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Muthoot Capital Services Ltd.

BSE: 511766 Sector: Financials
NSE: MUTHOOTCAP ISIN Code: INE296G01013
BSE 15:40 | 19 Jan 821.05 2.85
(0.35%)
OPEN

809.40

HIGH

855.00

LOW

809.40

NSE 15:44 | 19 Jan 825.60 13.45
(1.66%)
OPEN

809.00

HIGH

855.00

LOW

809.00

OPEN 809.40
PREVIOUS CLOSE 818.20
VOLUME 6310
52-Week high 904.00
52-Week low 221.82
P/E 31.21
Mkt Cap.(Rs cr) 1,351
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 809.40
CLOSE 818.20
VOLUME 6310
52-Week high 904.00
52-Week low 221.82
P/E 31.21
Mkt Cap.(Rs cr) 1,351
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Muthoot Capital Services Ltd. (MUTHOOTCAP) - Auditors Report

Company auditors report

To

THE MEMBERS OF MUTHOOT CAPITAL SERVICES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of MUTHOOT CAPITAL SERVICESLIMITED ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial control that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its Profit and its Cash Flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"; g. With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Amendment Rules 2017 in our opinion and to the best of our information andaccording to the explanations given to us;

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 7 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

iv. The Company has provided requisite disclosures of the direct receipts and paymentsin cash made by the Company in the financial statements as to holdings as well asdealings in Specified Bank Notes during the period from 8th November 2016 to 30thDecember 2016. However with regard to the Collection amounts remitted in the Company'sbank account by customers/borrowers/collection agencies/ company executives in cash theparticulars regarding the remittance if any made in specified bank notes were notfurnished by the bank. Hence the Company is not able to furnish the relevant particularsof such deposits if any made through Specified Bank Notes - Refer Note 9 to the financialstatements.

For K. VENKATACHALAM AIYER & Co
Chartered Accountants
FRN: 004610S
Sd/-
CA A. GOPALAKRISHNAN
Partner
Membership No. 18159
Place: Kochi
Date: April 18 2017

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading ‘R eport on Other Legal &Regulatory Requirement' of our report of even date;

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets; (b) The Fixed Assets have beenphysically verified by the management in a phased manner designed to cover all the it emsand no material discrepancies between the books and the physical fix ed assets have beennoticed. (c) The Company does not have any immovable property and hence the requirement offurnishing the particulars as per clause 3 (1) (c) of the order is not applicable.

2. Except for the repossessed assets from borrowers and stock of stationery theCompany does not have any other stock of in ventory. These Inventories have beenphysically verified during the year by the management. In our opinion the r f equency ofverification is reasonable. In our opinion and according to the information andexplanations given to us material discrepancies were not noticed on such physicalverification.

3. The Company has granted two secured loans to two companies and unsecured loans to apartnership firm covered in the Register maintained under section 189 of the Act inrespect of which; (a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the balance sheet date.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act2013 as applicable in respect of loans in vestments guarantees and security.

5. In respect of deposits accepted in our opinion and according to the information andexplanations given to us directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules f r amed there under to the extent applicable have been complied with. Weare informed by the management that no order has been passed by Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any court or any other Tribunalin relation to any matter connected with the Company.

6. To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under section 148 (1) of the Companies Act forthe services rendered by the Company.

(a) According to the information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales Tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2017 for a period of more than six monthsfrom the date on which they become payable. (b) According to the information andexplanation given to us there are no material dues of Income Tax Sales Tax Service TaxDuty of Customs Duty of Excise Value Added Tax Cess which have not been deposited as on31st March 2017 on account of dispute except the following;

Name of the Statute Nature of Dues Forum where dispute is pending Period to which the amount relates- Financial Year Amount involved (Rs in 000)
Income Tax Act 1961 Income Tax and Interest Commissioner of Income Tax 2011-12 1 87
Total 1 87

7. Based on our audit procedures and according to the information and explanationsgiven to us and on the basis of the books of accounts and other records examined by usthe Company has not defaulted in repayment of any dues to financial institution or banksor debenture holders. There are unpaid amounts against matured debentures amounting to Rs7 49 thousand outstanding as on March 31 2017 and the management has confirmed thatthey could not pay the same since claims were not received fr om the debenture holders.

8. Based on our audit procedures and according to the information and explanationsgiven to us and on the basis of the books of accounts and other records examined by usthe Company has utilized the debt instruments and term loans for the purpose for whichthey were actually obtained.

9. We have been informed that during the audit period there were no frauds.

10. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

11. The Company is not a Nidhi Company. Therefore the provisions of clause 3 (xii) ofthe Order are not applicable to the Company. 12. In our opinion and according to theinformation and explanations given to us all tr ansactions with the related parties arein compliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards. 13. Based upon the audit procedures performed and the informationand explanations given by the management the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company.

14. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company.

15. The Company is engaged in the business of Non-Banking Financial Institution and ithas obtained the certificate of registr ation as provided in section 45-IA of the ReserveBank of India Act 1934.

For K. VENKATACHALAM AIYER & Co
Chartered Accountants
FRN: 004610S
Sd/-
CA A. GOPALAKRISHNAN
Partner
Membership No. 18159
Place: Kochi
Date: April 18 2017

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act"):

We have audited the internal financial controls over financial reporting of MuthootCapital Services Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls:

The Company's management is responsible for establishing and maintaining internalfinancial controls based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility:

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidences we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting:

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that; 1. pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; 2. provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the Company; and 3. provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting:

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion:

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For K. VENKATACHALAM AIYER & Co
Chartered Accountants
Firm Regn No. 004610S
Sd/-
CA A. GOPALAKRISHNAN
Partner
Membership No. 18159
Place: Kochi
Date: April 18 2017