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Notes to Accounts of Manappuram Finance Ltd.

Mar 31, 2017

Notes:

a) Pursuant to Section 71 of the Companies Act, 2013 and circular 04/2013, read with notification issued date 19th June 2016 issued by Ministry of Corporate Affairs, the Company is required to transfer 25% of the value of the outstanding debentures issued through public issue as per the present SEBI (Issue and Listing of Debt Securities) Regulation, 2008 to Debenture Redemption Reserve (DRR) and no DRR is required in case of privately placed debenture. Also the Company is required before 30th day of April of each year to deposit or invest, as the case may be, a sum which shall not be less than 15% of the amount of its debenture issued through public issue maturing within one year from the balance sheet date.

b) In respect of the debentures issued through public issue, the Company has created DRR of - 821.21 as at March 31, 2017(Previous Year March 31, 2016 - 718.95). The Company subsequent to the year-end has deposited a sum of - 291.20 (previous year March 31,2016 - 189.08) in the form of fixed deposits with scheduled banks, representing 15% of the debenture issued through public issue, which are due for redemption within one year from the balance sheet date net of redemption before April 30, 2017.

These are secured by an exclusive charge by way of hypothecation of book debts pertaining to loans granted against gold and margin/cash collateral as per the agreement. Further, the loan has been guaranteed by personal guarantee of Mr. V.P Nandakumar, Managing Director and CEO.

The loans are secured by hypothecation of the respective vehicles against which the loan has been availed.

D. Subordinate debt from banks as at March 31, 2017 aggregating - Nil (March 31, 2016 - 1,000) which carries an interest rate of (floating -BR 3.75%) is repayable at the end of five years and six months from the date of the loan viz. December 13, 2010, and - 500 as at March 31, 2017, (- 500 as at March 31, 2016) which carries an interest rate of (floating - BR 3.30%) is repayable at the end of five years and six months from the date of the loan viz. January 28, 2012.

E. Finance lease obligation is secured by hypothecation of Computers taken on lease. The interest rate implicit in the lease is 11% p.a. The gross investment in lease, i.e., lease obligation plus interest, is payable in 12 quarterly installments of approx. '' 9.88 (March 31, 2016 -'' 7.41) each.

F. Foreign currency loan:

1) - 1,000 as at March 31, 2017 which carries interest @ LIBOR plus 265bps. The loan is repayable after 3 years from the date of its origination, viz., 9 May 2016.

2) - 500 as at March 31, 2017 which carries interest @ LIBOR plus 215bps. The loan is repayable after 3 years from the date of its origination, viz., 22 December 2016. The loans are secured against the first pari passu charge on current assets, book debts and receivables including gold loans 8 advances of the Company. Further, the loan has been guaranteed by personal guarantee of Mr.

V.P Nandakumar, Managing Director and CEO.

Nature of Security

Secured by mortgage of the immovable property of the Company and a charge on all book debts and other current assets as fully described in the debenture trust deed except those receivables exclusively charged, on a first ranking pari passu basis with all other lenders to the Company holding pari passu charge over security. The Company shall maintain an asset cover of at least 1.10 times of the outstanding amount of debenture, at all times, till the debentures are completely redeemed.

Subsequent to the share split and bonus issue in an earlier year, the number of options has been adjusted to 8,295,000 options and the exercise price has been adjusted to - 33.12/- per share in accordance with the terms of the scheme. Further, subsequent to bonus issue in the earlier year, the exercise price has been adjusted to - 16.56 per share.

The Company has adopted the (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 issued by Securities and Exchange Board of India, and has recorded a compensation expense using the intrinsic value method as set out in those guidelines.

The Company has re-allotted the lapsed options, pursuant to the approval of the Board. The Company has granted 1,191,000 options at an exercise price of - 31.25 on November 03, 2014 which will vest over a period of two years from the grant date (50% of the eligible share on November 03, 2015 and balance 50% of the eligible share on November 03, 2016). The exercise period commences from the date of vesting and will expire not later than four years from the date of vesting.

The expected volatility of the stock has been determined based on historical volatility of the stock. The period over which volatility has been considered is the expected life of the option.

Employee Stock Option Scheme (ESOS), 2016

The details of the Employee Stock Option Scheme 2016 are as under:

Date of share holders'' approval July 05, 2016 Number of options approved 25,236,214 Date of grant August 08, 2016

Date of Inpricipal ApprovalIn principal approval of the BSE was obtained on December 20, 2016 and NSE on December 28, 2016. Number of options granted 13,750,466

Method of settlement Equity

Graded Vesting Graded vesting shall happen in a graded basis in three tranches over a period of three years.

a) The first tranche of 30% shall be vested when a period of 12 months would expire from the Date of grant;

b) The second tranche of 30% shall B28 be vested when a period of 24 months would expire from the Date of grant;

c) The third tranche of 40% shall be vested when a period of 36 months would expire from the Date of grant. Exercisable period The vested options shall be allowed for exercise on and from the date of vesting. The vested options need to be exercised with in a period of one year and 30 days from the date of vesting of the respective tranche through the Exercise Window to apply for ESOS Shares against Options vested with the Eligible Employee in pursuance of the Scheme. However, the Eligible Employee has a right to exercise the Options vested in the first tranche and second tranche on or before the expiry of the Exercise Period of the third tranche, utilizing the exercise window which shall be a period of 30 days

__from the close of each half of the year counted from the date of vesting during the Exercise Period.

Vesting conditions Options shall vest essentially based on continuation of employment and apart from that the Board or

Committee may prescribe achievement of any performance condition(s) for vesting.

Source of shares Primary

Variation in terms of options No Variations made to the term of Scheme

The Company has adopted ESOS 2016 as per SEBI(Share Based Employee Benefits) Regulation, 2014 and has recorded a compensation expense using the fair value method as set out in those regulations.

The Company has granted 13750466 options at an exercise price of '' 86.45 on August 08, 2016 which will vest over a period of three years from the grant date (08.08.2016) and the vesting of options shall be at 30% each in the first and second year and the balance 40% in the third year from the date of grant.

NOTE: 1. RELATED PARTY DISCLOSURES

Names of related parties

Relationship Name of the party

Subsidiary company Manappuram Home Finance Private Limited

Asirvad Microfinance Limited(Formerly, Asirvad Microfinance Private Limited)

Manappuram Insurance Brokers Private Limited

Associates / Enterprises owned or significantly Manappuram Jewellers Limited

influenced by key management personnel or Manappuram Agro Farms Limited_

their relatives Manappuram Foundation

Manappuram Comptech and Consultant Limited *

Manappuram Health Care Limited *

Manappuram Construction and Properties Limited Manappuram Chit Funds Company Private Limited *

MABEN Nidhi Limited Manappuram Asset Finance Limited Manappuram Chits (Karnataka) Private Limited *

Manappuram Chits (Andhra) Private Limited *

Adlux Medicity and Convention centre Private Limited*

MAFIN Enterprise *

Manappuram travels *

MAGRO Farms *

Manappuram Chits *

Key Management PersonnelMr. V P Nandakumar- Managing Director 8 CEO

Mr. B.N Raveendra Babu- Executive Director Mr. Kapil Krishan -Chief financial officer Mr.Ramesh Periasamy -Company Secretary

Relatives of key management personnel Mrs. Sushama Nandakumar (wife of Mr. V P Nandakumar)

Mr. Sooraj Nandan (son of Mr. V P Nandakumar)

Mrs Sumitha Jayshankar(daughter of Mr. V P Nandakumar)

Mr. Suhas Nandan (son of Mr. V P Nandakumar)

Ms. Biji Babu (daughter of Mr. B.N Raveendra Babu)

Mrs. Shelly Ekalavyan (sister of Mr. V P Nandakumar)

Mrs. Rajalakshmi Raveendra Babu (wife of Mr. B.N Raveendra Babu)

* No transactions with these related parties.

The fund is administered by Life Insurance Corporation of India ("LIC") and Kotak Life Insurance. The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

NOTE: 2 COMMITMENTS

(i) Estimated amount of contracts remaining to be executed on capital account, net of advances is '' 82.99 as at March 31, 2017 (March 31, 2016 - '' 20.08).

(ii) The Company has entered into an agreement for outsourcing of Information Technology support in April 2011 for a period of 10 years with an annual expense of '' 270.

NOTE: 3. CONTINGENT LIABILITIES

(a) Applicability of Kerala Money Lenders'' Act

The Company has challenged in the Hon''ble Supreme Court the order of Hon''ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon''ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon''ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favorable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

(b) Litigations

Income tax demand - 325.17 (March 31, 2016 - 7.72) case is pending with Commissioner of Income tax (Appeals). The Company has filed an appeal with Commissioner of Income Tax - Appeals. Based on professional advice, the company strongly believe that the case will be decided in the their favour and hence no provision has been considered in the standalone financial statements..

Exchange Traded interest rate (IR) derivatives : NIL Disclosures on risk exposure of derivatives Qualitative disclosures

The Company has a Board approved policy in dealing with derivative transactions. Derivative transaction consists of hedging of foreign exchange transactions, which includes interest rate and currency swaps, interest rate options and forwards. The Company undertakes forward contracts for hedging on-balance sheet assets and liabilities. Such outstanding derivative transactions are accounted on accrual basis over the life of the underlying instrument. The Finance Resource Committee and Risk Management Committee closely monitors such transactions and reviews the risks involved.

NOTE: 4 DISCLOSURES RELATING TO SECURITISATION

The Company has no securitisation transaction during the current and previous year.

NOTE: 5. MISCELLANEOUS

i) Registration obtained from other financial sector regulators

The Company is not registered with any other financial sector regulators.

ii) Disclosure of Penalties imposed by RBI and other regulators

No penalties have been imposed by RBI and other Regulators during the year ended March 31, 2017 and March 31, 2016.

NOTE: 6 UNDER RECOVERY OF INTEREST INCOME

The Company disbursed some gold loans on which the total amount receivable including principal and accumulated interest have exceeded the value of the underlying security. As of March 31, 2017, the Company has not recognized interest income aggregating to - 143.00 (March 31, 2016 - 0.71).

NOTE: 7. During the year there have been certain instances of fraud on the Company by officers and employees where gold loan related misappropriations / cash embezzlements / burglaries have occurred for amounts aggregating - 17.46 million (March 31, 2016 - 36.36) (net of recoveries of - 54.71 million (March 31, 2016 - 23.69)). The Company has taken or is in the processing of taking legal and other actions against such employees/third parties and making insurance claims for recoveries of these amounts from the respective insurance companies where applicable. The Company has created provision aggregating to - 17.46 (March 31, 2016 - 36.36) towards these losses based on its estimate.

Note:

8 The Company implemented the directions and issued circulars to all its branches on November 8, 2016 in order to strictly comply with the directions issued by the Reserve Bank of India via circular DCM (Plg) No.1226/10.27.00/2016-17 dated November 8, 2016 with regard to demonization of SBNs. In a majority of cases the Company and its branches have complied with the directions. In some cases where there have been noncompliances the Company has taken note of those and suitable action has been taken against any employee in accordance with its internal policy. All disclosures made are in accordance with the books of accounts and other records.

9. The Company has noted that certain SBNs have been exchanged for other denominations on November 8, 2017 in certain branches by employees/customers. The Company has taken suitable action against those employees.

10. Non-permitted receipts/payments presented in the table above represents cash collection/payments made from/to customers at the Company''s branches against settlement/disbursement of Gold loan principal and interest. All these receipts/payments have been deposited by the Company in the bank accounts as per normal operating policies and procedures.

11. As a part of its normal operating policies and procedures, the Company maintains denomination-wise details of closing cash as at end of every day based on which the opening and closing balance is disclosed. In the ordinary course of business, loan borrowers of the Company have directly deposited cash as part of their loan repayments in the collection bank accounts of the Company with various banks, aggregating to - 254.54 million during the period November 9, 2016 to December 30, 2016 the denomination wise details of which are currently not available with the Company and hence not included in the above table.

NOTE: 12 LOANS AND ADVANCES IN THE NATURE OF LOANS GIVEN TO SUBSIDIARIES AND ASSOCIATES AND FIRMS/ COMPANIES IN WHICH DIRECTORS ARE INTERESTED

Loan given to wholly owned subsidiary:

a) Manappuram Home Finance Private Limited

Balance as at 31 March 2017 NIL (31 March 2016: NIL) Maximum amount outstanding during the year - 90.00 (31 March 2016 - 405.00)

b) Manappuram Insurance brokers private limited

Balance as at 31 March 2017 - 1.13 (31 March 2016: NIL) Maximum amount outstanding during the year - 1.50 (31 March 2016 Nil)

Loan given to other subsidiary: a) Asirvad Microfinance Limited

Balance as at 31 March 2017 NIL (31 March 2016: NIL) Maximum amount outstanding during the year - 750.00 (31 March 2016 - 500.00)

Notes :

1 As defined in point xix of paragraph 3 of chapter 2 of these Directions.

2 Provisioning norms shall be applicable as prescribed in these Direction

3 All Accounting standards and Guidance note issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However market value in respect of quoted investment and break up/share value/ NAV in respect of unqouted investment shall be disclosed irrespective of whether they are classified as long term or current in (5) above


Mar 31, 2016

1) Nature of operations

Manappuram Finance Limited (''MAFIL'' or ''the Company'') was incorporated on July 15, 1992 in Thrissur, Kerala. The Company is a Non-Banking Finance Company (''NBFC''), which provides a wide range of fund based and fee based services including gold loans, money exchange facilities, etc. The Company currently operates through 3,293 branches spread across the country. The Company is a Systemically Important Non-Deposit taking NBFC.

NOTE: 2

2) Basis of preparation

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the guidelines issued by the Reserve Bank of India as applicable to a non-deposit accepting NBFC. The financial statements have been prepared under the historical cost convention and on an accrual basis except for interest and discounts on non- performing assets which are recognized on realization basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Note: 3

Employment benefits disclosures:

The amounts of Provident fund contribution charged to the statement of Profit and loss during the year aggregates to Rs. 307.05 for March 31, 2016 (March 31, 2015 Rs. 223.13)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Kotak Life Insurance.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Note 4:

Commitments

(i) Estimated amount of contracts remaining to be executed on capital account, net of advances is Rs. 20.08 as at March 31, 2016 (March 31, 2015 - Rs. 4.70).

(ii) The Company has entered into an agreement for outsourcing of Information Technology support in April 2011 for a period of 10 years with an annual expense of Rs. 270.

Note 5:

Contingent liabilities

(a) Applicability of Kerala Money Lenders'' Act

The Company has challenged in the Hon''ble Supreme Court the order of Hon''ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon''ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon''ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

(b) Litigations

i) Matters of litigation, if any, the outcome of which in the opinion of Management is considered probable thereby requiring provision, have been provided for under the requirement of Indian GAAP.

ii) Income tax demand related to Financial year 2012-13 on account of disallowances of certain expenditure amounting to Rs. 7.72 including interest. The Company has preferred an appeal against the order with Commissioner of Income Tax (Appeals)

Note 6:

Lease Disclosures

Operating Lease :

Office premises are obtained on operating lease which are cancellable in nature. Operating lease payments are recognized as an expense in the statement of profit and loss.

Finance Leases:

The Company has finance leases for vehicles. These leases are non-cancellable and has no escalation clause. Future minimum lease payments (MLP) under finance leases together with the present value of the net MLP are as follows:

Note 7:

Cash collateral deposits

Deposit with Banks includes Cash collaterals deposits aggregating Rs. 1020.00 (March 31, 2015 Rs. 940.00) towards approved facilities. Bank /institution wise breakup of the same is as under :

Note 8:

Derivatives

There are no derivatives taken during the current and previous year.

Note 9:

Disclosures relating to Securitisation

The Company has no securitisation transaction during the current and previous year.

Note 10:

Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC

The Company has not exceeded the Single borrower and group borrower limits

Note 11:

Draw down from Reserves

Details of draw down from reserves, if any, are provided in Note 4 to these financial statements.

Note 12:

Miscellaneous

i) Registration obtained from other financial sector regulators

The Company is not registered with any other financial sector regulators.

ii) Disclosure of Penalties imposed by RBI and other regulators

No penalties have been imposed by RBI and other Regulators during the year ended March 31, 2016 and March 31, 2015.

Note: 13:

Under Recovery of Interest Income

The Company disbursed some gold loans on which the total amount receivable including principal and accumulated interest have exceeded the value of the underlying security. As of March 31, 2016, the Company has not recognized interest income aggregating to Rs. 0.71 (March 31, 2015 Rs. 773.90).

Note: 14

During the year there have been certain instances of fraud on the Company by employees and others, where gold loan related misappropriations / cash embezzlements have occurred for amounts aggregating an amount of ''60.05 (March 31, 2015 Rs.69.23) of which the Company has recovered Rs.23.69 (March 31, 2015 Rs.8.87). The Company has taken insurance cover for such losses and has filed insurance claims in this regard. Further, the Company is in the process of recovering these amounts from the employees and taking legal actions, where applicable. The Company has created provision aggregating to Rs.36.36 (March 31, 2015 Rs.42.98) towards these losses based on its estimate.

Note: 15

Utilisation of proceeds of public issue.

During the current year, the Company has raised Nil (March 31, 2015 Rs.2,785.52) by way of public issue of Secured Non Convertible Debentures (public issue) to be utilised to meet its various financing activities including lending and investment and towards business operations including Capital expenditure and working capital requirements. As at March 31, 2015, the Company has utilised the entire proceeds of the public issue, net of issue expenses in accordance with the objects stated in the offer document.

Note: 16

Loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested

a) Manappuram Home Finance Private Limited Loan given to wholly owned subsidiary:

"Balance as at 31 March 2016 NIL (31 March 2015: NIL)

Maximum amount outstanding during the year Rs.405 million (31 March 2015: NIL)"

b) Asirvad Microfinance Private Limited Loan given to other subsidiary:

"Balance as at 31 March 2016 NIL (31 March 2015: NIL)

Maximum amount outstanding during the year Rs.500 million (31 March 2015: NIL)"

Note: 17

Expenditure on Corporate Social Responsibility (CSR)

For the year ended March 31, 2016 the Company has incurred expenditure of Rs.94.22(March 31, 2015 Rs.43.38) as compared to expenditure required to be spent under section 135 of the Act of Rs.71.10 (March 31, 2015 Rs.101.78) resulting in an excess of Rs.23.12(March 31, 2015 shortfall Rs.58.40). Refer to the Director''s report for details on the same.

Note: 18

Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to conform current year''s classification.


Mar 31, 2014

1) Nature of operations

Manappuram Finance Limited (''MAFIL'' or ''the Company'') was incorporated on July 15, 1992 in Thrissur, Kerala. The Company is a Non Banking Finance Company (''NBFC''), which provides a wide range of fund based and fee based services including gold loans, money exchange facilities, etc. The Company currently operates through 3,293 branches spread across the country. The Company is a Systemically Important Non-Deposit taking NBFC.

2) Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April, 2014 issued by the Ministry of Corporate Affairs and the guidelines issued by the Reserve Bank of India as applicable to a non deposit accepting NBFC. The financial statements have been prepared under the historical cost convention and on an accrual basis except for interest and discounts on non performing assets which are recognised on realisation basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for certain changes in estimates discussed in note 2.1(c) and note 38.

NOTE: 3

Employee Stock Option Scheme (ESOS), 2009

Subsequent to the share split and bonus issue in an earlier year, the number of options has been adjusted to 8,295,000 options and the exercise price has been adjusted to Rs. 33.12/- per share in accordance with the terms of the scheme. Further, subsequent to bonus issue in the earlier year, the exercise price has been adjusted to Rs. 16.56 per share.

NOTE: 4

Employment benefits disclosures:

The amounts of Provident fund contribution charged to the statement of Profit and loss during the year aggregates to Rs. 160.80 for March 31, 2014 (March 31, 2013 Rs. 173.20)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Kotak Life Insurance.

The following tables summaries the components of net benefit expense recognized in the statement of Profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

NOTE 5:

Commitments

(i) Estimated amount of contracts remaining to be executed on capital account, net of advances is Rs. 4.32 as at March 31, 2014 (March 31, 2013 - Rs. 51.59).

(ii) The Company has entered into an agreement for outsourcing of Information Technology support in April 2011 for a period of 10 years with an annual expense of Rs. 270.

NOTE 6: Contingent liabilities

(a) Applicability of Kerala Money Lenders'' Act

The Company has challenged in the Hon''ble Supreme Court the order of Hon''ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon''ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon''ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

(b) Show cause notice from Reserve Bank of India

The Company has received a show cause notice from the Reserve Bank of India on May 7, 2012 with certain observations made pursuant to their inspection of books and records of the Company. The Company has submitted a detailed reply on May 21, 2012 to the Reserve Bank of India

b) Exposure to real estate sector

The Company does not have any significant direct exposure towards real estate sector.

NOTE 7:

Lease Disclosures

Operating Lease :

Office premises are obtained on operating lease which are cancellable in nature. Operating lease payments are recognized as an expense in the statement of Profit and loss.

NOTE: 8

Under Recovery of Interest Income

The Company disbursed some gold loans on which the total amount receivable including principal and accumulated interest have exceeded the value of the underlying security. As of March 31, 2014, the Company has not recognized interest income aggregating to Rs. 881.71 (March 31, 2013 Rs. 2,842.50) and has made a provision for doubtful debts to the extent of Rs. Nil (March 31, 2013 Rs. 514.35) relating to the said gold loans as a prudent measure.

NOTE: 9

During the year there have been certain instances of fraud on the Company by employees and others, where gold loan related misappropriations / cash embezzlements have occurred for amounts aggregating an amount of Rs.127.66 (March 31, 2013 Rs. 56.34) of which the Company has recovered Rs. 64.78 (March 31, 2013 Rs. 41.73). The Company has taken insurance cover for such losses and has fled insurance claims in this regard. Further, the Company is in the process of recovering these amounts from the employees and taking legal actions, where applicable. The Company has created provision aggregating Rs. 52.97 (March 31, 2013 Rs. 14.61) towards these losses based on its estimate.

NOTE 10

During the year ended March 31, 2014, the Company has decided to consider average market price of gold that existed during the 90 days period ending on the reporting date instead of average market price of gold that prevailed subsequent to the balance sheet date till the date of approval of the financial statements and also decided to include loans which have completed six months tenure as against loans which have completed twelve months tenure for the estimation of expected recoverability of interest income. Had the Company followed the previous practice, the Profit before tax for the year ended March 31, 2014 would have been higher by Rs. 39.43.

NOTE: 11

Utilisation of proceeds of public issue.

During the current year, the Company has raised Rs. 4,000 (including Rs. 2,000 representing application money towards redeemable non- convertible debenture pending allotment) by way of public issue of Secured Non Convertible Debentures (public issue) to be utilised to meet its various financing activities including lending and investment and towards business operations including Capital expenditure and working capital requirements. As at March 31, 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 document.

NOTE: 12

Previous year figures

Previous year figures have been regrouped/reclassified , where necessary, to conform current year''s classification.


Mar 31, 2013

NOTE: 1

Nature of operations

Manappuram Finance Limited (formerly Manappuram General Finance 8 Leasing Limited) (''MAFIL'' or ''the Company'') was incorporated on July 15, 1992 in Thrissur, Kerala. The Company is a non banking financial Company (''NBFC''), which provides a wide range of fund based and fee based services including gold loans, money exchange facilities, etc. The Company currently operates through 3,295 branches spread across the country. The Company is a Systemically Important Non-Deposit Taking NBFC.

NOTE: 2

Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 and the guidelines issued by the Reserve Bank of India as applicable to a non deposit accepting NBFC. The financial statements have been prepared under the historical cost convention and on an accrual basis except for interest and discounts on non performing assets which are recognised on realisation basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for certain change in estimates discussed in note 2(c).

NOTE: 3

Employment benefits disclosures:

The amounts of Provident fund contribution charged to the Profit and loss account during the year aggregates to Rs. 173.20 (Previous year - Rs. 173.97 ).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Kotak Life Insurance.

The following tables summaries the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

NOTE: 4

Commitments

(i) Estimated amount of contracts remaining to be executed on capital account, net of advances is Rs. 51.59 (Previous year - Rs. 127.90).

(ii) The Company has entered into an agreement for outsourcing of Information Technology support in April 2011 for a period of 10 years with an annual expense of Rs. 270.

NOTE: 5

March 31, 2013 March 31, 2012

Contingent liabilities

(a) The Company is contingently liable to banks and other financial institutions 1.94 2,600.72 with respect to assignment of gold loans to the extent of the collateral deposits/ guarantees. Management does not expect the contingency to dwell on the Company.

TOTAL 1.94 2,600.72

(b) Applicability of Kerala Money Lenders'' Act

The Company has challenged in the Hon''ble Supreme Court the order of Hon''ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon''ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon''ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

(c) Show cause notice from Reserve Bank of India

The Company has received a show cause notice from the Reserve Bank of India on May 7, 2012 with certain observations made pursuant to their inspection of books and records of the Company. The Company has submitted a detailed reply on May 21, 2012 to the Reserve Bank of India and no further communication has been received from the Reserve Bank of India in this matter.

(d) Provision for litigation claim

During the year the Company has made provision for the litigation claim related to the civil and consumer cases amounting to Rs. 12.19 on prudence basis.

NOTE: 6

Lease Disclosures

Operating Lease:

Office premises are obtained on operating lease which are cancellable in nature. Operating lease payments are recognised as an expense in the statement of profit and loss.

Finance Leases:

The Company has finance leases for vehicles. Future minimum lease payments (MLP) under finance leases together with the present value of the net MLP are as follows:

NOTE: 7

Assignment of Receivables

The Company has assigned a portion of its gold loans to banks and financial institution. The aggregate amount of assignment as at March 31, 2013 is Rs. Nil (Previous year 19,163.62). These amounts have been reduced from the gross loan and hypothecation loan balances. Bank/ Institution wise breakup of the same is as under.

NOTE: 8

Transactions with related parties

a) Remuneration to relatives of director

The Company had in the previous year filed an application to Central Government for waiver of remuneration paid in earlier years to relatives of director, holding office or place of profit in the Company amounting to Rs. 4.87. During the year, the Company has received a favourable order from the Central Government waiving the recovery of remuneration paid to them in the earlier years except to the extent of Rs. 0.43 and the Company has recovered the same.

b) Transactions under Section 297 of the Companies Act, 1956

During the year the Company has filed application to Central Government/Company Law Board for Compounding certain non compliance relating to earlier years under provision of section 297 of the Companies Act, 1956 in connection with rendering/receiving certain services to/from parties covered under Section 301 of the Companies Act, 1956. The Company has received the compounding orders from the respective authorities and paid the compounding fees.

NOTE: 9

Loan To Value (''LTV'') calculation:

The Reserve Bank of India vide its Notification No DNBS(PD).

241/CGM(US)-2012 dated March 21, 2012, requires NBFCs to maintain a Loan to Value (LTV) ratio not exceeding 60% for loans granted against the collateral of gold Jewellery.

The Company has adopted the rates prescribed by the Association of Gold Loan Companies (AGLOC) that factors the making charges involved in the manufacture of ornaments. Management of the Company has also discussed the methology with the Reserve Bank of India and also communicated the manner of arriving at the LTV to the Reserve Bank of India

NOTE: 10

Under recovery of interest income

During the FY 2011-12 the Company disbursed some gold loans on which the total amount receivable including principal and accumulated interest have exceeded the value of the underlying security. As at March 31, 2013, the Company has not recognised interest income aggregating to Rs. 2,842.5 and has made a provision for doubtful debts to the extent of Rs. 514.35 relating to the said gold loans as a prudent measure.

NOTE: 11

During the year there have been certain instances of fraud on the Company by employees and others where gold loan related misappropriations/cash embezzlements have occurred for amounts aggregating an amount of Rs. 56.34 (net of recoveries of Rs.14.61). The Company has fully provided for these amounts in the financial statements and is in the process of recovering these amounts from the employees and taking legal actions.

NOTE: 12

Previous year figures

Previous year figures have been regrouped/reclassified, where necessary, to confirm to this year''s classification.


Mar 31, 2012

Nature of operations

Manappuram Finance Limited (formerly Manappuram Genera Finance & Leasing Limited) ('MAFIL' or 'the Company') was ncorporated on July 15, 1992 in Thrissur, Kerala. The Company is a non banking financial Company ('NBFC'), which provides a wide range of fund based and fee based services including gold loans, money exchange facilities, etc. The Company currently operates through 2,907 branches spread across the country. The Company is a Systemically Important Non-Deposit Taking NBFC.

NOTE :1

Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financia statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 and the guidelines issued by the Reserve Bank of India as applicable to a non deposit accepting NBFC. The financia statements have been prepared under the historical cost convention and on an accrual basis except for interest and discounts on non performing assets which are recognised on realisation basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for certain change in estimates discussed in note 2(d).

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognised as distributions to equity shareholders was Rs. 1.50/- (31 March 2011: Rs. 0.60/- per share, after considering bonus issue).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature of Security

Secured by mortgage of the immovable property of the Company and a charge on all current asset, book debts, receivables as fully described in the debenture trust deed except those receivables specifically exclusively charged, on a first ranking pari passu basis with all other lenders to the Company holding pari passu charge over security.

The Company shall maintain an asset cover of at least 1.10 times of the outstanding amount of debenture, at all times, till the debentures are completely redeemed.

(b) Applicability of Kerala Money Lenders' Act

The Company has challenged in the Hon'ble Supreme Court the order of Hon'ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Hon'ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Hon'ble Supreme Court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

(c) Show cause notice from Reserve Bank of india

The Company has received a show cause notice from the Reserve bank of India on May 7, 2012 with certain observations made pursu- ant to their inspection of books and records of the Company. The Company is in process of responding to the show cause notice. Based on the internal and external legal opinion, the Company believes that it can address all observations to the satisfaction of the Reserve Bank of India. Pending resolution of the matter by the Reserve Bank of India, no adjustments, if any that may be required, have been made in these financial statements.

NOtE: 2

transactions with related parties

a) Remuneration to relatives of director

The Company had in an earlier year made an application to Central Government for approval of remuneration paid to relatives of director holding office or place of profit in the Company. During the current year, the application has been rejected by the Central Government. Subsequently, the Company has made an application to the Central Government to waive the amounts paid to the relatives in the earlier years. Pending the receipt of the approval the entire amount paid ofRs. 4.87 is shown as receivable from them.

b) transactions under Section 297 of the Companies Act, 1956

The Company had shared common infrastructure facilities and performed / received collection services from other companies covered under Section 301 of the Companies Act, 1956. The Company is in the process of obtaining necessary approvals / condonations from the Central Government, if any that may be required in respect of the various classes of transactions entered into with parties covered under Section 297 of the Companies Act, 1956, including certain free of cost transactions. The Company has also made provision for the probable compounding fees payable.

Note : 3

Utilisation of proceeds of public issue

During the current year, the Company has raised Rs. 4,416.19 by way of public issue of Secured Non Convertible debentures (public issue) to be utilised to meet its various financing activities including lending and investments and towards business operations including for capital expenditure and working capital requirements. As at March 31, 2012, the Company has utilised the entire proceeds of the public issue, net of issue expenses in accordance with the objects stated in the offer document.

Note : 4

During the year there have been certain instances of fraud on the Company by employees where gold loan related misappropriations / cash embezzlements have occurred for amounts aggregating Rs. 38.32 million. The Company has fully provided for these amounts in the financial statements and is in the process of recovering these amounts from the employees and taking appropriate legal actions.

Note : 5 Comparatives

Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1. 0 NATURE OF OPERATIONS

Manappuram General finance and Leasing Limited (‘MAGfIL' or ‘the Company') was incorporated on July 15, 1992 in Thrissur, Kerala. The Company is a non banking financial company (‘NBfC'), which provides a wide range of fund based and fee based services including gold loans, money exchange facilities etc. The Company currently operates through more than 1,900 branches spread across the country.

The Board of Directors of the Company at its meeting held on february 25, 2011, decided to change the Category A (Deposit Taking) registration of the Company with Reserve Bank of India (RBI) and made an application for the change. RBI approved the same and issued a new Certificate giving Category B (Non Deposit Taking) registration to the Company. As per the new registration, the Company is a Systemically Important Non-Deposit Taking NBfC.

1.2 SHARE CAPITAL Issue of equity shares to promoters on preferential basis

During the current period, the Company has issued 13,210,039 shares to its promoters on preferential basis at a price of Rs. 75.70/- per share at a premium of Rs. 73.70/- per share. The approval of the Board of Directors and shareholders has been taken and necessary regulatory requirements have been complied with by the Company.

Bonus and share split

The shareholders of the Company have on April 22, 2010 through a resolution, approved the sub-division of one fully paid equity share of Rs. 10/- each of the Company into five equity shares of Rs. 2/- each fully paid pursuant to Section 94 of the Act. further, the shareholders of the Company have through a resolution passed on April 22, 2010 approved the issuance of equity shares of Rs. 2/-each, fully paid up, as bonus shares (after considering the stock split as above) in the ratio of 1:1 to the shareholders existing as on the record date. These changes have been given effect to in the current period.

further, as per the requirements of paragraph 44 read with paragraph 24 of Accounting Standard 20 – ‘earnings per share' (AS-20), the number of equity shares outstanding as at March 31, 2010 has been adjusted for the amount of such bonus shares and sub-divided shares in the computation of the weighted average number of shares for the computation of ePS for the current year and previous year.

issue of equity shares through private placement to Qualified institutional Buyers ("QiBs")

During the current year, the Company has issued 59,523,809 shares to certain QIBs by way of a private placement at a price of Rs. 168/- per share at a premium of Rs. 166/- per share. The issues of these shares are for the purposes of augmenting the funding needs of the Company and to meet capital adequacy norms. The Company raised a total amount of Rs. 10,000 million from these QIBs and incurred an amount of Rs. 230 million as share issues expenses which has been set off against the share premium account.

employee Stock option Scheme (eSoS), 2009

The details of the employee Stock option Scheme 2009 are as under:

Date of share holders' approval August 1 7, 2009

Number of options approved 1,000,000

Date of grant August 1 7, 2009

Number of options granted 829,500

Method of settlement equity

Graded Vesting 50% after one year from the date of grant i.e. August 16, 2010 and balance 50% after two years from the date of grant i.e August 16, 2011

exercisable period 4 years from vesting date

Vesting conditions on achievement of pre-determined performance parameters in accordance with the Company Performance appraisal plans.

Subsequent to the share split and bonus issue, the number of options has been adjusted to 8,295,000 options and the exercise price has been adjusted to Rs. 33.12/- per share in accordance with the terms of the scheme.

1. Names of related parties

enterprises owned or significantly influenced by key management personnel or their relatives

Manappuram Benefit fund Limited

Manappuram Chits (India) Limited

Manappuram Asset finance Limited

Manappuram finance (sole proprietorship)

Manappuram Insurance Brokers Private Limited

Manappuram Jewellers Private Limited

Manappuram foundations (charitable trust)

Key Management Personnel

Mr. V P Nandakumar

Mr. I Unnikrishnan

Mr. B.N Raveendra Babu

Relatives of key management personnel

Mrs. Sushama Nandakumar

Mr. Sooraj Nandan

Mrs Sumitha Nandakumar

Mrs. Jyothi Prasannan

Mrs. Shelly ekalavyan

Mrs. Geetha Ravi

Mrs. Rajalakshmi Raveendra Babu

Mrs. Sathyalekshmy

2. Remuneration paid to directors is disclosed elsewhere in the financial statements (Refer note 18.15(c))

1.3 EMPLOYMENT BENEFITS DISCLOSURES

The amounts of Provident fund contribution charged to the Profit and loss account during the year aggregates to Rs. 96.51 (Previous year - Rs.26.25).

The Company has a defined benefit gratuity plan. every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

1.4 COMMITMENTS AND CONTINGENT LIABILITIES

(i) commitments

estimated amount of contracts remaining to be executed on capital account, net of advances is Rs. 89.54 (Previous year - Rs. 1.53).

2011 2010

(ii) contingent liabilities

Particulars

The Company is contingently liable to banks and other financial institutions with 1,702.76 707.17 respect to assignment of gold loans to the extent of the collateral deposits / guarantees.

Total 1,702.76 707.17

(iii) Applicability of Kerala Money Lenders' Act

The Company has challenged in the Hon'ble Supreme Court the order of Hon'ble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBfCs. The Hon'ble Supreme Court has directed that a status quo on the matter shall be maintained and the matter is currently pending with the Supreme court. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome. Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits.

1.5 charges created on assets of The company For Secured Loans

A. From banks

Cash credit, overdrafts and working capital loan accounts have been availed from various banks and are secured by Gold Loan receivables.

1.6 During the year there have been certain instances of fraud on the Company by employees where gold loan related misappropriations / cash embezzlements have occurred for amounts aggregating Rs. 24.87 million. The Company has fully provided for these amounts in the financial statements and is in the process of recovering these amounts from the employees and taking appropriate legal actions.

1.7 COMPARATIVES

Previous year's figures have been reclassified to conform to the presentation of the current year.


Mar 31, 2010

1. Nature of operations

Manappuram General France are Leasing Limited {"MAGFill or the Company) was incorporated on July 15,1992 in Thrissur, Kerala. The Company is a non banting francial company {"NBFC}, which provides a wide range of fund based and fee based services induding gold loans, hypothecation loans, money exchange facilities etc, Tne Company currently operates through more than 1.000 brancheis spred across the country

1.2 Amalgamation of Manappuram Finance (Tamil Nadu) Limited (MAFIT) with the Company

MA-IT is a non banking financial company (NBFC), which provides a wide range of fund based services mcluding gold loans, etc

The Company had entered in to a Scheme of Amalgamate (Scheme) with MAFIT or the amalgamation of MAFIT with the Company effective April 1 2008 ("Appointed Date)- The scheme was approved by the Honble High Court of Judicature at Madras on December 8,2009, and Hontte High Court of Judicature at Kerala on December 23,2009. Pursuant to an order of the Honble Hlgn Court and consequent filing tnere of with the Registrar of Companies, Colmbatore on December 23,2009 and Reglstrar of Comanies, Keralla on January 7,2010, MAFIT without being wound up The scheme has accordingly been given effect to in those financeial statements with retrospective effect from April 1, 2008

In consideration of transfer of the urrdertaking of MAFIT the Company has .on January 11, 2010 issued 11,677382 equity shares of Rs, 10/- each, credited as fully paid up* in the ratio of 2:1 equity share of the face value of Rs.10/-each in Company for every equity share of the face value of Rs. 10/- (Rupees Ten only) each held in MAFIT.

The amalgamation has been accounted for under "pooling of interests" method as prescribed by Accouning Stardard 14 "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India.

All tht assets and Liabilitles of MAFIT as of April 1,2008, were transfer red to and vested in the Company at the carrying values as appearing in the books of accounts. the summary of which is as below:

1.3 Acquisition of Manappuram Printers

Manappuram Printers, a sole proprietorship owned by the promoters of the Company was engaged in the business of trading stationery items Pursuant 10 a board resolution dated February 25,2009, the Company has acquired at the assets and liabilities of Manappuram Printers with effect from April 1,2009 on a slump sale basis based on an external valuation. The Company has obtained the necessary approvals in ths regard. The purchases of the assets and liabilities have been made at cost for Rs 10.17

1.4 Share Capital

Conversion of wairants

During the current year, the Promoters of the Company have in termsof the Warrant Subscription Agreement dated November 4. 2006 exercsed their option to convert 1,564,892 conditionally convertible warrants into 1,564392 equlity shares at a price of Rs 166,62/- In accordance with the agreement and relevant SEBI (Securities and Exchange Board of India regulations, the promoters have paid a sun of Rs 2307 towards the balance amount due payable at the time of all otment of equity shares upon conversion of the warrants.

Issued of equity shares through shdies through private pldccrrent to Qualified Institutional Buyers (*QIBs")

During the current year, me Company has issued 3,540,420 shares to certain QBs Dy way of a private placemen; at a price of Rs 69V- per share at a premum of Rs 681/* per share. The issues of these shares are for the purposes of augmenting the furring needs of the Company and to meetcapital adequacy norms. The Company raised at total amount of Rs. 2,446 43 from thrsr QIBs and incurred an amount of Rs 76 as shore issues expenses which has been set off against tine share premium account

Bonus and share spit approved subsequent to Balance Sheet

The shareholders of the Company have on April 22,2010 through a resolution approved the sub division of one fully paid equity share of Rs 10/- each of the Company into five equity shares of Rs 2/ each fully pad pursuant to Section 94 of the Act. farther, the shareholders of the Company nave through a resolution passed on April 22.2010 approved the issuance of equity shares of Rs2/-each fully paid up, as up as bonus shares(after considering the stock spilt as abowe) in the ration of the shareholders i*i*. existing as on the record dale- These changes will be given effect lo in the folowing year except for the changes in the Earrings Per Share discusseo below

As per the requrerrents of paragraph 44 read with paragraphs of Accounting Standard 20 Earnings per Share AS-20,the number of equity shares outstanding as at March 31,2010 has been adjusted for the amount of such bonus shares and sub- divided shares in the computation of the weighted average number of shares for the computation of EPS for all periods presented.

Employee Stock Option Scheme (ESOSI, 2009

The shareholders al the Annual General Meeting he a on August 17, 2009, have approved an Employee Stock Option Scheme 2009 (ESOS 2009) which provides for an issue of 1,000.000 options lo the employees. Consequently, the compensation cornmittee had granted the 829,500 options on August Vt 2009 at an exercise price of Rs 331.15/ per share.

1.5 Segment resorting

Primary Segment: Busiess Segment

The three identified reportable segments are:

1. Gold and other loans * Financing loans against pledging of gold and gold ornaments

2. Asset financing - Financing of loans aganstst hypothecation of vehicles3. Fee based activites Money transfer, foreign currency exchange

1.6 Employment benefits disclosure*:

The amounts of Provident fund contribution charged to the Profit and loss account during the year aggrcgatrs to Rs. 26.25 (Previous year * Rs. 9.95)-

The Company has a defined benefit gratuity plan Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance company in the form of a qualifying insurance polling.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status aro amounts recognised in the balance sheet for the gratuity plan.

1 .7 Commitments and contingent liabilities

Commitments

Estimated amount of contracts remaining to be exeuted on capital accounl,net of advances is Rs. 153(Prevlous Year - Rs. Nil) .

Contingent Liabilites 2010 2009

(I) Claims against the Company not acknowledged as debts

Penalty urder Kerala General Sates Tax Act and Kerala Money lenders Act - 0.72

pi) Others

The Company is contingently lable to banks and other financial

institutions with respect to assignment of gold / hypothecation loans

to the extent of the colateral cepost / guarantees 70717 1,25838

Total [ (i) + {iii)] 707,17 1,239,10



(iii) Applicability of Kerala Morey Lenders Act

The Company has challenged in the Honble Supreme Court the order of Honble Kerala High Court upholding the applicability of Kerala Money Lenders Act to NBFCs. The Honble Supreme Court has directed that a status quoon the matter shall be maintained and the matter is currently pening with opinion the management witnihe Supwrccourt The Cort. The Company has taken legal opinion on the matter and based on such opinion the management is confident of a favourable outcome Pending the resolution of the same, no adjustments have been made in the financial statements for the required license fee and Security deposits

1.8 Assignment of receivables

The Campany has assigned a portion of its go d loans / hypothecations loans to banks and financial Institutions during the year. The aggregate amount assigned as as at March 31,2010 is Rs, 7,077,02 (Previous year-Rs 5.381421

These amounts have been reduced from the gross gold loan and hypothecation loan balances.

1.9 Charges created on assets of the Company for Secured Loans

A Secured Non Convert We Debentures

Non convertible secured debentures are secured by floating cnarge on the specifled hire purchase receivables. Gold loan Including recelvables there on and olher unentumbered asselsboth prescnt and future.

B. From banks

Overdraft/ Working Capital Loan accounts have been availed With the following banks are sesured by Gold Loan receivables.



State Dank of India Syndicate Bank Limited

Corporation Bank Limited The Karur Vysya Bank Limited

South Indian Bank Limited Bank of Rajasihan Limited

Punjab National Bank Limited Axis Bank Limited

VFS Bar* Limited IDBI Bank Limited

Central Bank of India Limited Catholic Syrian Bank

IOFC Bank Limited ING Vysya Bark

Induslnd Bank Limited Lakshmi villas Bank

Dhhanalakshmi Bank Limited Kotak Mahindra Bank

Oriental Bank of Commerce United ICICI Bank United

union Bank of India Limited Allahabad Bank Limited

Indian Overseas Bank Limited Kotak Mahindra Limited

1.10 During the yeat there have been instances of fraudon the Company by employees /third parties where gold loan and cash related misappropriations have occurred for amounts aggregating Rs 8.47 The Company has taken necessary action including claim from insurance companles. Further, appropriate actions have been taken against such employees/third parties,

1.11 Comparatives

As stated in Notes 3 and 4 of Schedue 18 in view of the amation of MAFIT with the Company with effect from April 1, 2008 and acquisition of Manappram Printers, the figures for the year ended March 31- 2010 are not comparable with those of the year ended March 31,2009. Further, previous years figures have been reclassified to form to the presentation of the current year.

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