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Auditor Report of Muthoot Finance Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting 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 Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in 1ndia, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of these standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. 1n making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

OPINION

1n our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in 1ndia, of the state of affairs of the Company as at March 31, 2016, 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 1ndia in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure ‘A’, a statement on the matters specified in the paragraph 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 best of our knowledge and belief were necessary for the purposes of our audit.

b) 1n our opinion, proper books of account as required by law have been kept by the Company 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 Statement dealt with by this Report are in agreement with the books of account.

d) 1n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards 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 March 31, 2016, taken

on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2016 from being appointed as a Director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure B’.

g) With respect to the other matters to be included in the 1ndependent Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements- Refer Note 27 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses,

if any, on long term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the 1nvestor Education and Protection Fund by the Company.

(i) 1n respect of the Company’s fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As informed to us, not all the fixed assets have been physically verified by the management during the year, but there is a regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and

the nature of its assets. 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 examined by us and based on the examination of the title deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings, are held in the 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 and the Company does not hold any inventory during the period under audit. Accordingly, the provisions of clause 3 (ii) of the Order is not applicable to the Company.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, and limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.

(iv) 1n our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted deposits from the public attracting the directives issued by the Reserve Bank of 1ndia and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Therefore, the provisions of Clause 3(v) of the Order are not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, for any of the services rendered by the Company and therefore, the 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 has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State 1nsurance, 1ncome Tax, Sales Tax, Service Tax, Value Added Tax, Duty of Customs, Duty of Excise, Cess and other material statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Employees State 1nsurance, 1ncome Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were outstanding as at March 31, 2016, for a period of more than six months from the date they became payable.

(b) According to the information and explanations

given to us, there are no material dues of Sales tax, Duty of Customs, Wealth Tax, Duty of Excise and Cess which have not been deposited on account of any dispute. The following dues of Service Tax and 1ncome Tax have not been deposited with appropriate authorities on account of dispute:

Nature of

Amount Rs,In

Period to

Forum where dispute is

dues

Lakhs *

which the amount relates

pending

499.21

2003-2008

CESTAT, Bangalore

48,958.83

2007-2012

CESTAT, Bangalore

7.90

2013-2014

Commissioner (Appeals), Kochi

Service tax

445.72

2010-2013

CESTAT, Bangalore

21.55

2008-2011

Commissioner of Central Excise(Appeals), Kochi

53.64

2007-2013

Commissioner of Central Excise(Appeals), Kochi

110.39

2013-2014

High Court of Kerala

271.20

Assessment Year 2012-

Commissioner of 1ncome Tax (Appeals)-11, Kochi

1ncome

13

Tax

145.64

Assessment Year 201011

1ncome Tax Appellate Tribunal, Kochi

* Amount is net of payments made and without considering interest for the overdue period, 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 and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks, government or dues to debenture holders.

(ix) 1n our opinion and according to the information and explanations given to us, the Company has utilized the moneys raised by way of public offer of debt instruments and term loans 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,1,62,66,785.00 as given in Note 35 to the financial statements; and

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

(xi) 1n our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals 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 the Order is not applicable.

(xiii) 1n our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

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

(xv) 1n our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its Directors or persons connected to its Directors and hence reporting under clause 3(xv) of the Order is not applicable to the Company.

(xvi) The Company is engaged in the business of Non-Banking Financial 1nstitution and has obtained the certificate of registration under Section 45-1A of the Reserve Bank of 1ndia Act, 1934.

We have audited the internal financial controls over financial reporting of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (‘the Company’) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of 1nternal Financial Controls Over Financial Reporting issued by the 1nstitute of Chartered Accountants of 1ndia (the ‘Guidance Note’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of 1nternal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by 1CA1 and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of 1nternal Financial Controls and, both issued by the 1nstitute of Chartered Accountants of 1ndia. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that;(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and Directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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

OPINION

1n our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of 1nternal Financial Controls Over Financial Reporting issued by the 1nstitute of Chartered Accountants of 1ndia.

For Rangamani & Co

Chartered Accountants

(Firm Registration No.: 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date: 27th May, 2016 Membership No. 020566


Mar 31, 2015

We have audited the accompanying standalone fnancial statements of Muthoot Finance Limited, Registered and Corporate Ofce: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifcant accounting 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specifed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fnancial controls, that were operating efectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these standalone fnancial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specifed under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal fnancial control relevant to the Company''s preparation of the fnancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal fnancial control system over fnancial reporting and the operating efectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion on the standalone fnancial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of afairs of the Company as at March 31, 2015, and its proft and its the cash fows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 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 best of 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 the Company so far as it appears from our examination of those books.

c. The Balance Sheet, the Statement of Proft and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone fnancial statements comply with the Accounting Standards specifed 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 March 31, 2015, taken

on record by the Board of Directors, none of the Directors is disqualifed as on 31st March 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 fnancial position in its fnancial statements – Refer Note 28 to the fnancial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

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

Annexure to the Independent Auditors'' Report

The Annexure referred to in our Independent Auditors'' Report to the members of the Company on the standalone fnancial statements for the year ended March 31, 2015, we report that;

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) As informed to us, not all the fxed assets have been physically verifed by the management during the year, but there is a regular programme of verifcation, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. We are informed that no material discrepancies were noticed on such verifcation.

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

(iii) As informed to us, the company has not granted

secured or unsecured loans to companies, frms or other parties covered in the register maintained u/s 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a) and (b) of the Companies (Auditor''s Report) Order 2015 are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to the purchases of fxed assets and for sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. During the course of our audit, no major weaknesses have been noticed in internal control system in respect of these areas.

(v) According to the information and explanations given to us, the Company has not accepted deposits from the public attracting the directives issued by the Reserve Bank of

India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Therefore, the provisions of Clause 3(v) of the Companies (Auditor''s Report) Order, 2015 are not applicable to the Company.

(vi) According to the information and explanations given to us, in respect of the Company, Central Government has not prescribed the maintenance of cost records under section 148 (1) of the Companies Act, 2013.

(vii) (a) The Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues, applicable to it.

According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were outstanding as at March 31, 2015, for a period of more than six months from the date they became payable.

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

Period to Forum where Nature of Amount Rs, which the dispute is dues In Lakhs * amount pending relates

CESTAT, 499.21 2003-2008 Bangalore

CESTAT, 48,958.83 2007-2012 Service tax Bangalore

Commissioner 7.90 2013-14 (Appeals),Kochi

Commissioner

Assessment of Income Tax 271.20 Year 2012-13 (Appeals)-II, Kochi Income Tax

Commissioner Assessment of Income Tax

145.64 Year 2010-11 (Appeals) , Kochi

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

(c) According to the information and explanations

given to us, there is no amount that is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and the rules made there under.

(viii) The company does not have accumulated losses as at

the end of the fnancial year and it has not incurred cash losses during the fnancial year covered by the audit and in the immediately preceding fnancial year.

(ix) According to the records of the company examined by us and the information and explanations given to us, we are of the opinion that the company has not defaulted during the period in repayment of dues to fnancial institution, bank or debenture holders.

(x) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or fnancial institutions.

(xi) According to the information and explanations given

to us, the term loans were applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given

to us,

(a) there have been certain instances of fraud by customers/staf of the company amounting to Rs. 1,19,62,300 as given in Note 37 to the fnancial statements;

(b) no other material fraud on the company has been noticed or reported during the course of our audit; and

(c) no fraud by the company has been noticed or reported during the course of our audit.

For Rangamani & Co

Chartered Accountants

(Registration No.: 003050 S)



Sd/-

R. Sreenivasan

Place: Kochi Partner

Date: 5th May, 2015 Membership No. 020566


Mar 31, 2014

We have audited the accompanying financial statements of Muthoot Finance Limited, Registered and Corporate office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (the Company), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956, read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

ii. In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

iii. In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 , we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifed under the Companies Act 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of the written representations received from the directors, as on 31st March 2014, taken on record by the Board of Directors none of the Directors is disqualified as on 31st March 2014, from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.

Annexure to the Auditors'' report (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

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

(b) As informed to us, not all the assets have been physically verifed by the management during the year, but there is a regular program of verifcation, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. We are informed that no material discrepancies were noticed on such verifcation.

(c) No substantial part of fixed assets has been disposed off during the year.

(ii) (a) The Company is a Non-Banking Finance Company and has not dealt with any goods and the company does not hold any inventory during the period under audit. Accordingly, the provisions of clause 4 (ii) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(iii) (a) As informed, the company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(e) The company has taken unsecured loans from 17 parties covered in the register maintained u/s 301 of the Companies Act, 1956, the maximum amount of which during the year was Rs. 48,661.03 Lakhs and the year-end balance of such loan is Rs. 44,617.78 Lakhs.

(f) In our opinion, the rate of interest and other terms and conditions on loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g) In our opinion, in respect of loan taken, the repayment of principal amount and interest was regular.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to the purchases of fixed assets and for rendering of services. During the course of our audit, no major weaknesses have been noticed in internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions have been made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000 /- in respect of any party during the year have been made at prices which are reasonable as per the information available with the Company.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public attracting the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1976 with regard to the deposits accepted from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, in respect of the Company, Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues, applicable to it.

(b) According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues were outstanding as at 31st March, 2014, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Sales tax, Customs Duty, Wealth Tax, Excise duty and Cess which have not been deposited on account of any dispute. There are dues of Service Tax and Income Tax that have not been deposited with appropriate authorities on account of dispute and the forum where the disputes are pending is given below:

Nature of Amount Rs. Period to which Forum where dues In Lakhs * the amount dispute is pending relates

Service tax 117.28 Customs, Central

Penalty on 381.92 Excise and Service 2003-2008 above Tax Appellate Tribunal, Bangalore

Income Tax 196.62 AY 2010-11, Commissioner of 2012-13 Income Tax appeals (Kochi) & Assistant Commissioner of Income Tax (CPC)

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

(x) The company has no accumulated losses as at 31st March, 2014 and it has not incurred cash losses during current and the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, we are of the opinion that the company has not defaulted during the period in repayment of dues to financial institution, bank or debenture holders.

(xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a Chit Fund or a Nidhi/Mutual benefit Fund/Society and accordingly the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanation given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xix) According to the information and explanations given to us during the year covered by our audit report, the company has created security in respect of Secured Non-Convertible Debentures issued.

(xx) We have verifed that the end use of money raised by public issues as disclosed in the notes to the financial statements.

(xxi) According to the information and explanations given to us,

(a) there have been certain instances of fraud by customers/ staff of the company amounting to Rs. 19,701,706 as given in Note 34 to the financial statements;

(b) no other material fraud on the company has been noticed or reported during the course of our audit; and

(c) no fraud by the company has been noticed or reported during the course of our audit.

For Rangamani & Co

Chartered Accountants

(FRN : 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date : 26th May, 2014 Membership No. 020566


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (the Company), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards of Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence supporting the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet , of the state of affairs of the Company as at 31st March, 2013;

ii. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. In the case of the Cash Flow statement, of the 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, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, (together the ''Order'') issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (the ''Act''), we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Act , we report that:

a. We have obtained all the information and explanations, which to the best of 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 the Company so far as appears from our examination of those books

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act.

e. On the basis of written representations received from the Directors, as on 31st March 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2013 from being appointed as Director under Section 274(1)(g) of the Companies Act,1956

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

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

(c) No substantial part of fixed assets has been disposed off during the year.

(ii) (a) The Company is a Non-Banking Finance Company and has not dealt with any goods and the Company does not hold any inventory during the period under audit. Accordingly, the provisions of clause 4 (ii) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(iii) (a) As informed, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(e) The Company has taken unsecured loans from 27 parties covered in the register maintained u/s 301 of the Companies Act, 1956, the maximum amount of which during the year was Rs. 27,660.92 Lakhs and the year-end balance of such loan is Rs. 21,789.06 Lakhs.

(f) In our opinion, the rate of interest and other terms and conditions on loans taken by the Company, secured or unsecured, are not prima facie prejudicial to the interest of the Company.

(g) In our opinion, in respect of loan taken, the repayment of principal amount and interest was regular.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to the purchases of fixed assets and for rendering of services. During the course of our audit, no major weaknesses have been noticed in internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions have been made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000 /- in respects of any party during the year have been made at prices which are reasonable as per the information available with the Company.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public attracting the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1976 with regard to the deposits accepted from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, in respect of the Company, Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues, applicable to it.

(b) According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues were outstanding as at 31st March, 2013, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Sales tax, Customs Duty, Wealth Tax, Excise duty and Cess which have not been deposited on account of any dispute. There are dues of Service Tax and Income Tax that have not been deposited with appropriate authorities on account of dispute and the forum where the disputes are pending is given below:

Nature of Amount Rs. Period to Forum where dues in Lakhs * which the dispute is amount pending relates

Service tax 117.28 Customs, Penalty on 298.93 Central Excise above and Service 2003-2008 Tax Appellate Tribunal, Bangalore

Income Tax 483.63 AY 2006- Commissioner 07,2009-10 of Income Tax and 2010-11 appeals (Kochi)

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

(x) The Company does not have any accumulated loss as at 31st March, 2013 and it has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanations given to us, we are of the opinion that the Company has not defaulted during the period in repayment of dues to financial institution, bank or debenture holders.

(xii) The Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and in such cases, in our opinion, adequate documents and records are maintained.

(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society and accordingly the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xix) According to the information and explanations given to us during the year covered by our audit report, the Company has created security in respect of Secured Non-Convertible Debentures issued.

(xx) The Management has disclosed the utilisation of money raised by public issue of Secured Non-Convertible Debentures in Note No. 33, which has been verified by us.

(xxi) According to the information and explanations given to us,

(a) there have been certain instances of fraud by customers/staff of the Company amounting to Rs. 41,85,000 as given in Note 36 to the financial statements;

(b) no other material fraud on the Company has been noticed or reported during the course of our audit; and

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

For Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

(Sd/-)

R. Sreenivasan

Place: Kochi Partner

Date: 14th May, 2013 Membership No. 020566


Mar 31, 2012

1. We have audited the attached Balance Sheet of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (the company) as at 31st March 2012, the statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, (together the 'Order') issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (the 'Act'), and based on the information and explanations given to us, we give in Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraphs 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable.

e. On the basis of written representations received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March 2012 from being appointed as director under Section 274(1 )(g) of the Companies Act,1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet , of the state of affairs of the Company as at 31st March 2012;

ii. In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii. In the case of the Cash Flow statement, of the cash flows for the year ended on that date.

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

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

(c) No substantial part of fixed assets has been disposed off during the year.

(ii) (a) The Company is a Non-Banking Finance Company and has not dealt with any goods and the company does not hold any inventory during the period under audit. Accordingly, the provisions of clause 4 (ii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(iii) (a) As informed, the company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(e) The company has taken unsecured loans from 24 parties covered in the register maintained u/s 301 of the Companies Act, 1956, the maximum amount of which during the year was Rs. 8,829.94 Lakhs and the year-end balance of such loan is Rs. 7,917.88 Lakhs.

(f) In our opinion, the rate of interest and other terms and conditions on loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g) In our opinion, in respect of loan taken, the repayment of principal amount and interest are also regular.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to the purchases of fixed assets and for rendering of services.

During the course of our audit, no major weaknesses have been noticed in internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions have been made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000/- in respects of any party during the year have been made at prices which are reasonable as per the information available with the Company.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public attracting the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1976 with regard to the deposits accepted from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, in respect of the Company, Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues, applicable to it.

(b) According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues which are outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Sales tax, Customs Duty, Wealth Tax, Excise duty and Cess which have not been deposited on account of any dispute. There are dues of Service Tax and Income Tax that have not been deposited with appropriate authorities on account of dispute and the forum where the disputes are pending is given below:

Nature Amount Period to which Forum where of dues Rs.in Lakhs* the amount relates dispute is pending

Service tax 117.28 2003-2008 Customs, Central Penalty on 298.93 Excise and Service above Tax Appellate Tribunal, Bangalore

Income Tax 137.82 AY 2009-10 Commissioner of Income Tax appeals (Kochi)

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

(x) The company does not have any accumulated loss as at 31st March 2012 and it has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, we are of the opinion that the company has not defaulted during the period in repayment of dues to financial institution, bank or debenture holders.

(xii) The Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and in such cases, in our opinion, adequate documents and records are maintained.

(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society and accordingly the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003(as amended) are not applicable to the Company.

(xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003(as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions..

(xvi) According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short- term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year.

(xix) According to the information and explanations given to us during the year covered by our audit report, the company has created security in respect of Secured Non- Convertible Debentures issued.

(xx) The Management has disclosed the end use of money raised by initial public offer of equity shares in Note 32 to financial statements, which has been verified by us.

(xxi) According to the information and explanations given to us,

(a) there have been certain instances of fraud by customers/staff of the company amounting to Rs 6,270,000/- as given in Note 34 to the financial statements;

(b) no other material fraud on the company has been noticed or reported during the course of our audit; and

(c) no fraud by the company has been noticed or reported during the course of our audit.

For Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

R. Sreenivasan

Place: Kochi Partner

Date: May 15,2012 M. No. 020566


Mar 31, 2011

1. We have audited tile attached Balance Sheet of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Sarilha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 016, India, (the company) as at 31st March 2011, and the annexed Profit and Loss Account for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the company's management. Our responsibility is to express en opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted fn India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order. 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, (together the "Order') issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (the "Act"), and based on the information and explanations given to us, we give in Annexure-1, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. As required by the Non- Banking Financial Companies Auditor's Report (Reserve Bank) Directions, 2008, we give in Annexure U. a statement on the matters specified in the paragraph 3 and 4 of the said directions.

5. Further to our comments in the Annexures referred to In paragraphs 3 & 4 above, we report that;

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purpose of the audit have been received from branches not visited by us.

c The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable.

e. On the basis of written representations received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2011 from being appointed as director under Section 274(1)(g) of the Act.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Act, In the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011; and

ii. In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date

Annexure I to the Auditor's Report (Referred to in paragraph 3 or our report of even date)

Re. Muthoot Finance Limited

(i) (a) Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Not all the assets have been physically verified by the management during the year, but there Is a regular programme of verification, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. We are informed that no material discrepancies were noticed on such verification.

(c) Mo substantial part of fixed assets has been disposed off du ring the year.

(ii) (a) The Company is a Non-Banking Finance Company and has not dealt with any goods and the company does not hold any inventory during the period under audit. Accordingly, the provisions of clause A (ii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(iii) (a) The company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditors Report} Order 2003 are not applicable to the Company.

(e) The company has taken unsecured loans from directors and their relatives and from companies covered in the register maintained u/s 301 of the Companies Act, 1956 the maximum amount of which during the year was Rs. 9,836.07 Lakhs and the year-end balance of such loan is Rs 8.175.92 Lakhs.

(f) In our opinion. the rate of interest and other terms and conditions on loans laken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g) In our opinion, the payment of principal amount and interest are a Iso regular.

(iv) in our opinion and according to the information and explanations given to us. there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to the purchases of fisted assets and for rendering of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions have been made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 500 Lakhs in respects of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) in our opinion and according to the information and explanations given to us, the Company has not accepted deposits tram the public attracting the provisions of Section 5BA and Section 56AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules. 1976 with regard to the deposits accepted from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size end nature of its business.

(viii) According to the Information and explanations given to us. In respect of the Company. Central Government has not prescribed the maintenance of cost records under section 209(1} (d) of the Companies Act, 1956. fix) (a) The Company is regular In depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues, applicable to it.

(b) According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund. Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other materia! statutory dues which are outstanding for a period of more than s ix month s from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of sales tax, Income Tax, Customs Duty. Wealth Tax, Service Tax, Excise duty and Cass which have not been deposited on account of any dispute. There are dues of service tax that have not been deposited with appropriate authorities on account of dispute and the forum w here the disputes are pending is given below:

Nature of dues Amount Rs * Period to which Forum where In Lakhs the amount relates dispute is pending

Service tax 157.29 Customs, Central 2003-2009 Excise and Service Tax Penalty on above 293.93 Appellate Tribunal, Bangalore

* Amount is net of payments made and without considering interest for the overdue period, if any, as may belevied if demand raised is upheld

(x) The company doesnot have any accumulated loss as at 31 st, March 2011 and it has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted during the period in repayment of dues to financial institution, bank or debenture holders,

(xii) The Company has granted loans and advances an the basis of security by way of pledge of shares, debentures and other securities and in such cases, in our opinion, adequate documents are maintained.

(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/VSociety and accordingly the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4{xv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xvi) According to the information and explanations given to us. the term loans were applied for the purpose for which the loans were obtained

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

{xviii}According to the information and explanations given to us, the price at which the company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act is not prejudicial to the interest of the company.

(xix) According to the information and explanations given to us during the year covered by our audit report, the company has created security in respect of Secured IM on-Convertible Debentures issued.

(xx) According to the information and explanations given to us, the Company has not raised money by public issues. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xxi) According to the information and explanations given to us, no material fraud on the company has been noticed or reported during the course of our audit or no fraud by the company has been noticed or reported during the course of our audit. Company has taken appropriate legal actions against the persons perpetrated the fraud and the amounts are written off during the year.

Per Pro M/s Rangamani & Co

Chartered Accountants

(FRN : 003050 S)

Sd/- Place: Alleppey R.Sreenivasan

Date: May 26,2011 Membership No. 020566


Mar 31, 2010

1. We have audited the attached Balance Sheet of Muthoot Finance Limited, Kochi (the company) as at 31st March 2010, and the annexed Profit and Loss Account for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies ( Auditors Report) (Amendment) Order, 2004, (together the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (the Act), and based on the information and explanations given to us, we give in Annexure- I, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. As required by the Non- Banking Financial Companies Auditors Report (Reserve Bank) Directions, 2008, we give in Annexure - II, a statement on the matters specified in the paragraph 3 and 4 of the said directions.

5. Further to our comments in the Annexures referred to in paragraphs 3 & 4 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purpose of the audit have been received from branches not visited by us.

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act, to the extent applicable.

e. On the basis of written representations received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2010 from being appointed as director under Section 274(l)(g)oftheAct.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; and

ii. In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date

Annexure I to the Auditors Report (Referred to in paragraph 3 of our report of even date) Re. Muthoot Finance Limited

(i) (a) Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Not all the assets have been physically verified by the management during the year, but there is a regular programme of verification, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. We are informed that no material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during the year, other than a Scheme of Arrangement and Demerger of Radio Business which was approved by the Honourable High Court of Kerala vide Order dated 09.04.2010, the radio business of the Company was demerged and became vested with M/s Muthoot Broadcasting Private Limited on a going concern basis with effect from the appointed date i.e. 01st January 2010. However this demerger has not affected the going concern status of the company.

(ii) (a) The Company is a Non-Banking Finance Company and has not dealt with any goods and the company does not hold any inventory during the period under audit. Accordingly, the provisions of clause 4 (ii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(iii) (a) The company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(e) The company has taken unsecured loans from directors and their relatives and from companies covered in the register maintained u/s 301 of the Companies Act, 1956 the maximum amount of which during the year was Rs. 5,706.00 Lakhs and the year-end balance of such loan is Rs. 5,706.00 Lakhs.

(f) In our opinion, the rate of interest and other terms and conditions on loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g) In our opinion, the receipt of principal amount and interest are also regular.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to the purchases of fixed assets and for rendering of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions have been made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5.00 Lakhs in respects of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public attracting the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1976 with regard to the deposits accepted from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, in respect of the Company, Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956.

(ix) (a) The Company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues, applicable to it.

(b) According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues which are outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of sales tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise duty and Cess which have not been deposited on account of any dispute. There are dues of service tax that have not been deposited with appropriate authorities on account of dispute and the forum where the disputes are pending is given below:

Nature of Amount Rs. Period to which the Forum where dispute is dues In Lakhs * amount relates pending

Service tax 157.29 Customs, Central Excise

2003-2009 and Service Tax Penalty on 298.93 Appellate Tribunal, above Bangalore

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

(x) The company does not have any accumulated loss as at 31st March 2010 and it has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted during the period in repayment of dues to financial institution, bank or debenture holders.

(xii) The Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and in such cases, in our opinion, adequate documents are maintained.

(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society and accordingly the provisions of Clause 4(xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xiv) According to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xvi) According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the price at which the company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act is not prejudicial to the interest of the company.

(xix) According to the information and explanations given to us during the year covered by our audit report, the company has created security in respect of Secured Non- Convertible Debentures issued.

(xx) According to the information and explanations given to us, the Company has not raised money by public issues. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(xxi) According to the information and explanations given to us, no material fraud on the company has been noticed or reported during the course of our audit or no fraud by the company has been noticed or reported during the course of our audit. Company has taken appropriate legal actions against the persons perpetrated the fraud and the amounts are written off during the year.

Per Pro M/s Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

Sd/-

Place: Alleppey R. Sreenivasan

Date: 14.07.2010 M. No. 020566

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