You are here » Home » Companies » Company Overview » Manappuram Finance Ltd

Manappuram Finance Ltd.

BSE: 531213 Sector: Financials
NSE: MANAPPURAM ISIN Code: INE522D01027
BSE 00:00 | 20 Aug 100.10 -0.90
(-0.89%)
OPEN

101.00

HIGH

102.40

LOW

99.65

NSE 00:00 | 20 Aug 100.05 -0.80
(-0.79%)
OPEN

101.10

HIGH

102.35

LOW

99.65

OPEN 101.00
PREVIOUS CLOSE 101.00
VOLUME 208754
52-Week high 130.45
52-Week low 83.45
P/E 12.34
Mkt Cap.(Rs cr) 8,434
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 101.00
CLOSE 101.00
VOLUME 208754
52-Week high 130.45
52-Week low 83.45
P/E 12.34
Mkt Cap.(Rs cr) 8,434
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 FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Manappuram FinanceLimited ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting 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 and the Companies (Accounting Standards) Amendment Rules 2016. 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; andthe design implementation and maintenance of adequate internal financial control thatwere operating 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 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 inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgmentincluding the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by theActin 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 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("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure 1 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 standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules2016;

(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) ofthe Act;

(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 2" to this report;

(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 27 to the standalonefinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts – Refer Note 6 to the financial statements and ;

iii. The following are the instances of delay in transferring amounts to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided disclosures in Note 47 in the financial statements as tothe holding of Specified Bank Notes on November 8 2016 and December 30 2016 as well asdealings in Specified Bank Notes during the period from November 8 2016 to December 302016. Based on our audit procedures and relying on the management representation regardingthe holding and nature of cash transactions including those in Specified Bank Notes wereport that these disclosures are in accordance with the books of accounts maintained bythe Company and as produced to us by the management. However as stated in note 47 in thefinancial statements certain borrowers of the Company have directly deposited cash in theCompany’s bank accounts and we report that we were not made available sufficientappropriate audit evidence to report on the matter including denomination wise details ofsuch deposits the details of which as represented to us are not available with theCompany. Further as stated in note 47 in the financial statements and based oninformation and explanation provided to us we report that there have been non-permittedtransactions aggregating Rs. 47.17 million.

Particulars Amount Rs. In Million Date of payment No of days delay
Unpaid dividend 2008-09 0.47 24/10/2016 1
Unpaid Matured deposits 0.01 21/10/2016 One instance of 34 days and another of 69 days respectively

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Bharath N S

Partner

Membership Number: 210934

Place of Signature: Chennai

Date: May 25 2017

(All amounts are in millions of Indian Rupees unless otherwise stated)

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date Re: Manappuram Finance Limited("the Company")

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property fixed assets are held in the name ofthe Company.

(ii) The Company’s business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) (a) The Company has granted loans to three companies covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion and according tothe information and explanations given to us the terms and conditions of the grants andloans not prejudicial to the Company’s interest.

(b) In respect of loans granted to companies covered in the register maintained undersection 189 of the Companies Act 2013 repayment of the principal amount is as stipulatedand payment of interest has been regular.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Companies Act 2013 which are overdueand outstanding for more than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made guarantees and securities given have been complied withby the Company.

(v) The Company has not accepted any deposits from the public.

(vi) 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 2013for the products/services of the Company.

(vii) (a) Undisputed statutory dues including income-tax excise duty value added taxcess and other statutory dues have generally been regularly deposited with the appropriateauthorities though there has been a slight delay in a few cases with regard to remittancesof provident fund employees’ state insurance sales tax and service tax. Theprovisions relating to customs duty is not applicable to the Company.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees’ state insurance income-taxsales-tax service tax excise duty value added tax cess and other statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(c) According to the records of the Company there are no dues outstanding of wealthtax excise duty and cess on account of any dispute. The dues outstanding of service taxincome tax and sales-tax on account of a dispute are as follows:

Name of the Statute Nature of dues Period of dispute Amount due Rs. In Million * Forum where it is pending
Finance Act 1994 Service Tax FY 2001-02 to 2007- 08 2.99 (including penalty of 2.24) Commissioner of Central Excise and Service Tax (Appeals)
Andhra Pradesh Value Added Tax Act 2005 Value Added Tax FY-2011-12 5.60 (including penalty of 1.12) Appellate Deputy Commissioner (CT)
Finance Act 1994 Service Tax FY 2004-05 to 2007-08 3.05 Commissioner Central Excise and Service Tax Appellate Tribunal
Finance Act 1994 Service Tax FY 2008-09 0.37 (including penalty of 0.19) Commissioner Central Excise and Service Tax (Appeals)
Income Tax Act 1961 Income tax FY 2011-12 7.72 Commissioner of Income tax (Appeals)
Income Tax Act 1961 Income tax FY 2012-13 87.36 Commissioner of Income tax (Appeals)
Income Tax Act 1961 Income tax FY 2013-14 230.09 Commissioner of Income tax (Appeals)

*Amount paid under protest Income tax act Rs. 29.90 million & Value Added Tax Rs.2.80 million.

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues to a financial institutionbank or debenture holders. The Company did not have any outstanding dues to governmentduring the year.

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer during theyear. The Company has utilised the monies raised by way of term loan / debt instrumentsfor the purpose for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements and according to the information andexplanations given by the management we report that no fraud by the Company has beennoticed or reported during the year. However as more fully discussed in Note 46 to thefinancial statements and as informed by the management we report that during the yearthere have been certain instances of fraud on the Company by officers and employees wheregold loan related misappropriations / cash embezzlements / burglaries have occurred foramounts aggregating Rs. 17.46 million (net of recoveries of Rs. 54.71 million)The Companyhas taken or is in the processing of taking legal and other actions against suchemployees/third parties and making insurance claims for recoveries of these amounts fromthe respective insurance companies where applicable.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe standalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us we report that theCompany has registered as required under section 45-IA of the Reserve Bank of India Act1934.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Bharath N S

Partner

Membership Number: 210934

Place of Signature: Chennai

Date: May 25 2017

Annexure 2 to the Independent Auditor’s Report of Even Date on the StandaloneFinancial Statements of Manappuram Finance Limited

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

To the Members of Manappuram Finance Limited

We have audited the internal financial controls over financial reporting of ManappuramFinance Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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 responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company’s policies the safeguarding of its assets theprevention 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.

AUDITOR’S 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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance

Note require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of

financial statements in accordance with generally accepted accounting principles andthat receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial 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 theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Bharath N S

Partner

Membership Number: 210934

Place of Signature: Chennai

Date: May 25 2017