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Manappuram Finance Ltd.

BSE: 531213 Sector: Financials
NSE: MANAPPURAM ISIN Code: INE522D01027
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OPEN 113.80
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VOLUME 265641
52-Week high 179.45
52-Week low 81.50
P/E 8.30
Mkt Cap.(Rs cr) 9,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 113.80
CLOSE 113.15
VOLUME 265641
52-Week high 179.45
52-Week low 81.50
P/E 8.30
Mkt Cap.(Rs cr) 9,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Manappuram Finance Ltd. (MANAPPURAM) - Auditors Report

Company auditors report

To the Members of Manappuram Finance Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the standalone financial statements of Manappuram Finance Limited("the Company") which comprise the Balance Sheet as at March 31 2022 and theStatement of Profit and Loss Statement of Changes in Equity and Statement of Cash Flowsfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information.

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 Companies Act 2013 ("the Act') in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2022 and profit changes in equity and its cash flows for theyear ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fullilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics.

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

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the year ended March31 2022 (current period). These matters were addressed in the context of our audit of thestandatone financial statements as a whote and in forming our opinion thereon and we donot provide a separate opinion on these matters.

Sr. No Key Audit Matter How the Key Audit Matter was addressed in our audit
1. Interest Income on Gold Loans: We assessed the Company's process on interest income computation.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: Since the entire interest computation is system driven we tested
Interest in Gold Loan is based on the various gold loan schemes launched by the Company. The calculation of the interest on gold loan as per the applicable scheme involves complexities including rebates in the nature of reduced prospective interest rates for prompt payment and penal interest for delayed payment. • Evaluated the design of internal controls relating to interest income computation.
Due to such variety of schemes and involvement of complexity in calculating the interest income on gold loan we have considered this as Key Audit Matter. • Selected a sample of continuing and new gold loan schemes and tested the operating effectiveness o-'the internal control renting to interest income computation. We carried out a combination of procedures involving inquiry and observation inspection of evidence in respect of operation of these controls.
• Performed analytical procedures and test of details procedures for testing the accuracy of the revenue recorded.
• Tested the relevant information technology systems' access and change management controls relating to interest income computation and related information used in interest computation.
• Obtained the list of modifications made in the interest scheme master during the year and test checked the same on sample basis.
2. Provision for Expected Credit Losses (ECL) on Loans:
Management estimates impairment provision using Expected Credit loss model for the loan exposure Measurement of loan impairment involves application of significant judgement by the management. The most significant judgements are: We examined Board Policy approving methodologies for computation of ECL that address policies procedures and controls for assessing and measuring credit risk on all lending exposures commensurate with the size complicity and risk profile specific to the Company.
We evaluated the design and operating effectiveness of controls across the processes relevant to ECL.
Timely identification and classification of the impaired loans and
Determination of probability of defaults (PD) and estimation of loss given defaults (LGD) based on the Value of collaterals and relevant factors These controls among others included controls over the allocation of assets into stages including management's monitoring of stage effectiveness model mom to ring including the need for post model adjustments model validation credit monitoring individual/ collective provisions and production of journal entries and disclosures.
The estimation of Expected Credit Loss (ECL) on financial instruments involve sigm-leant judgements and estimates. Following are points with increased level of audit focus:
Classification of assets to stage 1. 2 or 3 using criteria in accordance with Ind AS 109 which also include considering the impact of recent RBI's Covid-19 regulatory circulars; We tested he completeness of loans included in the Expected Credit Loss calculations as of 31 March 2022.
Accounting interpretations modelling assumptions and data used to build and run the models; We tested assets in stage 1 2 and 3 on sample basis to verify that they were allocated to the appropriate stage.
Measurement or individual borrower provisions including Covld-19 impact assessment of multiple economic scenarios; For samples of exposure we tested he appropriateness of determining Exposure at Default (EAD). PD and LGD.
Inputs and Judgements used in determination of management overlay at various asset stages considering the current uncertain economic environment arising out of the COVID-19 Pandemic and We performed an overall assessment of the ECL provision levels at each stage including management's assessment on Covld-19 impact to determine if they were reasonable considering the Company's portfolio risk profile credit risk management practices and the macroeconomic environment.
The disclosures m3de in the financial statements -‘or ECL especially in relation to Judgements and estimates by the Management in determination of the ECL. Refer note 45 to the standalone financial statements We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 in relation to ECL especially in relation to judgements used in estimation of ECL provision.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual Report is expectedto be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance underSA 720 'The Auditor's responsibilities Relating to Other Information'.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statement that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasinternal financial controls with reference to financial statements in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the year ended March 31 2022 (current period) and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

OTHER MATTER

The Ind AS financial statements of the Company for the year ended March 31 2021 wereaudited by another auditor whose report dated May 26 2021 expressed an unmodified opinionon those statements.

Our opinion is not modified in respect of this matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.

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

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2022 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 with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has discLosed the impact of pending Litigations on its financialposition in its standalone financial statements - Refer Note 23 to the standalonefinancial statements;

ii. The Company did not have any Long-term contracts including derivative contracts forwhich there were any material foreseeabLe Losses;

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

iv. (1) Under RuLe 11(e)(i)

The Management has represented that to the best of it's knowLedge and beLief no fundshave been advanced or Loaned or invested (either from borrowed funds or share premium orany other sources or kind of funds) by the Company to or in any other person(s) orentity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shaLLdirectLy or indirectLy Lend or invest in other persons or entities identified in anymanner whatsoever by or on behaLf of the Company ("ULtimate Beneficiaries") orprovide any guarantee security or the Like on behaLf of the ULtimate Beneficiaries;

(2) Under RuLe 11(e)(ii)

The Management has represented that to the best of it's knowLedge and beLief nofunds have been received by the Company from any person(s) or entity(ies) includingforeign entities (Funding Parties) with the understanding whether recorded in writing orotherwise as on the date of this audit report that the Company shaLL directLy orindirectLy Lend or invest in other persons or entities identified in any mannerwhatsoever by or on behaLf of the Funding Party ("ULtimate Beneficiaries") orprovide any guarantee security or the Like on behaLf of the ULtimate Beneficiaries;

(3) Under RuLe 11(e)(iii)

Based on the audit procedures performed that have been considered reasonable andappropriate in the circumstances and according to the information and explanationsprovided to us by the Management in this regard nothing has come to our notice that hascaused us to believe that the representations under subclause (i) and (ii) of Rule 11(e)as provided under (1) and (2) above contain any material mis-statement.

v. The Company has declared and paid dividend during the year which is in compliancewith Section 123 of the Act.

3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the Rulesthereunder.

For M S K A & Associates For S K Patodia & Associates
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.105047W ICAI Firm Registration No. 112723W
Tushar Kurani Sandeep Mandawewala
Membership No.: 118580 Membership No.: 117917
UDIN: 22118580AJDTMX5745 UDIN: 22117917AJDUFR6974
PLace: Mumbai PLace: Mumbai
Date: May 18 2022 Date: May 18 2022

Annexure A to Independent Auditors' Report of even date on the Financial Statements ofManappuram Finance Limited for the year ended March 31 2022

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditors' Report]

i.(a) A. The company has maintained proper records showing fuU Particulars includingquantitative details and situation of Property Plant and Equipment.

B. The Company has maintained proper records showing full Particulars of intangibleassets.

(b) Property Plant and Equipment have been physically verified by the management atreasonable intervals during the year and no material discrepancies were identified on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties (otherthan properties where the company is the lessee and the lease agreements are duly executedin favour of the lessee) as disclosed in the financial statements are held in the name ofthe Company.

(d) According to the information and explanations given to us the Company has notreValued its property plant and Equipment (including Right of Use assets) and itsintangible assets. Accordingly the requirements under paragraph 3(i)(d) of the Order arenot applicable to the Company.

(e) According to the information and explanations given to us no proceeding has beeninitiated or pending against the Company for holding benami property under the BenamiTransactions (Prohibition) Act 1988 and Rules made thereunder. Accordingly theprovisions stated in paragraph 3(i) (e) of the Order are not applicable to the Company.

ii. (a) The Company is involved in the business of rendering services. Accordingly theprovisions stated in paragraph 3(ii) (a) of the Order are not applicable to the Company.

(b) The Company has been sanctioned working capital limits in excess of Rs.5 crores inaggregate from Banks/ financial institutions on the basis of security of current assets.Quarterly returns/statements filed with such Banks/ financial institutions are inagreement with the books of account.

iii. (a) The Company involved in the business of giving loans hence the requirementsunder paragraph 3 (iii) (a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and based on the auditprocedures performed by us we are of the opinion that the terms and conditions inrelation to investments made guarantees provided securities given and grant of all loansand advances in the nature of loans and guarantees are not prejudicial to the interest ofthe Company.

(c) In respect of the [aforesaid] loans/ advances in nature of loan the schedule ofrepayment of principal and payment of interest has been stipulated by the Company.Considering that the Company is a NonBanking Finance Company ('NBFC') which provides awide range of fund based and fee based services including gold loans money exchangefacilities etc the borrower-wise details of the amount due date for payment and extentof delay (that has been suggested in the Guidance Note on CARO 2020 issued by theInstitute of Chartered Accountants of India for reporting under this clause) have not beenreported because it is not practicable to furnish such details owing to the voluminousnature of data generated in the normal course of the Company's business. Further exceptfor the instances where there are delays or defaults in repayment of principal and/ orinterest and in respect of which the Company has recognised necessary provisions inaccordance with the principles of Indian Accounting Standards (Ind AS) and the guidelinesissued by the Reserve Bank of India ("RBI") for Income Recognition and AssetClassification (which has been disclosed by the Company in Note 10 to the financialstatements) the parties are repaying the principal amounts as stipulated and are alsoregular in payment of interest as applicable.

(d) In respect of the loans/ advances in nature of loans the Total amount overdue formore than ninety days as at March 31 2022 is Rs.6622.94 million. In such instances inour opinion based on information and explanations provided to us reasonable steps havebeen taken by the Company for the recovery of the principal amounts and the interestthereon. Refer Note 56(xi) in the financial statements for details of number of cases andthe amount of principal and interest overdue as at March 31 2022.

(e) The Company involved in the business of giving loans. Accordingly provision statedin paragraph 3(iii) (e) of the Order are not applicable to the Company.

(f) According to the information explanation provided to us the Company has notgranted any loans and / or advances in the nature of Loans which are either rePayable ondemand or without specifying any terms or period of repayment. Hence the requirementsunder paragraph 3(iii)(f) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has not either directly or indirectly granted any loan to any of its directors orto any other person in whom the director is interested in accordance with the provisionsof section 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the Rules framed there under.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable tothe Company as the Central Government of India has not specified the maintenance of costrecords for any of the products of the Company. Accordingly the provisions stated inparagraph 3 (vi) of the Order are not applicable to the Company.

vii.(a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including goods andservice tax provident fund employees' state insurance income-tax saLes-tax servicetax duty of customs duty of excise Value added tax cess have been reguLarLy depositedby the company with appropriate authorities in allcases during the year.

(b) According to the information and explanation given to us and examination of recordsof the Company the outstanding dues of income-tax goods and service tax customs dutycess and any other statutory dues on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs. In Million) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 301.20 Assessment Year 2015-16 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 1.38 Assessment Year 2018-19 Assistant Commissioner of Income Tax Appeals
Kerala Value Added Tax 2003 Value Added Tax (excluding penalty and interest if any) 44.94 Assessment Years 2009-10 2010-11 2011-12 2012-13 and 2014-15 Deputy Commissioner (Appeals)

viii. According to the information and explanations given to us there are notransactions which are not accounted in the books of account which have been surrenderedor disclosed as income during the year in Tax Assessment of the Company. Also there areno previousLy unrecorded income which has been now recorded in the books of account.Hence the provision stated in paragraph 3(viii) of the Order is not applicable to theCompany.

ix. (a) In our opinion and according to the information and explanations given to usthe Company has not defauLted in repayment of Loans or borrowings or in payment ofinterest thereon to any Lender.

(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the company has not been decLared wiLfuL defauLter by anybank or financial institution or government or any government authority.

(c) In our opinion and according to the information explanation provided to us moneyraised by way of term Loans during the year have been appLied for the purpose for whichthey were raised.

(d) According to the information and explanations given to us and the proceduresperformed by us and on an overallexamination of the financial statements of the companywe report that no funds raised on shortterm basis have been used for Long-term purposes bythe company.

(e) According to the information explanation given to us and on an overallexaminationof the financial statements of the Company we report that the company has not taken anyfunds from an any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised Loans during the year on the pLedge ofsecurities heLd in its securities joint ventures or associate companies.

x. (a) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the provisionsstated in paragraph 3 (x)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully partly or optionally convertibledebentures during the year. Accordingly the provisions stated in paragraph 3 (x)(b) ofthe Order are not applicable to the Company.

xi. (a) During the course of our audit examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company nor on the Company.

(b) We have not come across of any instance of material fraud by the Company or on theCompany during the course of audit of the financial statement for the year ended March 312022 accordingly the provisions stated in paragraph (xi)(b) of the Order is notapplicable to the Company.

(c) We have taken into consideration the whistle blower complaints received by thecompany during the year while determining the nature timing and extent of auditprocedures.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) (a)to (c) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv.(a) in our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business.

(b) We have considered internal audit reports issued by internal auditors during ouraudit.

xv. According to the information and explanations given to us in our opinion duringthe year the Company has not entered into non-cash transactions with directors or personsconnected with its directors and hence provisions of section 192 of the Act are notapplicable to company. Accordingly the provisions stated in paragraph 3(xv) of the Orderare not applicable to the Company.

xvi. (a) The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934 as a non-deposit taking non- banking financialinstitutions.

(b) In our opinion the Company has not conducted any Non-Banking Financial or HousingFinance activities without any valid Certificate of Registration from Reserve Bank ofIndia. Hence the reporting under paragraph clause 3 (xvi)(b) of the Order are notapplicable to the Company.

(c) The Company is not a Core investment Company (CIC) as defined in the regulationsmade by Reserve Bank of India. Hence the reporting under paragraph clause 3 (xvi)(c) ofthe Order are not applicable to the Company.

(d) The Company does not have any CIC as part of its group. Hence the provisions statedin paragraph clause 3 (xvi) (d) of the order are not applicable to the company.

xvii. Based on the overall review of financial statements the Company has not incurredcash losses in the current financial year and in the immediately preceding financial year.Hence the provisions stated in paragraph clause 3 (xvii) of the Order are not applicableto the Company.

xviii. There has been resignation of the statutory auditors during the year incompliance with RBI circular dated April 27 2021 on "Guidelines for Appointment ofStatutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excludingRRBs) UCBs and NBFCs (including HFCs)" and there were no issues objections orconcerns raised by the outgoing auditors.

xix. According to the information and explanations given to us and based on ourexamination of financial ratios ageing and expected date of realisation of financialassets and payment of liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans we are of theopinion that no material uncertainty exists as on the date of audit report and the Companyis capable of meeting its liabilities existing at the date of balance sheet as and whenthey fall due within a period of one year from the balance sheet date.

xx. (a) In respect of other than ongoing projects the Company has transferred unspentamount to a Fund specified in schedule VII of the Act within a period of six months of theexpiry of the financial year in compliance second proviso to sub-section (5) of section135 of the Act.

In respect of ongoing projects the Company has transferred unspent amount to a specialfund within a period of thirty days from the end of the financial year in compliancesection 135(6) of the said Act.

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect ofaudit of standalone financial statements. Accordingly no comment in respect of the saidclause has been included in the report.

For M S K A & Associates For S K Patodia & Associates
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.105047W ICAI Firm Registration No. 112723W
Tushar Kurani Sandeep Mandawewala
Membership No.: 118580 Membership No.: 117917
UDIN: 22118580AJDTMX5745 UDIN: 22117917AJDUFR6974
Place: Mumbai Place: Mumbai
Date: May 18 2022 Date: May 18 2022

Annexure B to Independent Auditors' Report of even date on the Standalone FinancialStatements of Manappuram Finance Limited

Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the Members ofManappuram Finance Limited on the Financial Statements for the year ended March 31 2022

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT")

OPINION

We have audited the internat financial controls with reference to standalone financialstatements of Manappuram Finance Limited ("the Company") as of March 31 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in att material respects internal financial controlswith reference to standalone financial statements and such internat financial controtswith reference to standalone financial statements were operating effectively as at March31 2022 based on the internal control with reference to standalone financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI) (the"Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note. These responsibilities include the designimplementation and maintenance of internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethicaL requirements and pLan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference tostandalone financial statements was established and maintained and if such controlsoperated effectively in allmaterial respects.

Our audit invoLves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements incLuded obtaining an understanding of internal financialcontrols with reference to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaLuating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures seLecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error.

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 withreference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS

A Company's internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS

Because of the inherent Limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For M S K A & Associates For S K Patodia & Associates
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.105047W ICAI Firm Registration No. 112723W
Tushar Kurani Sandeep Mandawewala
Membership No.: 118580 Membership No.: 117917
UDIN: 22118580AJDTMX5745 UDIN: 22117917AJDUFR6974
Place: Mumbai Place: Mumbai
Date: May 18 2022 Date: May 18 2022

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