DSP Merrill Lynch

1.  Company background
 
 DSP Merrill Lynch Limited (the Company) was incorporated under the
 Companies Act, 1956 (the Act) on October 23, 1975. The Company is
 registered with the Securities and Exchange Board of India (SEBI) as a
 Stock Broker, Merchant Banker, Underwriter and Portfolio Manager. The
 Company is engaged in the business of stock broking, investment banking
 including advice on merger and acquisition transactions and marketing
 and distribution of securities. The Company is also into the business
 of providing financial advice to high net-worth individuals which, in
 its view, is rendered as a stock broker.
 
 The Company was ultimately controlled by Merrill Lynch & Co., Inc.
 (ML&Co) till December 31, 2008. Effective January 1, 2009, ML&Co has
 been acquired by Bank of America Corporation (BAC).
 
 2. Contingent liabilities:
 
                                      Current Year       Previous Year
                                        (Rs. 000)       (Rs. 000)
 
 Income-tax demands disputed 
 in appeals before the authorities         328,697        253,102
 
 3. Employee benefits:
 
 Disclosure in respect of Defined Contribution Plan and Defined Benefit
 Plan:
 
 i.  Defined Contribution Plan:
 
 Companys contribution to provident fund - Rs. 78,431 (000) [previous
 year Rs. 60,195 (000)]
 
 4. Segment reporting :
 
 The Advisory and transactional services comprise Merchant Banking,
 Underwriting, Broking and Distribution of Securities. The Trading
 segment consists of trading in securities (including equity / debt
 derivatives).
 
 Segment revenue and segment results for Advisory and Transactional
 Services are net of loss on sale of devolved securities Rs. 1,140,089
 [previous year NIL], Segment assets include all operating assets used
 by a segment and consist primarily of fixed assets net of provision and
 allowance, investments and other current assets.
 
 Segment liabilities include all operating liabilities and other
 payables.
 
 Items that relate to the enterprise as a whole or at the corporate
 level not attributable to a particular segment are included under
 Unallocable.
 
 The company operates in a single reportable geographical segment.
 
 5. Related party disclosures :
 
 i.  List of related parties and their relationships -
 
 Sr. No.  Name of the related party Relationship
 
 1 Bank of America Corporation Ultimate Controlling Enterprise #
 
 2 Merrill Lynch & Co., Inc.  Controlling Enterprise #
 
 3 DSP Merrill Lynch Capital Limited Subsidiary
 
 4 DSP Merrill Lynch Trust Services Limited Subsidiary
 
 5 DSP Merrill Lynch Securities Trading Limited Subsidiary
 
 6 Bank of America, N.A - India Branches Fellow Subsidiary
 
 7 Indopark Holdings Limited Fellow Subsidiary
 
 8 Merrill Lynch Asia Inc.  Fellow Subsidiary
 
 9 Merrill Lynch (Asia Pacific) Limited Fellow Subsidiary
 
 10 Merrill Lynch Australia Pty Limited Fellow Subsidiary
 
 11 Merrill Lynch Canada Inc.  Fellow Subsidiary
 
 12 Merrill Lynch Capital Markets Espana, S.A., S.V.  Fellow Subsidiary
 
 13 Merrill Lynch Europe Limited Fellow Subsidiary
 
 14 Merrill Lynch Global Services Pte. Limited Fellow Subsidiary
 
 15 Merrill Lynch Holdings (Mauritius) Fellow Subsidiary
 
 16 Merrill Lynch (India) Technology Services Private Limited Fellow
 Subsidiary
 
 17 Merrill Lynch International Fellow Subsidiary
 
 18 Merrill Lynch International Inc.  Fellow Subsidiary
 
 19 Merrill Lynch International Incorporated Seoul Branch Fellow
 Subsidiary
 
 20 Merrill Lynch (Mauritius) Investments Limited Fellow Subsidiary
 
 21 Merrill Lynch Pacific Fund Inc.  Fellow Subsidiary
 
 22 Merrill Lynch, Pierce, Fenner & Smith Inc.  Fellow Subsidiary
 
 23 Merrill Lynch (Singapore) Pte. Limited Fellow Subsidiary
 
 24.  Mr. Hemendra Kothari, Mr. Shitin Desai, Mr. Pradeep DokaniaA, Mr.
 Nozer Shroff * Key Management Personnel Mr. Kevan WattsAA and Mr. Kumar
 Shah **
 
 25 Ms. Aditi Kothari Relative of Key Management Personnel
 
 26 DSP Adiko Holdings Private Limited, DSP HMK Holdings Private
 Limited, DSP Enterprises controlled by Key Investment Private Limited,
 D S Purbhoodas & Co., Reclamation Properties (India) Management
 Personnel Private Limited, Reclamation Realty (India) Private Limited
 
 27 DSP BlackRock Investment Managers Limited Enterprise controlled by
 Key Management
 
 Personnel ##
 
 28 DSP BlackRock Mutual Fund Enterprise controlled by Key Management
 Personnel ###
 
 29 DSP BlackRock Trustee Company Private Limited Enterprise controlled
 by Key Management Personnel A&
 
 # Refer Note 1-Company background Since August 6, 2008
 
 * From August 6, 2008 to January 31, 2009 From April 1, 2008 to January
 31, 2009
 
 ** From April 1, 2008 to May 5, 2008
 
 ## Associate till November 3, 2008; formerly known as DSP Merrill Lynch
 Fund Managers Limited
 
 ### Associate till November 3, 2008; formerly known as DSP Merrill
 Lynch Mutual Fund A& Associate till November 3, 2008; formerly known as
 DSP Merrill Lynch Trustee Company Private Limited
 
 (1) Represents purchase and sale of mutual fund units from DSP
 BlackRock Investment Managers Limited. During the year the Company sold
 its investment in associates viz. DSP Merrill Lynch Fund Managers
 Limited for Rs. 1,055,236 ) and DSP Merrill Lynch Trustee Company
 Private Limited for Rs. 538 ), which is included under Sales
 during the year.
 
 (2) Balance in current accounts maintained with Bank of America, N.A -
 India Branches.
 
 (3) Margin deposit placed by and repaid to Merrill Lynch Capital
 Markets Espana, S.A., S.V.
 
 (4) Includes commission of Rs. 1,200,329 ) [previous year Rs.
 2,444,939 )] from Merrill Lynch Capital Markets Espana, S.A., S.V
 and Rs. 381,222 ) [previous year Rs. 525,060 )] from Merrill
 Lynch International Inc.
 
 (5) Includes Rs. 106 ) [previous year NIL] pertaining to Mr. Nozer
 Shroff and Rs. 470 ) [previous year Rs. 1 )] pertaining to
 Mr. Hemendra Kothari.
 
 (6) Represents amount pertaining to DSP BlackRock Investment Managers
 Limited.
 
 (7) Represents amount pertaining to Merrill Lynch (India) Technology
 Services Private Limited.
 
 (8) Represents reimbursement of expenses Rs. 5,916 ) [previous
 year Rs. 4,180 )] to Reclamation Properties (India) Private
 Limited ; Rs. 5,916 ) [previous year Rs. 4,180 )] to
 Reclamation Realty (India) Private Limited and recovery of Rs. 6,993
 COOOs) [previous year Rs. 13,985 COOOs)] from DSP BlackRock Investment
 Managers Limited.
 
 (9) Rs. 19,917 ) [previous year 31,293 )] pertains to Mr.
 Pradeep Dokania; Rs. 25,269 ) [previous year NIL] pertains to Mr.
 Nozer Shroff; Rs. 71,688 ) [previous year NIL] pertains to Mr.
 Kevan Watts.
 
 (10) Includes Rs. 11,732 ) [previous year Rs. 26,303 )]
 pertaining to Merrill Lynch Global Services Pte. Ltd.; Rs. 24,933
 ) [previous year (Rs. 89,887 )] pertaining to Merrill Lynch
 International Inc.; Rs. 5,201 ) [previous year Rs. 10,170 )]
 pertaining to Merrill Lynch Asia Incorporated.
 
 (11) Represents professional fees of Rs. 25,239 COOOs) to DSP
 Investment Private Limited (previous year NIL); Rs. 48,642 )
 [previous year Rs. 52,192 )] of rent to Reclamation Realty (India)
 Private Limited; and Rs. 48,642 ) [previous year Rs. 52,192
 COOOs)] of rent to Reclamation Properties (India) Private Limited.
 
 (12) Represents recovery of FBT on restricted units / shares by
 ML&Co.,lnc. from employee accounts on behalf of the Company.
 
 (13) Represents amounts relating to preference shares issued to Merrill
 Lynch (Mauritius) Investments Limited.