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Muthoot Capital Services Ltd.

BSE: 511766 Sector: Financials
NSE: MUTHOOTCAP ISIN Code: INE296G01013
BSE 12:03 | 21 Aug 1033.10 3.95
(0.38%)
OPEN

1029.00

HIGH

1053.25

LOW

1008.00

NSE 11:54 | 21 Aug 1028.00 1.85
(0.18%)
OPEN

1026.15

HIGH

1056.00

LOW

1006.15

OPEN 1029.00
PREVIOUS CLOSE 1029.15
VOLUME 2321
52-Week high 1300.00
52-Week low 501.00
P/E 24.91
Mkt Cap.(Rs cr) 1,699
Buy Price 1029.00
Buy Qty 1.00
Sell Price 1034.90
Sell Qty 12.00
OPEN 1029.00
CLOSE 1029.15
VOLUME 2321
52-Week high 1300.00
52-Week low 501.00
P/E 24.91
Mkt Cap.(Rs cr) 1,699
Buy Price 1029.00
Buy Qty 1.00
Sell Price 1034.90
Sell Qty 12.00

Muthoot Capital Services Ltd. (MUTHOOTCAP) - Auditors Report

Company auditors report

To

the Members of Muthoot Capital Services Limited Kochi Report on the FinancialStatements

We have audited the accompanying Financial Statements of Muthoot Capital ServicesLimited ("the Company") which comprise the Balance Sheet as at March 312018 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the 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 Section 134(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. isresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 controls 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 specified underSection 143(10) of the Act. ose Standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. the procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

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 2018 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 of theAct we enclose in the "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 and the Cash Flow Statementdealt with by 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 the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) ofthe Act.

(f) With respect to the adequacy of the internal financial control systems withreference to financial statements reporting of the Company and the operating effectivenessof such controls 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. theCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements - Refer Note No. 7 of the financial statements. ii. the Company didnot have any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. ere has been no delay in transferring amounts requiredto be transferred to the Investor Education and Protection Fund by the Company.

For Varma & Varma
Chartered Accountants
Place: Kochi – 19 FRN: 004532S
Date:17-04-2018
VIJAY NARAYAN GOVIND
Partner
M.No. 203094

ANNEXURE A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED MARCH 312018:

1. (a) the Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) We are informed that the fixed assets of the Company have been physically verifiedby the management during the year the frequency of which in our opinion is reasonablehaving regard to the size of the Company and the nature of assets and that no materialdiscrepancies were noticed on such verification.

(c) the Company does not have any immovable property and hence the reportingrequirements as per clause 3 (1) (c) of the Order are not applicable.

2. Except for the repossessed assets from borrowers and stock of stationery theCompany does not have any other stock of inventory. ese Inventories have been physicallyverified during the year by the management. In our opinion the frequency of verificationis reasonable. In our opinion and according to the information and explanations given tous material discrepancies were not noticed on such physical verification.

3. the Company has granted secured loans to three companies and an unsecured loans toone company and one partnership firm covered in the Register maintained under section 189of the Act in respect of which; (a) the terms and conditions of the grant of such loansare in our opinion 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) ere is no overdue amount remaining outstanding as at the balance sheet date.

4. According to the information and explanations given to us and the records of theCompany examined by us the Company has complied with the provisions of Sections 185 and186 of the Act in respect of grant of loans making investments and providing guaranteesand securities as applicable.

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 Act and the rulesframed there under to the extent applicable have been complied with. According to theinformation and explanations given to us by the management no order has been passed byCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courtor any other Tribunal in respect of the aforesaid deposits.

As stated in Note No. 2.3.4 of the financial statements there are unpaid amountsagainst matured Public deposits amounting to ` 3 39 62 thousand (including interest)outstanding as on 31st March 2018 and the management has confirmed that theycould not pay the same since claims were not received from public deposit holders.

6. To the best of our knowledge and according to the information and explanation givento us central government has not prescribed the maintenance of cost records under Section148 (1) of the Act for the Company at this stage.

7. (a) As per the information and explanations furnished to us and according to ourexamination of the records of the Company the Company has been generally regular indepositing undisputed statutory dues including Provident Fund Employee's State InsuranceIncome Tax Sales Tax Service Tax Duty of customs Duty of excise Value Added Tax Cessand any other statutory dues as applicable to the Company to the appropriate authoritiesduring the year. According to the information and explanation given to us by themanagement there are no arrears of undisputed statutory dues outstanding as at the lastdate of the financial year for a period of more than six months from the date on whichthey became payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax service taxduty of customs duty of excise and value added tax that have not been deposited onaccount of any dispute as at March 31 2018 are as follows:

Name of the Statute Nature of Dues Amount (` in 000) Periods to which the amount relates Forum where the dispute is pending
Income Tax AY- 2012-13 (FY- Commissioner of Income Tax
Income Tax 1 87
Act1961 2011-12) (Appeals)

8. In our opinion and according to the information and explanations given to us and therecords of the Company examined by us the Company has not defaulted in repayment oRs.oansor borrowings to financial institutions banks Governments or dues to debenture holders.

As stated in Note No. 2.7 of the financial statementsthere are unpaid amounts againstmatured debentures amounting to ` 9 56 thousand outstanding as on March 31 2018 and themanagement has confirmed that they could not pay the same since claims were not receivedfrom the debenture holders.

9. According to the information and explanations given to us and the records of theCompany examined by us no moneys were raised by way of initial public offer or furtherpublic offer (including debt instruments) and the term loans availed by the Company havebeen applied for the purpose for which the loans were obtained.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

11. According to the information and explanations given to us and the records of theCompany examined by us managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act.

12. the Company is not a Nidhi Company. Accordingly the reporting requirements underclause (xii) of paragraph 3 of the Order is not applicable to the Company.

13. the Company has complied with the provisions of Section 177 and 188 of the Actwereapplicable for all transactions with the related parties. the details of related partytransactions have been disclosed in Note No. 4 of the financial statements as required bythe applicable accounting standards.

14. the Company has not made any preferential allotment of shares or fully or partlyconvertible debentures during the year under review. As stated in Note No. 2.1 of thefinancial statements the Company has made private placement of Equity shares to QualifiedInstitutional Buyers during the year under review in compliance with the requirements ofSection 42 of the Act. the amounts raised have been used for the purpose for which fundswere raised.

15. According to the information and explanations given to us and based on ourexamination of the records of the

Company the Company has not entered into any non-cash transactions with Directors orpersons connected with the Directors and hence the reporting requirement under clause (xv)of paragraph 3 of the Order is not applicable.

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

Place: Kochi - 19 For Varma & Varma
Date: 17-04-2018 Chartered Accountants
FRN: 004532S
VIJAY NARAYAN GOVIND
Partner
M.No. 203094

ANNEXURE B REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING "REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED 31STMARCH 2018: Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial control systems with reference to financialstatements reporting of Muthoot Capital Services Limited ("the Company") as ofMarch 31 2018 in conjunction with our audit of the financial statements of the Companyfor 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 controls with reference to financial statementsreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. eseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols systems with reference to financial statements reporting based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under Section 143 (10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. ose Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls system withreference to financial statements reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements reportingand their operating effectiveness. Our audit of internal financial controls system withreference to financial statements reporting included obtaining an understanding ofinternal financial controls system with reference to financial statements 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 Company's internal financial controls systemwith reference to financial statements reporting.

Meaning of Internal Financial Controls with reference to Financial Statements reporting

A company's internal financial controls system with reference to financial statementsreporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls system with reference to financial statements reporting 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 financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements reporting

Because of the inherent limitations of internal financial controls system withreference to financial statements reporting including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols system with reference to financial statements reporting to future periods aresubject to the risk that the internal financial controls system with reference tofinancial statements reporting may become inadequate because of changes in conditions orthat the 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 with reference to financial statements reporting and suchinternal financial controls system with reference to financial statements reporting wereoperating effectively as at March 31 2018 based on the internal control with referenceto financial statements reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Other Matters

1. the company has a concurrent audit system the coverage and periodicity of whichrequires to be further improved so as to be effective and commensurate with the sizegeographical spread and nature of business.

2. As per the gap-analysis conducted by an independent agency the informationtechnology framework requires to be modified to be in line with the RBI guidelinesprescribed for NBFC sector which we are informed will be complied within the timelinesspecified by RBI Rs.Rs.Rs.Rs.Rs.Rs.Rs.Rs. Our opinion is not modified in respect of theabove matters.

For Varma & Varma
Chartered Accountants
Place: Kochi - 19 FRN: 004532S
Date:17-04-2018
VIJAY NARAYAN GOVIND
Partner
M.No. 203094