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ANNUAL REPORT2012-13

Prudenceand Simplicity

Kotak Mahindra Old Mutual Life Insurance Limited

1ANNUAL REPORT 2012-13

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DIRECTORS REPORT

TO THE MEMBERS OF KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

Your Directors take great pleasure in presenting their Thirteenth Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31, 2013.

FINANCIAL RESULTS

Your Company continues to demonstrate a consistent performance in a challenging and competitive environment. This year the Company continues to be profitable, which it has achieved through a better product mix, management of capital and cost management. The summarised results of operation of the Company for the Financial Year 2012-13 are as follows: (Rs. in Crores)

Particulars Year ended March 31, 2013

Year ended March 31, 2012

New Business Premium 1,188 1,164

Renewal Premium 1,590 1,773

Total Premium 2,778 2,937

Profit/(Loss) before tax 212 211

Profit/ (Loss) after tax 203 211

Bonus to Policyholders 42 33

Net worth 803 613

New Business Sum Assured 106,847 90,474

Assets Under Management 10964 9724

2 KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

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Your Directors have declared the following rates of bonus on participating policies for the year ended 31st March 2013:

(a) 7% (2012 7%) on accumulation non retirement products to participating life policyholders which comprises 4% cash bonus in addition to the guaranteed rate of 3%. Additionally, terminal bonus of 10% for the policies matured, death claims benefit paid during the year.

(b) 8% (2012 8%) to Annuity participating policyholders which comprises 5% cash bonus in addition to the guaranteed rate of 3%. Additionally, terminal bonus of 10% for the policies matured, death claims benefit paid during the year.

(c) A reversionary bonus of 2% (2012 -2%) for all plans (2.25% simple reversionary bonus for policies completing 5th policy year in Surakshit Jeevan Plan, Eternal Life Plan).

DIVIDEND

Your Directors do not recommend any dividend for the current year.

CAPITAL

Your Company is one of the efficient capital users in the life insurance space having good Assets under Management to Capital ratio. During the year under review, the Authorised Share Capital of your Company was Rs. 625 Crores, while the Paid-up Share Capital of your Company was Rs. 510 Crores. There has been no capital infusion in 2012-13. LICENCE

The Insurance Regulatory and Development Authority has renewed your Companys licence to carry on the business of life insurance and annuity for the year 2013-14.


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BUSINESS AND DISTRIBUTION CHANNELS

a) Individual Business

The year witnessed increased focus towards traditional products and an increasing trend towards long-term selling, which augurs well for the Industry. Your Company has driven protection and long term savings (PALTS) across its distribution verticals.

Your Companys Life Advisors and the distribution team worked hard to successfully adapt to changes in their operating environment. Life Advisors exiting the profession is a challenge for the Industry as a whole. Your Company is working on the challenge and remains confident of adjusting to changes in the Industry and environment and improve its distribution strength.

Your Company continues to focus on distribution efficiency and will ensure that it remains a key deliverable in next fiscal as well. Investment in training Life Advisors and sales hierarchy have been stepped up to ensure that the distribution is equipped to meet customers expectations.

Kotak Mahindra Bank has a share of 62% (APE basis) of Alternate Channel business for Financial Year 2012-13. Besides Kotak Mahindra Bank, we have agency tie ups with cooperative and commercial banks, corporate agents and brokers which also contribute to the premium income.

b) Group Business

Your Company provides a range of products from Term Insurance, Group Gratuity and Group Mortgage Insurance Schemes to cater to its group clientele. Your Company generated a premium income of Rs. 500 Crores (FY 2011-12 Rs. 354 Crores) from the group insurance business representing a growth of 41.2% over FY 2011-12.


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PRODUCTS

Your Company launched Kotak Assured Protection Plan, a unique and first of its kind traditional product which offered the customer Complete Protection or protection against every conceivable outcome during the term, such as natural death, accidental death, accidental disability, critical illness or on survival at end of the term. This is an innovative product in the Industry to provide for all these benefits in a single product. Your Company also launched Kotak Single Invest Plus, a single premium unit linked joint life plan. Your Company also launched two Group Products in the Traditional Non Par Segment Kotak Secure Return Gratuity Plan and Kotak Secure Return Leave Encashment. A Leave Encashment product has been introduced for the first time in your Companys product portfolio. MARKETING Your Companys marketing efforts during the year were focused on establishing your Companys core purpose of adding value to peoples lives through Protection & Long Term Savings (PALTS) and reinforcing the culture of customer-centricity in every outreach.

Your Companys website was redesigned to reflect this commitment and it has fared well on usability tests and user surveys, on criteria of ease of use, navigation, design and content.

Your Company also reworked on its recruitment and sales tools to make them more effective. Comprehensive kits were created in keeping with the essence of various channels, to drive volumes in Life Advisor recruitment and to attract good talent. Sales enablers were also designed in keeping with PALTS and transformed sales strategies.

Your Companys Facebook application won a Bronze at the Campaign India Digital Media Awards. Your Companys innovative use of in-car advertising in Meru cabs won it a Bronze in the new media category. Your Companys Facebook page has crossed 1 Lakh fans.

RURAL AND SOCIAL SECTORS

During the year, your Company wrote 36091 policies (Previous year 46053) in the rural sector representing 21.3 % (Previous year 22.2 %) of the total policies. This is


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against the Regulatory requirement as per the IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations, 2002 of 20% (Previous year 20%) of the total policies written in the financial year from the rural sector. Outperforming the Regulatory requirement of covering 55,000 lives in the social sector, your Company covered 509279 lives (Previous year - 178470 lives). Your Company takes the rural and social sector target seriously with a sense of duty towards the community. INDUSTRY SCENARIO

The private industry has witnessed a fall of 6% in new business premiums over the previous year. In this new environment of sluggish growth, focus of insurers will shift from large-scale expansion to sustained value creation and efficient use of capital coupled with productivity of distribution channels. A fresh set of Regulations which have bearing on all categories of products, across the Industry, were released in the beginning of March and your Companys product design efforts would be directed to ensure that the present products are revamped and are ready and available to customers on time.

HUMAN RESOURCES Your Companys HR department has been, for a fourth year in a row, re-certified with the ISO certification for the year for its HR operations. Last year, your Company has successfully embarked on a restructuring exercise and this has resulted in rationalization of managerial spans and building role clarity at all levels. The full cost benefits of the exercise shall become visible from the coming year. Your Company has also focused on building managerial skills in the areas of team and people leadership and execution management. The focus in the current year is to further build on the managerial skills to execute with greater effectiveness and integrate new managers into the Kotak Way. INFORMATION TECHNOLOGY

Your Company is continuing its journey of creating a risk-free, innovative, secure and scalable technology infrastructure to enable your Company to achieve the growth that it desires. Several initiatives have been taken to empower distribution channels to achieve


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growth, improve persistency, to enhance customer service and improve process efficiency with a constant focus on compliance and risk management. Your Company implemented KRUX an IT system for Persistency management. This will help us in taking pro-active measures at all levels to ensure that customers remain invested through the entire term in turn helping us achieve our core purpose of PALTS. The Insurance One system which was implemented for Policy Servicing last year has now been extended to Underwriting and Claims. This has enabled us to automate several manual processes, extend them to the branches thereby reducing the resolution time. Since this offers better controls, risks would be significantly reduced in these core areas. OPERATIONS AND CUSTOMER SERVICE

Your Company is committed to best in class customer service and recognizes it to be a key long term strategic differentiator. Towards this end, during the course of the year, your Company invested in several initiatives to make the customers experience seamless and pleasant. a. Your Company introduced multiple new modes through which customers can pay

premiums apart from expanding and strengthening existing ones. Your Companys customers can now pay premiums through debit and credit card online, or through credit card at branches or over the Companys Interactive Voice Response (IVR) system, or pay using a mobile device through the Interbank Mobile Payment Service (IMPS), a first in the insurance sector. Your Company has extended the Regional Electronic Clearing Service (RECS) facility to 16 states and the direct debit facility to 14 Banks, besides enabling customers to pay via standing instructions on their Kotak Bank Credit Card.

b. In line with your Companys avowed commitment to sustainability, your Company actively encourages customers to shift from paper based communication to paperless communication via the electronic mode.


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c. Your Company has enhanced its online policyholder self-service platform, Online Policy Manager, with several features to improve its usability such as auto registration facility and premium calendar.

COMPLIANCE AND INTERNAL CONTROL

The Compliance function is not only the custodian of Regulatory framework but also counsels other functions within the Company on the changing Regulations and their implications within the Industry. During the Financial year all regulatory changes were implemented in a seamless and time bound manner. Your Company received the final order in respect of inspection carried out in 2011. Appropriate corrective actions have been carried out wherever required. Your Company believes and engages in proactive compliance and ensures that its practices are among the best in the Industry. Your Company has a Compliance Policy and Risk Management framework in place, in order to mitigate risks across various functions of the Company and suitable measures are taken to proactively manage risks at all levels. Compliance processes of your Company are also complemented by independent audit conducted across various functions. As a part of good Corporate Governance, the Audit Committee reviews the findings of the Internal Auditors who report directly to the Audit Committee.

INVESTMENTS

Your Company manages its investments within the overall framework laid down by the Investment Policy and provisions of IRDA Investment Regulations, 2000 and Insurance Act, 1938. The Investment function works under the overall supervision of Investment Committee of the Board. Your Company has implemented systems to help in analysis of investment portfolio, which acts as an enabler to the front-end Investment team in asset allocation and stock selection. Further, your Company has well-staffed Investment team which has been structured for effective function and independent checks to constantly monitor investment performance and analysis. The total Assets under Management for the Traditional and Unit Linked Funds was Rs. 10,964 crores as at March 31, 2013 as against Rs. 9,724 crore as at March 31, 2012 registering a growth of 13% over the previous year. Financial Year 2012- 2013 was


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volatile for Markets. During the year 10 year benchmark Government Security yield has gone down from 8.57% as at March 31, 2012 to 7.95% as at March 31, 2013 and has seen a high and low of 8.76% and 7.80% respectively, while the NIFTY has gone up from 5,296 as at March 31, 2012 to 5,683 as at March 31, 2013 with a high of 6,082 and low of 4,836 during the year.

CORPORATE GOVERNANCE

Your Company has consciously endeavoured to follow the policy of transparency and accountability and holds the interest of its stakeholders paramount. Your Company has implemented the requirement of Corporate Governance circular issued by IRDA. (Note: A separate section pertaining to Corporate Governance compliance is appended to this

document)

BOARD OF DIRECTORS AND COMMITTEES Your Company has nine Directors on its Board. Eight of the Directors are Non-Executive Directors of which three are Independent Directors. Chairman of the Board holds a Non-Executive position and Chairman of Audit Committee is an Independent Director.

Mr Shivaji Dam and Mr Gaurang Shah, Directors of your Company, are liable to retire by rotation at the ensuing Annual General Meeting of your Company. Mr Shivaji Dam and Mr Gaurang Shah, being eligible, offer themselves for reappointment.

The detailed composition of the Board and various Committees along with the list of meetings held, are disclosed as part of the annexed report on Corporate Governance.

Mr. S. S. Thakur and Mr. Ralph Mupita resigned from the Board and ceased to be Directors of your Company. Your Company wishes to place on record the valuable contribution of Mr. S.S. Thakur and Mr. Ralph Mupita during their association with the Company. Your Company also wishes to place on record the contribution of Mr. S. S. Thakur as Chairman of the Audit Committee. AUDITORS

M/s S. R. Batliboi & Co. LLP, Chartered Accountants and M/s Walker, Chandiok & Co. Chartered Accountants, the Joint Auditors of your Company, hold office until the


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conclusion of the ensuing Annual General Meeting of your Company. As per the requirements of the Regulations, M/s S.R. Batliboi & Co. LLP, one of the retiring Auditors will not be offering themselves for reappointment as they have completed 5 years tenure. It is proposed to appoint M/s Contractor, Nayak & Kishnadwala as one of the joint auditor in place of M/s S.R. Batliboi & Co. LLP, M/s Walker, Chandiok & Co. being eligible, have offered themselves for reappointment. The shareholders are requested to consider appointment of M/s Contractor, Nayak & Kishnadwala and M/s Walker, Chandiok & Co. as Joint Statutory Auditors of the Company in the ensuing Annual General Meeting. MANAGEMENT REPORT

Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002, the Management Report forms a part of the financial statements. STATUTORY INFORMATION

PUBLIC DEPOSITS: During the period under review, your Company has not accepted any deposits from the public.

PARTICULARS OF EMPLOYEES: The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 is enclosed herewith.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND EXPENDITURE:

1. Conservation of Energy and Technology Absorption The particulars in the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 pertaining to conservation of energy do not apply to life insurance industry and hence are not applicable.


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Information Technology Your Company leverages information technology as a strategic tool to gain competitive advantage and to improve productivity and efficiency of the organisation. Our platforms are designed to service scale and are capable of handling high customer and transaction volumes. We have used technology to deliver process improvements, innovations and to add value to our services to the customers.

2. Foreign Exchange Earnings and Expenditure (Rs. in Crore)

Particulars 2012-13

Foreign Exchange earned 2.24

Foreign Exchange expenditure 35.24

DIRECTORS RESPONSIBILITY STATEMENT

Based on representations from the Management, your Directors state, in pursuance of Section 217(2AA) of the Companies Act, 1956, that:

a. Your Company has, in the preparation of the annual accounts for the year ended 31st March, 2013, followed the applicable accounting standards alongwith proper explanations relating to material departures, if any;

b. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2013, of the surplus in the Revenue Account and the surplus in the Profit and Loss Account of your Company for the financial year ended 31st March, 2013;

c. The Directors have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and


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d. The Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors thank the Insurance Regulatory and Development Authority for its continuous support. The Directors are grateful for the continued faith that the policyholders have reposed. The Directors acknowledge the support extended by their shareholders and express their appreciation of the fine performance of the employees that made this year a notable one.

For and on behalf of the Board of Directors

Uday Kotak Chairman

Mumbai April 29, 2013


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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LTD.

MANAGEMENT REPORT FOR THE YEAR ENDED MARCH 31, 2013

In accordance with the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002, the Board of Directors presents its Management Report for the year ended March 31, 2013.

1. Validity of Registration: Your Directors confirm that the registration granted to the Company by the Insurance Regulatory and Development Authority is valid on this date.

2. Statutory Dues: Your Directors certify that all the dues payable to the statutory authorities have been duly paid.

3. Shareholding pattern: Your Directors confirm that the shareholding pattern and transfer of shares during the year are in accordance with the statutory and regulatory requirements

4. Investment of policyholders funds: During the year, your Company has not directly or indirectly invested outside India the funds of the holders of policies issued in India.

5. Solvency margins: Your Directors confirm that the solvency margins as required by regulations prescribed by Insurance Regulatory and Development Authority of India have been maintained.

6. Values of assets: Your Directors certify that the values of all the assets have been

reviewed on the date of the Balance Sheet and that the assets set forth in the Balance Sheet are shown in the aggregate at amounts not exceeding their realisable or market value under the several headings Loans, Investments(except fixed income securities held in the Shareholders account and non-linked Policyholders account which are carried at amortised cost as indicated in this paragraph), Agents balances, Outstanding Premiums, Interest, Dividends and Rents outstanding, Interest, Dividends and Rents accruing but not due, Amounts due from other persons or bodies carrying on


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insurance business, Sundry Debtors, Bills Receivable Advances and other assets, Cash and the several items specified under Other Accounts.

All debt securities held under Shareholder and Non Linked Policyholder investments are considered as held to maturity for the purpose of valuation and are accordingly stated at historical cost i.e. at net amortized cost in the Balance Sheet. As at March 31, 2013 the market value of these investments are higher by Rs. 33,209 thousand. The higher market value is attributable to the fall in yields since their purchase.

7. Application of life insurance funds: Your Directors certify that no part of the

life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investment of the life insurance funds.

8. Risk exposure: Your Company recognises the risks associated with the life

insurance business and plans to manage it by adopting prudent policies commensurate with the needs of the life insurance business. The key risks affecting the operations of the Company are underwriting risks, investment risks and operational risks.

The underwriting risk is managed by the Companys underwriting function and further by establishing reinsurance treaties with various reinsurance companies. All risks above the pre-determined retention limits are reinsured.

The investment risk is managed by creating a portfolio of different asset classes and of varied maturities so as to spread the risk across a wide category of investee companies. Your Company has constituted an Investment Committee of the Board of Directors, which acts as the policy making body for the investment operations. The Investment Committee lays down various internal policies and norms governing the functioning of the Investment Department. The investment strategy framed is kept appropriate to the underlying liabilities of the policyholders. The Investment Committee periodically discusses the investment strategy, portfolio structures, performance of the portfolio and other issues relating to the investment portfolio. This is then approved by the Board of Directors. The Investment Committee has in turn constituted the Asset & Liability Management Committee


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(ALM) and Credit Committee. The Asset & Liability Management Committee (ALM) reviews the Asset Liability Management Strategy, Investment Risk Management Strategy and other related risks periodically. The Credit Committee approves the credit limit for each Investee Company and approves the initial investment in any company. The committee also does a periodical review of the existing exposure of debt investments in other companies. The company has established a Risk Management Framework to manage, control and mitigate operational risks. Each function is required to ensure that all processes are documented, process risks are identified and that steps are taken to mitigate identified operational risks. An independent risk management function, in turn, reviews the risks identified, the effectiveness of the operational controls and ensures that risk mitigation steps suggested are implemented. Operational risks are also mitigated by audits conducted by an independent internal audit team, and an independent concurrent audit team for the investment function. The Risk Committee meets at periodic intervals and lays down and reviews various internal policies and norms governing the risk function across the company. The Committee also reviews the top risks, mitigations implemented and progress made by the Risk Management Function.

9. Operations in other countries: Your Directors confirm that during the year ended March 31, 2013, your Company had no operations in other countries.


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10. Ageing of claims: Claims registered and not settled (Rs. in lakhs) Period Traditional Business Linked Business

Number of Claims

Amount Involved

Number of Claims

Amount Involved

30 days 218 591.19 7056 2354.28 30 days to 6

months

6 months to 1 year

1 year to 5 years 5 years and

above

Total

218 591.19 7056 2354.28

Ageing of claims has been done from the date of receipt of all claim requirements from the claimant.

Statement of Age wise analysis of the Unclaimed Amount of Policyholders in accordance with IRDA circular no- IRDA/F&I/CIR/CMP/174/11/2010 dated 04-11-2010 has been disclosed under Note 16 - 27 of the audited Financial Statements for the year ended 31st March 2013.

11. Valuation of investments: For the Shareholders and non-linked policyholders investments your company considers its debt securities as held to maturity and measures them at amortised cost. Accretion of discount and amortisation of premium relating to debt securities is recognized over the maturity period on internal rate of return basis. Listed equity shares as at Balance Sheet date are stated at fair value being the lower of last quoted closing price on Bombay Stock Exchange Limited (BSE) and the National Stock Exchange Limited (NSE). Equity shares awaiting listing are stated at historical cost subject to provision for diminution, if any. Unrealized gains/ losses arising due to changes in the fair value of listed equity shares are taken to Fair Value Change Account and carried forward to Balance Sheet where the net balance is positive. Negative balance in the "Fair Value Change Account" is recognized in the Revenue Account\Profit and Loss Account to the extent of negative balance in Fair Value Change Account as reduced by the


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amount previously provided in the Revenue Account\Profit and Loss Account. All the shares in the Companys portfolio are quoted. Investment in the real estate investment property is valued at historical cost plus revaluation, if any. Revaluation of the investment property is done at least once in three years. Any change in the carrying amount of the investment property is accounted to Revaluation Reserve. Impairment loss, if any, exceeding revaluation reserve is recognised as expenses in the revenue/profit and loss account

In respect of the unit-linked business, all securities are valued on a Mark to Market basis. The discount on purchase of treasury bills, certificate of deposit, Collateral Borrowing and Lending Obligations (CBLO) and commercial papers are amortized over the period to maturity on internal rate of return basis.

12. Review of asset quality and performance of investment: Your directors confirm that all the investments are performing investments. Your Company has investments in commercial bank fixed deposits and investments in debt securities issued by the Government of India, State Governments, public financial institutions, selected banks and public and private sector undertakings with AA- and above rating / guaranteed by the Government. Shares quoted on Indian Stock Exchanges and real estate are also a part of your Companys investment portfolio.

13. Responsibility Statement: Your Directors state that:

(a) In the preparation of financial statements, the applicable accounting standards, principles and policies have been followed;

(b) The accounting policies have been adopted and applied consistently and

the judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the year and of the surplus under the Revenue Account and of the profit in the Profit and Loss Account for the year ended March 31, 2013;

(c) Proper and sufficient care has been taken for the maintenance of adequate

accounting records in accordance with the applicable provisions of the Insurance Act 1938 (4 of 1938) / Companies Act, 1956 (1 of 1956), for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;


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(d) The financial statements are prepared on a going concern basis; (e) An internal audit system commensurate with the size and nature of the

business exists and is operating effectively.

14 Schedule of payments made to individuals, firms, companies and organizations in which the Directors are interested: Your Company has made the following payments to individuals, firms, companies and organizations in which the Directors are interested:

Sr. No.

Name of the Director/s

Entity in which Director is interested Interested As

Expense during the financial year ( Rs in lakhs)

1 Uday Kotak, Dipak Gupta

Kotak Mahindra Bank Ltd Director 6857.41

2 Uday Kotak

Kotak Securities Ltd Director 246.53

3 Uday Kotak, Dipak Gupta

Kotak Mahindra Prime Ltd Director 5.16

4 S. S. Thakur Kamat Hotels India Ltd Director

1.36

Total 7110.46 For and on behalf of Board of Directors

Uday Kotak G. Murlidhar Chairman Managing Director Mumbai April 29, 2013


Walker, Chandiok & Co. Chartered Accountants 16th Floor, Tower II, Indiabulls Finance Centre, S B Marg, Elphinstone (W), Mumbai 400 013, India

S.R.BATLIBOI & CO. LLP Chartered Accountants 14th Floor, The Ruby 29, Senapati Bapat Marg Dadar (West), Mumbai 400 028, India,

INDEPENDENT AUDITORS CERTIFICATE

The Board of Directors Kotak Mahindra Old Mutual Life Insurance Limited Kotak Towers, 7th floor, Building No. 21, Infinity Park, General A.K.Vaidya Marg Malad (East), Mumbai 400 097 Dear Sirs, [Ref: Certificate in accordance with the Regulation 13(D)(7) of the IRDA (Investment) (5th Amendment) Regulations, 2013 notified on February 16, 2013 in the Gazette of India read with subsequent clarification vide IRDA circular Ref: IRDA/F&I/INV/CIR/062/03/2013 dated March 26, 2013 and IRDA letter dated March 29, 2013 (the Regulations)] 1. At the request of Kotak Mahindra Old Mutual Life Insurance Limited (the Company), we have

performed the procedures stated in paragraph 2 below, for the purpose of issuing a certificate required by the Regulations, regarding the declaration and application of the Net Asset Value (NAV) of the schemes of the Company as at March 31, 2013.

2. In this connection, we have performed the following procedures:

a) Obtained representation from the management that the Company has declared March 31, 2013 as a business day based on IRDA circular Ref: IRDA/F&I/INV/CIR/062/03/2013 dated March 26, 2013 for accepting application forms and that it has declared NAV for March 31, 2013;

b) Obtained the list of New Business applications, Renewal applications and applications for Surrender, Free- look Cancellation, Fund Switches, Partial Withdrawal and Top Ups received in respect of Unit Linked Products on March 31, 2013 and April 1, 2013 (collectively referred to as application forms), from the Management;

c) Selected samples of application forms from listing mentioned in paragraph 2(b) above and for the samples selected verified whether:

i) the applications received on Sunday, March 31, 2013, upto 3.00 p.m. hours have been

processed with the NAV of March 31 2013; and

ii) the applications received on Sunday, March 31, 2013, after 3.00 p.m. hours have been processed with the NAV of April 1, 2013.

3. The compliance with conditions stated in the Regulations is the responsibility of the Companys

management. Our responsibility is to perform the above-mentioned procedures on the particulars and state our findings. We performed the above-mentioned procedures, in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes issued by the Institute of Chartered Accountants of India (ICAI). The above-mentioned procedures include examining evidence supporting the particulars on a test basis. Further, our scope of work did not involve us performing audit tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial statements of the Company taken as a whole. We


Walker, Chandiok & Co. Chartered Accountants

S.R.BATLIBOI & CO. LLP Chartered Accountants


Independent Auditors Certificate for the year ended March 31, 2013

have not performed an audit, the objective of which would be the expression of an opinion on the financial statements, specified elements, accounts or items thereof, for the purpose of this certificate. Accordingly, we do not express such opinion.

4. Based on the procedures performed by us, as mentioned in paragraph 2 above, according to the information and explanations provided to us and representation by the Companys management, we confirm that:

(a) The Company had declared March 31, 2013 as a business day for accepting applications; (b) The Company has declared NAV for March 31, 2013; (c) The applications received on Sunday, March 31, 2013 upto 3.00 p.m. have been processed

with the NAV of March 31, 2013; and (d) The applications received on Sunday, March 31, 2013 after 3.00 p.m. have been processed

with the NAV of the next business day i.e. April 01, 2013.

5. This certificate is issued at the request of the Company solely for use of the Company as per Regulation 13 (D) (7) of the Regulations and is not intended to be used or distributed for any other purpose.

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Chartered Accountants Chartered Accountants ICAI Firm Registration No: 001076N ICAI Firm Registration No: 301003E per Khushroo Panthaky per Shrawan Jalan Partner Partner Membership No:42423 Membership No:102102 Mumbai Mumbai April 29, 2013 April 29, 2013



S.R.BATLIBOI & CO. LLP Chartered Accountants 14th Floor, The Ruby 29, Senapati Bapat Marg Dadar (West), Mumbai 400 028, India

Independent Auditors Report To the Members of Kotak Mahindra Old Mutual Life Insurance Limited Report on the Financial Statements 1. We have audited the accompanying financial statements of Kotak Mahindra Old Mutual Life

Insurance Limited (the Company) which comprise the Balance Sheet as at March 31, 2013, the related Revenue Account (also called the Policyholders Account or the Technical Account), the Profit and Loss Account (also called the Shareholders Account or the Non-Technical Account) and the Statement of Receipts and Payments for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements 2. Management is responsible for the preparation of these financial statements that give a true and

fair view of the financial position, financial performance and the receipts and payments of the Company in accordance with accounting principles generally accepted in India, including the provisions of the Insurance Act, 1938 (the Insurance Act), the Insurance Regulatory and Development Authority Act, 1999 (the IRDA Act), the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 (the IRDA Financial Statements Regulations) read with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, to the extent applicable. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.





Independent Auditors Report for the year ended March 31, 2013

Opinion 5. In our opinion and to the best of our information and according to the explanations given to us, the

financial statements are prepared in accordance with the requirements of the Insurance Act, the IRDA Act, the IRDA Financial Statements Regulations and the Companies Act, 1956 to the extent applicable and in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India, as applicable to Insurance Companies:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,

2013; (b) in the case of Revenue Account, of the net surplus for the year ended on that date; (c) in the case of Profit and Loss Account, of the profit for the year ended on that date; and (d) in the case of the Statement of Receipts and Payments, of the receipts and payments for the

year ended on that date. Other Matter 6. The actuarial valuation of liabilities for life policies in force is the responsibility of the Companys

Appointed Actuary (the Appointed Actuary). The actuarial valuation of these liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at March 31, 2013 has been duly certified by the Appointed Actuary and in his opinion, the assumptions for such valuation are in accordance with the guidelines and norms issued by the Insurance Regulatory Development Authority (IRDA/Authority) and the Actuarial Society of India in concurrence with the Authority. We have relied upon Appointed Actuarys certificate in this regard for forming our opinion on the valuation of liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists on financial statements of the Company.

Report on Other Legal and Regulatory Requirements 7. As required by the IRDA Financial Statements Regulations, we have issued a separate certificate

dated April 29, 2013 certifying the matters specified in paragraphs 3 and 4 of Schedule C to the IRDA Financial Statements Regulations.

8. As required by the IRDA Financial Statements Regulations, read with section 227(3) of the Companies Act 1956, we report that:

(a) we have obtained all the information and explanations which, to the best of our knowledge

and belief were necessary for the purposes of the audit and have found them to be satisfactory;

(b) in our opinion and to the best of our information and according to the explanations given

to us, proper books of account as required by law have been maintained by the Company, so far as appears from our examination of those books;

(c) as the Company's financial accounting system is centralized, no returns for the purposes of

our audit are prepared at the branches of the Company;





Independent Auditors Report for the year ended March 31, 2013

(d) the Balance Sheet, the Revenue Account, the Profit and Loss Account and the Receipts and Payments Account referred to in this report are in agreement with the books of account;

(e) in our opinion the Balance sheet, the Revenue Account, the Profit and Loss Account and

the Receipts and Payments Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and the Rules framed there under to the extent they are not inconsistent with the accounting principles prescribed in the Regulations and orders / directions issued by IRDA in this regard;

(f) in our opinion and to the best of our information and according to the explanations given to

us , investments have been valued in accordance with the provisions of the Insurance Act, the IRDA Financial Statements Regulations and / or orders / directions issued by IRDA in this regard;

(g) the accounting policies selected by the Company are appropriate and are in compliance

with the applicable Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and the Rules framed there under and with the accounting principles as prescribed in the IRDA Financial Statements Regulations and orders / directions issued by IRDA in this regard; and

(h) on the basis of written representations received from the Directors of the Company, as on

March 31, 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Chartered Accountants Chartered Accountants ICAI FirmRegistration No: 001076N ICAI Firm Registration No: 301003E

per Khushroo Panthaky per Shrawan Jalan Partner Partner Membership No:42423 Membership No:102102 Mumbai Mumbai April 29, 2013 April 29, 2013



S.R.BATLIBOI & CO. LLP Chartered Accountants 14th Floor, The Ruby 29, Senapati Bapat Marg Dadar (West), Mumbai 400 028, India

Independent Auditors Certificate In accordance with the information and explanations given to us and to the best of our knowledge and belief and based on our examination of the books of account and other records maintained by Kotak Mahindra Old Mutual Life Insurance Limited (the Company) for the year ended March 31, 2013, we certify that: 1. We have reviewed the Management Report attached to the financial statements for the year

ended March 31, 2013, and on the basis of our review, there is no apparent mistake or material inconsistencies with the financial statements;

2. Based on management representations and compliance certificates submitted to the Board of Directors by the officers of the Company charged with compliance and the same being noted by the Board, we certify that the Company has complied with the terms and conditions of registration stipulated by Insurance Regulatory and Development Authority (IRDA);

3. We have verified the cash balances, to the extent considered necessary, and securities relating to the Companys loans and investments as at March 31, 2013, by actual inspection or on the basis of certificates / confirmations received from the Custodian and/ or Depository Participants appointed by the Company, as the case may be. As at March 31, 2013, the Company does not have reversions and life interests;

4. The Company is not a trustee of any trust; and

5. No part of the assets of the Policyholders Funds has been directly or indirectly applied in contravention to the provisions of the Insurance Act, 1938, relating to the application and investments of the Policyholders Funds.

This certificate is issued to comply with Schedule C of the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations 2002, (the Regulations) read with Regulation 3 of the IRDA Financial Statements Regulations and is not intended to be used or distributed for any other purpose. For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Chartered Accountants Chartered Accountants ICAI Firm Registration No: 001076N ICAI Firm Registration No: 301003E per Khushroo Panthaky per Shrawan Jalan Partner Partner Membership No:42423 Membership No:102102 Mumbai Mumbai April 29, 2013 April 29, 2013


Particulars Schedule Year ended March 31, 2013 Year ended

March 31, 2012

Premiums earned - net(a) Premium 1 2,77,77,846 2,93,74,331 (b) Re-insurance ceded (5,37,931) (4,45,129) (c) Re-insurance accepted - -

Income from investments(a) Interest, Dividends and Rent Gross- Net of accretion/amortization of Discount/Premium ( Refer Schedule 16 - Note 15(d)) 53,22,089 46,96,449 (b) Profit on sale/ redemption of investments 70,77,492 35,05,088 (c) (Loss on sale/ redemption of investments) (26,97,846) (41,13,992) (d) Transfer/ Gain on revaluation/change in fair value (89,184) (15,21,516)

Other Income(a) Contribution from Shareholders Account (Refer Schedule 16 - Note 11) 4,12,221 - (a) Miscellaneous income 20,551 30,811 (b) Profit/(Loss) on sale/disposal of fixed assets (Net) (2,347) (13,936)

TOTAL (A) 3,72,82,891 3,15,12,106 Commission 2 11,74,124 11,21,193 Operating Expenses related to Insurance Business 3 57,32,751 55,46,026 Provision for doubtful debts - - Bad debts written off - - Provision for tax 58,637 - Provisions (other than taxation) - (a) For diminution in the value of investments (Net) 12,706 - (b) Others - -

TOTAL (B) 69,78,218 66,67,219 Benefits paid (net) 4 1,78,21,346 1,43,49,423 Interim & Terminal Bonuses paid 24,194 2,533 Change in valuation of liability in respect of life policies,(a) Gross 53,45,931 28,52,546 (b) Amount ceded in Reinsurance 35,182 (14,519) (c) Amount accepted in Reinsurance - - Provision for Linked Liabilities 60,03,643 64,59,042

TOTAL (C) 2,92,30,296 2,36,49,025 SURPLUS/(DEFICIT) (D)=(A)-(B)-(C) 10,74,377 11,95,862 APPROPRIATIONSTransfer to Shareholders' Account (Refer Schedule 16 - Note 10) 18,25,020 17,10,091 Transfer to Other Reserve - - Balance being Funds for Future Appropriations (8,83,295) (5,95,765) Surplus/(Deficit) after Appropriation 1,32,652 81,536

TOTAL (D) 10,74,377 11,95,862

SURPLUS/(DEFICIT) BROUGHT FORWARD 1,23,756 42,220 Surplus/(Deficit) after Appropriation 1,32,652 81,536 SURPLUS/(DEFICIT) CARRIED FORWARD TO BALANCE SHEET 2,56,408 1,23,756

(a) Interim & Terminal Bonuses Paid 24,194 2,533 (b) Allocation of Bonus to Policyholders 4,23,356 3,25,995 (c) Surplus/ (Deficit) shown in the Revenue Account 1,32,652 81,536 Total Surplus: [(a) + (b) + (c)] 5,80,202 4,10,064

The Schedules and accompanying notes are an integral part of this Revenue Account

As per our report of even date For and on behalf of the Board of Directors

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Gaurang ShahChartered Accountants Chartered Accountants Director ICAI Firm Registration No : 001076N ICAI Firm Registration No.:301003E

Khushroo B. Panthaky per Shrawan Jalan Sunil SharmaPartner Partner Appointed ActuaryMembership No- 42423 Membership No-102102

R.Mahesh KumarCompany Secretary

Mumbai MumbaiApril 29, 2013 April 29, 2013

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITEDRegistration No: 107; Date of Registration: January 10, 2001

FORM A-RAREVENUE ACCOUNT FOR THE YEAR ENDED MARCH 31, 2013

Vice-Chairman

Policyholders' Account (Technical Account)(Amounts in thousands of Indian Rupees)

As required by Section 40-B (4) of the Insurance Act, 1938, we certify that all expenses of Management in respect of life insurance business transacted in India by the Insurer have been fully recognized in this Revenue Account.

Cedric Fernandes Chief Financial Officer

Uday Kotak Chairman

G. Murlidhar Managing Director

Shailesh Devchand


Particulars Schedule Year ended March 31, 2013


Amounts transferred from Policyholders Account (Technical Account) (Refer Schedule 16 - Note 10) 18,25,020 17,10,091 Income from Investments

(a) Interest, Dividends and Rent Gross- Net of amortisation ( Refer Schedule 16 - Note 15(d)) 5,19,542 3,23,023 (b) Profit on sale/ redemption of investments 19,076 3,815 (c) (Loss on sale/ redemption of investments) (19,515) (360) Other Income - -

TOTAL (A) 23,44,123 20,36,569

Expenses other than those directly related to the insurance business 7,249 4,087 Bad debts written off - - Provisions (other than taxation)

(a) For diminution in the value of investments (Net) - (b) Provision for doubtful debts - - (c) Others

-Contribution to the Policyholders Fund ( Refer Schedule 16 - Note 11) 4,12,221 - TOTAL (B) 4,19,470 4,087

Profit before tax 19,24,653 20,32,482 Provision for taxation

- Current Year 27,270 - - Earlier Year - - Profit after tax 18,97,383 20,32,482

Appropriations

(a) Balance at the beginning of the year 5,06,052 (15,26,430) (b) Interim dividends paid during the year - - (c) Proposed final dividend - - (d) Tax on dividend distributed - - (e) Transfer to reserves/ other accounts - -

Profit/(Loss) carried to the Balance Sheet 24,03,435 5,06,052

Earnings Per Share (Basic and Diluted) (in ` ) (Refer Schedule 16 - Note 21) 3.72 3.98

The Schedules and accompanying notes are an integral part of this Profit and Loss Account.

As per our report of even date attached For and on behalf of the Board of DirectorsAs per our report of even date attached For and on behalf of the Board of Directors

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Uday Kotak Gaurang ShahChartered Accountants Chartered Accountants Chairman Director ICAI Firm Registration No : 001076N ICAI Firm Registration No.:301003E

Khushroo B. Panthaky per Shrawan Jalan G. Murlidhar Sunil SharmaPartner Partner Managing Director Appointed ActuaryMembership No- 42423 Membership No-102102

R.Mahesh Kumar Company Secretary


Shailesh DevchandVice-Chairman

Cedric Fernandes Chief Financial Officer

(Amounts in thousands of Indian Rupees)

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITEDRegistration No: 107; Date of registration: January 10, 2001

FORM A-PLPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2013

Shareholders Account (Non-technical Account)


Particulars Schedule As at March 31 , 2013

As at March 31, 2012

SOURCES OF FUNDSShareholders Funds:Share Capital 5 51,02,902 51,02,902 Reserves and Surplus 6 29,23,798 10,26,416 Credit/[Debit] Fair Value Change Account - -

Sub-Total 80,26,700 61,29,318 Borrowings 7 - -

Policyholders Funds:Credit/[Debit] Fair Value Change Account 15 386 Policy Liabilities

- Life Participating 1,20,60,895 86,96,073 - Pension Participating 7,13,480 6,35,796 - Life Non- Participating 52,75,534 30,43,846 - General Annuity 55,591 - - Unit Linked 15,56,438 19,16,780 - Unit Linked Pension 1,28,665 1,97,90,603 1,16,994 1,44,09,489 (Refer Schedule 16 - Note-4)

Insurance Reserves- Life Participating 1,85,317 81,751 - Pension Participating 71,092 42,005 - Life Non- Participating - - - General Annuity - Unit Linked - - - Unit Linked Pension - 2,56,409 - 1,23,756 (Refer Schedule 16 - Note-18)

Provision for Linked Liabilities- Linked Liabilities 7,75,71,750 7,17,88,829 - Fair Value Change 21,40,015 7,97,11,765 22,29,199 7,40,18,028

#REF!Sub-Total 9,97,58,792 8,85,51,659

Funds for Discontinued policies ( Refer Schedule 16 - Note-28) - Discontinued on account of non-payment of premium 4,59,952 1,50,047 - Others -

Funds for Future Appropriation:-Linked Liabilities #REF! 5,54,829 14,38,124 Total 10,88,00,273 9,62,69,148

APPLICATION OF FUNDSInvestments Shareholders 8 62,96,974 43,03,890 Policyholders 8A 2,26,12,172 1,73,28,641

Assets Held to Cover Linked Liabilities 8B 8,07,26,548 7,56,06,199

Loans 9 58,707 63,652

Fixed Assets 10 3,16,726 3,65,655

Current AssetsCash and Bank Balances 11 16,34,150 14,26,287 Advances and Other Assets 12 19,49,330 13,93,270

Sub-Total (A) 35,83,480 28,19,557 Current Liabilities 13 46,99,649 40,11,051 Provisions 14 94,685 2,07,395

Sub-Total (B) 47,94,334 42,18,446 Net Current Assets (C) = (A-B) (12,10,854) (13,98,889)

Miscellaneous Expenditure (To the extent not written off or adjusted) 15 - - Debit Balance in Profit and Loss Account (Shareholders Account) - -

10,88,00,273 9,62,69,148 The Schedules and accompanying notes are an integral part of this Balance Sheet. 16

As per our report of even date attached For and on behalf of the Board of Directors

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Uday Kotak Shailesh Devchand Gaurang ShahChartered Accountants Chartered Accountants Chairman Vice-Chairman Director ICAI Firm Registration No : 001076N ICAI Firm Registration No.:301003E

Khushroo B. Panthaky per Shrawan Jalan G. Murlidhar Cedric Fernandes Sunil SharmaPartner Partner Managing Director Chief Financial Officer Appointed ActuaryMembership No- 42423 Membership No-102102

R.Mahesh KumarCompany Secretary



KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITEDRegistration No: 107; Date of registration: January 10, 2001

FORM A-BSBALANCE SHEET AS AT MARCH 31, 2013


Year Ended Year Ended March 31, 2013 March 31, 2012

2,76,72,358 2,91,69,076 (50,27,020) (56,68,361) (11,59,504) (10,76,448) 21,514 9,74,833 (3,03,780) (1,57,918) (1,80,49,152) (1,43,10,451) (82,784) (891) (3,91,779) (3,97,553)

26,79,853 85,32,287

(1,91,949) (1,95,850) 53,62,951 48,06,156 (37,58,57,007) (21,45,21,974) 36,44,68,316 20,40,25,874 37,33,506 (34,69,023) 7,248 5,338 4,945 (5,910)

(24,71,990) (93,55,389)

- -

- -

2,07,863 (8,23,102) 14,26,287 22,49,389

16,34,150 14,26,287

Notes:

5,65,194 6,90,963 10,68,956 7,35,324

16,34,150 14,26,287

As per our report of even date attached For and on behalf of the Board of Directors

For Walker, Chandiok & Co. For S. R. BATLIBOI & CO. LLP Uday Kotak Shailesh Devchand Gaurang ShahChartered Accountants Chartered Accountants Chairman Vice-Chairman Director ICAI Firm Registration No : 001076N ICAI Firm Registration No.:301003E

Khushroo B. Panthaky per Shrawan Jalan G. Murlidhar Cedric Fernandes Sunil SharmaPartner Partner Managing Director Chief Financial Officer Appointed ActuaryMembership No- 42423 Membership No-102102

R. Mahesh Kumar Company Secretary


The above Statement of Receipts and Payments has been prepared as prescribed by Insurance Regulatory (Preparation of Financial Statements & Auditors Report of Insurance Companies) Regulations, 2002 under the Direct Method laid out in Accounting Standard 3 Cash Flow Statements issued by the Institute of Chartered Accountants of India.


STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED MARCH 31, 2013(Amounts in thousands of Indian Rupees)

Net increase in Cash and Cash Equivalents ( A+B+C)

Sale of InvestmentInvestments in money market instruments and in liquid mutual funds (Net)Proceeds on sale of fixed assets

Particulars

Cash Flows from Financing Activities

Cash Flows from Investing Activities

Purchase of Investment

Net cash deployed in Investing Activities (B)

Cash Flows from Operating ActivitiesPremium and Other receipt from CustomerPayments of other operating expensesPayments of commission and brokerageAdvances/ Loans / Deposits placedReinsurance premium (net of claims and commission)Claims paidIncome-tax paidService Tax paid

Net cash from/ (deployed in) Operating Activities (A)

Purchase of fixed assetsInterest and Dividend received on Investments (net of interest expended on purchase of investments)

Loan against policies

Proceeds from issue of Share Capital

Net cash from Financing Activities (C)

Cash and cash equivalent at the beginning of the year

Cash and Cash Equivalents at end of year

Cash and cash equivalents at the end of the year includes:

Cash (including cheques on hand, drafts and stamps)Bank Balances (including deposits)




First year Premium 74,93,522 66,07,534 Renewal Premium 1,58,96,802 1,77,31,647 Single Premium 43,87,522 50,35,150

Total Premium 2,77,77,846 2,93,74,331

Notes:(a) All the premium income relates to business in India(b) Refer Schedule 16- Note 2(a)

Premium (Amounts in thousands of Indian Rupees)


SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS

SCHEDULE 1




Commission PaidFirst year Premium 8,70,652 7,71,694 Renewal Premium 2,81,774 3,12,758 Single Premium 44,790 68,381

Sub-total 11,97,216 11,52,833 Add: Commission on Re-insurance accepted - - Less: Commission on Re-insurance ceded (23,092) (31,640)

Net Commission 11,74,124 11,21,193

Breakup of Gross Commission Particulars Year ended

March 31, 2013 Year ended

March 31, 2012 ParticularsAgents 4,42,160 5,47,224 Brokers 2,15,587 2,05,873 Corporate Agents 5,39,262 3,99,909 Referral 207 (173) Total 11,97,216 11,52,833

Note : (a) Refer Schedule 16 - Note 2(b)

Commission(Amounts in thousands of Indian Rupees)



SCHEDULE 2




Employees remuneration and welfare benefits [Refer Note-(b) below] 26,74,082 25,44,632 Travel, conveyance and vehicle running expenses 1,21,544 92,200 Training expenses 28,785 31,116 Rent, Rates and Taxes 3,94,453 3,66,917 Repairs 1,09,048 1,01,318 Printing and Stationery 45,842 50,483 Communication expenses 93,581 1,10,277 Legal and Professional charges 1,11,101 98,952 Medical fees 37,784 51,533 Auditors fees, expenses etc.(a) as auditor 3,545 3,630 (b) as adviser or in any other capacity , in respect of

- Taxation matters - - - Insurance Matters - - - Management services; and - -

(c) in any other capacity (including out of pocket expenses) 297 397 Advertisement and publicity 4,34,519 4,30,210 Distribution Expenses 4,49,478 4,73,492 Sales Promotion Expenses 1,16,490 71,447 Interest and Bank charges 26,124 29,379 Depreciation 2,31,226 2,49,249 Information Technology expenses 1,49,901 1,34,838 Electricity charges 67,399 69,287 Recruitment expenses 44,488 49,644 Brokerage 696 2,038 Stamp Duty 1,24,118 93,960 Membership and Subscription Fees 3,224 1,444 Preliminary and Share issue Expenses - - Service Tax Expenditure 3,96,993 4,21,757 Other expenses 68,033 67,826

Total 57,32,751 55,46,026

Notes:a) Refer Schedule 16 -Note 2(k) and Note 24.b) Refer Schedule 16 - Note 2 (h) , Note 6, Note 22 and Note 29



SCHEDULE 3Operating Expenses Related to Insurance Business





1. Insurance Claims (a) Claims by Death 17,50,938 11,68,542 (b) Claims by Maturity 6,64,389 7,27,950 (c) Annuities/ Pension payment - - (d) Other Benefits Survival Benefits 58,060 56,518 Surrenders 1,56,48,897 1,25,01,354 Riders 8,491 5,043 Claim Investigation Fees 5,080 4,926 Others (Refer note (c) below) 69,284 9,913 Sub Total (A) 1,82,05,139 1,44,74,246 2. Amount ceded in reinsurance (a) Claims by Death (3,81,962) (1,24,663) (b) Claims by Maturity - - (c) Annuities/ Pension payment - - (d) Other Benefits - - Survival Benefits - - Surrenders - - Riders (1,831) (160) Others - - Sub Total (B) (3,83,793) (1,24,823) 3. Amount accepted in reinsurance (a) Claims by Death - - (b) Claims by Maturity - - (c) Annuities/ Pension payment - - (d) Other Benefits - - Survival Benefits - - Surrenders - - Riders - - Others - - Sub Total (C) - - Total (A)+(B)+(C) 1,78,21,346 1,43,49,423

Notes :(a) Refer Schedule 16- Note 2(e)(b) All the claims are paid in India.



(c) Includes provision for policy related claims.

Benefits Paid (Net)SCHEDULE 4



Particulars As at March 31 , 2013


Authorized Capital625,000,000 (2012 625,000,000) Equity Shares of ` 10 each 62,50,000 62,50,000

Issued Capital510,290,249 (2012 510,290,249) Equity Shares of ` 10 each 51,02,902 51,02,902

Subscribed Capital510,290,249 (2012 510,290,249) Equity Shares of ` 10 each 51,02,902 51,02,902

Called-up Capital510,290,249 (2012 510,290,249) Equity Shares of ` 10 each 51,02,902 51,02,902

Less: Calls unpaid - - Add: Shares forfeited (Amount originally paid up) - - Less: Par Value of Equity Shares bought back - - Less: Preliminary Expenses - - Less: Expenses on issue of shares - -

Total 51,02,902 51,02,902 Notes:

ParticularsNumber of Shares % Holding Number of Shares % Holding

ShareholdersPromoters

- Indian 37,76,14,797 74% 37,76,14,797 74%- Foreign 13,26,75,452 26% 13,26,75,452 26%

Others - - - - Total 51,02,90,249 100% 51,02,90,249 100%

As at March 31, 2013 As at March 31, 2012

(a) Of the above, 260,248,044 (2012 260,248,044) Equity Shares of ` 10 each fully paid up are held by Kotak Mahindra Bank Limited, the holding company and its nominees, 54,000,000 (2012-54,000,000) and 63,366,753 (2012-63,366,753) fully paid-up Equity Shares of ` 10 each are held by Kotak Mahindra Prime Limited and Kotak Mahindra Capital Company Limited respectively, which are subsidiaries of Kotak Mahindra Bank Limited.



SCHEDULE 5Share Capital


SCHEDULE 5APattern of Shareholding

(As certified by the Management)




Capital Reserve - - Capital Redemption Reserve - - Securities Premium 5,20,363 5,20,363 Revaluation Reserve - - General Reserves - - Less: Debit balance in Profit and Loss Account - - Less: Amount utilized for Buy-back - - Catastrophe Reserve - - Other Reserve - - Balance of profit in Profit and Loss Account 24,03,435 5,06,053

Total 29,23,798 10,26,416



SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS SCHEDULE 6

Reserves and Surplus




Debentures/ Bonds - - Banks - - Financial Institutions - - Others - -

Total - -



SCHEDULE 7Borrowings





LONG TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills (Refer note (d) below) 11,64,861 17,05,301 Other Approved Securities 13,30,588 3,34,436 Other Investments(a) Shares - - (aa) Equity - - (bb) Preference - - (b) Mutual Funds - - (c) Derivative Instruments - - (d) Debentures/ Bonds 9,16,811 3,75,064 (e) Other Securities (including Fixed Deposits) 2,70,900 2,30,000 (f) Subsidiaries - - (g) Investment Properties Real Estate - - Investment in Housing & infrastructure sector (a) Equity - - (b) Others 16,67,650 7,42,669 Other than Approved Investments(a) Equity - - (b) Others - -

Total 53,50,810 33,87,470

SHORT TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills 1,57,352 1,84,016 Other Approved Securities - 50,852 Other Investments(a) Shares - - (aa) Equity - - (bb) Preference - - (b) Mutual Funds - (c) Derivative Instruments - - (d) Debentures/ Bonds 26,703 53,068 (e) Other Securities (including Fixed Deposits) 7,51,109 5,28,206 (f) Subsidiaries - - (g) Investment Properties Real Estate - - Investment in Housing & infrastructure sector (a) Equity - - (b) Others 11,000 1,00,278 Other than Approved Investments(a) Equity - - (b) Others - -

Total 9,46,164 9,16,420

Grand Total 62,96,974 43,03,890

Notes: -



(a)Investments in Kotak Mahindra Prime Ltd in Debentures 4,90,000 2,50,000 (b) Particulars of Investment other than Listed Equity Securities:- - Cost 62,96,974 43,03,890 - Market Value 62,69,625 41,48,457

(d) Refer Schedule 16 Notes 15(b)



SCHEDULE 8Investments-Shareholders'


(c) Refer Schedule 16 Notes 2(d)




LONG TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills 98,07,656 66,45,229 Other Approved Securities 39,29,671 25,29,156 Other Investments(a) Shares (aa) Equity 4,94,006 2,46,223 (bb) Preference - - (b) Mutual Funds - - (c) Derivative Instruments - - (d) Debentures/ Bonds 9,19,217 5,85,266 (e) Other Securities (including Fixed Deposits) 1,41,200 8,62,500 (f) Subsidiaries - - (g) Investment Properties Real Estate 4,90,694 - Investment in Housing & infrastructure sector (a) Equity 78,341 13,157 (b) Others 55,44,849 43,01,650 Other than Approved Investments(a) Equity - 8,186 (b) Others - -

Total 2,14,05,634 1,51,91,367

SHORT TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills - 1,19,991 Other Approved Securities - 10,511 Other Investments(a) Shares (aa) Equity - - (bb) Preference - - (b) Mutual Funds - - (c) Derivative Instruments - - (d) Debentures/ Bonds 52,165 3,48,710 (e) Other Securities (including Fixed Deposits) 10,61,966 11,89,114 (f) Subsidiaries - - (g) Investment Properties Real Estate - - Investment in Housing & infrastructure sector (a) Equity - - (b) Others 42,367 4,68,948 Other than Approved Investments(a) Equity - - (b) Others 50,040 -

Total 12,06,538 21,37,274

Grand Total 2,26,12,172 1,73,28,641

Notes:



(a)Investments in Kotak Mahindra Prime Ltd in Debentures 60,000 50,000 (b) Particulars of Investment other than Listed Equity Securities:- - Cost 2,20,39,825 1,70,61,076 - Market Value 2,21,00,383 1,64,93,961



SCHEDULE 8AInvestments-Policyholders'


(c) Refer Schedule 16 Notes 2(d)




LONG TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills 98,82,503 61,05,738 Other Approved Securities 39,44,009 23,71,014 Other Investments(a) Shares (aa) Equity 3,47,25,504 3,23,07,347 (bb) Preference - - (b) Mutual Funds - - (c) Derivative Instruments - - (d) Debentures/ Bonds 47,54,934 36,48,356 (e) Other Securities (including Fixed Deposits) 4,67,400 22,37,600 (f) Subsidiaries - - (g) Investment Properties Real Estate - - Investment in Housing & infrastructure sector (a) Equ

Prudence and Simplicity - Kotak Mahindra Bank Old Mutual Life... · trend towards long-term...

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Transcript of Prudence and Simplicity - Kotak Mahindra Bank Old Mutual Life... · trend towards long-term...