minister Nehru. The Committee had little time to do
anything but prepare programs and reports before the Second World War which put an end to
it. But it was already more than an academic exercise remote from administration.
Provisional government had been elected in 1938, and the Congress Party leaders held
positions of responsibility. After the war, the Interim government of the pre-independence
years appointed an Advisory Planning Board. The Board produced a number of somewhat
disconnected Plans itself. But, more important in the long run, it recommended the
appointment of a Planning Commission.

The Planning Commission did not start work properly until 1950. During the first three years
of independent India, the state and economy scarcely had a stable structure at all, while
millions of refugees crossed the newly established borders of India and Pakistan, and while
ex-princely states (over 500 of them) were being merged into India or Pakistan. The Planning
Commission as it now exists, was not set up until the new India had adopted its Constitution
in January 1950.

Objectives of Indian Planning

The Planning Commission was set up the following Directive principles :

 To make an assessment of the material, capital and human resources of the country,
including technical personnel, and investigate the possibilities of augmenting such of
these resources as are found to be deficient in relation to the nation’s requirement.

 To formulate a plan for the most effective and balanced use of the country’s
resources.

37
  Having determined the priorities, to define the stages in which the plan should be
carried out, and propose the allocation of resources for the completion of each stage.

 To indicate the factors which are tending to retard economic development, and
determine the conditions which, in view of the current social and political situation,
should be established for the successful execution of the Plan.

 To determine the nature of the machinery this will be necessary for securing the
successful implementation of each stage of Plan in all its aspects.

 To appraise from time to time the progress achieved in the execution of each stage of
the Plan and recommend the adjustments of policy and measures that such appraisals
may show to be necessary.

 To make such interim or auxiliary recommendations as appear to it to be appropriate

either for facilitating the discharge of the duties assigned to it or on a consideration of
the prevailing economic conditions, current policies, measures and development
programs; or on an examination of such specific problems as may be referred to it for
advice by Central or State Governments.

The long-term general objectives of Indian Planning are as follows:

 Increasing National Income

 Reducing inequalities in the distribution of income and wealth

 Elimination of poverty

 Providing additional employment; and

 Alleviating bottlenecks in the areas of : agricultural production, manufacturing

capacity for producer’s goods and balance of payments.

Economic growth, as the primary objective has remained in focus in all Five Year Plans.
Approximately, economic growth has been targeted at a rate of five per cent per annum. High
priority to economic growth in Indian Plans looks very much justified in view of long period
of stagnation during the British rule

38
 COMPANY PROFILE

Kotak Mahindra Bank is the fourth largest Indian private sector bank by market
capitalization, headquartered in Mumbai, Maharashtra.

Since the inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has been a
steady and confident journey leading to growth and success. The milestones of the group
growth story are listed below year wise.

2015

Reserve Bank of India (RBI) approves merger of ING Vysya Bank with Kotak Mahindra
Bank effective April 1, 2015.

2014

Thrust on digital and social with the launch of innovative solutions - first-of-its-kind fully
integrated social bank account - 'Jifi', and world's first bank agnostic instant funds transfer
platform using Facebook - 'KayPay'. Subsequently in Jan 2015, 'Jifi Saver' - a savings bank
account with secure and seamless transactions on popular social networks was launched.

Kotak Mahindra Bank acquires 15% equity stake in Multi Commodity Exchange of India
Limited (MCX)

Kotak Mahindra Asset Management Company Ltd. acquires schemes of Pinebridge Mutual
Fund

Kotak Mahindra Group announces its foray into General Insurance business

2010-2014  Ahmedabad Derivatives and Commodities Exchange, a Kotak

anchored enterprise, became operational as a national commodity
exchange.

2009  Kotak Mahindra Bank Ltd. opened a representative office in Dubai

 Entered Ahmedabad Commodity Exchange as anchor investor.

39
2008  Launched a Pension Fund under the New Pension System.

2006  Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital
Company and Kotak Securities.

2005  Kotak Group realigned joint venture in Ford Credit; their stake in Kotak
Mahindra Prime was bought out (formerly known as Kotak Mahindra Primus
Ltd) and Kotak group’s stake in Ford credit Kotak Mahindra was sold.
 Launched a real estate fund.

 Launched India Growth Fund, a private equity fund.

2004

2003  Kotak Mahindra Finance Ltd. converted into a commercial bank - the first Indian
company to do so.

2001  Matrix sold to Friday Corporation.

 Launched Insurance Services.
 Kotak Securities Ltd. was incorporated

2000  Kotak Mahindra tied up with Old Mutual plc. for the Life Insurance business.
 Kotak Securities launched its on-line broking site.
 Commencement of private equity activity through setting up of Kotak
Mahindra Venture Capital Fund.

 Entered the mutual fund market with the launch of Kotak Mahindra Asset
1998 Management Company.

1996  The Auto Finance Business is hived off into a separate company - Kotak
Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited).

40
 Kotak Mahindra takes a significant stake in Ford Credit Kotak
 Mahindra Limited, for financing Ford vehicles. The launch of Matrix
Information Services Limited marks the Group's entry into information
distribution.

1995  Brokerage and Distribution businesses incorporated into a separate company -

Securities. Investment banking division incorporated into a separate company -
Kotak Mahindra Capital Company

 Entered the Funds Syndication sector

1992

1991  The Investment Banking Division was started. Took over FICOM, one of India's
largest financial retail marketing networks

1990  The Auto Finance division was started

1987  Kotak Mahindra Finance Ltd entered the Lease and Hire Purchase market

1986  Kotak Mahindra Finance Ltd started the activity of Bill Discounting

Our Businesses

Multiple businesses. One brand.

Kotak Mahindra is one of India's leading banking and financial services groups, offering a
wide range of financial services that encompass every sphere of life.

41
Kotak Mahindra Bank Ltd

 Kotak Mahindra Bank Ltd is a one stop shop for all banking needs.
The bank offers personal finance solutions of every kind from savings accounts to
credit cards, distribution of mutual funds to life insurance products. Kotak Mahindra
Bank offers transaction banking, operates lending verticals, manages IPOs and
provides working capital loans. Kotak has one of the largest and most respected
Wealth Management teams in India, providing the widest range of solutions to high
net worth individuals, entrepreneurs, business families and employed professionals.

For more information, please visit the Kotak Mahindra Bank website
www.kotak.com/bank/personal-banking/

Kotak Mahindra Old Mutual Life Insurance Ltd

 Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26 joint

venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual plc. A
Company that combines its international strengths and local advantages to offer its
customers a wide range of innovative life insurance products, helping them take
important financial decisions at every stage in life and stay financially independent.
The company covers over 3 million lives and is one of the fastest growing insurance
companies in India. www.kotaklifeinsurance.com

Kotak Securities Ltd

 Kotak Securities is one of the largest broking houses in India with a

wide geographical reach. Kotak Securities operations include stock broking and
distribution of various financial products including private and secondary placement
of debt, equity and mutual funds.

42
 Kotak Securities operate in five main areas of business:

o Stock Broking (retail and institutional)

o Depository Services
o Portfolio Management Services
o Distribution of Mutual Funds
o Distribution of Kotak Mahindra Old Mutual Life Insurance Ltd products

For more information, please visit the Kotak Securities website

www.kotaksecurities.com

Kotak Mahindra Capital Company (KMCC)

 Kotak Investment Banking (KMCC) is a full-service investment

bank in India offering a wide suite of capital market and advisory solutions to leading
domestic and multinational corporations, banks, financial institutions and government
companies.

Our services encompass Equity & Debt Capital Markets, M&A Advisory, Private
Equity Advisory, Restructuring and Recapitalization services, Structured Finance
services and Infrastructure Advisory & Fund Mobilization.

For more information, please visit the Kotak Investment Banking website
www.kmcc.co.in

43
Kotak Mahindra Prime Ltd (KMPL)

 Kotak Mahindra Prime Ltd is among India's largest dedicated

passenger vehicle finance companies. KMPL offers loans for the entire range of
passenger cars, multi-utility vehicles and pre-owned cars. Also on offer are inventory
funding and infrastructure funding to car dealers with strategic arrangements via
various car manufacturers in India as their preferred financier.

For more information, please visit the KMPL website http://carloan.kotak.com

Kotak International Business

 Kotak International Business specialises in providing a range of

services to overseas customers seeking to invest in India. For institutions and high net
worth individuals outside India, Kotak International Business offers asset
management through a range of offshore funds with specific advisory and
discretionary investment management services.

For more information, please visit the Kotak Mahindra International Business website
www.investindia.kotak.com

Kotak Mahindra Asset Management Company Ltd (KMAMC)

 Kotak Mahindra Asset Management Company offers a complete

bouquet of asset management products and services that are designed to suit the
diverse risk return profiles of each and every type of investor. KMAMC and Kotak
Mahindra Bank are the sponsors of Kotak Mahindra Pension Fund Ltd, which has
been appointed as one of six fund managers to manage pension funds under the New
Pension Scheme (NPS).

For more information, please visit the KMAMC website

www.kotakmutual.com/kmw/main.htm
44
Kotak Private Equity Group (KPEG)

 Kotak Private Equity Group helps nurture emerging businesses and

mid-size enterprises to evolve into tomorrow's industry leaders. With a proven track
record of helping build companies, KPEG also offers expertise with a combination of
equity capital, strategic support and value added services. What differentiates KPEG
is not merely funding companies, but also having a close involvement in their growth
as board members, advisors, strategists and fund-raisers.

For more information, please visit the KPEG website

www.privateequityfund.kotak.com

Kotak Realty Fund

 Kotak Realty Fund deals with equity investments covering sectors

such as hotels, IT parks, residential townships, shopping centres, industrial real estate,
health care, retail, education and property management. The investment focus here is
on development projects and enterprise level investments, both in real estate intensive
businesses.

For more information, please visit the Kotak Realty Fund website
www.realtyfund.kotak.com

Senior Management-2014-15

Mr. Uday S. Kotak

Executive Vice Chairman and Managing Director

Mr. Uday Kotak, is the Executive Vice-Chairman and Managing Director of the Bank, and its
principal founder and promoter. Mr. Kotak is an alumnus of Jamnalal Bajaj Institute of
Management Studies.

45
In 1985, when he was still in his early twenties, Mr Kotak thought of setting up a bank when
private Indian banks were not even seen in the game. First Kotak Capital Management
Finance Ltd (which later became Kotak Mahindra Finance Ltd), and then with Kotak
Mahindra Finance Ltd, Kotak became the first non-banking finance company in India's
corporate history to be converted into a bank. Over the years, Kotak Mahindra Group grew
into several areas like stock broking and investment banking to car finance, life insurance and
mutual funds.

Among the many awards to Mr Kotak's credit are the CNBC TV18 Innovator of the Year
Award in 2006 and the Ernst & Young Entrepreneur of the Year Award in 2003. He was
featured as one of the Global Leaders for Tomorrow at the World Economic Forum's annual
meet at Davos in 1996. He was also featured among the Top Financial Leaders for the 21st
Century by Euromoney magazine. He was named as CNBC TV18 India Business Leader of
the Year 2008 and as the most valued CEO by businessworld in 2010.

Mr. C Jayaram

Joint Managing Director

Mr. C. Jayaram, is a Joint Managing Director of the Bank and is currently in charge of the
Wealth Management Business of the Kotak Group. An alumnus of IIM Kolkata, he has been
with the Kotak Group since 1990 and member of the Kotak board in October 1999. He also
oversees the international subsidiaries and the alternate asset management business of the
group. He is the Director of the Financial Planning Standards Board, India. He has varied
experience of over 25 years in many areas of finance and business, has built numerous
businesses for the Group and was CEO of Kotak Securities Ltd. An avid player and follower
of tennis, he also has a keen interest in psephology.

46
Mr. Dipak Gupta
Joint Managing Director

An electronics engineer and an alumnus of IIM Ahmedabad, Mr. Gupta has been with the
Kotak Group since 1992 and joined the board in October 1999.

He heads commercial banking, retail asset businesses and looks after group HR function.
Early on, he headed the finance function and was instrumental in the joint venture between
Kotak Mahindra and Ford Credit International. He was the first CEO of the resulting entity,
Kotak Mahindra Primus Ltd.

Awards

Recent achievements

At Kotak Mahindra Group we take a client-centric view and constantly innovate to provide
you with the best of services and infrastructure. We have regularly received accolades that
stand testimony to our success in this endeavour. Some of our recent achievements are:

 Won ‘Gold Award for Best Innovation – World’s first socially powered bank account’
and ‘Gold Award for Best App developed – World’s first banking application using
Twitter’ awards at the Indian Digital Media Awards 2014 for Kotak Jifi
 Recognised as Highest Fundraising Company in Corporate Challenge category in
Standard Chartered Mumbai Marathon 2014
 Kotak Mahindra Bank was ranked 292nd among India's most trusted brands according
to the Brand Trust Report 2012, a study conducted by Trust Research Advisory. In the
Brand Trust Report 2013, Kotak Mahindra Bank was ranked 861st among India's
most trusted brands and subsequently, according to the Brand Trust Report 2014,
Kotak Mahindra Bank was ranked 114th among India's most trusted brands.
 Adjudged Best Bank among Emerging Banks at Outlook Money Awards 2013

47
Banking
FY2014-15
Kotak Mahindra Bank Ltd. (KMBL)
Uday Kotak - Ernst & Young World Entrepreneur Of The Year Award 2015
Uday Kotak - 'Transformational Business Leader Award' at the AIMA Managing India
Awards 2015
Uday Kotak - 'Entrepreneur of the Decade' by Bombay Management Association (BMA)
Uday Kotak - Banker of the year 2014 by Businessworld magazine
Shanti Ekambaram - Woman of the Year award in the Banking and Financial Services
category for 2013-2014 by IMC Ladies Wing
Shanti Ekambaram - Among Business Today's Most Powerful Women in Indian Business
Best Bank in 2014 by Business India
Most Imminent Bank 2014 by Outlook Money

 Euromoney
Best Private Banking Services (India), 2014.
 ICAI Award
Excellence in Financial Reporting under Category 1 - Banking Sector for the year
ending 31st March, 2012
 Asiamoney
Best Local Cash Management Bank 2012
 IDG India
Kotak won the CIO 100 'The Agile 100' award 2011
 IDRBT
Banking Technology Excellence Awards Best Bank Award in IT Framework and
Governance Among Other Banks' - 2010
Banking Technology Award for IT Governance and Value Delivery, 2008
 IR Global Rankings
Best Corporate Governance Practices - Ranked among the top 5 companies in Asia
Pacific, 2009
 FinanceAsia
Best Private Bank in India, for Wealth Management business, 2009
 Kotak Royal Signature Credit Card
Was chosen "Product of the Year" in a survey conducted by Nielsen in 2009

48
  IBA Banking Technology Awards
Best Customer Relationship Achievement - Winner 2008 & 2009
Best overall winner, 2007
Best IT Team of the Year, 4 years in a row from 2006 to 2009
Best IT Security Policies & Practices, 2007
 Euromoney
Best Private Banking Services (overall), 2009
 Emerson Uptime Champion Awards
Technology Senate Emerson Uptime Championship Award in the BFSI category,
2008

Miscellaneous

 Best Local Trade Bank in India

The UK based Trade & Forfaiting Review awarded Kotak Mahindra Bank Ltd. the
Bronze Award in the category of Best Local Trade Bank in India at the TFR Awards
2011.
 LACP Vision Awards 2010 for Annual Report 2010-11
Platinum Award - Best among Banking Category, APAC
Gold Award - Most Creative Report, APAC
Ranked No. 21 among Top 50 Reports, APAC
Ranked No. 87 among the World's Top 100 Annual Reports
 Businessworld
'Most Valuable CEO' overall, 2010 awarded to Mr. Uday Kotak, Executive Vice
Chairman & Managing Director
 CNBCTV 18
 'Best Performing CFO in the Banking/Financial Services sector by CNBCTV 18 CFO
Awards 2010 awarded to Mr. Jaimin Bhatt
 GIREM
GIREM awarded Kotak Realty Funds Group, the "Investor of the Year" Award for
2009
 IBA Banking Technology Awards
Best Use of Business Intelligence - up, 2008
Best Enterprise Risk Management - Runner up, 2008

49
  The Great Places to Work Institute, India
Best Workplaces in India, 2008
 Hewitt
10th Best Employer in India, 2007, 2008 & 2009
 Financial Insights Innovation Award
Best Innovation in Enterprise Security Management in the Asia Pacific Region, 2009
 Frost & Sullivan
Best Passenger Vehicle Finance Company in India, 2006
 CNBC TV 18
Indian Business Leader of the Year, 2008 awarded to Uday Kotak, Executive Vice
Chairman & Managing Director

Banking information

The Bank publishes the standalone and consolidated results on a quarterly basis. The
standalone results is subjected to "Limited Review" by the auditors of the Bank. The same are
also reviewed by the Audit Committee before submission to the Board. Along with the
quarterly results, an earnings update is also prepared and posted on the website of the Bank.
Every quarter, the Executive Vice-Chairman and Managing Director and the Executive
Director(s) participate on a call with the analysts / shareholders, the transcripts of which are
posted on the website of the Bank. The Bank also has dedicated personnel to respond to
queries from investors.

Financial Calendar:For each calendar quarter, the financial results are reviewed and taken
on record by the Board during the last week of the month subsequent to the quarter ending.
The audited annual accounts as at 31st March are approved by the Board, after a review
thereof by the Audit Committee. The Annual General Meeting to consider such annual
accounts is held in the second quarter of the financial year.

50
Stock Exchanges on which listed:

Sr.No Name & Address of Stock Exchange Market Scrip Code

The Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers
1 500247
Dalal Street, Fort,
Mumbai 400 023

National Stock Exchange of India Limited

Exchange Plaza, 5th Floor,
2 KOTAKBANK
Bandra-Kurla Complex,
Bandra, Mumbai 400 051

Luxembourg Stock Exchange BP 165, L-2011

3
Luxembourg

Trading of shares to be in compulsorily dematerialized form:The equity shares of the

Bank have been activated for dematerialisation with the National Securities Depository
Limited and with the Central Depository Services (India) Limited vide ISIN INE237A01028.

Share Transfer System: Applications for transfers, transmission and transposition are
received by the Bank at its Registered Office or at the office(s) of its Registrars & Share
Transfer Agents. As the shares of the Bank are in dematerialised form, the transfers are duly
processed by NSDL/CDSL in electronic form through the respective depository participants.
Shares which are in physical form are processed by the Registrars & Share Transfer Agents,
Karvy Computershare Private Limited, on a regular basis and the certificates despatched
directly to the investors.

Investor Helpdesk:Share transfers, dividend payments and all other investor related
activities are attended to and processed at the office of our Registrars & Share Transfer
Agents. For lodgement of Transfer Deeds and any other documents or for any
grievances/complaints, kindly contact Karvy Computershare Private Limited, contact details
of which are provided elsewhere in the Report.

51
For the convenience of the investors, transfers and complaints from the investors are accepted
at the Registered Office between 9:30 a.m. to 5:30 p.m. from Monday to Friday except on
bank holidays:

Corporate Responsibility

Community investment and development

Kotak Mahindra views Corporate Social Responsibility as an investment in society and in its
own future. Kotak uses the power of its human and financial capital to help in transforming
communities into vibrant, desirable places for people to live. The group leverages its core
competencies in three areas:

 Sustainability
An integral part of all Kotak Mahindra Group activities is to be consistently
responsible to shareholders, clients, employees, society and the environment.
 Economic Development
By helping people achieve their financial goals, Kotak strengthens the fabric of
communities and helps them overcome unemployment and poverty to help them
shape their future.
 Doing My Bit
A growing number of employees are committed to civic leadership and responsibility
with the support and encouragement of the Kotak Group. A number of employees
have been involved in strengthening communities through voluntary work, payroll
giving and management inputs.

For any CSR related queries, please contact:

Group CSR
Kotak Mahindra Bank Ltd
Tel. Board +91 22 6720 6720
Email: cr@kotak.com

52
 CHAPTER-IV
DATA ANALYSIS
AND
INTERPRETATION

53
 Composition of current Assets
(All the amounts are in Cr)

Particulars 2013-14 2014-15 2015-16 2016-17 2017-18 Avg.

Inventory 524.93 675.57 636.76 669.55 815.49 3322.3

Sundry 130.59 272.31 665.00 920.58 1389.59
Debtors
3378.07
Cash and 71.52 56.10 181.04 117.50 159.25
Bank 585.41
Loans & 728.66 926.99 1401.95 1303.54 1378.02
Advances
5639.16
Other 48.87 20.72 0.00 0.00 0.00
current
Assets
Total 1504.57 1951.69 2884.75 2241.62 3742.35 69.59

6000

5000

2013-14
4000
2014-15

3000 2015-16
2016-17
2000 2017-18
Avg.
1000

0
Inventory
Sundry Debtors Cash and
Loans
Bank
&
Other
Advances
current Assets
Total

54
The income statement is also called as income statement, it is considered to be the most

useful of all financial statements. It prepared by a business concern in order to know the

profit earned and loss sustained during a specified period. It explains what has happened to a

business as a result of operations between two balance sheet dates. For this purpose it

matches the revenues and cost incurred in the process of earning revenues and shows the net

profit earned or loss suffered during a particular period.

The nature of Income which is a focus of the income statement can be well understood if

business is taken as an organization that uses “Input” to produce “Output”. The output of the

goods and services that the business provides to its customers. The values of these outputs are

the goods and services that the business provides to its customers. The values of these outputs

art the amounts paid by the customers for them. These amounts are called “revenues” in the

accounting. The inputs are the economic resources used by the business in providing these

goods and services. These are termed “expenses” in accounting.

55
STATEMENT OF CHANGES IN WORKING CAPITAL
Rs in Crors

Working capital turnover ratio 2018

Working capital turnover ratio 2017 2018
Total current Assets
669.55 815.49
Inventories
920.58 1389.59
Sundry Debtors
117.50 159.25
Cash and Bank Balances
0.00 0.00
Other Current Assets
1303.54 1378.02
Loans and Advances

Total 2911.17 3742.35

Total Current Liabilities

Current Liabilities 2903.13 3180.69

Provisions 1594.31 799.68

Total 4497.43 3,980.37

Net working capital -1586.26 -238.02

Increase\decrease in net working
capital -1348.24

56
 10000

8000
6000
4000

2000 Series3

0 Series2
Cash and Bank…
Working capital…

Working capital…

Increase\decrease in…
Sundry Debtors

Loans and Advances

Current Liabilities
Total
Inventories

Provisions

Total
Other Current Assets

Total Current Liabilities

Total current Assets

Net working capital

-2000 Series1

-4000

Interpretation:
The networking capital of KOTAK MAHINDRA LTDhas been decreased to 238.02 Cr the
financial position i.e. the performance of KOTAK MAHINDRA LTDhas decreased and the
current assets defects its current liability.
Note: financial position may depend on long term liabilities and also fixes assets.

57
 STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2016-17)

Rs in cr

Source Rs. Application Rs.

Issue of share capital 39.94 Funds lost in operation 0.00
Repayment of long term loan
Raising of long term loans 0.00 0.00
loans
Purchase of long term
Sale of non-current (fixed) assets 337.70 -1517.64
investments
Non-trading receipts 0.00
Sale of investment 1,378.02
Decrease in working capital -238.02
1517.64 1517.64
TABLE-2
2000

1500

1000

500 Source
Rs.
0
1 2 3 4 5 6 7 Application
-500 Rs.

-1000

-1500

-2000

Analysis:
From the table it is observed that the working capital of company shows decreased trend. The
current Asset of the company has increased Rs 3742.35 in 2017-2018. But the item cash balance
showing increasing trend. The current liabilities of company are decreased in 2017-2018.In the
net working capital of company stood -238.02 It is decreased in 2017-18. The decreasing net
working capital.
Regarding the application of funds 45.27 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 35.57 % respectively.

INTERPRETATION
It is concluded that during the period 2017-18 Increasing gross block and net Decreasing in
working capital.

58
STATEMENT OF CHANGES IN WORKING CAPITAL
Rs in Crors

Working capital turnover ratio 2017

Working capital turnover ratio 2016 2017
Total current Assets
636.76 669.55
Inventories
665.00 920.58
Sundry Debtors
181.04 117.50
Cash and Bank Balances
0.00 0.00
Other Current Assets
1401.95 1303.54
Loans and Advances

Total 2884.75 2911.17

Total Current Liabilities

Current Liabilities 2893.39 2903.13

Provisions 1439.86 1594.31

Total 4333.25 4497.43

Net working capital -1448.50 -1586.26

Increase\decrease in net working
capital -137.76

59
 10000

8000
6000
4000

2000 Series3

0 Series2
Cash and Bank…
Working capital…

Working capital…

Increase\decrease in…
Sundry Debtors

Loans and Advances

Current Liabilities
Total
Inventories

Provisions

Total
Other Current Assets

Total Current Liabilities

Total current Assets

Net working capital

-2000 Series1

-4000

Interpretation:
The networking capital of KOTAK MAHINDRA LTDhas been decreased to 137.76 Cr the
financial position i.e. the performance of KOTAK MAHINDRA LTDhas decreased and the
current assets defects its current liability.
Note: financial position may depend on long term liabilities and also fixes assets.

60
STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2015-16)

Rs in cr

Source Rs. Application Rs.

Issue of share capital 39.94 Funds lost in operation 0.00

Repayment of long term loan

Raising of long term loans 0.00 0.00
loans

Purchase of long term

Sale of non-current (fixed) assets 446.38 -1552.10
investments

Non-trading receipts 0.00

Sale of investment 1303.54

Decrease in working capital -137.76

1552.10 1552.10

TABLE-2

100%
80%
60%
40% Rs.
20% Application
0% Rs.
1 2 3 4 5 6 7
-20% Source
-40%
-60%
-80%
-100%

61
 Analysis:
From the table it is observed that the working capital of company shows decreased trend. The
current Asset of the company has decreased Rs 137.76 in 2013-2014. But the item cash balance
showing increasing trend. The current liabilities of company are decreased in 2013-2014.In the
net working capital of company stood -137.76 It is decreased in 2016-17. The decreasing net
working capital.

Regarding the application of funds 39.97 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 28.04 % respectively

INTERPRETATION
It is concluded that during the period 2016-17 Increasing gross block and net Decreasing in
working capital.

62
STATEMENT OF CHANGES IN WORKING CAPITAL
Rs in Crors

Working capital turnover ratio 2016

Working capital turnover ratio 2015 2016
Total current Assets
675.57 636.76
Inventories
272.31 665.00
Sundry Debtors
56.10 181.04
Cash and Bank Balances
20.72 0.00
Other Current Assets
926.99 1401.95
Loans and Advances

Total 1951.69 2884.75

Total Current Liabilities

Current Liabilities 3520.66 2893.39

Provisions 1090.07 1439.86

Total 4610.73 4333.25

Net working capital -2659.04 -1448.50

Increase\decrease in net working
capital -1310.54

63
 10000
8000
6000
4000
2000 Series3

0 Series2
Working capital…

Working capital…

Cash and Bank…

Increase\decrease in…
Loans and Advances
Sundry Debtors
Inventories

Total

Provisions

Total
Current Liabilities
Total current Assets

Total Current Liabilities

Other Current Assets

Net working capital

Series1
-2000
-4000
-6000

Interpretation:
The networking capital of KOTAK MAHINDRA LTDhas been decreased to 1310.54 Cr the
financial position i.e. the performance of KOTAK MAHINDRA LTDhas increased and the
current assets defects its current liability.

64
STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2015-16)

Rs in cr

Source Rs. Application Rs.

Issue of share capital 45.69 Funds lost in operation 0.00

Repayment of long term loan

Raising of long term loans 42.57 5324.51
loans

Purchase of long term

Sale of non-current (fixed) assets 498.62 -2324.340
investments

Non-trading receipts 0.00

Sale of investment 3623.83

Decrease in working capital -1310.54

3000.17 3000.17

TABLE-2

7000
6000
5000
4000 Rs.
3000 Application
2000 Rs.
1000 Source
0
1 2 3 4 5 6 7
-1000
-2000
-3000

65
 Analysis:
From the table it is observed that the working capital of company shows decreased trend. The
current Asset of the company has decreased Rs 1310.54 in 2013-2013. But the item cash balance
showing increasing trend. The current liabilities of company are decreased in 2011 2013.In the
net working capital of company stood -2324.34 It is decreased in 2018-16. The decreasing net
working capital.

Regarding the application of funds 49.61 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 38.67 % respectively

INTERPRETATION
It is concluded that during the period 2018-16 Increasing gross block and net Decreasing in
working capital.

66
STATEMENT OF CHANGES IN WORKING CAPITAL
Rs in Crors

Working capital turnover ratio 2015

Working capital turnover ratio 2014 2015
Total current Assets
524.93 675.57
Inventories
130.59 272.31
Sundry Debtors
71.52 56.10
Cash and Bank Balances
23.77 20.72
Other Current Assets
783.48 926.99
Loans and Advances

Total 1510.52 1951.69

Total Current Liabilities

Current Liabilities 5063.68 3520.66

Provisions 1081.07 1090.07

Total 6144.75 4610.73

Net working capital -4640.21 -2659.04

Increase\decrease in net working
capital -1981.17
8000

6000

4000

2000 Series1

0 Series2
Working capital…

Working capital…

Cash and Bank…

Increase\decrease in…
Loans and Advances
Sundry Debtors

Total

Total
Inventories

Provisions
Current Liabilities
Total Current Liabilities
Total current Assets

Other Current Assets

Net working capital

Series3
-2000

-4000

-6000

67
Interpretation:
The networking capital of KOTAK MAHINDRA LTDhas been decreased to 2659.04 Cr the
financial position i.e. the performance of KOTAK MAHINDRA LTDhas increased and the
current assets defects its current liability.

STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2014-15)

Rs in cr

Source Rs. Application Rs.

Issue of share capital 39.94 Funds lost in operation 0.00

Repayment of long term loan

Raising of long term loans 32.71 4987.36
loans

Purchase of long term

Sale of non-current (fixed) assets 456.37 -2507.91
investments

Non-trading receipts 0.00

Sale of investment 3964.26

Decrease in working capital -1981.17

2479.45 2479.45

TABLE-2

6000

5000

4000

3000
Rs.
2000 Application
1000 Rs.
Source
0
1 2 3 4 5 6 7
-1000

-2000

-3000

68
 Analysis:
From the table it is observed that the working capital of company shows decreased trend. The
current Asset of the company has decreased Rs 2659.04 in 2013-2014is 1951.69. But the item
cash balance showing increasing trend. The current liabilities of company are decreased in 2011
2013.In the net working capital of company stood -1981.17 It is decreased in 2017-18. The
decreasing net working capital .

Regarding the application of funds 41.21 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 34.59 % respectively

INTERPRETATION
It is concluded that during the period 2017-18 Increasing gross block and net Decreasing in
working capital.

69
STATEMENT OF CHANGES IN WORKING CAPITAL
Rs in Crors

Working capital turnover ratio 2014

Working capital turnover ratio 2013 2014
Total current Assets
436.4 524.93
Inventories
108.39 130.59
Sundry Debtors
1907.21 71.52
Cash and Bank Balances
405.76 728.66
Other Current Assets
24.82 48.84
Loans and Advances

Total 2882.58 1504.54

Total Current Liabilities

Current Liabilities 3805.06 5063.68

Provisions 1026.35 1081.07

Total 4831.41 6144.75

Net working capital -1948.83 -4640.21

Increase\decrease in net working
capital -2691.38

100%
80%
60%
40%
20% Series3

0% Series2
Working capital…

Working capital…

Cash and Bank…

Increase\decrease in…
Loans and Advances
Sundry Debtors

Total

Total
Inventories

Provisions
Current Liabilities
Total Current Liabilities
Total current Assets

Other Current Assets

Net working capital

-20% Series1

-40%
-60%
-80%
-100%

70
Interpretation:
The networking capital of KOTAK MAHINDRA LTDhas been decreased to 2691 Cr the
financial position i.e. the performance of KOTAK MAHINDRA LTDhas increased and the
current assets defects its current liability.

71
STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD (2013-14)

Rs in cr

Source Rs. Application Rs.

Issue of share capital 39.94 Funds lost in operation 0.00

Repayment of long term loan

Raising of long term loans 32.71 4699.94
loans

Purchase of long term

Sale of non-current (fixed) assets 424.87 -1765.05
investments

Non-trading receipts 0.00

Sale of investment 5138.75

Decrease in working capital -2691.38

2934.89 2934.89

TABLE-2

0
1 2 3 4 5 6 7
-500

-1000
Year
Increase/Decrease
-1500
Amount

-2000

-2500

-3000

72
 Analysis:
From the table it is observed that the working capital of company shows decreased trend. The
current Asset of the company has decreased Rs 2882.58 in 2010-2011 is 1504.54. But the item
cash balance showing increasing trend. The current liabilities of company are decreased in 2011
2011.In the net working capital of company stood -2691.38. It is decreased in 2013-14. The
decreasing net working capital is Rs 2691.38

Regarding the application of funds 33.71% used for investment in fixed assets and
funds used for working capital purpose. Constitute 30.77% respectively

INTERPRETATION
It is concluded that during the period 2017-18 Increasing gross block and net Decreasing in
working capital.

73
 NET DECREASE IN WORKING CAPITAL
Rs in Lakhs
Year Increase/Decrease Amount
2013-14 Decrease -2691.38
2014-15 Decrease -1981.17
2015-16 Decrease -1310.54
2016-17 Decrease -137.76
2017-18 Decresase -238.02

Amount
0
Decrease Decrease Decrease Decrease Decresase
-500
2013-14 2014-15 2015-16 2016-17 2017-18

-1000

-1500 Amount

-2000

-2500

-3000

TABLE 7
INTERPRETATION
The above table we observed that 2014-15 would be decreased. In the year 2013-14
the working capital is Rs. 2691.38. In 2017-18 Rs.1981.17 has decreased the working capital.
In the year 2016-17 it was 137.76. current year it is -238.02.

74
 CHAPTER-V
FINDINGS
CONCLUSION
SUGGESTIONS
BIBLIOGRAPHY

75
 FINDINGS

1. The KOTAK MAHINDRA LTDnet working capital is satisfactory between the years

2017-2018 since it shows decreasing trend ; but after that it is in declining position.

2. The current ratio of KOTAK MAHINDRA LTDis satisfactory during the period of

study 2013-2014to 2017-18. It is increased but after that it is declining.

3. The average quick ratio of KOTAK MAHINDRA LTDis not good though the quick

ratio is showing maximum value of 6.01 in the year 2017-18 and then it is declining

to be deal.

4. Fixed assets turnover ratio of KOTAK MAHINDRA LTDincreased. The company

has to maintain this.

5. Inventory turnover ratio of KOTAK MAHINDRA LTDis also increased gradually,

without any fit falls up to 2017-18 But in the year 2017-18 it is declined, and again it

has increased in the year 2017-18. Good inventory management is good sign for

efficient management

6. Total Assets turnover ratio of KOTAK MAHINDRA LTDis not satisfactory because

it is always below one, except in the year 2017-18 having a value of 1.03

7. Return on investment is not satisfactory. This indicates that the company’s funds are

not being utilized in a better way.

76
 CONCLUSION

The KOTAK MAHINDRA LTDnet working capital is satisfactory between the years since it

shows increasing trend; but after that it is in declining position Profit Margin of KOTAK

MAHINDRA LTDis decreasing and showing negative profit because there is increase in the

price of copper The KOTAK MAHINDRA LTDNet Working Capital Ratio is satisfactory.

The Operating Ratio of KOTAK MAHINDRA LTDisn’t satisfactory. Due to increase in cost

of production, this ratio is decreasing. So the has to reduce its office administration expenses

Improve position funds should be utilized properly. Better Awareness to increase the sales is

suggested. Cost cut down mechanics can be employed. Better production technique can be

employed.

77
 SUGGESTIONS

 Net working capital is very low; it is suggested to maintain sufficient net working
capital.
 Effective inventory management is needed in the company
 The firm should increase investment in current assets to create sufficient securities for
the current liabilities
 For the improving the financial performance of the company the following
suggestions are made.
 In order to reduce the outside borrowings in the company has to acquire. The capital
from equity sources. Keeping in view the debt equity the proportion as normal.
 The liquidity of the company should be improved by maintaining the optimum current
assets and liquid assets according to standard norms.

 The quantum of the sales generated should be improved impressively in order to

attain higher return on investment.

 To improve the financial health of the company and maximizing the time between the
source mobilization and utilization the management must introduce the new cost
saving techniques.

78
 BIBLIOGRAPHY

1. Khan, M Y and P K Jain, Financial Management, TATA McGraw-Hi

Publishing Co., New Delhi, 2007.

2. I M Pandey, Essentials of Financial Management, Vikas Publishing House Pvt

Ltd, New Delhi, 1995.

3. Prasanna Chandra, financial Management, TATA McGraw-Hill Publishing

Co., New Delhi, 2007.

4. R.K.SHARMA ,Advanced management , Kalyani publishers (2008)

 ANNUAL REPORTS OF KOTAK MAHINDRA LTD2013-2018

www.kotak.com

79