Home  »  Company  »  Muthoot Finance  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Muthoot Finance Ltd.

Mar 31, 2015

1. LEASES

The Company has not taken or let out any assets on fnancial lease.

All operating lease agreements entered into by the Company are cancellable in nature. Hence Company has debited/credited the lease rent paid/received to the Statement of Proft and Loss.

Consequently, disclosure requirement of future minimum lease payments in respect of non operating lease as per AS 19 is not applicable to the Company.

Lease rentals received for assets let out on operating lease Rs. 1,191,393.00 (Previous year: Rs. 821,905.00) are recognized as income in the Statement of Proft and Loss under the head ''Other Income'' and lease payments for assets taken on an operating lease Rs. 1,649,533,191.00 (Previous year: Rs. 1,541,703,632.45) are recognized as ''Rent Paid'' in the Statement of Proft and Loss.

c) Employee stock option

Pursuant to approval by the shareholders at their meeting held on 27th September, 2013, the company has established "Muthoot ESOP 2013" scheme administered by the ESOP Committee of Board of Directors. The following options were granted as on 31st March, 2015 :-

2. DEPRECIATION

The Company has recomputed depreciation based on the useful life of the fxed assets as prescribed in Schedule II of the Companies Act, 2013. This has resulted in additional charge of depreciation of Rs. 344,309,614.33 for the year ended March 31 2015. Further as per the transitional provisions, the Company has adjusted accumulated depreciation of Rs. 36,472,607.11 to the opening balance of Reserves and Surplus. The corresponding impact of Rs. 12,397,039.16 has also been given efect to in Deferred Tax.

3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT Rs. NOT PROVIDED FOR)

As at As at Particulars 31st March, 2015 31st March, 2014

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

i) Service Tax demand for the period 2003-2008, pending in appeal with 49,921,307.00 49,921,307.00

CESTAT, Bangalore (Net of amount already remitted).

Commissioner of Central Excise, Customs and Service Tax, Kochi has raised a demand of Rs. 52,007,698.00 (Previous year: Rs. 52,007,698.00) as Service tax liability and penalty. During the course of the proceedings

Company paid Rs. 2,086,391.00. The Appellate Authority admitted the Appeal preferred by the company and granted stay of recovery, on predeposit of Rs. 8,300,000.00 (Previous year: Rs. 8,300,000.00). Pending disposal of appeal, no provision has been made by the company during the year.

ii) Service Tax demand for the period from 2007-08 to 2011-12 as per 4,895,883,216.00 -

Order No.COC-EXCUS-000-COM- 035-14-15 DT.19.12.2014, served on 30.12.2014, pending in appeal with CESTAT, Bangalore.Commissioner of Central Excise, Customs and Service Tax, Kochi as per order mentioned above has raised a demand of Rs. 1,531,458,734.00 as service tax payable on securitisation transactions with banks for the period from 2007 to 2012, along with interest U/s.75, Penalty U/s.76, Penalty U/s.77 and Penalty U/s.78 (Total liability including tax, interest and penalty under various sections if confrmed is estimated approximately, till the end of fnancial year at Rs. 4,895,883,216.00). Pending disposal of appeal , no provision has been made by the company during the year.

iii) Service Tax demand for the fnancial year 2013-14 as per Order 790,046.00 -

No.03/2015-ST DT.20.01.2015, served on 23.01.2015, pending in appeal with Commissioner (Appeals), Kochi.

Deputy Commissioner of Central Excise & Customs, & Service Tax, Kochi, as per order mentioned above has raised a demand of Rs. 790,046.00 (including penalty under sections 77(2) and 78, of Chapter V, of The Finance Act, 1994) as service tax payable, on foreign payments during fnancial year 2013-14. The company has fled an appeal against the above order with Commissioner (Appeals), Kochi. Pending disposal no provision has been made by the company during the year.

iv) Income tax demand for the Assessment Year (A.Y) 2012-13, pending 27,120,000.00 5,099,103.00

rectifcation petition and in appeal with Commissioner of Income Tax (Appeals)-II, Kochi.

Earlier, the demand outstanding as per Intimation U/s.143(1) wasRs. 5,099,103.00.

Additional Commissioner of Income Tax, Corp. Range -1, Kochi has issued an Order U/s.143(3) dated 02.03.2015 superseding the earlier order by demanding tax of Rs. 29,230,000.00. Out of the above, the company has remitted Rs. 2,110,000.00 and the balance outstandingis Rs. 27,120,000.00. Appeal fled with CIT (A)-II, Kochi and rectifcation application with Addl. CIT are pending for disposal.Pending disposal no provision has been made by the company for the year.

v) Income Tax demand for Assessment Year 2010-11,pending in appeal with 14,563,505.00 14,563,505.00

Commissioner of Income Tax (Appeals) , Kochi.

Additional Commissioner of Income Tax, Range 1, Kochi has passed an order demanding Rs. 36,384,640.00 towards income tax due for the Assessment Year 2010-11 U/s.143(3). The Company has remitted Rs. 21,821,135.00 and the balance demand outstanding as on 31.03.2015 is Rs. 14,563,505.00.

vi) Draf order on proposed action U/s.13 of Prevention of Money Laundering 26,970,000.00 26,970,000.00

Act,2002 pending in appeal with Appellete Tribunal under Prevention of Money Laundering Act,2002.

vii) Disputed claims against the company under litigation not acknowledged 20,284,568.00 7,264,133.00 as debts (b) Guarantees - Counter Guarantees Provided to Banks 165,193,750.00 93,693,750.00

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not 31,659,000.00 129,867,000.00 provided for.

4. DIVIDENDS PROPOSED TO BE DISTRIBUTED TO EQUIT Y SHAREHOLDERS

The Board has recommended a fnal dividend for the year 2014-15 of Rs. 2/- (20%) per equity share of Rs. 10/- each, subject to the approval of shareholders in the ensuing Annual General Meeting. The Company has during the year paid interim dividend of Rs. 4/- (40%) per equity share of Rs. 10/- each. The total dividend for the year 2014-15 is Rs. 6/- (60%) per equity share of Rs. 10/- each (Previous year Rs. 6/- per (60%) per equity share of Rs. 10/- each)

5. UTILIZATION OF PROCEEDS OF PUBLIC ISSUE OF SECURED NON - CONVERTIBLE DEBENTURES

The company has during the year raised through public issue (a) Rs. 13,370,186,000.00 of Rated Secured Redeemable Non - Convertible Debentures and (b) Rs. 1,248,856,000.00 of Rated Unsecured Redeemable Non-Convertible Debentures in the nature of Subordinated Debt which qualifes as Tier II capital under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. As at 31.03.2015, the Company has utilised the entire proceeds of the public issue, net of issue expenses in accordance with the objects stated in the ofer documents.

6. UTILIZATION OF PROCEEDS OF INSTITUTIONAL PL ACEMENT PROGR AMME OF EQUIT Y SHARES

The company has during the year allotted 2,53,51,062 shares of Rs. 10 each for cash at a premium of Rs. 155 per equity share aggregating to Rs. 4,182,925,230.00, pursuant to Institutional Placement Programme (IPP) under Chapter VIII A of the SEBI ICDR Regulations complying with the minimum public shareholding requirement under Rule 19 (2) (b) (ii) of the Securities Contract (Regulation) Rules, 1957. The proceeds from the Institutional Placement Programme have been utilised in accordance with the objects as set out in the ofer document. Share issue expenses in connection with the said issue has been adjusted against the share premium account.

7. INVESTMENT IN ASIA ASSET FINANCE PLC, SRI L ANKA (A AF)

The company has during the year acquired 428,011,711 shares in AAF representing 51 % of equity share capital of AAF for a consideration of Rs. 338,123,555.16 (including expenses incurred in connection with the acquisition) and thus becomes a subsidiary of the company as on 31st December, 2014.

8. (DISCLOSURE REQUIRED AS PER RESERVE BANK OF INDIA NOTIFICATION NO. DNBS(PD).263 /CGM (NSV)-2013 DATED SEPTEMBER 16 , 2013)

The Company auctioned 648,123 loan accounts (Previous Year: 714,014 accounts) during the fnancial year. The outstanding dues on these loan accounts were Rs. 32,043,293,613.00 (Previous Year: Rs. 37,347,285,075.00) till the respective date of auction. The Company realised Rs. 27,879,028,742.00 (Previous Year: Rs. 34,293,127,267.00) on auctioning of gold jewellery taken as collateral security on these loans. Company confrms that none of its sister concerns participated in the above auctions.

9. PREVIOUS YEAR''S FIGURES HAVE BEEN REGROUPED / REARR ANGED, WHEREVER NECESSARY TO CONFORM TO CURRENT YEAR''S CLASSIFICATIONS / DISCLOSURE.


Mar 31, 2014

1. BACKGROUND

Muthoot Finance Ltd. was incorporated as a private limited Company on 14th March, 1997 and was converted into a public limited Company on 18th November, 2008. The Company is promoted by Mr. M. G. George Muthoot, Mr. George Thomas Muthoot, Mr. George Jacob Muthoot and Mr. George Alexander Muthoot collectively operating under the brand name of ''The muthoot Group'', which has diversifed interests in the felds of Financial Services, Healthcare, Education, Plantations, Real Estate, Foreign Exchange, Information Technology, Insurance Distribution, Hospitality etc. The Company obtained permission from the Reserve Bank of India for carrying on the business of Non- Banking Financial Institutions on 13th November, 2001 vide Regn No. N 16.00167. The Company is presently classifed as Systemically Important Non Deposit Taking NBFC (NBFC- ND-SI).

The Company made an Initial Public Offer of 51,500,000 Equity Shares of the face value Rs. 10/- each at a price of Rs. 175/- raising Rs. 9,012,500,000.00 during the month of April 2011. The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited from 6th May, 2011.

2. Leases

The Company has not taken or let out any assets on financial lease.

All operating lease agreements entered into by the Company are cancellable in nature. Hence Company has debited/credited the lease rent paid/received to the Statement of Profit and Loss.

Consequently, disclosure requirement of future minimum lease payments in respect of non operating lease as per AS 19 is not applicable to the Company.

Lease rentals received for assets let out on operating lease Rs. 821,905.00 (Previous year: Rs. 981,832.00) are recognised as income in the Statement of Profit and Loss under the head ''Other Income'' and lease payments for assets taken on an operating lease Rs. 1,541,703,632.45 (Previous year: Rs. 1,309,254,514.55 ) are recognised as ''Rent Paid'' in the Statement of Profit and Loss.

3. Employee benefits

a) Defined Contribution Plan

During the year, the Company has recognised the contribution to Provident Fund, in the Statement of Profit and Loss in Note 20- Employee benefit Expenses as under:-

b) Defined benefit Plan

Gratuity Plan

Gratuity liability is funded through a Gratuity Fund managed by Kotak mahindra Old mutual Life Insurance Limited and ICICI Prudential Life Insurance Company Limited.

The following table set out the status of the Gratuity Plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the Defined benefit obligation and plan assets:

The defcit in funding of gratuity Rs. 18,733,086.00 has been accounted as Long term provisions. Estimated employer contribution for 2014-15 - Rs. 90,000,000.00

The estimates of rate of escalation in salary considered in actuarial valuation, take into account infation, seniority, promotion and other relevant factors including supply and demand in the employment market. Discount rate is based on the prevailing market yields of the Government Bond as at Balance Sheet date for the estimated term of obligation.

4. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for):- Rs.

As at As at Particulars 31st March, 2014 31st March, 2013

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debt

i) Service Tax demand for the period 2003-2008, pending in appeal with 49,921,307.00 49,921,307.00 CESTAT (Net of amount already remitted) Commissioner of Central Excise, Customs and Service Tax, Cochin has raised a demand of Rs. 52,007,698.00 (Previous year: Rs. 52,007,698.00) as Service tax liability and penalty. During the course of the proceedings Company paid Rs. 2,086,391.00. The Appellate Authority admitted the Appeal preferred by the company and granted stay of recovery, on predeposit of Rs. 8,300,000.00 (Previous year: Rs. 8,300,000.00). Pending disposal of appeal, no provision has been made by the company during the year.

ii) Income Tax demand for Assessment Year 2012-13 issued by CPC 5,099,103.00 - Bangalore U/s. 143 (1) Intimation Rs. 52,829,853.00/-. Out of the above demand Rs. 47,730,750.00/- has already been paid and balance outstanding is Rs. 5,099,103.00/-

iii) Income Tax demand for Assessment Year 2010-11,pending in appeal 14,563,505.00 36,384,640.00 with Commissioner of Income Tax (Appeals) , Cochin. Additional Commissioner of Income Tax, Range 1, Kochi has passed an order demanding Rs. 3,63,84,640/- towards income tax due for the Assessment Year 2010-11 U/s. 143(3).The Company has remitted Rs. 2,18,21,135/- and the balance demand outstanding as on 31.03.2014 is Rs. 1,45,63,505/-.

iv) Income tax demand for Assessment Year 2009-10, pending in appeal - 11,071,240.00 with Commissioner of Income Tax (Appeals), Kochi Additional Commissioner of Income Tax, Range 1, Kochi has passed an order demanding Rs. 13,782,470.00/- towards income tax due for the Assessment Year 2009-10 and on rectifcation ,demand was reduced to Rs. 1,33,21,240.00/- . The Commissioner of Income Tax (Appeals), Kochi has partly allowed the appeal in favour of the company. Company has fled appeal with ITAT, Cochin against the disallowances. The Company has already remitted the entire demand of tax and the balance demand pending as on 31.03.2014 is Nil.

v) Income tax demand for Assessment Year 2006-07, appeal with - 907,625.00 CIT(Appeals) II ,Cochin not allowed. Appeal fled with ITAT Cochin is pending. Company has already remitted the entire demand of tax and the balance outstanding as on 31.03.2014 is Nil.

vi) Draft order on proposed action U/s.13 of Prevention of Money 26,970,000.00 26,970,000.00 Laundering Act,2002 pending in appeal with Appellete Tribunal under Prevention of Money Laundering Act,2002 .

vii) Disputed claims against the company under litigation not 7,264,133.00 6,477,221.00 acknowledged as debts

(b) Guarantees - Counter Guarantees Provided to Banks 93,693,750.00 83,873,750.00

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital 129,867,000.00 148,744,000.00 account and not provided for.

5. Dividends proposed to be distributed to equity shareholders

The Board has recommended a final dividend for the year 2013-14 of Re.1/- (10%) per equity share of Rs. 10/- each , subject to the approval of shareholders in the ensuing Annual General Meeting. The Company has during the year paid interim dividends aggregating to Rs. 5/- (50%) per equity share of Rs. 10/- each ( Previous Year : Nil) . The total dividend for the year 2013-14 is Rs. 6/- (60%) per equity share of Rs. 10/- each ( Previous Year: Rs. 4.5/- (45%) per equity share of Rs. 10/- each ).

6. Disclosure with regard to dues to micro and Small Enterprises Based on the information available with the Company and has been relied upon by the auditors, none of the suppliers have confirmed to be registered under "The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006". Accordingly, no disclosures relating to amounts unpaid as at the period ended 31st March, 2014 together with interest paid /payable are required to be furnished.

7. Utilisation of proceeds of Public Issue of Secured Non - Convertible Debentures

The company has during the year raised through public issue (a) Rs. 10,119,814,000.00 of Rated Secured Redeemable Non - Convertible Debentures and (b) Rs. 880,186,000.00 of , Rated Unsecured, Redeemable Non-Convertible Debentures which qualifies as Tier II capital under the Non-Banking Financial ( Non-Deposit Accepting or Holding) Companies Prudential Norms ( Reserve Bank) Directions, 2007 As at 31st March, 2014, the Company has utilised the entire proceeds of the public issue, net of issue expenses in accordance with the objects stated in the offer documents.

8. Disclosure of related party transaction in accordance with Accounting Standard (AS18) "Related Party Disclosures" issued by The Institute of Chartered Accountants of India.

(a) Names of Related Parties with whom transactions has taken place:

Category Name of the Related Party

Key management Personnel 1. M. G. George Muthoot

2. George Thomas Muthoot

3. George Jacob Muthoot

4. George Alexander Muthoot

Relatives of Key management Personnel 1. Sara George w/o M. G. George Muthoot

2. Susan Thomas w/o George Thomas Muthoot

3. Elizabeth Jacob w/o George Jacob Muthoot

4. Anna Alexander w/o George Alexander Muthoot

5. George M. George s/o M. G. George Muthoot

6. Alexander M. George s/o M. G. George Muthoot

7. George M. Jacob s/o George Jacob Muthoot

8. Reshma Susan Jacob d/o George Jacob Muthoot

9. George Alexander (Jr.) s/o George Alexander Muthoot

10. Eapen Alexander s/o George Alexander Muthoot

11. Anna Thomas d/o George Thomas Muthoot

12. Valsa Kurien w/o George Kurien

13. Georgie Kurien s/o George Kurien

Entities over which Key management Personnel and their relatives are able to exercise significant infuence

1. Muthoot Vehicle & Assets Finance Limited

2. Muthoot Leisure And Hospitality Services Pvt. Limited

3. MGM Muthoot Medical Centre Pvt. Limited.

4. Muthoot Marketing Services Pvt. Limited.

5. Muthoot Broadcasting Pvt. Limited

6. Muthoot Forex Ltd (Previously known as Muthoot Exchange Company Pvt. Limited)

7. Backdrop Advertising Pvt. Limited

8. Emgee Board and Paper Mills Pvt. Limited

9. Muthoot Health Care Private Limited (Previously known as mar Gregorios memorial muthoot medical Centre )

10. Muthoot Precious Metals Corporation

11. GMG Associates

12. Muthoot Insurance Brokers Private Limited

13. Emgee Muthoot benefit Funds (India) Limited

14. Geo Bros Muthoot Funds (India) Limited

15. Muthoot Investment Advisory Services Private Limited

16. Muthoot Securities Limited

17. Muthoot M George Permanent Fund Limited

18. Muthoot Housing & Infrastructure ( Previously known as muthoot Builders)

19. Muthoot Properties & Investments

20. Venus Diagnostics Limited

21. Muthoot Systems & Technologies Pvt Ltd

33. Segment Reporting

a) The Company is engaged in two segments of business – Financing and Power Generation.

b) In the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, Company has identified business segment as the primary segment for the purpose of disclosure. The segment revenues, results, assets and liabilities include the respective amounts identifable to each of the segment and amounts allocated on a reasonable basis.

c) Company operates in a single geographical segment. Hence, secondary geographical segment information disclosure is not applicable.

9. Frauds during the year

During the year , frauds committed by customer /staff of the company amounted to Rs. 19,701,706.00 (Previous year: Rs. 4,185,000.00) which has been recovered /written off / provided for.

10. Dividend remitted in foreign currency

The company has also remited Rs. 264,441,172.50 in Indian currency to 908 non resident shareholders holding 58,764,705 shares of Rs. 10/- each as final dividend for the F Y 2012-13 and the company has remited Rs. 174,697,074.00 in Indian currency to 980 non resident shareholders holding 58,232,358 shares of Rs. 10/- each as First Interim Dividend for the F Y 2013-14 and Rs. 101,637,018.00 in Indian currency to 915 shareholders holding 50,818,509 shares of Rs. 10/- each as Second Interim Dividend for the F Y 2013-14 (Previous year : The Company has remitted Rs. 150,220,372.00 in Indian currency to 1060 non-resident shareholders holding 37,555,093 shares of Rs. 10/- each ).

11. Previous year''s figures have been regrouped / rearranged, wherever necessary to conform to current year''s classifcations / disclosure.


Mar 31, 2013

1. BACKGROUND

Muthoot Finance Ltd. was incorporated as a private limited Company on 14th March, 1997 and was converted into a public limited Company on 18th November, 2008. The Company is promoted by Mr. M. G. George Muthoot,

Mr. George Thomas Muthoot, Mr. George Jacob Muthoot and Mr. George Alexander Muthoot collectively operating under the brand name of ''The Muthoot Group, which has diversified interests in the fields of Financial Services, Healthcare, Education, Plantations, Real Estate, Foreign Exchange, Information Technology, Insurance Distribution, Hospitality etc. The Company obtained permission from the Reserve Bank of India for carrying on the business of Non-Banking Financial Institutions on 13.11.2001 vide Regn No. N 16.00167. The Company is presently classified as Systemically Important Non- Deposit Taking NBFC (NBFC-ND-SI).

The Company made an Initial Public Offer of 51,500,000 Equity Shares of the face value Rs. 10/- each at a price of Rs. 175/- raising Rs. 9,012,500,000.00 during the month of April 2011. The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited from 6th May, 2011.

2. LEASES

The Company has not taken or let out any assets on financial lease.

All operating lease agreements entered into by the Company are cancellable in nature. Hence Company has debited/credited the lease rent paid/received to the Statement of Profit and Loss.

Consequently, disclosure requirement of future minimum lease payments in respect of non - operating lease as per AS 19 is not applicable to the Company.

Lease rentals received for assets let out on operating lease Rs. 981,832.00 (Previous year Rs. 856,845.00) are recognised as income in the Statement of Profit and Loss under the head ''Other Income'' and lease payments for assets taken on an operating lease Rs. 1,309,254,514.55 (Previous year Rs. 1,042,002,948.58 ) are recognised as ''Rent Paid'' in the Statement of Profit and Loss.

3. DISCLOSURE WITH REGARD TO DUES TO MICRO AND SMALL ENTERPRISES

Based on the information available with the Company and has been relied upon by the auditors, none of the suppliers have confirmed to be registered under "The Micro, Small and Medium Enterprises Development (''MSMED'') Act, 2006". Accordingly, no disclosures relating to amounts unpaid as at the year ended 31st March, 2013 together with interest paid /payable are required to be furnished.

4. UTILISATION OF PROCEEDS OF THE INITIAL PUBLIC OFFER OF EQUITY SHARES

The Company made an Initial Public Offer of 51,500,000 Equity Shares of face value of Rs. 10/- each at a price of Rs. 175/- raising Rs. 9,012,500,000.00 during the month of April 2011. As at 31st March, 2013, the Company has fully utilised the amount for extending retail loans of Rs. 8,721,009,554.96 and to meet issue expenses of Rs. 291,490,445.04, in accordance with the objects stated in the offer documents.

5. UTILISATION OF PROCEEDS OF PUBLIC ISSUE OF SECURED NON - CONVERTIBLE DEBENTURES

The Company has during the year raised Rs. 5,346,926,000.00 through public issue of Secured Non-Convertible Debentures and as at 31st March, 2013, the Company has utilised the entire proceeds of the public issue, net of issue expenses in accordance with the objects stated in the offer documents.

6. SEGMENT REPORTING

a) The Company is engaged in two segments of business - Financing and Power Generation.

b) In the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, Company has identified business segment as the primary segment for the purpose of disclosure. The segment revenues, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

c) Company operates in a single geographical segment. Hence, secondary geographical segment information disclosure is not applicable

7. FRAUDS DURING THE YEAR

During the year , frauds committed by customer /staff of the Company amounted to Rs. 4,185,000.00 which has been recovered / written off / provided for.

The Company has also remitted Rs. 150,220,372.00 in Indian currency to 1060 non-resident shareholders holding 37,555,093 shares of Rs. 10/- each.

8. Previous years figures have been regrouped / rearranged, wherever necessary to conform to current years classifications / disclosure.


Mar 31, 2012

1. BACKGROUND

Muthoot Finance Ltd. was incorporated as a private limited Company on 14th March 1997 and was converted into a public limited Company on 18th November 2008. The Company is promoted by Mr. M. G. George Muthoot, Mr. George Thomas Muthoot, Mr. George Jacob Muthoot and Mr. George Alexander Muthoot collectively operating under the brand name of 'The Muthoot Group', which has diversified interests in the fields of Financial Services, Healthcare, Education, Plantations, Real Estate, Foreign Exchange, Information Technology, Insurance Distribution, Hospitality etc. The Company obtained permission from the Reserve Bank of India for carrying on the business of Non-Banking Financial Institutions on 13.11.2001 vide Regn No. N 16.00167. The Company is presently classified as Systemically Important Non-Deposit Taking NBFC (NBFC-ND-SI).

The Company made an Initial Public Offer of 5,15,00,000 Equity Shares of the face value Rs. 10/- each at a price of Rs. 175/- raising Rs. 9,012,500,000.00 during the month of April 2011. The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited from 6th May 2011.

2.1 Terms and Rights attached to Equity Shares

The Company has only one class of equity shares having face value Rs. 10/- per share. All these shares have the same rights and preferences with respect to the payment of dividend, repayment of capital and voting. The dividend proposed by your Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3.1 Share Issue Expenses

The Company made an Initial Public Offer of 5,15,00,000 Equity Shares of Rs. 10/- each at a price of Rs. 175/- raising Rs. 9,012,500,000.00 during the month of April 2011. The expenses incurred for Initial Public Offer amounting to Rs. 291,490,445.04 has been written off against Securities Premium as per Section 78(2) of the Companies Act, 1956.

3.2 Transfer to General Reserve

In accordance with the Companies (Transfer of Profits to Reserves) Rules, 1975, Company has transferred an amount Rs. 892,024,022.00 (Previous Year: Rs. Nil) being 10% of the current profits to General Reserve.

3.3 Debenture Redemption Reserve

In accordance with Section 117C of the Companies Act, 1956, read with General Circular No. 9/2002 dated 18.04.2002 issued by the Ministry of Corporate Affairs and Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations 2008, Company is required to create a Debenture Redemption Reserve equal to the 50% of the value of debentures issued through public issue. Accordingly, Company has transferred an amount of Rs. 742,038,311.00 (Previous Year: Nil) to the Debenture Redemption Reserve. No appropriation was made from the Reserve Fund during the year.

3.4 Statutory Reserve

Statutory Reserve represents the Reserve Fund created under Section 45-IC of the Reserve Bank of India Act, 1934. An amount of Rs. 1,784,048,044.00 (Previous Year Rs. 988,352,855.00) representing 20% of Net Profit is transferred to the Fund for the year. No appropriation was made from the Reserve Fund during the year.

4.1 Secured Non-Convertible Debentures

The Company had privately placed Secured Non-Convertible Debentures under Non-Cumulative Scheme for a maturity period upto 5 years with an outstanding of Rs. 59,748,398,000.00 (Previous Year Rs. 34,892,443,000.00) and under Cumulative scheme for a maturity period ranging from 36 months to 90 months with an outstanding of Rs. 6,353,984,000.00 (Previous Year Rs. 49,39,824,000.00).

Out of the above Rs. 27,089,427,000.00 (Previous year Rs. 19,570,052,000.00) is included in long term borrowings, Rs. 38,944,570,000.00 (Previous year Rs. 20,216,528,000.00) is included in current maturities of long term debt ( Note 7.1) and Rs. 68,385,000.00 (Previous year Rs. 45,687,000.00) is included in unpaid matured debentures (note 7.2).

4.2 Subordinated Debt

Subordinated Debt is subordinated to the claims of other creditors and qualifies as Tier II capital under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. As on 31st March 2012, out of Rs. 14,801,096,000.00 (Previous year Rs. 7,105,856,000.00) outstanding, Rs. 407,786,000.00 (Previous year Rs. 407,136,000.00) represents amounts raised from promoters and promoter group and remaining Rs. 14,393,310,000.00 (Previous year Rs. 6,698,720,000.00) raised from investors other than promoters and promoter group, raised through private placement.

5. CURRENT INVESTMENTS (VALUED AT LOWER OF COST AND FAIR VALUE) - NON TRADE - QUOTED

Current investments refers to investment in 9.90% Unsecured, Redeemable, Non-Convertible, Lower Tier II Subordinated Bonds issued by Yes Bank Limited Rs. 9,00,000,000.00 (Previous Year: Rs. Nil). The bonds were allotted on 28.03.2012 and are not listed as on the Balance Sheet date.

6. LEASES

The Company has not taken or let out any assets on financial lease.

All operating lease agreements entered into by the Company are cancellable in nature. Hence Company has debited/credited the lease rent paid/received to the Statement of Profit and Loss.

Consequently, disclosure requirement of future minimum lease payments in respect of non- operating lease as per AS 19 is not applicable to the Company.

Lease rentals received for assets let out on operating lease Rs. 856,845.00 (Previous year Rs. 588,981.00) are recognized as income in the Statement of Profit and Loss under the head 'Other Income' and lease payments for assets taken on an operating lease Rs. 1,042,002,948.58 (Previous year Rs. 602,691,904.30) are recognized as 'Rent Paid' in the Statement of Profit and Loss.

7. EMPLOYEE BENEFITS

a) Defined Contribution Plan

During the year, the Company has recognized in the Statement of Profit and Loss in Note 21 - Employee Benefit Expenses: (Amount in Rs.)

b) Defined Benefit Plan Gratuity Plan

Gratuity liability is funded through a Gratuity Fund managed by Kotak Mahindra Old Mutual Life Insurance Limited and ICICI Prudential Life Insurance Company Limited.

The following table set out the status of the Gratuity Plan as required under AS 15.

8. FOREIGN CURRENCY TRANSACTIONS

The exchange difference amounting to Rs. Nil (Previous Year Rs. 187,403.00 (net loss) ) arising on account of foreign currency transactions has been accounted in the Statement of Profit and Loss in accordance with Accounting Standard AS - 11 - Accounting for the effects of changes in foreign exchange rates.

9. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(Amount in Rs.)

As on As on 31.03.2012 31.03.2011

(a) Claims against the company not acknowledged as debt

i) Service Tax demand for the period -2003-2008, pending in appeal 49,921,307.00 49,921,307.00 with CESTAT (Net of amount already remitted)

Commissioner of Central Excise, Customs and Service Tax, Cochin has raised a demand of Rs. 52,007,698.00 (Previous year Rs. 52,007,698.00) as Service tax liability and penalty. During the course of the proceedings Company paid Rs. 20,86,391.00. The Appellate Authority admitted the Appeal preferred by the company and granted stay of recovery, on pre-deposit of Rs. 83,00,000.00 (Previous year Rs. 43,00,000.00). Pending disposal of appeal, no provision has been made by the company during the year.

ii) Income tax demand for Assessment Year 2004-05, pending in appeal - - with ITAT (Net of amount already remitted)

Assistant Commissioner of Income Tax, Circle 1(3), Ernakulam has filed an appeal before ITAT against the order of Commissioner of Income Tax (Appeals) - II, Cochin demanding Rs. 52.37 Lakhs (Previous year Rs. 52.37 Lakhs). The Company has already paid the demand by way of Advance Tax, Tax Deducted at Source and adjustment against refund due. No additional income tax liability is expected. Hence no provision is required to be made by the company during the year.

iii) Income tax demand for Assessment Year 2006-07, pending in appeal with ITAT (Net of amount already remitted) - -

Company has filed an appeal before ITAT against the order of Commissioner of Income Tax (Appeals) - II, Cochin demanding Rs. 15.21 Lakhs (Previous year Rs. Nil). The Company has already paid the demand by way of Advance Tax and Tax Deducted at Source. No additional income tax liability is expected. Hence no provision is required to be made by the company during the year.

iv) Income tax demand for Assessment Year 2009-10, pending in appeal with Commissioner of Income Tax (Appeals), Kochi 13,782,470.00 -

Additional Commissioner of Income Tax, Range - 1, Kochi has passed an order demanding Rs. 13,782,470.00 towards income tax due for the Assessment Year 2009-10. The Commissioner of Income Tax (Appeals) admitted the appeal preferred by the Company. Pending disposal of appeal, no provision has been made by the company during the year.

(b) Guarantees - Counter Guarantees Provided to Banks 218,493,750.00 32,543,750.00

(c) Other money for which the company is contingently liable

Cash collateral provided as credit enhancement for bilateral assignment of receivables 2,610,700,403.00 2,743,159,469.00

Over collateral provided as credit enhancement for bilateral assignment of receivables 25,000,000.00 63,572,430.00

Corporate guarantee provided as credit enhancement for bilateral assignment of receivables 1,571,430,939.94 751,548,454.56

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 189,802,675.27 24,726,183.84

10. DISCLOSURE WITH REGARD TO DUES TO MICRO AND SMALL ENTERPRISES

Based on the information available with the Company and has been relied upon by the auditors, none of the suppliers have confirmed to be registered under "The Micro, Small and Medium Enterprises Development ('MSMED') Act, 2006". Accordingly, no disclosures relating to amounts unpaid as at the year ended 31st March, 2012 together with interest paid /payable are required to be furnished.

11. FRAUDS DURING THE YEAR

During the year, frauds committed by customer / staff of the Company amounted to Rs. 6,270,000.00 which has been recovered/written off / provided for.

12. SEGMENT REPORTING

a) The Company is engaged in two segments of business - Financing and Power Generation.

b) In the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, Company has identified business segment as the primary segment for the purpose of disclosure. The segment revenues, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

c) Company operates in a single geographical segment. Hence, secondary geographical segment information disclosure is not applicable

13. The Revised Schedule VI which has come to effect from April 1, 2011 has significantly impacted the disclosure and presentation of financial statements. Previous year's figures have been regrouped / rearranged, wherever necessary to conform to current year's classifications / disclosure.


Mar 31, 2011

1. BACKGROUND

Muthoot Finance Ltd. was incorporated as a private limited company on 14th March 1997 and was converted into a public limited company on IB" November 2008. The company is promoted by Mr M. & George Muthoot, Mr. George Thomas Muthoot. Mr. George Jacob Muthoot and Mr. George Alexander Muthoot collectively operating under the brand name of The Muthoot Group1, which has diversified interests in the fields of Financial Services. Healthcare, Education, Plantations, Real Estate, Foreign Exchange, Information Technology, Insurance Distribution, Hospitality etc, The Company obtained permission from the Reserve Bank of India for carryirig on the business of Non-Bankig Financial Institutions on 13 11 2001 vids Regn No. N 16.00167. The company is presently classified as Systemically Important Non-Deposit Taking NBFC(NBFC-ND-SI).

The company made 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 during the month of April 2011. The shares of the Company were listed on National Stock Exchange of India Limited and The Bombay Stock Exchange Limited on 6th May 2011.

2.1 Contingent liabilites not provided for; {Rs. in lakhs)

2010-11 2009-10

Claims against the Company, not acknowledged as debts

i) Service Tex demand for the period- 2003-2008. pending In appeal with CESTAT Commissioner of Central Excise, Customs and Service Tax, Cochin has raised a demand of Rs. 221.15 Lakhs [Previous year Rs.91 91 lakhs) as Service tax liability and equal amount as penalty. Curing the course of the proceedings Company paid Rs 20.86 Lakhs. The Appellate Authority admitted the Appeal preferred by the company and granted stay of recovery, on pre-deposit of Rs 43 00 Lakhs Pending disposal of appeal, no pro vision has been made by the company during the year. 157.29 157.29

ii) Income tax demand for Assessment Year 2004-05, pending in appeal with ITAT Assistant Commissioner of Income Tax, Circle 1(3), Ernakulam has filed an appeal before ITAT against The order of Commissioner of Income Tax (Appeals) 11, Cochin demanding Rs. 52.37 Lakhs (Previous year Rs. 52.37 Lakhs). The Company has already paid the demand by way of Advance Tax, Tax Deducted at Source and adjustment against refund due. No additional income tax liability is expected. Hence no provision is required to be made by the company during the year. Nil Nil

iii) Income tax demand for Assessment Year 2006-07, pending in appeal with ITAT Company has filed an appeal before ITAT against the order of Commissioner of Income Tax (Appeals) 11, Cochin demanding Rs. 15.21 Lakhs (Previous year Rs. Nil). The Company has already paid The demand by way of Advance Tax and Tax Deducted at Source. No additional income tax liability is expected. Hence no provision is requted to be made by the company during the year. Nil Nil

Estimated amount of contracts remaining to be executed an capital accounts and not provided for 247.26 269.00

Other money for which company is contingently liable:

i) Counter Guarantee provided to Banks 325,44 303.00

ii) Cash collateral provided as credit enhancement for bilateral assignment of receivables 27,431.59 10,371.10

iii) Over collateral provided as credit enhancement for bilateral assignment of receivables 635.72 801.21

iv) Corporate guarantee provided as credit enhancement for bilateral assignment of receivables 7.515.48 15,000.07

2.2 Disclosure with regard to dues to Micro and Small Enterprises

Based on the information available with the Company and has been relied upon by the auditors, none of the suppliers have confirmed to be registered under "The Micro. Small and Medium Enterprises Development ('MSMED'} Act, 2006". Accordingly, no disclosures relating to amounts unpaid as at the year ended 31st March. 2010 together with interest paid /payable are required to be furnished.

2.3 Segment Reporting

a) The Company is engaged in two segments of business Financing and Power Generation. (Previous Year: Financing, Power Generation and FM Radio)

b) In the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, company has identified business segment as the pnmary segment for the purpose of disclosure. The segment revenues, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

a) Company operates in a single geographical segment. Hence, secondary geographical segment information disclosure is not applicable

2.4 Previous year's figures have been regrouped / rearranged, wherever necessary to confirm to current year's classifications.


Mar 31, 2010

1. BACKGROUND

Muthoot Finance Ltd. was incorporated as a private limited company on 14th March 1997 and was converted into a public limited company on 18th November 2008. The company is promoted by Mr. M. G. George Muthoot, Mr. George Thomas Muthoot, Mr. George Jacob Muthoot and Mr. George Alexander Muthoot collectively operating under the brand name of The Muthoot Group, which has diversified interests in the fields of Financial Services, Healthcare, Education, Plantations, Real Estate, Foreign Exchange, Information Technology, Insurance Distribution, Hospitality etc. The Company obtained permission from the Reserve Bank of India for carrying on the business of Non-Banking Financial Institutions on 13.11.2001 vide Regn No. N 16.00167. The company is presently classified as Systemically Important Non-Deposit Taking NBFC (NBFC-ND-SI).

2. BALANCE SHEET

2.1 Secured Non-Convertible Debentures

The Company had privately placed Secured Non-Convertible Debentures under Non- Cumulative Scheme for a maturity period upto 5 years with an outstanding of Rs. 234,995.11 Lakhs (Previous Year Rs. 161,695.57 Lakhs) and under Cumulative scheme for a maturity period ranging from 36 months to 90 months with an outstanding of Rs.36,930. lOLakhs (Previous Year Rs.28,502.89 Lakhs)

2.2 Unsecured Non-Convertible Debentures

The Unsecured Non-Convertible Debentures of Rs. 5,000.00 Lakhs (Previous Year : Rs. Nil) represents debentures issued to a Mutual Fund which is governed by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.

2.3 Subordinated Debt

Subordinated Debt is subordinated to the claims of other creditors and qualifies as Tier II capital under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. As on 31st March 2010, out of Rs. 32,466.81 Lakhs (Previous year Rs. 10,991.54 Lakhs) outstanding, Rs. 4,037.06 lakhs (Previous year Rs. 4,000.00 Lakhs) represents amounts raised from promoters and shareholders and remaining Rs.28,429.75 Lakhs (Previous year Rs.6991.54 lakhs) were raised from investors other than promoter group, both raised through private placement route.

2.4 FM Radio Station

The company had obtained license from Government of India for establishing and operating FM Radio Station in Chennai, Tamil Nadu (Radio Business). Radio Station commenced its operations on 1st January 2008.

In accordance with 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.

Accordingly, assets and liabilities of demerged undertaking have been transferred to Muthoot Broadcasting Private Limited at book value and excess of assets over liabilities, Rs. 1,419.76 Lakhs was adjusted against Profit & Loss Account, as per the Scheme.

Necessary effects in respect of the above have been given in the books of accounts of the company during the year and the amount due from Muthoot Broadcasting Private Limited as on 31.03.2010, Rs. 75.39 Lakhs, have been shown under Other Loans and Deposits.

Licence Fee of Rs. 940.16 Lakhs was being amortized over a period of 10 years starting from 1st January 2008 on straight-line basis and the current year amortization was made for a period of nine months only, being amortization upto the appointed date.

2.5 Current Assets, Loans & Advances

In the opinion of the Board of Directors, Current Assets, Loans and Advances have a value as stated in the Balance Sheet, if realized in its ordinary course of business.

3. PROFIT AND LOSS ACCOUNT 4.1 Income

a) Interest income includes Interest on Bank Deposits (Gross) Rs. 779.59 Lakhs. (Previous year Rs. 786.61 Lakhs). Tax deducted at Source on above Rs. 81.76 Lakhs (Previous year Rs. 145.80 Lakhs).

b) Other income includes income from investments (Gross) Rs. 0.29 Lakhs (Previous year Rs. 105.44 Lakhs). Tax deducted at Source on above Rs. Nil (Previous year Rs. Nil).

c) Other income includes profit on sale of fixed assets Rs. 45.97 Lakhs (Previous year Rs. 1.85 Lakhs).

4.0 Leases

The Company has not taken or let out any assets on financial lease.

All operating lease agreements entered into by the Company are cancellable in nature. Hence Company has debited/credited the lease rent paid/received to the Profit and Loss Account.

Consequently, disclosure requirement of future minimum lease payments in respect of non- cancellable operating lease as per AS 19 is not applicable to the company.

Lease rentals received for assets let out on operating lease Rs. 5.22 Lakhs (Previous year Rs.3.75 Lakhs) are recognized as income in the Profit and Loss Account under the head Other Income and lease payments for assets taken on an operating lease Rs. 2,901.32 Lakhs (Previous year Rs. 1,307.22 Lakhs) are recognized as Rent Paid in the Profit and Loss Account.

4.1 Statutory Reserve

Statutory Reserve represents the Reserve Fund created under Section 45-IC of the Reserve Bank of India Act, 1934. An amount of Rs. 4,551.50 Lakhs (Previous Year Rs. 1,954.40 Lakhs) representing 20% of Net Profit is transferred to the Fund for the year. No appropriation was made from the Reserve Fund during the year.

4.2 Employee Benefits

b) Defined Benefit Plan

Gratuity liability is funded through a Gratuity Fund managed by ICICI Prudential Life Insurance Company Limited. Company has remitted Rs. 394.81 Lakhs (Previous 141.11 Lakhs).

5. GENERAL

5.1 Contingent liabilities not provided for:

31.03.2010 31.03.2009 Claims against the Company, not acknowledged as debts

i) Service Tax demand for the period- 2003-2008, pending in appeal with CESTAT Commissioner of Central Excise, Customs and Service Tax, Cochin has raised a demand of Rs. 221.15 Lakhs (Previous year Rs.91.91 lakhs) as Service tax liability and equal amount as penalty. During the course of the 157.29 91.91 proceedings Company paid Rs. 20.86 Lakhs. The Appellate Authority admitted the Appeal preferred by the company and granted stay of recovery, on pre-deposit of Rs. 43.00 Lakhs. Pending disposal of appeal, no provision has been made by the company during the year.

ii) Income tax demand for Assessment Year 2004-05, pending in appeal with IT AT Assistant Commissioner of Income Tax, Circle 1(3), Ernakulam has filed an appeal before ITAT against the order of Commissioner of Income Tax (Appeals) - II, Cochin demanding Rs. 52.37 Lakhs (Previous year Rs. Nil Nil 52.37 Lakhs). The Company has already paid the demand by way of Advance Tax, Tax Deducted at Source and adjustment against refund due. No additional income tax liability is expected. Hence no provision is required to be made by the company during the year.

iii) Income tax demand for Assessment Year 2006-07, pending in appeal with ITAT Company has filed an appeal before ITAT against the order of Commissioner of Income Tax (Appeals) - II, Cochin demanding Rs. 15.21 Lakhs (Previous year Rs. Nil Nil Nil). The Company has already paid the demand by way of Advance Tax and Tax Deducted at Source. No additional income tax liability is expected. Hence no provision is required to be made by the company during the year.

Estimated amount of contracts remaining to be executed 269.00 Nil on capital accounts and not provided for Other money for which company is contingently liable:

i) Counter Guarantee provided to Banks 303.00 333.68

ii) Cash collateral provided as credit enhancement for bilateral assignment 10,371.10 13,139.43 of receivables

iii) Over collateral provided as credit 801.21 775.07 enhancement for bilateral assignment of receivables

iv) Corporate guarantee provided as credit enhancement for 15,000.07 Nil bilateral assignment of receivables

5.2 Disclosure with regard to dues to Micro and Small Enterprises

Based on the information available with the Company and has been relied upon by the auditors, none of the suppliers have confirmed to be registered under "The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006". Accordingly, no disclosures relating to amounts unpaid as at the year ended 31st March, 2010 together with interest paid /payable are required to be furnished.

5.3 Segment Reporting

a) The Company is engaged in three segments of business - Financing, Power Generation and FM Radio.

b) In the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, company has identified business segment as the primary segment for the purpose of disclosure. The segment revenues, results, assets and liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

e) Company operates in a single geographical segment. Hence, secondary geographical segment information disclosure is not applicable

5.4 Previous Years figures have been regrouped / rearranged, wherever necessary to conform to current years classifications.

 
Subscribe now to get personal finance updates in your inbox!