Kotak Mahindra Bank Limited

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate.

The group has a net worth of around Rs.3,200 crore and employs around 10,800 employees across its various businesses servicing around 2.6 million customer accounts through a distribution network of branches, franchisees, representative offices and satellite offices across 300 cities and towns in India and offices in New York, London, Dubai, Mauritius and Singapore.

Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of KMBL, is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December 1998 and has over 4 Lac investors in various schemes. KMMF offers schemes catering to investors with varying risk - return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.

Sponsor

Kotak Mahindra Bank Limited.

The previous Sponsor company, Kotak Mahindra Finance Limited (KMFL) was converted into Kotak Mahindra Bank Limited (Kotak Bank) in March 2003 after being granted a banking license by the Reserve Bank of India. Thus, the Sponsor of the Fund is Kotak Bank. KMFL promoted by Mr. Uday S. Kotak, Mr. S. A. A.

Pinto and Kotak & Co., was incorporated on November 21, 1985 under the name Kotak Capital Management Finance Limited. In early 1986, the promoters were joined by Late Mr. Harish Mahindra and Mr. Anand G. Mahindra and the Company's name was changed to Kotak Mahindra Finance Limited. Kotak & Co. (now Kotak & Co. Limited) is a highly respected trading company of Mumbai, with international business.

KMFL started with a capital base of Rs. 30.88 lakh. From being a provider of a single financial product, KMFL grew substantially during the seventeen years of its existence into a highly diversified financial services company and has now converted into a Bank. As on September 30, 2005, the net worth of Kotak Bank is around Rs. 800 crore and combined with its subsidiaries, the Group net worth (before minority interest) is around Rs. 2,000 crore. There are over 47,000 shareholders of Kotak Bank. The Sponsor and its subsidiaries / associates offer wide ranging financial services such as loans, lease and hire purchase, consumer finance, home loans, commercial vehicles and car finance, investment banking, stock broking, primary market distribution of equity and debt products and life insurance. The group has offices in over 88 Indian cities and also present internationally in Mauritius, London, Dubai and New York. Kotak Mahindra (UK) Limited, an ultimate subsidiary of Kotak Bank, is the first company owned from India to be registered with the Financial Services Authority in UK. Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Bank and Old Mutual Plc based in the UK and with large presence in the South African insurance market. Some of the other subsidiaries of Kotak Bank are Kotak Mahindra Securities Limited, Kotak Mahindra Prime Limited, Kotak Mahindra International Limited, Kotak Mahindra Private-Equity Trustee Limited, Kotak Mahindra Investments Limited, Kotak Mahindra Inc., and Kotak Forex Brokerage Limited.The Sponsor has been consistently profitable and dividend paying company since inception. All group companies are professionally run companies, employing over 5,000 professional staff including CAs, MBAs and Engineers.

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited.

Since then Kotak Mahindra’s been a steady and confident journey to growth and success: 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987.

Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started

1991

The Investment Banking Division is started. Takes over FICOM, one India's largest financial retail marketing networks 1992 Enters the Funds Syndication sector.

1995:

Brokerage and Distribution businesses incorporated into a separate

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

1996:

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

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

2000:

Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance

business.

Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.

2001:

Matrix sold to Friday Corporation Launches Insurance Services

2003:

Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian company to do so.

2004:

Launches India Growth Fund, a private equity fund.

2005:

Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund

2006:

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

Directors trustee company:

Mr. Amit Desai is a graduate in Commerce and Law from the Bombay University. He is an advocate and has about 20 years of experience in criminal, economic and revenue laws. Mr. Desai is associated with the Sponsor.

Mr. Girish Sharedalal is a graduate in Commerce and Arts and also a Fellow of the Institute of Chartered Accountants of India. Formerly a Senior Partner of Messrs Dalal, Desai and Kumana, a firm of Chartered Accountants, he has about 44 years of experience in the field of audit, taxation and management consultancy.

Mr. Tushar Mavani is a graduate in Commerce and Law from the Bombay University. He is a partner with Messrs Mulla & Mulla & Craigie Blunt & Croe and has about 14 years of experience in the legal field.

Mr. Anirudha Barwe is a postgraduate in Mathematics and also a Certified Associate of Indian Institute of Bankers, Mumbai. Mr. Barwe has about 43 years of experience in the field of banking and financial services. Mr. Barwe was actively associated with and responsible to a great extent for the success of the Resurgent India Bond issue of SBI. Mr. Chandrashekhar Sathe is a graduate with B. Tech. (Chemical Engineering) from IIT, Mumbai. He has over 27 years' experience in Banking and Finance. He has been a part of the Senior Management team of the Kotak Mahindra Group since 1992 and was responsible for setting up the Fixed Income Securities capability of Kotak Mahindra Capital Company. Prior to Kotak Mahindra, he was with the Bank of Nova Scotia and Bank of Maharashtra and has wide ranging experience in Banking, Finance, Administration, Credit, Foreign Exchange and Money Markets. Mr. Sathe is a widely consulted expert on Foreign Exchange and Money Markets in India and is a frequent contributor to financial newspapers, magazines and TV News channels.

Directors of AMC

Mr. Uday S. Kotak, 46, is a graduate in Commerce and a post-graduate in Business Administration from Jamnalal Bajaj Institute of Management Studies of Mumbai University. Mr. Kotak has over 18 years of experience in the financial services industry. Mr. Kotak is the Vice Chairman and Managing Director of the Promoter, and the chairman of various other companies Mr. R. C. Khanna, 79, is a graduate in Commerce from London University, Fellow of the Institute of Chartered Accountants of England & Wales, Fellow of the Institute of Chartered Accountants of India, Associate of the Chartered Institute of Management Accountants, London and Associate of the Institute of Cost and Works Accountants of India.

Mr. Sukant S. Kelkar, 66, is a post-graduate in commerce. He has about 40 years of experience in finance, capital markets, and related areas. Mr. Kelkar has over 10 years experience in the Bank of India, and has even been a foreign exchange dealer in London for 3 years during this tenure.

Mr. Chengalath Jayaram, 48, holds a postgraduate diploma in Management from IIM, Calcutta, and has over 25 years' experience in the field of Finance. Mr. C. Jayaram began his career nearly two decades ago in the Financial Services industry. He joined the Kotak Mahindra Group in 1990, before which he had worked with several renowned organizations such as ICICI Limited and A. F.

Fergusons. At Kotak Mahindra, besides being instrumental in setting up the car finance business, he was also responsible for the distribution business, which was then called FICOM.

Mr. Bipin R. Shah, 73, a member of the Institute of Chartered Accountants of India, holds a Bachelor's Degree in Commerce from Bombay University, and has 48 years of work experience. Mr. Shah began his career in 1956, with Hindustan Lever Limited, where he held various Senior Commercial Assignments, including the post of Commercial Manager at its largest soaps, detergents and foods factory in Bombay, Chief Buyer, Raw Materials and Head of Foods Business.

Mr. Narayan S. A., 44, is a member of the Institute of Chartered Accountants of India, holds a Bachelor's Degree in Commerce from Bombay University, and has spent 13 years in the Kotak Group, handling various responsibilities and portfolios.

Key Employees of Asset Management Company:

Chief Executive Officer: Mr. Sandesh Kirkire, 41, is a Mechanical Engineer, and holds a Masters degree in Management Studies from Jamnalal Bajaj Institute of Management Studies (JBIMS), Mumbai University. Following assignments with SBI Capital Markets Ltd. and ITC Bhadrachalam Finance & Investments Ltd., Mr. Kirkire joined the Kotak Mahindra Group in 1994. His 15 years of experience in the financial services space spans Corporate Finance, Proprietary Trading, Investment Banking, Treasury Sales, Debt Market Trading and Debt Fund Management. Mr. Kirkire has earned several awards in his last assignment as CIO (Debt) with the AMC, a position he held till May 2005.

Chief Strategist and Global Head Equities Asset Management:

Mr. Alroy Lobo, 42 years, is a Mechanical Engineer, Masters Degree in Management Studies from Sydenham Institute of Management, Mumbai University. Past experience of over 13 years in Institutional Equities. Worked as Equity research analyst (pharmaceuticals, technology), head of research and equity strategist. His prior assignments were with HMG Financial Services in equity research and with Godrej and Boyce in evaluating companies as vendors.

Mr. Lobo’s last assignment was Head of Institutional Equities at Kotak Securities.

Chief Operations Officer: Mr. R. Krishnan, 36, is a Chartered Accountant and Cost Accountant with over 11 years of experience in the fields of Operations, Systems, Finance, MIS, Accounting, Audit and Taxation. Prior to joining the Kotak Group in August 1994, Mr. Krishnan was a practicing Chartered. Accountant for two years, handling Accounting, Audit and Taxation matters for clients. Since joining the Kotak Group, Mr. Krishnan has handled major assignments like the US GAAP implementation for the erstwhile Kotak Mahindra Finance Limited (KMFL) and subsidiary/group companies, Systems Development and Implementation, for the Retail Assets Group and KMFL's transition to Kotak.

Bank. Mr. Krishnan's latest assignment was as Head - Operations, Retail Assets, at Kotak Bank. Mr. Krishnan joined Kotak Mutual in August 2004 as Senior Vice President, and Chief Operations Officer, and oversees the Operations, Accounting and IT functions of the Fund.

Compliance Officer: Mr. V.R.Narasimhan, 49, Post graduate in commerce, business administration and member of the Institute of company secretaries of India. He was associated with NSDL- the first depository in the country since its inception. He was designated as Senior Vice President at NSDL immediately before joining Kotak AMC. He has total experience of over 25 years of which four years was as faculty at university level, about 10 years in a state level development financial institution, about three years in a national level market regulator and about 10 years in the depository.

Awards:

NDTV AWARDS, 2006

LIPPER FUND AWARDS, 2006

ICRA AWARDS, 2006

ICRA MFR 1 (December 2004 & December 2005)

OUTLOOK MONEY BEST WEALTH CREATOR DEBT 2003

CRISIL BEST FUND AWARD 2003

Some of the Schemes offered by Kotak mutual fund Kotak-30 (Open Ended Equity Scheme)

About the Schemes: A large cap diversified scheme, which invests in companies with a medium to long-term view. The scheme follows a bottom-up approach to stock selection. The fund has predominantly invested into blue chip large market capitalization companies. Also small portion of the funds is invested in medium capitalization companies, which have the potential to become blue chip companies of tomorrow. Thus the investment strategy is to take balanced exposure across sectors while maintaining less than 30% exposure to mid-cap stocks.

Allotment Date: Dec 29, 1998

Corpus: Rs. 588.17 Crores

Fund Manager: Krishna Sanghvi,Sanjib Guha

Fund Manager’s View: Indian Economy is expected to do well over medium to long-term on back of favorable demographics fueling consumption demand, growing exports and government's thrust on Infrastructure development.

Corporate earnings too have been on the rise as is evident from the robust tax collections. It is therefore reasonable to expect India's growth momentum to sustain over a longer period. It is also heartening to note that almost 67% of India's GDP is consumption led, rendering sustainability to this growth engine.

Equity as an asset class is typically recommended for investors with a long-term horizon. Also to benefit from short-term volatility of markets, SIP/STP is the preferred way of investing.

Scheme Feature:

•        Investment Objective: To generate capital appreciation from a portfolio of predominantly equity and equity related securities with investment in not more than 30 stocks.

•        Investment Horizon: 1 - 3 years

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 5000

•        Additional investments: Rs 1000

•        Returns since its inception (Dec 29,1998) : 34.9%

•        Entry Load:

[1]     Where the purchase amount/switch in amount is equal to or more than Rs. 5crores: Nil.

[2]     Where the switch in is from an Equity/Balanced/Equity FOF Scheme to an Equity/Balanced/Equity FOF Scheme: Nil

[3]     Where investments is made by FIIs or sub a/c of FIIs:Nil.

[4]     Where investments is made by Fund of Funds as defined under SEBI Regulations: Nil.

[5]     Where units are allotted upon reinvestment of Dividends: Nil Cases not covered above:2.25%.

•        Exit: For exit within 6 months for investments less than Rs 5 crores Cases not covered above: NIL

Kotak Opportunities: (Open Ended Equity Scheme)

About the Scheme: Kotak Opportunities is a diversified equity scheme, with a flexible investing style. It will invest in sectors, which the Fund Manager believes would outperform others in the short to medium-term. By virtue of its flexible investment pattern, the fund is uniquely positioned to increase concentration sectors which look promising. As markets evolve and grow, new opportunities for growth keep emerging. Kotak Opportunities would Endeavour to capture.

Fund Managers: Krishna Sanghvi & Anurag Jain.

Fund Manager View: Indian Economy is expected to do well over medium to long- term on back of favorable demographics fueling consumption demand, growing exports and government's thrust on Infrastructure development.

Corporate earnings too have been on the rise as is evident from the robust tax collections. It is therefore reasonable to expect India's growth momentum to sustain over a longer period. It is also heartening to note that almost 67% of India's GDP is consumption led, rendering sustainability to this growth engine. Equity as an asset class is typically recommended for investors with a long-term horizon. Also to benefit from short-term volatility of markets, SIP/STP is the preferred way of investing.

Scheme Feature:

Investment Objective: To generate capital appreciation from a diversified portfolio of equity & equity related instruments.

•        Investment Pattern: Equity & Equity related securities: 65% - 95%. Debt & Money Market Instruments: 5% - 35%

•        Investment Horizon: 1 - 3 years

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 5000

•        Additional investments: Rs 1000

•        Returns since its inception (Dec 29,1998) : 61.9%

•        Entry Load: Same for all the open ended.

Kotak Tax-Saver: (Open-Ended Equity Linked Savings cheme)

About the scheme: Kotak Tax saver offers the investor the dual advantage of potential capital appreciation as well as tax savings (as applicable). The portfolio offers a diversified mix across various sectors. As it is a close ended architecture, the investor has to compulsorily lock in ones fund for 3 years.

Fund Managers: Krishna Sanghavi, Anurag

Fund Managers View: Indian economy is expected to sustain its growth momentum in the coming years on the back of growing consumption, demand for infrastructure and an increasing trend towards outsourcing. We expect the Indian economy to be resilient against any shocks in the global economy due to huge base of domestic consumption. The improving demographic profile of the country and growing urbanization are likely growth drivers. Focus of the fund is to capitalize on the investment opportunities in the economy with long-term perspective. The investors in this fund has to invest with a minimum of 3 years horizon, hence investment of the fund is made in companies which can create greater performance over longer period of time. The fund focuses on a bottom up style of investing.

Scheme Feature:

Investment Objectives: To generate capital appreciation from a diversified portfolio of equity & equity related securities and enable investors to avail the income tax rebate, as permitted from time to time.

Investment Pattern: Equity & Equity related securities : 80% - 100% Debt & Money Market instruments : 0% - 20%

Investment Horizon: 3 years & above.

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 500

•        Additional investments: Rs 500

•        Returns since its inception (Dec 29,1998) :

•        Entry & Exit Load: Same for all the open ended.

Kotak Contra: (Open Ended Equity Scheme)

About The Scheme: Kotak Contra follows a contrarian style of investing. The preference is for bargain hunting rather than the momentum approach to stock picking. This would imply that the stock may be undervalued at the time of investing, but are fundamentally sound and have a good long-term growth potential.

Fund Manager: Sanjib Guha , Anurag Jain

Fund Manager’s View: The growth momentum of Indian economy is expected to continue going ahead as well. It has been observed that different sectors pitch in at different point of times to fuel the overall growth. Also there are always fundamentally attractive investment opportunities which might be temporarily neglected / not recognized by the broader market. At Kotak Contra Fund we strive to benefit from both the above situations. We employ both top-down and bottom-up investment styles to pick investment opportunities that the market is expected to discover and reward over a longer investment horizon.

Scheme Feature:

Investment Objectives: To generate capital appreciation from a diversified portfolio of equity & equity related instruments.

Investment Pattern: Equity & equity related securities: 65% - 100%, Debt & Money Market instruments: 0% - 35%

•        Investment Horizon: 1-3 years.

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 5000

•        Additional investments: Rs 1000

•        Returns since its inception (Dec 29,1998) :

•        Entry & Exit Load: Same for all the open ended.

Kotak MNC: (Open Ended Equity Scheme)

About The Scheme: A scheme diversified across sectors that invest in Multinational companies having business in India. The scheme follows a bottomup approach to stock selection and the investment strategy is to make aggressive allocation across select sectors. The investment focus is on companies that have good governance, strong brands.

Fund Managers: Krishna Sanghavi, Anurag Jain

Fund managers View: Kotak MNC invests in a diversified portfolio of multinational companies to generate capital appreciation. We are very positive on the MNC theme to drive long term value for shareholders driven by: The strong growth in Indian economy provides a large and fast growing market for the MNCs making the Indian subsidiaries a focus area in their portfolio.

Hence, technology and new product support would continue in the Indian entity driving business growth. These companies being low-cost centers also have the opportunity to become global outsourcing hub for the parent with huge business opportunity. Many of these companies are also de-listing candidates and hence creating further value for their shareholders.

Scheme Feature:

Investment Objectives: To generate capital appreciation from a portfolio of predominantly equity and equity related securities issued by multinational companies.

Investment Pattern: Equity & Equity related securities: 60% - 100%, Debt & Money Market securities: 0% - 40%

•        Investment Horizon: More 1 year.

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 5000

•        Additional investments: Rs 1000

•        Returns since its inception (Dec 29,1998) :

•        Entry & Exit Load: Same for all the open ended.

Kotak Tech: (Open-Ended Equity Scheme)

About The Scheme: It is a sector scheme, investing only in IT sector companies. As it is a sectoral /thematic fund, investors in this fund will need to have a relatively longer investment horizon. This is necessary as any sector has its own peaks and bottoms in a cycle. The fund manager invests with a long-term perspective and therefore it would be reasonable to assume that any sector story yields results over a longer period of time.

Fund Managers: Sanjib Guha, Anurag Jain

Fund Manager’s View: The mandate of the fund has been widened to include Telecom and Media stocks along-with IT. Post the INR appreciation and the US slowdown scare IT companies are now trading at close to all time low valuations.

However, business models of the large IT companies are very robust with diversification across geographies, verticals and practices and business traction remaining very strong. These are good businesses and would continue to outperform in the long term. Telecom and Media stocks are strong domestic consumption stories and continue to have good earnings visibility.

Investment Objectives: To generate capital appreciation from a portfolio of predominantly equity and equity related securities in technology, other technology enabled companies and related sectors as given in the investment strategy.

Investment Pattern: Equity & Equity related securities: 60% - 100% , Debt & Money Market instruments: 0% - 40%

•        Investment Horizon: More 1-3 years.

•        Investment Options: Growth, Dividend Payout, Dividend Re-Investment.

•        Minimum Investment: Rs. 5000

•        Additional investments: Rs 1000

•        Returns since its inception (Dec 29,1998) : 32%

•        Entry & Exit Load: Same for all the open ended.

KOTAK MID-CAP: Open Ended Equity Growth Scheme

Investment Objectives:To generate capital appreciation from a diversified portfolio of equity and equity related securities.

Fund Managers: Krishna Sanghvi and Anurag Jain.

Loads: Same to all the schemes

Minimum Initial Investment: Rs. 5000

Additional Investments: Rs 1000 & in multiples of Re.1

Ideal Investment Horizon: 1-3 Years

Corpus: Rs 239.92 crores

Returns from its inception (September 28, 2007): 54.1%

Operational definition of concepts:

Mutual Fund: Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Net asset value: Net Asset Value is the market value of the securities held by the scheme.

Sponsor: Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund.

Open-ended Funds: An Open-ended Fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.

Close-ended Funds: A Close-ended Fund has a stipulated maturity period, which generally ranges from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices.

Systematic Encashment Plan: Systematic Encashment Plan that allows the investor the facility to withdraw a pre-determined amount / units from his fund at a pre-determined interval.

ULIP: Unit-linked life insurance products are a combination of insurance and mutual funds.

AMC: Asset Management Company is the company appointed by the Trustee as the Investment Manager of the Mutual Fund.

These are the Products of Kotak Mahindra Bank Ltd.