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Directors Report of Muthoot Finance Ltd.

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 17th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2014.

1. Financial Results

The financial results of your company for the year ended 31st March, 2014 are summarised below:

Rs. in Crores

Particulars FY 2013-14 FY 2012-13

Income from Operations 4,928 5,359

Other Income 20 28

Total Expenditure 3,754 3,876

Profit Before Depreciation and Other Non Cash Charges 1,241 1,557

Depreciation and Other Non Cash Charges 47 45

Profit Before Tax 1,194 1,511

Tax Expenses 413 507

Profit After Tax 780 1,004

Share Capital and Reserves 4,265 3,736

Subordinated Debt 2,635 2,310

Secured Non-Convertible Debentures 10,631 11,247

Borrowings from Banks/FIs 5,803 10,136

Gross Retail Loan Assets under Management 21,862 26,387

2. Dividend

Based on Company''s performance, your Directors are pleased to recommend for approval of the shareholders a dividend of 10% for Equity Shares of face value of Rs. 10 each (T 1/- per share) of the Company for the financial year 2013-14 which is payable on obtaining the approval of the shareholders of the Company on the 17th Annual General Meeting.

The Company has during the year paid interim dividend aggregating to Rs. 5 per equity share (50% of face value). The total dividend declared for the year 2013-14 is ^ 6 per equity share (60% of face value). The dividend pay-out amount including dividend distribution tax will be Rs. 260.93 Crores.

The list of unpaid dividend is available on the Company''s website www.muthootfinance.com. Shareholders are requested to check the said list and if any dividend is due to them is remaining unpaid in the said list, they can approach the company for release of unpaid dividend.

3. Transfer to Reserves

Your Board proposes to transfer Rs. 78.01 Crores to the General Reserve in accordance with the Companies (Transfer of Profit to Reserves) Rules, 1975. Your Board also proposes to transfer Rs. 156.01 Crores to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934. An amount of Rs. 663.70 Crores has been transferred to Debenture Redemption Reserve. Post transfer of Profits to reserves and distribution of dividend, your Board proposes to retain Rs. 990.18 Crores in the Profit and Loss Account.

4. Economic Scenario

The Global operating environment improved considerably in FY 2013-14, as economic activity strengthened and spending in most economies began to recover, however, in a sporadic manner. Whilst the advanced economies, particularly the US and UK, led the rebound, as growth became broader and more entrenched, Europe saw the frst tentative signs of recovery after a long and painful slowdown.

India''s economic growth rate in the current financial year remained weak at 4.7% (Previous Year: at 4.5%). The Industrial activity remained weak and the stagnation was broad based. Mining and manufacturing output remained negative and the economy witnessed decline in investment in new projects in line with slowdown in overall growth. Macroeconomic situation in 2013-14 had to balance the concerns of containing elevated infation and at the same time promoting growth. It also involved managing a volatile external situation characterised by a sharp depreciation of the Rupee witnessed till the second quarter of 2013-14. High interest rates, retail infation, lack of policy direction, combined with uncomfortably high fiscal and current account defcits, left the policy makers with very few options. RBI had to increase the repo rate by 75 bps during the year.

Your Board of Directors is hopeful that the new government will be able to accelerate reform process and remove various bottlenecks in implementation of various stalled projects and get back the economy on growth mode.

5. Company''s Performance

During the year, RBI further tightened the LTV cap of 60% by clarifying that LTV has to be calculated based on the gold price and not on the value of jewellery. This further impacted customer interest and we saw further erosion in our Customer base. Majority of the customers approached unorganised sector for better terms than us and some to banks. Since there were no LTV norms applicable to banks, absence of level playing feld created a disequilibrium in gold loan business. In whole, during the year, disbursements came down and our gold loan portfolio declined by 17% from Rs. 26000 Crores to Rs. 21618 Crores. Only 188 branches were added during the year as against 404 branches in the previous year. Total income declined by 8% to Rs. 4947 Crores. Profit Before Tax declined by 21% to Rs. 1194 Crores and Profit After Tax by 22% to Rs. 780 Crores. The Return on Average Retail Loans declined to 3.22% as compared to 4.05% in fiscal 2012-13. The cost of borrowed funds declined to 11.88% compared to 12.42% in fiscal 2012-13. Interest yield declined to 20.27% as compared to 21.66% in fiscal 2012-13. On account of the above, the Net Interest Margin declined to 9.42% as against 10.28% in fiscal 2012-13. The Company remitted to exchequer Rs. 458 Crores as taxes.

However, in January 2014, RBI relaxed the LTV cap to 75% of gold price as per the recommendations of the KUB Rao

Committee of RBI. Further, RBI made these regulations applicable for banks, regional rural banks and co-operative banks paving way for a level playing feld in the organised sector. We believe that these regulatory changes can positively impact our business in the future.

6. Resource Mobilisation

(a) Non Convertible Debentures:

Reserve Bank of India vide its circular RBI/2012- 13/560 DNBD(PD) CC No. 330/03.10.001/2012-13 dated June 27, 2013 and RBI/2013-14/115 DNBS(PD) CC No.349/03.10.001/2013-14 dated July 02, 2013 issued certain guidelines with respect to raising money through private placement by NBFCs in the form of non-convertible debentures. These guidelines include restrictions on number of investors in an issue to 49 investors, minimum subscription amount for a single investor of Rs. 25 Lakhs, prohibition on providing loan against own debentures etc. The above directions limits Company''s ability to mobilise resources through private placement as in the past for investments less than Rs. 25 Lakhs. Company is, hence, focusing on ensuring that upon maturity of existing privately placed debentures, holders subscribe to debentures issued through Public Issue route. Accordingly, Company has successfully completed Public Issue of 5th, 6th and 7th Issue of Non-Convertible Debentures during Financial Year 2013-14 raising Rs.1100 Crores. Your Company is thankful to all investors who have subscribed the debentures through Public Issue and endorsed their Trust towards the Company.

Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2014 was Rs. 2635 Crores. It qualifies as Tier II capital under the Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank Directions), 2007.

(b) Bank Finance:

Commercial Banks continued their support to the Company during Financial Year. As of 31st March, 2014, borrowings from banks were Rs. 5803 Crores as against Rs. 10136 Crores in the previous year. The reduction in borrowings were on account of the decline in gold loan portfolio of Rs. 4383 Crores during the year.

Availment of these limits will increase as and when there is corresponding increase in the loan portfolio.

Your Company''s rated short term debt instruments were also placed with various institutions at competitive rates enabling the company to reduce the overall cost of liabilities.

7. Ratings

Your Company''s debt instruments are rated by ICRA and CRISIL, two of the leading Credit Rating Agencies in the country. The Credit Ratings assigned to various instruments of the Company are as follows:

Credit Rating Agency Instruments Ratings Limit in Rs. in Crores

CRISIL Commercial Paper CRISIL A1 4000

Subordinated Debts CRISIL AA-/ Stable 100

Non Convertible Debentures CRISIL AA-/Stable 500

ICRA Commercial Paper ICRAA1 200

Short Term Bank Borrowings* ICRAA1 5712

Subordinated Debts ICRA AA-/Stable 100

Non Convertible Debentures ICRA AA-/Stable 200

Long Term Bank Borrowings* ICRA AA-/Stable 7186

*subject to overall rating of Rs. 11,134 Crores for line of credit

8. Internal Control

The Company has a well placed proper and adequate internal control system commensurate with the size and nature of its business. The primary objective of the internal control system is to ensure that all its assets are safeguarded and protected and prevent any revenue leakage and losses to the Company.

The Company has an Audit and Inspection Department which conducts regular internal audits to examine the adequacy and compliance with policies, plans and statutory requirements. The Department through a team of 1124 personnel ensures quality of the assets pledged and adherence to various risk management practices at all the operating units. The audit functions are decentralised to match the requirements of exercising proper control over nationwide network of the Company.

The Internal Audit Team directly reports to the Audit Committee of the Company. significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.

The Audit Committee oversees the functioning of the audit team and reviews the effectiveness of internal control at all levels apart from laying down constructive suggestions for improving the audit function in the Company. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

9. Human Resources

The factor that makes an organisation to move from Good to Great is its "HUMAN CAPITAL"; and your company has realised this long ago and invests every year in building this human capital to greater heights. Your company''s focus area for the year was talent management, capability building, leadership development and employee engagement. The company quickened the dream of growth for many of the employees by automating the fast track promotion process, allowed them to move into a sales-oriented structure so that they can grow faster, encouraged lateral movements of employee so talent is managed within the group, became a proud organisation where 38% of the workforce is women, took quantum leap in providing state-of-art training centres so as to improve the quality of the training delivery. It also introduced the Employee Stock Option Plan (ESOP) to create a sense of ownership among employees and as recognition of their efforts towards the organisation growth and development.

As of 31st March, 2014, the company had 25012 employees in its rolls at various organisational levels. The company has also heavily invested in training its people assets by a humongous figure of 1,77,000 training man-days, which shows your company''s commitment towards its human resources

Apart from the statutory welfare measures like ESI, PF, Maternity benefits, many staff welfare benefits are provided to employees by the Company in the form of indirect compensation in order to motivate employees to perform better. Rs. 27.5 Lakhs was disbursed to 1351 employees by way of Awards & Presentations like Marriage Presentation, First Time Parent Presentation and Children''s Educational Award. 8327 Employees (outside the purview of ESI) are covered under a Group Mediclaim Insurance Policy which is of immense benefit to employees and their families for their hospitalisation needs. 1200 Senior Citizen employees were given Medical Reimbursements amounting to Rs. 30 Lakhs. A Onetime Compassionate Payment Scheme and a Personal Accident Compensation Scheme extended financial compensation of Rs. 31.5 Lakhs to the next of kin of employees who died while in harness.

The Details of ESOP is annexed to report of Board of Directors of the Company and is essential part of this report.

10. Public deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

11. Capital adequacy

Your Company''s Capital Adequacy Ratio as of 31st March, 2014 stood at 24.69% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, Tier I capital ratio stood at 18.01%.

12. RBI Guidelines

Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time.

13. Directors

During the year under review, Mr. K. George John was appointed as Director of your Company in place of Mr. P George Varghese who retired at previous Annual General Meeting.

Mr. George Thomas Muthoot and Mr. George Jacob Muthoot are retiring at the ensuing Annual General Meeting and being eligible offers themselves for reappointment. Board of Directors of your company recommends their reappointment at the Annual General Meeting. Your Board of Directors recommend appointment of Mr. George Joseph , Justice K John Mathew, Mr. John K Paul and Mr. K. George John as Independent Directors in compliance with Section 149 of Companies Act, 2013 and clause 49 of listing agreement with Stock Exchange (s) for a period of two years continuing till second Annual General Meeting from date of appointment. Further, the existing term of appointment of Mr. M.G George Muthoot, Whole Time Director & Chairman ; Mr. George Thomas Muthoot ,Whole Time Director ; Mr. George Jacob Muthoot ,Whole Time Director and Mr. George Alexander Muthoot, Managing Director are expiring on 31st March, 2015. Your Board of Directors recommends their re-appointment for a further period of 5 years from 1st April, 2015.

14. Auditors

M/s Rangamani & Co., Chartered Accountants, [Firm Registration No: 003050S] the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

16. Directors'' Responsibility Statement

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 ("the Act"), your Directors hereby confirm that:

1. In the preparation of Annual Accounts for the financial year 2013-14, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for financial year;

3. They have taken proper and suffcient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis.

17. Corporate Governance Report and Management discussion and analysis Statement

Your Company has complied with the Corporate Governance norms as stipulated under Clause 49 of the Listing Agreements entered into with the Stock Exchanges. Detailed reports on Corporate Governance and Management Discussion and Analysis are attached to this Report.

18. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since your Company does not carry on manufacturing activities, disclosure requirements under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned : NIL

Total Foreign Exchange Used : Rs. 1,25,93,695.27

19 Material Changes affecting the Company after 31st March, 2014

On 29th April, 2014, your Company allotted 2,53,51,062 shares of Rs. 10 each for cash at a premium of Rs. 155 per equity share aggregating to Rs. 41,829.25 Lakhs, pursuant to Institutional Placement Programme (IPP) under Chapter VIII A of the SEBIICDR Regulations complying with the minimum public shareholding requirement under Rule 19 (2) (b) (ii) of the Securities Contracts (Regulations) Rules, 1957.

On July 8, 2014 The ESOP committee of Board of Directors of your Company has granted second tranche of ESOP of 6100 options @ Rs. 10/- per option and 836900 options @ Rs. 50/- per option to the permanent employees of the Company as per ESOP 2013 scheme of the Company.

20. Acknowledgement

Your Directors thank the Company''s stakeholders in large including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees of your Company at all levels. Your Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India, Securities and Exchange Board of India and Ministry of Corporate Affairs for the guidance and support received from them including offcials there at from time to time.

For and On Behalf of the Board of Directors

M G George Muthoot

Chairman

Kochi, 11th August, 2014

Registered office:

2nd Floor, Muthoot Chambers,

Opposite Saritha Theatre Complex,

Banerji Road,

Kochi – 682 018


Mar 31, 2013

Dear Shareholder,

The Directors have pleasure in presenting the 16th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2013.

1. FINANCIAL RESULTS

The financial results for the year ended 31st March, 2013 are summarised below:

(Amount in Rs. Crore)

Particulars 2012-13 2011-12

Income from Operations 5,359 4,537

Other Income 28 12

Total Expenditure 3,876 3,218

Profit Before Depreciation and Other Non Cash 1,557 1,364 Charges

Depreciation and Other Non Cash Charges 45 33

Profit Before Tax 1,511 1,331

Tax Expenses 507 439

Profit After Tax 1,004 892

Share Capital and Reserves 3,736 2,926

Subordinated Debt 2,310 1,480

Secured Non-Convertible Debentures 11,247 7,863

Bank Borrowings 10,136 9,232

Gross Retail Loan Assets under Management 26,387 24,674

2. DIVIDEND

Based on Company''s performance, your Directors are pleased to recommend for approval of the shareholders a dividend of 45% for Equity Shares of face value of Rs. 10 each (Rs. 4.50 per share) of the Company for the financial year 2012-13 which is payable on obtaining the approval of the shareholders of the Company on the 16th Annual General Meeting. The dividend payout amount including dividend distribution tax will be Rs. 194 Crore The dividend payout ratio for the current year, inclusive of dividend distribution tax is 19%. The list of unpaid dividend is available on the Companies website www. muthootfinance.com. Shareholders are requested to check the said list and if any dividend is due to them is remaining unpaid in the said list, they can approach the Company for release of unpaid dividend.

3. TRANSFER TO RESERVES

Your Board proposes to transfer Rs. 100 Crore to the General Reserve in accordance with the Companies (Transfer of Profit to Reserves) Rules, 1975. Your Board also proposes to transfer Rs. 201 Crore to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934. An amount of Rs. 97 Crore has been transferred for creation of Debenture Redemption Reserve Account as required under the Companies Act, 1956. Post transfer of profits to reserves and distribution of dividend, your Board proposes to retain Rs. 1,368 Crore in the Profit and Loss Account.

4. ECONOMIC SCENARIO

Global growth continues to remain uneven and slow. In Advanced Economies activity has weakened further adversely impacting growth in Emerging and Developing Economies.

The announcement by US Federal Reserve of tapering of Quantitative Easing has resulted in large sell-offs in the financial markets of these economies due to safe haven flight of capital and also on expectation of increase in real interest rates in the US. Consequent to it, there has been a rapid appreciation of the US Dollar and corresponding depreciation in Emerging and Developing Economies currencies.

The economic activity in the Indian Economy has further weakened in the first quarter of FY 2014. Industrial Production remained muted and Capital Goods production contracted reflecting deteriorating investment conditions. Growth in services and exports has remained sluggish on account of global slowdown. Though headline inflation measured by Wholesale Price Index declined from an average of 8.9 percent in 2011-12 and 7.3 percent in 2012-13 to 4.9 percent in first quarter of FY 2014, the retail inflation measured by Consumer Price Index remained high at average of 10.2 percent in 2012-13 and continuing at those levels in the first quarter of FY 2014. Though fiscal deficit has been contained at 5.2% of the GDP, Current Account Deficit of 5.1% poses serious challenge to the economy since it is much above the sustainable level of 2.5% of GDP. RBI has further revised its growth projections for the current year further from 5.7 percent to 5.5 percent. Though the government has taken several positive policy initiatives in the last few quarters, unless these policies are transformed to real actions removing various bottlenecks across various layers, achieving the above growth will be an insurmountable task.

5. COMPANY''S PERFORMANCE

In the wake of change in regulatory environment on account of 60% cap on Loan to Value ratio and resultant negative perceptions created in the market, to provide more comfort to the regulator as well as other stakeholders, Company consciously decided to reduce the pace of its growth and consolidate its operations during the year, focussing on improving customer service, staff training and internal controls while maintaining profitability. The branch network was increased only by 11% reaching 4082 branches compared to addition of 35% in the previous year. Though immediately after the regulatory change in March 2012, Retail Loan Asset Under Mangement declined by 5% in the first quarter of FY 2013, on account of the positive views expressed by the KUB Rao Committee on the role of the sector in the economy, Company achieved a marginal YOY growth of 7% reaching Rs. 26,386 Crore as of March 2013. Total income grew by 18% to Rs. 5,387 Crore . Profit Before Tax rose by 14% to Rs. 1,511 Crore and Profit After Tax by 13% to Rs. 1,004 Crore The Return on Average Retail Loans declined to 4.05% as compared to 4.40%in fiscal 2011-12. The cost of borrowed funds went upto 12.42% compared to 12.20% in fiscal 2011-12. On account of the above, the Net Interest Margin declined to 10.27% as against 10.65% in fiscal 2011-12. The Company remitted to the exchequer Rs. 517 Crore as income tax.

6. RESOURCE MOBILISATION

(a) Secured Debentures

With a view to diversify the funding profile of the Company, Your Company successfully completed third and fourth series of public issues of Secured Non-Convertible Debentures during the year and mobilised Rs. 535 Crore. NCDs offered in the public issue are listed in the BSE Limited and/or National Stock Exchange of India Limited. The Company raised Rs. 2,849 Crore net of repayments, through private placement of Secured Non-Convertible Debentures. Funds raised through this route continue to be a substantial resource base for the Company.

Reserve Bank of India vide its circular RBI/2012-13/560 DNBD(PD) CC No. 330/03.10.001/2012-13 dated 27th June, 2013 and RBI/2013-14/115 DNBS(PD) CC No.349/03.10.001/2013-14 dated 02 July, 2013 issued certain guidelines with respect to raising money through private placement by NBFCs in the form of non-convertible debentures. These guidelines include restrictions on number of investors in an issue to 49 investors, minimum subscription amount for a single investor of Rs. 25 Lakhs, prohibition on providing loan against own debentures etc. Though the above directions limits Company''s ability to mobilise resources through private placement like earlier for investments less than Rs. 25 Lakhs, Company intends to fill the gap through public issuance of listed and rated instruments primarily focusing on retail investors with investment of less than Rs. 25 Lakhs. The existing debentures already taken under private placement route will continue till its maturity.

(b) Bank Finance

Commercial Banks continued their support of the Company''s asset growth. As of 31st March, 2013, borrowings from banks were Rs. 10,136 Crore Your Company''s rated short term debt instruments were also placed with various mutual funds at competitive rates enabling the Company to reduce the overall cost of liabilities.

(c) Subordinated Debts

Subordinated Debts continue to be another source for funding the operations of your Company. Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2013 was Rs. 2,310 Crore. It qualifies as Tier II capital under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank Directions), 2007. The above includes privately placed Rated Unsecured Redeemable Non-Covertible Listed Subordinated Debt of Rs 10 Crore which is listed in the Debt Segment of BSE limited.

7. RATINGS

Your Company''s debt instruments are rated by ICRA and CRISIL, two of the leading Credit Rating Agencies in the country. The Credit Ratings assigned to various instruments of the Company are as follows:

Credit Rating Instruments Ratings Limit in Rs. in Crore Agency

Commercial Paper CRISIL A1 4,000

CRISIL Subordinated Debts CRISIL AA-/Negative 100

Non Convertible Debentures CRISIL AA-/Negative 500

Commercial Paper ICRA A1 200

Short Term Bank Borrowings* ICRA A1 4751

ICRA Subordinated Debts ICRA AA-/Negative 100

Non Convertible Debentures ICRA AA-/Negative 200

Long Term Bank Borrowings* ICRA AA-/Negative 6975

*subject to overall rating of Rs. 10428 Crore for line of credit

8. INTERNAL CONTROL

The Company has a well placed proper and adequate internal control system commensurate with the size and nature of its business .The primary objective of the internal control system is to ensure that all its assets are safeguarded and protected and prevent any revenue leakage and losses to the Company. The Company has an Audit and Inspection Department which conducts regular internal audits to examine the adequacy and compliance with policies, plans and statutory requirements. The Department through a team of 1119 personnel ensures quality of the assets pledged and adherence to various risk management practices at all the operating units. The audit functions are decentralised to match the requirements of exercising proper control over nation wide network of the Company.

The Internal Audit Team directly reports to the Audit Committee of the Company. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems. The Audit Committee oversees the functioning of the audit team and reviews the effectiveness of internal control at all levels apart from laying down constructive suggestions for improving the audit function in the Company. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

9. HUMAN RESOURCES

Your Company understands the strength of Company''s workforce whose collective commitment and passion towards work has helped the organisation to scale new pinnacles. Your Company''s human capital agenda for the year was focused on two main areas: building a vigorous and varied talent pipeline and also invest in progressive employee relations practices and ensure building of capability at grass root level through continued training programmes. The Company aim to create and nourish the best and help in the inclusive growth of their individual and organisational career prospects. As of 31st March, 2013, your company had 24,881 employees on its rolls at various organisational levels. Employee training at all levels is a key priority. Major steps have been initiated to augment the capacity of the in house training system both quantitatively and qualitatively. A total of 79,245 staffs were trained cumulatively under various sessions during the year 2012-13. To recognise and provide opportunity to competent employees to reach higher cadres, opportunity is provided to participate in ''Fast Track Channel Promotion''. We have several staff welfare schemes like Group Mediclaim Insurance Cover, Personal Accident Insurance Cover, Contributory National Pension Scheme with 50% contribution by the Company, Educational Awards, Marriage Presentation, Presentation for First Time Parents, Compassionate payment to the kith and kin of employees who die in harness etc ., in addition to statutory benefits such as ESIC Scheme, Provident Fund, Maternity Benefits etc.

10. PUBLIC DEPOSITS

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

11. CAPITAL ADEQUACY

Your Company''s Capital Adequacy Ratio as of 31st March, 2013 stood at 19.62% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%.Out of the above, Tier I capital ratio stood at 13.41%.

12. RBI GUIDELINES

Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time.

13. DIRECTORS

Pursuant to the Provisions of the Companies Act, 1956 and in accordance with the Article 110 of the Articles of Association of the Company, Mr. George Thomas Muthoot and Mr. P George Varghese retire by rotation at the ensuing Annual General Meeting.

At the Meeting of the Board of Directors of the Company held on 25th July, 2013, Mr. P George Varghese expressed his intention to relinquish his position as Director of the Company and requested the Board to accept his request and make his retirement effective at the Conclusion of the next Annual General Meeting. The Board Members placed on record their deep sense of gratitude and appreciation for the invaluable contribution and guidance provided by Mr. P George Varghese.

Mr. George Thomas Muthoot, being eligible, offers himself for reappointment at the Annual General Meeting.

14. AUDITORS

M/s Rangamani & Co., Chartered Accountants, [Firm Registration No: 003050 S] the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

15. PERSONNEL

Particulars of employees drawing remuneration beyond the monetary ceilings prescribed under Section 217 (2A) of the Companies Act, 1956 are as follows

16. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 ("the Act"), your Directors hereby confirm that:

1. In the preparation of Annual Accounts for the financial year 2012-13, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for financial year;

3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis.

17. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Your Company has complied with the Corporate Governance norms as stipulated under Clause 49 of the Listing Agreements entered into with the Stock Exchanges. Detailed reports on Corporate Governance and Management Discussion and Analysis are attached to this Report.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not carry on manufacturing activities, disclosure requirements under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned : NIL

Total Foreign Exchange Expended : Rs. 58,55,090.88

19. ACKNOWLEDGEMENT

Your Directors thank the Company''s share holders, investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees at all levels. Your Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India and Ministry of Corporate Affairs for the guidance and support received from them including officials thereat from time to time.

For and on Behalf of the Board of Directors

M G George Muthoot

Chairman

Kochi, 25th July, 2013

Registered Office:

2nd Floor, Muthoot Chambers,

Opposite Saritha Theatre Complex,B

anerji Road,

Kochi - 682 018


Mar 31, 2012

The Directors have pleasure in presenting the 15th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2012.

1. Financial Results

The financial results for the year ended 31st March, 2012 are summarized below:

(Amount in Rs. Lakhs)

Particulars 2011-12 2010-11

Income from Operations 454,906 231,587

Total Expenditure 314,289 150,238

Profit Before Depreciation 140,617 81,349

Depreciation and Other Non Cash Charges 7,492 5,228

Profit Before Tax 133,125 76,121

Provision for Tax/Deferred Taxes 43,922 26,703

Profit After Tax 89,202 49,418

Share Capital and Reserves 292,573 133,441

Subordinated Debt 148,011 71,059

Secured Non-Convertible Debentures 786,284 419,823

Bank Borrowings 923,197 605,283

Gross Retail Loan Assets under Management 2,467,360 1,586,845

2. Economic Scenario

The fall in values of investments triggered primarily by the deceleration in economic growth and high inflation characterized the economic scenario in the year gone by. The huge fiscal and current account deficits in the context of declining export growth led to substantial erosion in the exchange rate of Indian rupee and triggered a sovereign rating reduction by some of the rating agencies. These developments throw a dark shadow on the growth prospects of the country in the fiscal 2012-13 and despite a huge consumption demand, the nation's GDP growth reaching 8% looks improbable.

3. Business

Increase in foot print, aggressive marketing efforts and tweaking of products in response to market conditions enabled the Company to improve its loan book by 55% taking the outstanding to Rs. 2,467,360 Lakhs. The cost of borrowed funds went upto 12.20% compared to 8.87% in fiscal 2010-11. Despite this, we could, thanks to overall control on expenditure, efficient collection of interest and control on NPAs, retain the Net Interest Margin at 10.65%. Total income grew by a very creditable 96% to Rs. 454,906 lakhs. Profit Before Tax rose by 75% to Rs. 133,125 lakhs and Profit After Tax by 80% to Rs. 89,202 lakhs. The Return on Average Retail Loans rose to 4.40% as compared to 4.24% in fiscal 2010-11.

Financial Year 2011-12 flags a significant mile stone in the gold loan industry as it marks the beginning of a consolidation phase and your Company too has taken cautious steps in moving towards such a positive direction. The Gross Retail Loan Assets under Management as on 31st March, 2012 stood at Rs. 2,467,360 lakhs registering a year over year growth of 55%. While the total income grew by 96% to reach at Rs. 454,906 lakhs on 31st March, 2012, Profit After Tax stood at Rs. 89,202 lakhs as against a figure of Rs. 49,418 lakhs reported during the previous financial year.

945 new branches were opened during the financial year taking the branch network as on 31st March, 2012 to 3,678 branches spread across 21 states and 4 union territories. The average gold loan outstanding per branch has increased from Rs. 5.75 crores to Rs. 6.64 crores as on March 31, 2012.

4. Dividend

Based on Company's performance, your Directors are pleased to recommend a maiden dividend of 40% on the equity shares (Rs. 4 per Equity Share) of the Company which is payable on obtaining the approval of the shareholders of the Company in the 15th Annual General Meeting. The dividend payout amount for the current year inclusive of additional tax on dividend will be Rs. 172.81 Crores.

5. Appropriations

Your Board proposes to transfer Rs. 892,024,022/- to the General Reserve in accordance with the Companies (Transfer of Profit to Reserves) Rules, 1975. Your Board also proposes to transfer Rs. 1,784,048,044/- to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1 934. An amount of Rs. 742,038,311/- has been transferred for creation of Debenture Redemption Reserve Account as required under the Companies Act, 1956. Post transfer of profits to reserves and distribution of dividend, your Board proposes to retain Rs. 9,569,275,904/- in the Profit and Loss Account. The expenses incurred for Initial Public Offer amounting to Rs. 291,490,445/- have been written off against Securities Premium as per Section 78(2) of the Companies Act, 1956.

6. Regulatory Developments

The Reserve Bank of India vide circular no: DNBS.CC.PD.No. 265/03.10.01/2011-12 dated March 21, 2012 has directed all NBFCs engaged in lending against the security of gold jewellery to maintain a Loan To Value ratio not exceeding 60% of the value of Gold Jewellery. As a matter of abundant caution, we had been progressively reducing our lending rates per gram as a risk management measure, seeing the volatility in the gold prices during the last couple of months. We are complying to this direction from RBI. RBI also reduced the exposure ceiling of banks to a single NBFC having gold loans to the extent of 50% or more of its financial assets from 10% to 7.50% of the banks Total Capital Funds. The minimum Tier-I capital requirement of these NBFCs will be increased from 10% presently to 12% by 1st April, 2014.

7. Resource Mobilization

(a) Secured Debentures

With a view to diversify the funding profile of the Company, your Company successfully completed two public issues of Secured Non-Convertible Debentures during the year and moped up Rs. 115,260 lakhs. NCDs offered in the public issue are listed in the BSE Limited and/or National Stock Exchange of India Limited Company raised Rs. 661,024 Lakhs, net of repayments, through private placement of Secured Non-Convertible Debentures. Funds raised through this route continue to be a substantial resource base for the Company. Your Company has also privately placed Secured Non-Convertible Debentures to the tune of Rs. 10,000 Lakhs which are listed in the Wholesale Debt Segment of the National Stock Exchange of India Limited.

(b) Bank Finance

Commercial Banks continued their support of the Company's asset growth. As of 31st March, 2012, borrowings from banks were Rs. 923,197 lakhs. The company also raised resources through sale of gold loan portfolio and the outstanding amount of gold loan sold under such bilateral sales as of 31st March, 2012 was Rs. 333,521 lakhs. Your Company's rated short term debt instruments were also placed with various mutual funds at competitive rates enabling the company to reduce the overall cost of liabilities.

(c) Subordinated Debts

Subordinated Debts continue to be another source for funding the operations of Company. Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2012 was Rs. 148,011 lakhs. It will qualify as Tier II capital under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank Directions), 2007.

8. Ratings

Your Company's debt instruments are rated by ICRA and CRISIL, two of the leading Credit Rating Agencies in the country. The Credit Ratings assigned to various instruments of the Company are as follows:

Credit Rating Agency Instruments Ratings Limit in Rs.(Lakhs)

CRISIL Commercial Paper CRISIL A1 400,000

Subordinated Debts CRISIL AA-(Stable) 10,000

Non Convertible Debentures CRISIL AA-(Stable) 50,000

ICRA Commercial Paper ICRA A1 20,000

Short Term Bank Borrowings ICRA A1 480,300

Subordinated Debts ICRA AA-(Stable) 10,000

Non Convertible Debentures ICRA AA-(Stable) 20,000

Long Term Bank Borrowings ICRA AA-(Stable) 567,500

9. Internal Control

The Audit and Inspection Department of the Company through a team of 964 personnel ensures quality of the assets pledged and adherence to various risk management practices at all the operating units. The structure of the audit teams have been totally recast with decentralization of functions to match with the expansion in footprint without compromising control.

The Internal Audit Team directly reports to the Audit Committee of the Company. The Audit Committee oversees the functioning of the audit team and reviews the effectiveness of internal control at all levels apart from laying down constructive suggestions for improving the audit function in the Company. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

10. Human Resources

Being a service oriented Company; your company considers human resource capital as its most valuable asset. As of March 31, 2012, your company had 25,351 employees on its rolls at various organizational levels. Your Company offers employees the opportunity to harness their inherent skills and to brave newer frontiers at every phase of their growth. Your management is committed to providing a wholesome work environment and support with excellent training programs and workshops. Your Company provides extensive training to branch employees through training programs that are tailored to acquiring and honing their skills in all operational matters. While every new employee is introduced to the business through an orientation program and through training programs covering job-relevent topics, experienced branch employees receive additional training for upgradation of skills on an ongoing basis.

As of date, your company has established two Staff Training Colleges, one each in Cochin and in New Delhi, and 57 Regional Learning Centers located at Regional Offices spread across the country.

11. Public Deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

12. Capital Adequacy

Your Company's Capital Adequacy Ratio as of March 31, 2012 stood at 18.29% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%.

13. RBI Guidelines

Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time.

14. Directors

In accordance with Article 110 of the Articles of Association of the Company, Mr. George Joseph and Mr. John K Paul retire by rotation at the ensuing Annual General Meeting. Both of them being eligible seek re-appointment at the Annual General Meeting.

15. Auditors

M/s Rangamani & Co., Chartered Accountants, [Firm Registration No: 003050S] the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

16. Personnel

Particulars of employees drawing remuneration beyond the monetary ceilings prescribed under Section 217 (2A) of the Companies Act, 1956 are as follows:

Sl Name of Employee Age Designation Date of No (yrs) Commencement of employment

1 Mr. M G George 62 Whole Time 28.07.2000 Muthoot Director & Chairman

2 Mr. George Alexander 56 Managing Director 28.07.2000 Muthoot

3 Mr. George Thomas 61 Whole Time Director 16.08.2005 Muthoot

4 Mr. George Jacob 59 Whole Time Director 16.08.2005 Muthoot

Name of Employee Gross Qualification Total Last Remuneration Experience employment (Rs.in Lakhs)

Mr M G George Rs. 480 B. Tech 38 years Muthoot Muthoot Bankers

Mr George Alexander Rs. 480 FCA 32 years Muthoot Muthoot Bankers

Mr George Thomas Rs. 480 Under 37 years Muthoot Muthoot Graduate Bankers

Mr George Jacob Rs. 480 B. Tech 35 years Muthoot Muthoot Bankers

17. Directors' Responsibility Statement

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 ("the Act"), your Directors hereby confirm that:

1. In the preparation of Annual Accounts for the financial year 2011-12, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for financial year;

3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis.

18. Corporate Governance Report and Management Discussion and Analysis Statement

Your Company has complied with the Corporate Governance norms as stipulated under Clause 49 of the Listing Agreements entered into with the Stock Exchanges. Detailed reports on Corporate Governance and Management Discussion and Analysis are attached to this Report.

19. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since the Company does not carry on manufacturing activities, disclosure requirements under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned : NIL

Total Foreign Exchange Expended : 20.96 Lakhs

20. Acknowledgement

Your Directors thank the Company's share holders, investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees at all levels. Your Company's consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India and Ministry of Corporate Affairs for the guidance and support received from them including officials thereat from time to time.

For and On Behalf of the Board of Directors

Kochi, M G George Muthoot

July 30, 2012 Chairman

Registered Office:

2nd Floor, Muthoot Chambers, Opposite Saritha Theatre

Complex, Banerji Road, Kochi - 682 018


Mar 31, 2011

To the Members

The Directors have pleasure in presenting the 14th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2011.

1. Financial Results

The financial results for the year ended 31st March. 2011 are summarized below:

(Amount in Rs. Lacs)

Particulars 2010-11 2009-10

Income from Operations 231,587 108,938

Total Expenditure 150,435 72,684

Profit Before Depreciation 81,152 36,254

Depreciation and Other Non Cash Charges 5,031 1,699

Profit Before Tax 76,121 34,555

Provision for Tax/Deferred Taxes 26,703 11,798

Profit After Tax 49,418 22,757

Share Capital and Reserves 133,441 58,455

Subordinated Debt 71,059 32,457

Secured Non-Convertible Debentures 419,823 271,925

Bank Borrowings 605,282 212,787

Gross Retail Loan Assets under Management 1586,845 743,815

2. Business

Financial Year 2010-11 has been a landmark year for your Company for the Gross Retail Loan Assets Under Management crossing the land mark figure of Rs. 1500000 lacs. Gross Retail Loan Assets Under Management stood at Rs. 1586045 lacs as of 31" March, 2011 registenng a growth of 113% as against Rs. 743815 lacs reported during the financial year ended 31" March, 2010. Interest Income registered a growth of 113% to reach at Rs 229834 lacs for the financial year 2010-11 as compared to Rs. 10774$ lacs reported during the previous financial year Profit Before Tax amounted to Rs. 76121 lacs for the financial year 2010- 11 as compared to Rs. 34555 lacs registering a growth of 120% as compared to the previous financial year.

1128 new branches were opened across the country during the year white efforts were put in ensuring deeper penetration into the rural heartlands of the Country. The average gold loan outstanding per branch has increased from Rs. 457.43 lacs to Rs. 575.49 lacs as on March 31,2011.

3. Dividend

Your Board of Directors has decided to plough back the entire profit for the year and retain the same in the Profit and Loss Account further strengthening your Company's net owned funds position.

4. Resource Mobilization

(a) Secured Debentures

During the year, Company raised Rs. 126397 Lacs, net of repayments, through private placement of Secured Non-Convertible Debentures. Funds raised through this routs continue to be a substantial resource base for the Company. Company has also privately placed Secured Non-Convertible Debentures to the tune of Rs. 21500 lacs which are listed in the Wholesale Debt Segment of the National Stock Exchange of India Limited.

(b) Bank Finance

Commercial Banks continued their support of the company's aggressive asset growth. As of 31" March. 2011, borrowings from banks held at Rs. 605282 lacs. The company also raised resources through sell down of gold loan portfolio such that the outstanding amount of gold loan sold under bilateral assignment as of 31' March. 2011 was Rs. 41G639 lacs. Your company's rated short term debt instruments were also placed with various mutual funds at competitive rates enabling the company to reduce the overall cost of liabilities.

(c) Subordinated Debts

Subordinated Debts continue to be another source for funding the operations of Company. Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31* March, 2011 was Rs. 71050 lacs. It will qualify as Tier II capital under the Non- Ban king Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank Directions). 2007.

5. Ratings

The company is rated by CRISIL for Rs.4000 crones of Short Term Debt Programme with a rating of "CRISIL A1 " This is the highest credit quality rating assigned by CRISIL to short term debt instruments. "CRISIL A1 " rating indicates that the degree of safety with regard to timely payment of interest and principal is very strong. CRFSIL has also assigned the company with a long term rating of CRTSIL AA- / (stable)" for Rs.500 crores Non-Convertible Debenture issue and for Rs.100 crones Subordinated Debt issue. This rating Indicates high degree of safety with regard to timely payment of interest and principal on the Instrument.

The company is also rated by ICRA for Rs.200 crores of Short Term Debt Programme with a rating of "[ICRA] A1 ", This is the highest credit quality rating assigned by ICRA to short term debt instruments which indicates Lowest credit Risk and stronger credit quality. ICRA has also assigned the company for Rs.200crs Non-Convertible Debenture issue and for Rs.100crs Subordinated Debt issue with a long term rating of "[ICRA) AA-1 Stable*. Instruments rated in this category carry lowest credit risk and it indicates high quality credit rating. Further, ICRA has also assigned the company with Long Term/Short Term rating of "[ICRA] AA- '/"[ICRA] A1 ' respectively for Rs.6000 crones of Bank loans which indicates high quality credit rating and lowest credit risk / stronger credit quality and Lowest credit Risk respectively.

6. Initial Public Offer

During the month of April, 2011, your Company has completed an Initial Public Offer of 5.15.00,000 Equity Shares of Rs. 10/- each at a price of Rs. 175/- raising Rs. 901.25 crores. The issue had seen an overwhelming success with an oversubscription of 24.33 times. The shares of the Company were listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited on 6th May 2011.

7. Internal Control

The Audit and Inspection Department of the company through a team of 704 personnel ensures quality of the assets pledged and adherence to various risk management practices at the branch and regional office level. The structure of the audit teams has been totally recast with decentralization of functions to match with the expansion in footprint without compromising control.

The internal audit team directly reports to the Audit Committee of the Company The audit committee oversees the functioning of the audit team and reviews the effectiveness of internal control at all levels apart from laying down constructive suggestions for improving the audit function in the Company. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

8. Human Resources

Being a service oriented Company, your company consider human resource capital as the biggest asset. As of March 31, 2011, your company has 16668 employees on payroll at various management levels, Your Company offer employees the opportunity to harness their Inherent skills and to brave newer frontiers at every phase of their growth. Your management is committed In providing a wholesome work environment and support with excellent training programs and workshops. Your Company provides extensive training to branch employees through training programs that are tailored to appraising the gold content in gold jewellery. Anew employee is introduced to the business through an orientation program and through training programs covering job-appropriate topics. The experienced branch employee receives additional training and an introduction to the fundamentals of management to acquire the skills necessary to move into management positions within the organization. Manager training involves a program that includes additional management principles and more extensive training in topics such as income maximization, business development, staff motivation, customer relations and cost efficiency.

As of date, your company has established two staff training colleges, one each in Cochin and in New Delhi, and three regional training centers located in Chennai, Hyderabad and in Bangalore, and is in the process of establishing staff training colleges at other region allocations as well

9. Public Deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

10. Capital Adequacy

As at 31st March. 2011. the capital adequacy of the company stood at 15.82% as against the statutory requirement of 15%.

11. RBI Guidelines

Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time.

12. Directors

Mr, George Joseph and Mr John K Paul have joined the Board of Directors as independent Directors during the year. Mrs. Anna Alexander and Mrs. Sana George have resigned from the Board of Directors effective July 21, 2010. Board place on record their deep sense of appreciation for the services rendered by them during their tenure in the Boa rd of Directors of the Company.

In accordance with Article 110 of the Articles of Association of the Company, Mr K John Mathew and Mr. George Jacob Muthoot retire by rotation at the ensuing Annual General Meeting. Both of them being eligible seek, re-appointment at the Annual General Meeting.

13. Auditors

M/s Rangamani & Co., Chartered Accountants, the Statutory Auditor of the Company, hold office in accordance with the provisions of the Act upto the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

14. Personnel

Particulars of employees drawing remuneration beyond the monetary ceilings prescribed under Section 217 (2A) of the Companies Act. 1956 are as follows:

SL Name of Employee Age Designation Date of Gross Qualifica -tion Total Last No: (yrs} Commenc -ement Remune ration Experie -nce employment of employ -ment (Re. In Lacs)

1 Mr.M G George Muthoot 61 Whole Time Director & Chairman 28.07. 2000 Rs.480 B.Tech 37 years Muthoot Bankers

2 Mr. George Aisaandar Managing Muthoot 55 Director 28.07. 2000 Rs.480 FCA 31 years Muthoot Bankers

3 Mr George Thomas Whole Under Muthoot 60 Time Director 16.08. 2005 Rs.480 Graduate 36 years Muthoot Bankers

4 Mr George Jacob 56 Whole Time 16.08. 2005 Rs.480 B.Tech 34 years Muthoot Bankers Muthoot Director

15. Directors' Responsibility Statement

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956 ("the Act"), your Directors hereby confirm that:

1. In the preparation of Annual Accounts for the financial year 2010-11, the applicable Accounting Standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for financial year;

3. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis

16. Corporate Governance Report and Management Discussion and Analysis Statement

Your Company has complied with the Corporate Governance norms as stipulated under the Listing Agreement entered into with the Stock Exchanges. Detailed reports on Corporate Governance and Management Discussion and Analysis are annexed to this Report.

17. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Since the Company does not carry on manufacturing activities, disclosure requirements under Companies [Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned : NIL

Total Foreign Exchange Expended : NIL

18, Acknowledgement

Your Directors thank the Company's share holders, investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees at all levels. Your Company's consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India and Ministry of Corporate Affairs for the guidance and support received from them including staff officials thereat from time to time.

For and On Behalf of the Board of Directors

Sd/-

M G George Muthoot

Chairman

Kochi, July 27, 2011

Registered Office:

2nd Floor, Muthoot Chambers.

Opposite Saritha Theatre Complex,

Banerji Road,

Kochi 682 018






Mar 31, 2010

The Directors have pleasure in presenting the 13th Annual Report of the Company together with the audited financial statements for the year ended 31st March 2010.

Financial Results

The financial results for the year ended 31st March 2010 are summarized below:

(Amount in Rs. Lakhs)

Particulars Yr. ended Yr. ended 31.03.10 31.03.09

Income from Operations 108938 62,040

Total Expenditure 72684 46,167

Profit Before Depreciation 36254 15,873

Depreciation and Other Non Cash 1699 1,056 Charges

Profit Before Tax 34555 14,817

Provision for Tax/Deferred Taxes 11798 5,045

Profit After Tax 22757 9,772

Share Capital and Reserves 58455 37,117

Subordinated Debt 32467 10,991

Secured Non-Convertible Debentures 271925 190,198

Bank Borrowings 212787 110,676

Gross Retail Loan Assets under 743815 336,900 Management

Directors

In accordance with the provisions of Section 255 & 256 of the Companies Act, 1956, Mr. M. G. George Muthoot, Whole Time Director and Mr. P. George Varghese, Director retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Auditors

M/s Rangamani & Co., Chartered Accountants, the Statutory Auditor of the Company retires at the conclusion of the ensuing Annual General Meeting and has expressed their willingness to be appointed as the Auditors for a further period of one year. The Company has received a letter from the Auditor to the effect that, if they are appointed, appointment will be within the statutory limits prescribed under the Companies Act, 1956.

Energy Conservation, Foreign Exchange Earnings and Outgo

Since the Company does not carry on manufacturing activities, disclosure requirements under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956 in this connection are not applicable. However, your Company, being a responsible corporate citizen, has been taking various measures for reducing the energy consumption.

Total Foreign Exchange Earned : NIL

Total Foreign Exchange Expended : Rs. 139.84 lakhs

Directors Responsibility Statement

As required under the provisions contained in Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm mat:

1. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed and there have been no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. The annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors thank the Companys customers, banks, rating agency, debenture holders, debenture trustees and well wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees at all levels. Your Companys consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India and Ministry of Corporate Affairs for the guidance and support received from them from time to time.

For and On Behalf of the Board of Directors

Sd/-

M G George Muthoot

Chairman

Kochi, 19th August, 2010

Registered Office:

2nd Floor, Muthoot Chambers,

Opposite Saritha Theatre Complex,

Banerji Road,

Kochi-682 018

 
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