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Muthoot Finance Ltd.

BSE: 533398 Sector: Financials
NSE: MUTHOOTFIN ISIN Code: INE414G01012
BSE 00:00 | 25 May 399.00 1.65
(0.42%)
OPEN

401.60

HIGH

402.70

LOW

380.70

NSE 00:00 | 25 May 399.80 0.95
(0.24%)
OPEN

399.85

HIGH

404.80

LOW

397.15

OPEN 401.60
PREVIOUS CLOSE 397.35
VOLUME 23791
52-Week high 525.80
52-Week low 360.00
P/E 9.28
Mkt Cap.(Rs cr) 15,964
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 401.60
CLOSE 397.35
VOLUME 23791
52-Week high 525.80
52-Week low 360.00
P/E 9.28
Mkt Cap.(Rs cr) 15,964
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Muthoot Finance Ltd. (MUTHOOTFIN) - Auditors Report

Company auditors report

TO THE MEMBERS OF MUTHOOT FINANCE LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Muthoot FinanceLimited Registered and Corporate O3ce: Muthoot Chambers Opposite Saritha TheatreComplex 2nd Floor Banerji Road Kochi 682 018 India ("the Company")which comprise the Balance Sheet as at March 31 2017 the Statement of Profit and Lossand the Cash Flow Statement for the year then ended and a summary of the significantaccounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating e3ectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthese standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditors' judgement including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit and its cash flows 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 in theparagraph 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 purposes 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 the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the Directors as on March31 2017 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 e3ectiveness of such controls refer to ourseparate Report in ‘Annexure B' to this report.

g) With respect to the other matters to be included in the Independent Auditors' Reportin accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amendedin our opinion and to the best of our information and according to the explanations givento us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note 26 to the financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes as defined in theNotification S.O. 3407 (E) dated the 8th of November 2016 of the Ministry of Financeduring the period from 8th November 2016 to 30th December 2016 and these are inaccordance with the books of account maintained by the Company and as produced to us bythe management. Refer Note 36 to the standalone financial statements.

For Rangamani & Co
Chartered Accountants
(Firm Registration No.: 003050 S)
Sd/-
R. Sreenivasan
Place: Kochi Partner
Date: 18th May 2017 Membership No. 020566

ANNEXURE ‘A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on Companies (Auditor's Report) Order 2016 (‘the Order') issued by theCentral Government in terms of Section 143(11) of the Companies Act 2013 (‘the Act')of Muthoot Finance Limited (‘the Company')

(i) In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) As informed to us not all the fixed assets have been physically verified by themanagement during the year but there is a regular programme of verification which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. We are informed that no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the title deed provided to us we report that thetitle deeds comprising all the immovable properties of land and buildings are held inthe name of the Company as at the balance sheet date.

(ii) The Company is a Non-Banking Finance Company and has not dealt with any goods andthe company does not hold any inventory during the period under audit. Accordingly theprovisions of clause 3 (ii) of the Order is not applicable to the Company.

(iii) The Company has granted unsecured loans to its subsidiary during the year and thesame is covered in the register maintained under Section 189 of the Act. The terms andconditions of the grant of such loans are not prejudicial to the Company's interest. Therepayment or receipts of principal and interest are as per schedule stipulated and areregular. There are no overdue amounts.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted deposits from the public attracting the directives issued by the Reserve Bank ofIndia and the provisions of Section 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed there under. Therefore the provisions of Clause3(v) of the Order are not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company and thereforethe provisions of the clause 3 (vi) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given to us the Company hasgenerally been regular in depositing undisputed statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Value Added Tax Duty ofCustoms Duty of Excise Cess and other material statutory dues applicable to it with theappropriate authorities.

According to the information and explanations given to us no undisputed statutory duespayable in respect of Provident Fund Employees State Insurance Income Tax Sales TaxService Tax Duty of Customs Duty of Excise Value Added Tax Cess and other materialstatutory dues were outstanding as at March 31 2017 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of Sales tax Duty of Customs Wealth Tax Duty of Excise and Cess which have notbeen deposited on account of any dispute. The following dues of Service Tax and Income Taxhave not been deposited with appropriate authorities on account of dispute:

Nature of dues Amount Rs.. In Lakhs * Period to which the amount relates Forum where dispute is pending
499.21 2003-2008 CESTAT Bangalore
48958.83 2007-2012 CESTAT Bangalore
7.90 2013-2014 Commissioner (Appeals) Kochi
445.72 2010-2013 CESTAT Bangalore
Service tax 21.55 2008-2011 Commissioner of Central Excise(Appeals) Kochi
53.65 2007-2013 Commissioner of Central Excise(Appeals) Kochi
110.39 2013-2014 High Court of Kerala
68.05 April to September 2014 Commissioner (Appeals) Kochi.
Income Tax 271.20 Assessment Year 2012-13 Commissioner of Income Tax (Appeals)- II Kochi
145.64 Assessment Year 2010-11 Income Tax Appellate Tribunal Kochi

* Amount is net of payments made and without considering interest for the overdueperiod if any as may be levied if demand raised is upheld

(viii) According to the records of the Company examined by us and the information andexplanations given to us we are of the opinion that the Company has not defaulted in therepayment of loans or borrowings to financial institutions banks government or dues todebenture holders.

(ix) In our opinion and according to the information and explanations given to us theCompany has utilized the moneys raised by way of public offer of debt instruments and termloans for the purposes for which they were raised.

(x) According to the information and explanations given to us

a) there have been certain instances of fraud by employees of the Company amounting to

Rs. 12827281.00 as given in Note 34 to the financial statements; and

b) no fraud by the Company has been noticed or reported during the course of our audit.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act where applicable forall transactions with the related parties and the details of related party transactionshave been disclosed in the standalone financial statements as required by the applicableaccounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence reporting under clause 3(xv) ofthe Order is not applicable to the Company.

(xvi) The Company is engaged in the business of Non-Banking Financial Institution andhas obtained the certificate of registration under section 45-IA of the Reserve Bank ofIndia Act 1934.

For Rangamani & Co
Chartered Accountants
(Firm Registration No.: 003050 S)
Sd/-
R. Sreenivasan
Place: Kochi Partner
Date: 18th May 2017 Membership No. 020566

ANNEXURE ‘B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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 MuthootFinance Limited Registered and Corporate O3ce: Muthoot Chambers Opposite Saritha TheatreComplex 2nd Floor Banerji Road Kochi 682 018 India (‘the Company') as ofMarch 31 2017 in conjunction with our audit of the standalone financial statements of theCompany 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(‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating e3ectively for ensuring the orderly and e3cientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 and both issued by the Instituteof Chartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated e3ectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatinge3ectiveness. 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 e3ectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence 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 authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material e3ect 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating e3ectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Rangamani & Co
Chartered Accountants
(Firm Registration No.: 003050 S)
Sd/-
R. Sreenivasan
Place: Kochi Partner
Date: 18th May 2017 Membership No. 020566