Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of Muthoot Capital Services Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss and Statement of Cash Flows for the year ended on that date, and the notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its Profit and Cash Flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters |
How addressed in Audit |
Accuracy in identification and categorisation of receivables from financing activities as performing and non-performing assets including those under securitisation arrangements and in ensuring appropriate asset classification, existence of security, income recognition, provisioning/ write off thereof and completeness of disclosure including compliance in accordance with the applicable extant guidelines issued by Reserve Bank of India (RBI). |
We have assessed the systems and processes laid down by the company to appropriately identify and classify the receivables from financing activities including those in place to ensure correct classification, income recognition and provisioning/write off including of Non-performing assets as per applicable RBI guidelines. The audit approach included testing the existence and effectiveness of the control environment laid down by the management and conducting of detailed substantive verification on selected samples of continuing and new transactions in accordance with the principles laid down in the Standards on Auditing and other guidance issued by Institute of Chartered Accountants of India. Agreements entered into regarding significant transactions including related to corporate loans and securitization/assignment arrangements have been examined to ensure compliance. We have also reviewed the reports generated from management information systems, audit/inspection reports issued by the concurrent / internal/secretarial auditors and Reserve Bank of India. The impact of all significant external and internal events including those if any, subsequent to balance sheet date have been taken into consideration for the above purposes. Compliance with material disclosure requirements prescribed by RBI guidelines and other statutory requirements have been verified. |
Completeness in identification, accounting and disclosure of related party transactions in accordance with the applicable laws and financial reporting framework. |
We have assessed the systems and processes laid down by the company to appropriately identify, account and disclose all material related party transactions in accordance with applicable laws and financial reporting framework. We have designed and performed audit procedures in accordance with the guidelines laid down by ICAI in the Standard on Auditing (SA 550) to identify, assess and respond to the risks of material misstatement arising from the entityâs failure to appropriately account for or disclose material related party transactions which includes obtaining necessary approvals at appropriate stages of such transactions as mandated by applicable laws and regulations. We have also reviewed the Secretarial Audit report during the course of evaluating the internal control systems in ensuring compliance with applicable laws, rules, regulations and guidelines. |
Information Other than the Standalone Financial Statements and Auditorâs Report thereon (Other Information)
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Corporate Overview, Boardâs Report, Management Discussion and Analysis Report and Report on Corporate Governance in the Annual Report of the Company for the financial year 2018-19, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other Information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss, and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial statement reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Section 197(16) of the Act, in our opinion and to the best of our information and according to the explanations given to us: the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 7 to the financial statements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGALAND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED MARCH 31, 2019:
1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b) We are informed that the company has a programme for physical verification of fixed assets at reasonable intervals and that no material discrepancies were noticed on such verification.
(c) The Company does not have any immovable property and hence the reporting requirements as per clause 3 (1) (c) of the Order are not applicable.
2. Except for the repossessed assets from borrowers, stock of stationery and sales promotion items, the Company does not have any other stock of inventory. These Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, material discrepancies were not noticed on such physical verification.
3. According to the information and explanation given to us, the Company has granted secured loan to one company, unsecured intercorporate deposit to one company and unsecured loan to one partnership firm covered in the Register maintained under section 189 of the Act in respect of which;
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companyâs interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the balance sheet date.
4. According to the information and explanations given to us and the records of the company examined by us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
5. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. According to the information and explanations given to us by the management no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in respect of the aforesaid deposits.
As stated in Note 11.2 of the financial statements, there are unpaid amounts against matured public deposits amounting to Rs. 28,916 thousand (including interest) outstanding as on 31st March, 2019, and the management has confirmed that they could not pay the same since claims were not received from public deposit holders.
6. The maintenance of cost audit records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 for the business activities carried out by the company. Thus reporting under clause 3(vi) of the order is not applicable to the company.
7. (a) As per the information and explanations furnished to us and according to our examination of the records of the Company, except for three instances of delay in deduction and remittance of Tax deducted at source, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employeeâs State Insurance, Income Tax, Goods and Service Tax, Cess and any other statutory dues, as applicable to the Company. According to the information and explanation given to us by the management, there are no arrears of undisputed statutory dues outstanding as at the last date of the financial year for a period of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us, there were no outstanding dues of sales tax, income tax, wealth tax, customs duty, excise duty, service tax, Goods and Service Tax, and cess that have not been deposited on account of any dispute.
8. In our opinion and according to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks, Governments or dues to debenture holders.
As stated in Note No.11.1 of the financial statements, there are unpaid amounts against matured debentures amounting to Rs. 621 thousand (including interest) outstanding as on March 31, 2019 and the management has confirmed that they could not pay the same since claims were not received from the debenture holders.
9. According to the information and explanations given to us and the records of the Company examined by us, no moneys were raised by way of initial public offer or further public offer (including debt instruments) and the term loans availed by the company have been applied for the purpose for which the loans were obtained.
10. According to the information and explanations given to us, no material fraud by the company or on the company by its officers or employees has been noticed or reported during the year.
11. According to the information and explanations given to us and the records of the Company examined by us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company. Accordingly, the reporting requirement under clause (xii) of paragraph 3 of the Order is not applicable to the Company.
13. The Company has complied with the provisions of Section 177 and 188 of the Act, where applicable, for all transactions with the related parties. The details of related party transactions have been disclosed in Note No 4 of the financial statements, as required by the applicable accounting standards.
14. The company has not made any preferential allotment of shares or fully or partly convertible debentures during the year under review and thus the requirement under section 42 of the Act is not applicable.
15. According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with Directors or persons connected with the Directors and hence the reporting requirement under clause (xv) of paragraph 3 of the Order is not applicable.
16. The Company is engaged in the business of Non-Banking Financial Institution and it has obtained the certificate of registration as provided in section 45-IA of the Reserve Bank of India Act, 1934.
ANNEXURE B REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED 31st MARCH 2019.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial control systems with reference to financial statements reporting of Muthoot Capital Services Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls systems with reference to financial statements reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls system with reference to financial statements reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements reporting and their operating effectiveness. Our audit of internal financial controls system with reference to financial statements reporting included obtaining an understanding of internal financial controls system with reference to financial statements reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements reporting.
Meaning of Internal Financial Controls with reference to Financial Statements reporting
A companyâs internal financial controls system with reference to financial statements reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls system with reference to financial statements reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements reporting
Because of the inherent limitations of internal financial controls system with reference to financial statements reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls system with reference to financial statements reporting to future periods are subject to the risk that the internal financial controls system with reference to financial statements reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements reporting and such internal financial controls system with reference to financial statements reporting were operating effectively as at March 31, 2019, based on the internal control with reference to financial statements reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Varma & Varma
Chartered Accountants
FRN No: 004532S
Sd/-
Place : Kochi - 19 VIJAY NARAYAN GOVIND
Date : 24th April, 2019 Partner
M.No. 203094
Mar 31, 2018
INDEPENDENT AUDITOR''S REPORT
To
The Members of Muthoot Capital Services Limited Kochi
Report on the Financial Statements
We have audited the accompanying Financial Statements of Muthoot Capital Services Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its Profit and its Cash Flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of
India in terms of sub-section 11 of Section 143 of the Act, we enclose in the âAnnexure Aâ, a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial control systems with reference to financial statements reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 7 of the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE A REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGAL
AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON
THE FINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED
MARCH 31, 2018:
1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b) We are informed that the fixed assets of the Company have been physically verified by the management during the year, the frequency of which in our opinion is reasonable having regard to the size of the Company and the nature of assets and that no material discrepancies were noticed on such verification.
(c) The Company does not have any immovable property and hence the reporting requirements as per clause 3 (1) (c) of the Order are not applicable.
2. Except for the repossessed assets from borrowers and stock of stationery, the Company does not have any other stock of inventory. These Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, material discrepancies were not noticed on such physical verification.
3. The Company has granted secured loans to three companies and an unsecured loans to one company and one partnership firm covered in the Register maintained under section 189 of the Act in respect of which;
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companyâs interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the balance sheet date.
4. According to the information and explanations given to us and the records of the Company examined by us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
5. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. According to the information and explanations given to us by the management no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in respect of the aforesaid deposits.
As stated in Note No. 2.3.4 of the financial statements, there are unpaid amounts against matured Public deposits amounting to '' 3 39 62 thousand (including interest) outstanding as on 31st March, 2018, and the management has confirmed that they could not pay the same since claims were not received from public deposit holders.
6. To the best of our knowledge and according to the information and explanation given to us, central government has not prescribed the maintenance of cost records under Section 148 (1) of the Act for the Company at this stage.
7. (a) As per the information and explanations furnished to us and according to our examination of the records of the
Company, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employeeâs State Insurance, Income Tax, Sales Tax, Service Tax, Duty of customs, Duty of excise, Value Added Tax, Cess and any other statutory dues, as applicable to the Company to the appropriate authorities during the year. According to the information and explanation given to us by the management, there are no arrears of undisputed statutory dues outstanding as at the last date of the financial year for a period of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax that have not been deposited on account of any dispute as at March 31, 2018, are as follows:
Name of the Statute |
Nature of Dues |
Amount ('' in 000) |
Periods to which the amount relates |
Forum where the dispute is pending |
Income Tax Act,1961 |
Income Tax |
1 87 |
AY- 2012-13 (FY-2011-12) |
Commissioner of Income Tax (Appeals) |
8. In our opinion and according to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks, Governments or dues to debenture holders.
As stated in Note No. 2.7 of the financial statements, there are unpaid amounts against matured debentures amounting to '' 9 56 thousand outstanding as on March 31, 2018 and the management has confirmed that they could not pay the same since claims were not received from the debenture holders.
9. According to the information and explanations given to us and the records of the Company examined by us, no moneys were raised by way of initial public offer or further public offer (including debt instruments) and the term loans availed by the Company have been applied for the purpose for which the loans were obtained.
10. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
11. According to the information and explanations given to us and the records of the Company examined by us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company. Accordingly, the reporting requirements under clause (xii) of paragraph 3 of the Order is not applicable to the Company.
13. The Company has complied with the provisions of Section 177 and 188 of the Act, were applicable, for all transactions with the related parties. The details of related party transactions have been disclosed in Note No. 4 of the financial statements, as required by the applicable accounting standards.
14. The Company has not made any preferential allotment of shares or fully or partly convertible debentures during the year under review. As stated in Note No. 2.1 of the financial statements, the Company has made private placement of Equity shares to Qualified Institutional Buyers during the year under review, in compliance with the requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised.
15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with Directors or persons connected with the Directors and hence the reporting requirement under clause (xv) of paragraph 3 of the Order is not applicable.
16. The Company is engaged in the business of Non-Banking Financial Institution and it has obtained the certificate of registration as provided in section 45-IA of the Reserve Bank of India Act, 1934.
ANNEXURE B REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MUTHOOT CAPITAL SERVICES LIMITED FOR THE YEAR ENDED 31st MARCH 2018:
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial control systems with reference to financial statements reporting of Muthoot Capital Services Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls systems with reference to financial statements reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls system with reference to financial statements reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements reporting and their operating effectiveness. Our audit of internal financial controls system with reference to financial statements reporting included obtaining an understanding of internal financial controls system with reference to financial statements reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements reporting.
Meaning of Internal Financial Controls with reference to Financial Statements reporting
A companyâs internal financial controls system with reference to financial statements reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls system with reference to financial statements reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal financial controls system with reference to financial statements reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls system with reference to financial statements reporting to future periods are subject to the risk that the internal financial controls system with reference to financial statements reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements reporting and such internal financial controls system with reference to financial statements reporting were operating effectively as at March 31, 2018, based on the internal control with reference to financial statements reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
1. The company has a concurrent audit system, the coverage and periodicity of which requires to be further improved so as to be effective and commensurate with the size, geographical spread and nature of business.
2. As per the gap-analysis conducted by an independent agency, the information technology framework requires to be modified to be in line with the RBI guidelines prescribed for NBFC sector, which we are informed will be complied within the timelines specified by RBI
Our opinion is not modified in respect of the above matters.
For Varma & Varma
Chartered Accountants
Place: Kochi - 19 FRN: 004532S
Date:17-04-2018
VIJAY NARAYAN GOVIND
Partner
M.No. 203094
Mar 31, 2017
To THE MEMBERS OF MUTHOOT CAPITAL SERVICES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of MUTHOOT CAPITAL SERVICES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its Profit and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";
g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Amendment Rules, 2017, in our opinion and to the best of our information and according to the explanations given to us;
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 7 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures of the direct receipts and payments, in cash, made by the Company, in the financial statements, as to holdings as well as dealings in Specified Bank Notes, during the period from 8thNovember, 2016 to 30th December, 2016. However with regard to the Collection amounts remitted in the Company''s bank account by customers/borrowers/collection agencies/ company executives in cash, the particulars regarding the remittance, if any, made in specified bank notes were not furnished by the bank. Hence the Company is not able to furnish the relevant particulars of such deposits if any made through Specified Bank Notes - Refer Note 9 to the financial statements.
Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date;
1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items and no material discrepancies between the books and the physical fixed assets have been noticed.
(c) The Company does not have any immovable property and hence the requirement of furnishing the particulars as per clause 3 (1) (c) of the order is not applicable.
2. Except for the repossessed assets from borrowers and stock of stationery, the Company does not have any other stock of inventory. These Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, material discrepancies were not noticed on such physical verification.
3. The Company has granted two secured loans to two companies and unsecured loans to a partnership firm covered in the Register maintained under section 189 of the Act in respect of which;
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the balance sheet date.
4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013, as applicable, in respect of loans, investments, guarantees, and security.
5. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in relation to any matter connected with the Company.
6. To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under section 148 (1) of the Companies Act for the services rendered by the Company.
(a) According to the information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on which they become payable.
(b) According to the information and explanation given to us, there are no material dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess which have not been deposited as on 31st March 2017 on account of dispute except the following;
Name of the Statute |
Nature of Dues |
Forum where dispute is pending |
Period to which the amount relates-Financial Year |
Amount involved (Rs. in 000) |
Income Tax Act, 1961 |
Income Tax and Interest |
Commissioner of Income Tax |
2011-12 |
1 87 |
|
|
Total |
|
1 87 |
7. Based on our audit procedures and according to the information and explanations given to us and on the basis of the books of accounts and other records examined by us, the Company has not defaulted in repayment of any dues to financial institution or banks or debenture holders.
There are unpaid amounts against matured debentures amounting to Rs. 7 49 thousand outstanding as on March 31, 2017 and the management has confirmed that they could not pay the same since claims were not received from the debenture holders.
8. Based on our audit procedures and according to the information and explanations given to us and on the basis of the books of accounts and other records examined by us, the Company has utilized the debt instruments and term loans for the purpose for which they were actually obtained.
9. We have been informed that during the audit period there were no frauds.
10. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
11. The Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
12. In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
13. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
14. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.
15. The Company is engaged in the business of Non-Banking Financial Institution and it has obtained the certificate of registration as provided in section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act"):
We have audited the internal financial controls over financial reporting of Muthoot Capital Services Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls:
The Company''s management is responsible for establishing and maintaining internal financial controls based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India". These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility:
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting:
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that;
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the Company; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting: |
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion:
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India".
For K. VENKATACHALAM AIYER & Co
Chartered Accountants
Firm Regn No. 004610S
Sd/-
CA A. GOPALAKRISHNAN
Partner
Membership No. 18159
Place: Kochi
Date: April 18, 2017
Mar 31, 2015
We have audited the accompanying financial statements of MUTHOOT
CAPITAL SERVICES LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these financial statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India :
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 201 5 (the
'Order') issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, and based on the
information and explanations given to us, we give in the Annexure, a
statement on the matters specified in paragraph 3 of the said Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 1 64 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note No. 12 to
the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. During the year, there has been no delay in transferring the
amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORSÂ REPORT
Annexure referred to in our report to the members of Muthoot Capital
Services Limited on the Financial Statements for the year ended March
31, 2015.
We report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the Management
during the year, which in our opinion is resonable having regard to the
size of the Company and the nature of the fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of accounts.
2. (i) Except for the repossessed assets from borrowers and gold in
hand not sold in auction, the Company does not have any stock of
inventory. These Inventories have been physically verified during the
year by the Management. In our opinion, the frequency of verification
is reasonable.
(ii) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(iii) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. The Company has not given any loan to Companies, firms and other
parties covered in the Register maintained under section 189 of the
Companies Act, 2013. Accordingly, requirements of reporting under
Paragraphs (iii) (a) and (iii) (b) of the Order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures,
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory and fixed assets and
for the sale of goods and services. During the course of our audit, we
have not observed any major weakness in such internal control system.
5. In our opinion and according to the information and explanations
given to us, the Company has accepted deposits, and has complied with
the directives issued by the Reserve Bank of India and the provisions
of sections 73 to 76 and any other relevant provisions of the Companies
Act, 2013 and the rules framed thereunder,as applicable or any order
passed by Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any court or any other tribunal.
6. The central government has not prescribed the maintenance of cost
records under section 148(1) of the Companies Act, 201 3 for the
services rendered by the company.
7. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company,amounts
deducted or accrued in the books of account in respect of undisputed
statutory dues including provident fund, employees state insurance,
income tax, sales tax, wealth tax, service tax, duty of customs, value
added tax, cess and other material statutory dues have been regularly
deposited during the year by the Company with appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employee's
state insurance, income tax, sales tax, wealth tax , service tax, duty
of customs, duty of excise, value added tax , cess and other material
statutory dues were in arrears as at March 31, 2015 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no material dues of income tax, sales tax, wealth tax, service tax,
duty of customs, duty of excise, value added tax, cess which have not
been deposited as on 31st March, 2015 on account of any dispute except
the following.
(RS. in '000)
Name of the Nature of Dues Forum where dispute is pending
Statute
Income Tax Act, Income Tax and The Commissioner of Income Tax,
1961 Interest (Appeals)
Income Tax Act, Income Tax and The Commissioner of Income Tax,
1961 Interest (Appeals)
Name of the Period to which Amount involved
the amount relates
Financial Year
Income Tax Act, 2001-02 14 45
1961
Income Tax Act, 2002-03 9 13
1961
Total 23 58
(c) Based on our examination of the records and the information and
explanations given to us the Company has transferred an amount of RS.
1 81 thousand lying in the unpaid dividend account to Investor
Education and Protection Fund for the period 2006-07 within the time in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules framed thereunder.
8. The Company does not have any accumulated losses at the end of the
financial year and it has not incurred cash losses in this financial
year or in the immediately preceding financial year.
9. Based on our audit procedures and according to the information and
explanations given to us and on the basis of the books of accounts and
other records examined by us, the Company has not defaulted in the
repayment of any dues to financial institutions, banks or debenture
holders.
Even though there are unclaimed amounts of debentures amounting to RS.
15 19 thousand outstanding as on 31.03.201 5, the Management has
confirmed that they could not pay the same since the claims were not
received from the debenture holders.
10. In our opinion and according to the information and explanations
given to us, the company has not given any guarantee during the year
for loans taken by others from banks or other financial institutions.
11. According to the information and explanations given to us and on
the basis of the verification of the books of account of the company,
in our opinion, the company has applied the term loans for the purpose
for which the loans were obtained.
12. We have been informed that during the audit period there have been
certain instances of fraud on the Company by employees, where
hypothecation loans related misappropriations or cash embezzlements
have occurred for amounts aggregating to RS. 3 79 thousand of which
the Company has recovered RS. 3 33 thousand. The Company is in the
process of recovering these amounts from the employees and taking legal
actions where applicable.
For K.VENKATACHALAM AIYER & Co.
Chartered Accountants
Firm Regn No: 00461 0S
CA A. GOPALAKRISHNAN
Partner
Membership No. 18159
Place: Kochi
Date: 25th May, 201 5
Mar 31, 2014
We have audited the accompanying financial statements of MUTHOOT
CAPITAL SERVICES LIMITED (''the Company''), which comprise the Balance
Sheet as at 31st March 2014, the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of the Companies Act, 1956 ("the Act") read with
the General Circular 15/2013 dated 13th September 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013 and in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatements, whether
due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidences we have obtained are sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements together
with the notes thereon give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2014;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") as amended by the Companies (Audit Report)(Amendment) Order,
2004 (together the ''Order'') issued by the Central Government of India
in terms of sub-section (4A) of section 227 of the Act, and based on
the information and explanation given to us, we give in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by section 227(3) of the Act, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) in our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination of those books;
(iii) the Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by this report have been
prepared in all material respects in compliance with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act 1956, read with the General Circular 15/2013 dated 13th
September 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013; and
(v) on the basis of the written representations received from the
Directors of the Company as on 31st March 2014, and taken on record by
the Board of Directors, we report that none of the Directors is
disqualified as on 31st March 2014, from being appointed as a director
of the Company in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
Annexure to Independent Auditors'' Report
The Annexure referred to in our report to the members of Muthoot
Capital Services Limited ("the Company") for the year ended 31st March
2014.
We report that:
1. (i) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets on the basis of available information.
(ii) The fixed assets have been physically verified by the management
during the period, the programme of verification of which, in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies have been noticed on
such physical verification.
(iii) In our opinion and according to the information and explanation
given to us, Fixed Assets disposed off by the Company during the year
were not substantial, and therefore, do not affect the going concern
assumption.
2. (i) Except for the repossessed assets from the borrowers and gold
in hand not sold in auction, the company does not have any stock of
inventory.
(ii) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. (i) On the basis of the explanations given by the management, we
report that the Company has not taken any loans, secured or unsecured
from Companies or other parties covered in the register maintained u/s
301 of the Companies Act 1956 ("the Act"). However, we report that the
Company has entered into transactions with the Directors of the Company
and the maximum amount to the credit of such account of the Directors
during the year 2013-14 was Rs. 821.30 Lakhs (2012-13: Rs. 772.74 Lakhs)
and the outstanding balance as on 31st March 2014 including interest
payable was Rs. 821.30 Lakhs (31st March 2013: Rs. 768.25 Lakhs).
(ii) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken from/ granted to companies,
firms or other parties listed in the register maintained under section
301 of the Act were not, prima facie, prejudicial to the interest of
the Company.
(iii) In respect of the aforesaid loans, the Company was regular in the
repayment of the principal amounts as stipulated and has been regular
in payment of interest.
(iv) There are no overdue amounts of loans taken from or granted to
companies, firms or other parties listed in the register maintained in
pursuance of Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to the purchase of fixed assets and sale of goods and services. We have
not observed any major weakness in the internal control system during
the course of the audit.
5. (i) In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of
contracts or arrangements that need to be entered in the register
maintained under Section 301 of the Companies Act, 1956 have been so
entered.
(ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements referred to in (5)(i) above and exceeding the value of
Rupees Five Lakhs with any party during the year have been made at
prices which are reasonable having regard to the nature of the service
and the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the directives issued by the
Reserve Bank of India and the provisions of Section 58A, Section 58AA
or any other relevant provisions of the Act, and the rules framed there
under with regard to deposits accepted from the public.
7. The Company has an internal audit system, which in our opinion, is
commensurate with the size and the nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under section 209(1) (d) of the Act for any services
rendered by the Company.
9. (i) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted / accrued in the books of accounts in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Wealth Tax, Service Tax, Sales Tax / Value Added Tax, and
other material statutory dues, have been regularly deposited during the
year by the Company with the appropriate authorities. As explained to
us, the Company did not have any dues on account of Customs Duty and
Excise Duty.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax / Value
Added Tax, and other material statutory dues were in arrears as at 31st
March 2014 for a period of more than six months from the date they
became payable.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to any financial
institution or Bank or debenture holders during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares and other securities, except loans
given against the security of its own secured debentures / bonds and
public deposits.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund / nidhi / mutual benefit
fund / society.
14. In our opinion, the Company has maintained proper records for the
trading in shares, securities and other investments, and timely entries
have been made.
15. According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or other financial institutions.
16. In our opinion, and according to the information and explanations
given to us, term loans availed by the Company, prima facie, were
applied by the Company during the year for the purposes for which the
loans were obtained.
17. According to the cash flow statement and other records examined by
us and as per the explanations and information given to us, funds
raised by the Company on short-term basis have not been used for long-
term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act,1956.
19. According to the information and explanations given to us, the
Company has created securities / charges in respect of secured
debentures issued and outstanding as on 31st March 2014.
20. The Company has not raised money by public issues during the year.
21. According to the explanations and informations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For K.VENKATACHALAM AIYER & CO
CHARTERED ACCOUNTANTS
Firm Regn No: 004610 S
sd/-
CA A. GOPALAKRISHNAN
PARTNER
Membership Number: 18159
Place - Kochi
Date - May 20, 2014
Mar 31, 2013
Report on the financial statements
We have audited the accompanying financial statements of MUTHOOT
CAPITAL SERVICES LTD (the Company), which comprise the Balance Sheet as
at March 31,2013, the Statement of Profit and Loss and Cash Flow
Statement for theyearthen ended, and a summary of significant
accounting policies and other explanatory information.
Management''s responsibility forthe financial statements
Management is responsible forthe preparation of these financial
statements that give atrue and fair view ofthe financial position,
financial performance and cash flows ofthe Company in accordance with
the accounting principles generally accepted in India, including
accounting standards referred to in sub section (3C) of section 21 I
ofthe Companies Act,
1956 (Âthe Act"). This responsibility includes design, the
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatements, whether
due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whetherthe financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement ofthe financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in these circumstances.
An audit also includes evaluating the appropriateness of accounting
policies and principles used and reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
presentation ofthe financial statements.
We believe that the audit evidences we have obtained are sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements together with the
notes thereon give the information required by the Act in the manner so
required and give atrue and fairview in conformity with the accounting
principles generally accepted in India:
a. in the case ofthe Balance Sheet, ofthe state of affairs ofthe
Company as at 3 I st March, 2013;
b. in the case ofthe Statement of Profit and Loss, ofthe profit ofthe
Company for the year ended on that date and;
c. in the case of Cash Flow Statement, ofthe cash flows forthe year
ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Audit
Report)(Amendment) Order, 2004 (togetherthe Order'') issued bythe
Central Government of India in terms of sub-section (4A) of section 227
ofthe Act, and based on the information and explanation given to us, we
give in the Annexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
2. As required by section 227(3) ofthe Act, we reportthat:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary forthe purpose of our
audit.
b. In our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination ofthose books.
c. The Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d. In our opinion the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report have been
prepared in all material respects in compliance with the accounting
standards referred to in sub-section (3C) of section 211 of the
companies act 1956,to the extent applicable.
e. On the basis of the written representations received from the
Directors of the Company as on March 31, 2013, and taken on record by
the Board of Directors, we report that none of the directors is
disqualified as on March 31, 2013 from being appointed as a director of
the Company in terms of clause (g) of sub-section (I) of section 274
ofthe Companies Act, 1956.
Annexure to the Auditors'' Report
The Annexure referred to in our report to the members of Muthoot
Capital Services Limited (ÂThe Company") forthe year ended March 3
1,2013.
We reportthat;
1. (i) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(ii) The fixed assets have been physically verified by the management
during the period, the programme of verification ofwhich, inouropinion,
is reasonable having regard to the size ofthe Company and the nature of
its assets. No material discrepancies have been noticed on such
physical verification.
(iii) In our opinion and according to the information and explanation
given to us, a substantial part of the Fixed Assets has not been
disposed off by the Company duringthe year and therefore doesn''t
affect going concern assumption.
2. (i) Except the repossessed assets from the borrowers, the company
does not have any stock of inventory.
(ii) On the basis of our examination ofthe inventory records, in our
opinion, the Company is maintaining proper records of inventory ofthe
above items.
3. (i) On the basis of the explanations given by the management, we
report that the Company has not taken any loans, secured or unsecured
from Companies or other parties covered in the register maintained u/s
301 ofthe Companies Act 1956 (ÂThe Act"). However we report that
the Company has frequently entered into transactions with the Directors
ofthe Company and the maximum amount to the credit of such account
ofthe Directors duringthe year ended March 31,2013 wasRs. 772.74 Lakhs
(201 I - 12:Rs. 6,907.06 Lakhs) and the outstanding balance as on 3
1.03.2013 including interest payable was Rs. 768.25
Lakhs(31.03.2012:Rs.917.41 Lakhs)
(ii) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken from / granted to companies,
firms or other parties listed in the register maintained under section
301 ofthe Act are not prima facie prejudicial to the interests ofthe
Company.
(iii) In respect ofthe aforesaid loans, the company is regular in
repaying the principal amounts as stipulated and is also regular in
payment ofinterest, whereverapplicable.
(iv) There are no overdue amounts of loans taken from or granted to
companies, firms or other parties listed inthe register maintained in
pursuance of Section 301 ofthe Act.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size ofthe Company and the nature of its business
for the purchase of fixed assets and sale of goods and services. We
have not observed any major weakness in the internal control system
duringthe course ofthe audit.
5. (i) In our opinion and according to the information and
explanations given to us, the transactions that need to be entered in
the register in pursuant of section 301 ofthe Act have been so entered.
(ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 ofthe
Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, prima facie, have been made at prices which are
reasonable having regard to the nature of the service and the
prevailing market prices atthe relevant time.
6. The Company has not accepteddeposit swithin themeaning ofS ec 58A
of the Companies Act 1956 from the public during the year ended March
31,2013.
7. The Company has an internal audit system, which in our opinion, is
commensurate with the size and the nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under section 209( I )(d) of the Act for any services
rendered by the Company.
9. (i) According to the information and explanations given to us and
the records of the Company examined
by us, and in our opinion, the Company is regular in depositing the
undisputed statutory dues including provident fund, value added tax and
other material statutory dues as applicable with the appropriate
authorities.
According to the information and explanations given to us there are no
undisputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax/ value added tax, excise duty and cess which are
outstanding as at March 31,2013 for a period of more than six months
from the date they became payable.
(ii) According to the records of the Company and the information and
explanation given to us, there are no dues of wealth tax, excise duty
and cess which have not been deposited on account of dispute. Details
of dues of Income-Tax, which have not been deposited as on 3 I March,
2013 on account of disputes are given below:
Name of Nature of
Dues Forum where
dispute is Period to
which Amount
Statute pending the amount involved
relates (Rs.
in Â000)
(Financial
Year)
Income Tax Income Tax
and Commissioner
of Income 2001-02 14 45
Act, 1961 Interest Tax (Appeals)
Income Tax Income Tax
and Commissioner of
Income 2002-03 9 13
Act, 1961 Interest Tax (Appeals)
TOTAL 23 58
10. The Company has no accumulated losses as at March 31,2013 and it
has not incurred any cash losses during the yearended on that date or
in the immediately preceding financial year.
I I. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to any financial
institution or Bank or Bondholders as atthe Balance Sheet date.
12. According to the information and explanations given to us, Company
has not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities, except loans given
against the security of its own secured debentures/bonds.
13. The provisions of any special statute applicable to
chitfund/nidhi/mutual benefitfund/societiesarenot applicable to the
Company.
14. In our opinion Company has maintained proper records for the
trading in shares, securities and other investments and timely entries
have been made.
15. According to the explanations and information given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or other financial institutions, the terms and
conditions of which are prejudicial to the interest ofthe Company.
16. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company, prima facie, were applied by the Company during the year for
the purposes for which the loans were obtained.
17. According to the cash flow statement and other records examined by
us and the explanations and information given to us, on an overall
examination of the Balance Sheet of the Company, funds raised on
short-term basis have not been used for long-term investment.
18. According to the explanations and information given to us, during
the year under audit the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained undersection30l oftheAct.
19. According to the explanations and information given to us, the
Company has created securities in respect of the secured redeemable
non-convertible bonds issued and outstanding as on March 3 1,2013.
20. The Company has not raised money by public issues duringthe year.
21. According to the explanations and informations given to us, we
have neither come across with any instance of fraud on or by the
Company being noticed or reported duringthe year, nor have we been
informed of such case bythe management.
For K. VENKATACHALAM AIYER & Co
Chartered Accountants.
FRN:0046I0S
Sd/-
CAA. GOPALAKRISHNAN
(Partner)
Membership No. 18159
Place: Kochi
Date: May 5,2013
Mar 31, 2012
We have audited the accompanying financial statements of MUTHOOT
CAPITAL SERVICES LTD ("the company"), which comprise the Balance Sheet
as at March 31, 2012 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's responsibility for the financial statements
The Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
the accounting standards referred to in sub section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatements,
whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by the management,
as well as evaluating the overall presentation of the financial
statement.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and;
c. in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure,
a statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c. The Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d. In our opinion the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report have been
prepared in all material respects in compliance with the accounting
standards referred to in sub-section (3C) of section 211of the
Companies act 1956.
e. On the basis of the written representations received from the
Directors of the Company as on March 31, 2012, and taken on record by
the Board of Directors, none of the Directors is disqualified as on
March 31, 2012 from being appointed as a director of the Company in
terms of clause (g) of sub-section (1) of section 274 of the Companies
Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 1UNDER THE HEADING "REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF MUTHOOT CAPITAL SERVICES LIMITED ON THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2012.
1. (i) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(ii) All the fixed assets have not been physically verified by the
management during the year, but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies have been noticed on such physical verification.
(iii) There was no disposal of fixed assets during the year.
2. (i) Except the repossessed assets from the borrowers the company
does not have any stock of inventory.
(ii) The procedure of physical verification of the repossessed vehicles
followed by the management is reasonable and adequate in relation to
the size of the company and the nature of its business.
(iii) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory of the
above items.
3. (i) On the basis of the explanations given by the management, we
report that the Company has not taken any loans, secured or unsecured
from Companies or other parties covered in the register maintained u/s
301 of the Companies Act. However we report that the Company has
frequently entered into recurring and repetitive transactions with the
Directors of the Company and the maximum amount to the credit of such
account of the Directors during the year ended March 31, 2012
wasRs.6,907.06 lakhs (2010-11 : 8,234.84 lakhs) and the outstanding
balance as on 31.03.2012 including interest payable was 917.41 lakhs
(31.03.2011 : 2,924.64 lakhs).
(ii) According to the information and explanation given to us, the
company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. (2010-11: The Company has granted
secured loan Rs.6.15 lakhs to one relative of directors covered in the
register maintained in pursuance of Section 301 of the Act) The loan
paid during earlier year was fully repaid during the current year.
(iii) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken from/granted to companies,
firms or other parties listed in the register maintained under section
301 of the Act are not prima facie prejudicial to the interests of the
Company.
(iv) In respect of the aforesaid loans, the company is regular in
repaying the principal amounts as stipulated and is also regular in
payment of interest, wherever applicable. The parties are repaying the
principal amounts as stipulated and are also regular in payment of
interest, wherever applicable.
(v) There are no overdue amounts of loans taken from or granted to
companies, firms or other parties listed in the register maintained in
pursuance of Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures,
commensurate with the size of the Company and the nature of its
business for the purchase of fixed assets and sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
5. i) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
in pursuant of section 301 of the Act, have been so entered.
ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees five Lakhs in respect of any
party during the year prima facie, have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted deposits within the meaning of Sec 58A
and 58AA of the Companies Act 1956 from the public during the year
ended March 31, 2012. We are informed by the management that no order
has been passed by the Company Law Board, National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal.
7. The Company has an internal audit system, which in our opinion, is
commensurate with the size and the nature of its business.
8. i) According to the information and explanations given to us and
the records of the Company examined by us, and in our opinion, the
Company is regular in depositing the undisputed statutory dues
including provident fund, value added tax and other material statutory
dues as applicable with the appropriate authorities.
ii) According to the information and explanations given to us there are
no undisputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax/ value added tax, excise duty and cess which are
outstanding as at March 31,2012 for a period of more than six months
from the date they became payable.
iii) Details of dues of Income-Tax, which have not been deposited as on
31 March, 2012 on account of disputes are given below:
Nature of Dues Forum where dispute is Period to Amount
which the involved
amount (Rs. in
relates '000)
Financial
Year
Income Tax Assistant Commissioner
of Income Tax 2001-02 99
Income Tax Assistant Commissioner
of Income Tax 2002-03 1 89
Income Tax Assistant Commissioner
of Income Tax 2004-05 2 64
TOTAL 5 52
9. The Company has no accumulated losses as at March 31, 2012 and it
has not incurred any cash losses during the year ended on that date or
in the immediately preceding financial year.
10. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to any financial
institution or banks or debenture holders as at the balance sheet date.
11. In our opinion and according to the information and explanations
given to us, Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
except loans given against the security of its own secured debentures/
bonds.
12. In our opinion Company has maintained proper records for the
trading in shares; securities and other investments and timely entries
have been made.
13. According to the explanations and information given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or other financial institutions, the terms and
conditions of which are prejudicial to the interest of the Company.
14. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company, prima facie, were applied by the Company during the year for
the purposes for which the loans were obtained.
15. According to the cash flow statement and other records examined by
us and the explanations and information given to us, on an overall
examination of the balance sheet of the Company, funds raised on
short-term basis have not been used for long-term investment.
16. According to the explanations and information given to us, during
the year under audit the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act.
17. According to the explanations and information given to us, the
Company has created securities in respect of the secured redeemable
non-convertible debenture issued and outstanding as on March 31, 2012.
18. We have verified that the end use of money raised by public issue
(rights issue) is as disclosed in the notes to the financial
statements.
19. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the explanations and
information given to us, we have neither come across with any instance
of fraud on or by the Company being noticed or reported during the
year, nor have we been informed of such case by the management.
20. In our opinion and according to the information and explanations
given to us, the nature of the Company's business/ activities during
the year have been such that clauses (viii) and (xiii) of paragraph 4
of the Companies (Auditors' Report) Order, 2003 are not applicable to
the Company for the year.
For K.VENKATACHALAM AIYER & Co
Chartered Accountants
FRN: 004610S
Sd/-
CA A. GOPALAKRISHNAN
(Partner)
Membership No.18159
Place: Kochi
Date : June 11, 2012
Mar 31, 2011
1) We have audited the attached Balance Sheet of MUTHOOT CAPITAL
SERVICES LTD., M.G.Road, Ernakulam as at 31st March 2011 and the
related Profit and Loss Account and Cash Flow Statement for the year
ended on that date annexed thereto, which we have signed under
reference to this report. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3) As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Audit Report) (Amendment) Order, 2004
(together the ÃOrder) issued by the Government of India in terms of
Sub-section (4A) of Section 227 of the Companies Act, 1956, of India
(the "Act") and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4) Further to our comments in the Annexure referred to in paragraph 3
above we report that;
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report have been prepared in
all material respects in compliance with the Accounting Standards
referred to in Sub-section (3C) of Section 211 of the Companies Act,
1956, to the extent applicable;
(e) On the basis of the written representations received from the
Directors of the Company as on 31st March, 2011, and taken on record by
the Board of Directors, we report that none of the Directors is
disqualified as on 31st March, 2011 from being appointed as a Director
of the Company in terms of Clause (g) of Sub-section (1) of Section 274
of the Companies Act, 1956.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Companys significant accounting policies and the notes attached
thereto, appearing in Schedule-O and other notes appearing elsewhere in
the accounts give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2011;
ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date and;
iii) in the case of Cash Flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS? REPORT OF EVEN
DATE TO THE MEMBERS OF MUTHOOT CAPITAL SERVICES LIMITED, M.G.ROAD,
ERNAKULAM ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31st,
2011.
1. (i) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(ii) The fixed assets have been physically verified by the management
during the period, the programme of verification of which, in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies have been noticed on
such physical verification.
(iii) In our opinion and according to the information and explanation
given to us, a substantial part of the fixed assets has not been
disposed off by the Company during the year.
2. (i) Except the repossessed assets from the borrowers the Company
does not have any stock of inventory.
(ii) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory of the
above items.
3. (i) On the basis of the explanations given by the Management, we
report that the Company has not taken any loans, secured or unsecured
from companies or other parties covered in the register maintained u/s
301 of the Companies Act. However we report that the Company has
frequently entered into recurring and repetitive transactions with the
Directors of the Company and the maximum amount to the credit of such
account of the directors during the year ended 31.03.2011 was
Rs.8,234.84 Lakhs (2009-10 : Rs.3178.11 Lakhs) and the outstanding
balance as on 31.03.2011 was Rs.2,924.64 Lakhs (31.03.2010 :
Rs.2,240.43 Lakhs).
(ii) The Company has granted secured loans of Rs.6.15 Lakhs during the
year 2010-2011 (2009-10 : Rs.1.10 Lakhs) to one relative of the
Directors covered in the register maintained in pursuance to Section
301 of the Act. Apart from the above, the Company has not granted any
loans to other companies or firms covered in the register maintained
u/s 301 of the Companies Act, 1956.
(iii) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken from/granted to companies,
firms or other parties listed in the register maintained under Section
301 of the Act are not prima facie prejudicial to the interests of the
Company.
(iv) In respect of the aforesaid loans, the Company is regular in
repaying the principal amounts as stipulated and is also regular in
payment of interest, wherever applicable. The parties are repaying the
principal amounts as stipulated and are also regular in payment of
interest, wherever applicable.
(v) There are no overdue amounts of loans taken from or granted to
companies, firms or other parties listed in the register maintained in
pursuance of Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures,
commensurate with the size of the Company and the nature of its
business for the purchase of fixed assets and sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
5. i) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
in pursuant of Section 301 of the Act, have been so entered.
ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees five lakhs in respect of any
party during the year prima facie, have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted deposits within the meaning of Section
58A of the Companies Act, 1956, from the public during the year ended
March 31, 2011.
7. The Company has an internal audit system, which in our opinion, is
commensurate with the size and the nature of its business.
8. a. According to the information and explanations given to us and
the records of the Company examined by us, and in our opinion, the
Company is regular in depositing the undisputed statutory dues
including provident fund, value added tax and other material statutory
dues as applicable with the appropriate authorities.
b. According to the information and explanations given to us there are
no undisputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax/value added tax, excise duty and cess which are
outstanding as at 31st March, 2011 for a period of more than six months
from the date they became payable.
c. Details of dues of Income Tax, which have not been deposited as on
31.03.2011 on account of disputes are given below:
Nature of Dues Forum where dispute Period to which the Amount
is pending amount relates- involved
Financial (Rs. in
Year involved lakhs)
Income Tax and
Interest Commissioner of
Income Tax
(Appeals) 2001-02 14.02
Income Tax and
Interest Commissioner of
Income Tax
(Appeals) 2002-03 9.13
Income Tax Income Tax Appellate
Tribunal 2001-02 0.99
Income Tax Income Tax Appellate
Tribunal 2002-03 1.89
Income Tax Income Tax Appellate
Tribunal 2004-05 2.64
9. The Company has no accumulated losses as at 31st March, 2011 and it
has not incurred any cash losses during the year ended on that date or
in the immediately preceding financial year.
10. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to any financial
institution or Bank or Bondholders as at the Balance Sheet date.
11. In our opinion and according to the information and explanations
given to us, Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
except loans given against the security of its own secured debentures/
bonds.
12. In our opinion Company has maintained proper records for the
trading in shares, securities and other investments and timely entries
have been made.
13. According to the explanations and information given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or other financial institutions, the terms and
conditions of which are prejudicial to the interest of the Company.
14. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company, prima facie, were applied by the Company during the year for
the purposes for which the loans were obtained.
15. According to the Cash Flow Statement and other records examined by
us and the explanations and information given to us, on an overall
examination of the Balance Sheet of the Company, funds raised on
short-term basis have not been used for long-term investment.
16. According to the explanations and information given to us, during
the year under audit the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Act.
17. According to the explanations and information given to us, the
Company has created securities in respect of the secured redeemable
non-convertible bonds issued and outstanding as on 31.03.2011.
18. The Company has not raised money by public issues during the year
ended 31.03.2011.
19. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the explanations and
information given to us, we have neither come across with any instance
of fraud on or by the Company being noticed or reported during the
year, nor have we been informed of such case by the management.
20. In our opinion and according to the information and explanations
given to us, the nature of the Companys business/activities during the
year have been such that Clauses(viii)and (xiii) of paragraph 4 of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company for the year.
For K. VENKATACHALAM AIYER & Co
Chartered Accountants
Firm Registration Number: 004610S
A. GOPALAKRISHNAN
(Partner)
Membership Number:018159
Place: KOCHI
Date : April 28, 2011
Mar 31, 2010
1) We have audited the attached Balance Sheet of MUTHOOT CAPITAL
SERVICES LTD., KOCH I as at 31st March 2010 and the related Profit and
Loss Account and Cash Flow Statement for the year ended on that date
annexed there to, which we have signed under reference to this report.
These financial statements are the responsibility of the companys
management. Our responsibility is to express an opinion on these
financial statements based on ouraudit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Audit Report) (Amendment) Order, 2004
(together the Order) issued by the Government of India in terms of
sub-section (4A) of section 227 of the Companies Act 1956 of India (the
Act) and on the basis of such checks of the books and records of the
Company as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4) Further to our comments in the Annexure referred to in paragraph 3
above we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination of those books.
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d) In our opinion the Balance sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report have been prepared in
all material respects in compliance with the Accounting Standards
referred to in sub-section (3C) of Section 211of the Companies Act
1956, to the extent applicable.
e) On the basis of the written representations received from the
Directors of the Company as on 31st March 2010, and taken on record by
the Board of Directors, we report that none of the Directors is
disqualified as on 31st March, 2010 from being appointed as a Director
of the Company in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
companys significant accounting policies and the notes attached there
to, appearing in Schedule-O and other notes appearing elsewhere in the
accounts give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
ii) in the case of the Profit and Loss Account, of the profit of the
company for the year ended on that date and;
iii) in the case of Cash Flow statement, of the cash flows for the year
ended on that date.
Annexure Referred to in Paragraph 3 of the Auditors Report of even
date to the members of Muthoot Capital Services Limited, Kochi on the
Financial Statements for the year ended 31st March 2010
1.
(i) The Company is maintaining proper records showing full particulars,
including quantitative details and situation of fixed assets.
(ii) The fixed assets have been physically verified by the management
during the period, the programme of verification of which, in our
opinion, is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies have been noticed
on such physical verification.
(iii) In our opinion and according to the information and explanation
given to us, a substantial part of the Fixed Assets has not been
disposed off by the company during the year.
2.
(i) Except for the stocks on hire, (the legal ownership of which is to
be transferred to the hirer on receipt of the last installment from
them,) the company does not have any stock of inventory.
(ii) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory.
3.
(i) On the basis of the explanations given by the Management, we report
that the Company has not taken any loans, secured or unsecured from
Companies or other parties covered in the register maintained u/s 301
of the Companies Act. However we report that the Company has entered
into current account transactions with the Directors of the Company and
the maximum amount to the credit of such current accounts of the
Directors during the year was Rs. 3178.11 Lakhs and the year-end
balances was Rs. 2188.50 Lakhs.
(ii) The Company has not granted secured loans to company covered in
the register, maintained in pursuance of Section 301 of the Act.
(iii) In our opinion, the rate of interest and other terms and
conditions on which loans have been taken from/granted to companies,
firms or other parties listed in the register maintained under section
301 of the Act are not prima facie prejudicial to the interests of the
Company.
(iv) In respect of the aforesaid loans, the Company is regular in
repaying the principal amounts as stipulated and is also regular in
payment of interest, wherever applicable.
The parties are repaying the principal amounts as stipulated and are
also regular in payment of interest, wherever applicable.
(v) There are no overdue amounts of loans taken from or granted to
companies, firms or other parties listed in the register maintained
in pursuance of Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us there are adequate internal control procedures,
commensurate with the size of the Company and the nature of its
business for the purchase of fixed assets and sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
5.
i) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
in pursuant of section 301 of the Act, have been so entered.
ii) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees five lakhs in respect of any
party during the year prima facie, have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted deposits within the meaning of Sec 58A
of the Companies Act 1956 from the public during the financial year
2009-10.
7. The Company has an internal audit system, which in our opinion, is
commensurate with the size and the nature of its business.
8.
(a) According to the information and explanations given to us and the
records of the Company examined by us, and in our opinion, the Company
is regular in depositing the undisputed statutory dues including
provident fund, sales tax and other material statutory dues as
applicable with the appropriate authorities.
(b) According to the information and explanations given to us there are
no undisputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax, excise duty and cess which are outstanding as
at 31st March,2010 for a period of more than six months from the date
they became payable.
9. The Company has no accumulated losses as at 31st March 2010 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
10. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that, the
Company has not defaulted in repayment of dues to any financial
institution or Bank or Bondholders as at the balance sheet date.
11. In our opinion and according to the information and explanations
given to us, Company has granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. In our opinion Company has maintained proper records for the
trading in shares; securities and other investments and timely entries
have been made.
13. According to the explanations and information given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or other financial institutions, the terms and
conditions of which are prejudicial to the interest of the company.
14. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company, prima facie, were applied by the Company during the year for
the purposes for which the loans were obtained.
15. According to the cash flow statement and other records examined by
us and the explanations and information given to us, on an overall
examination of the balance sheet of the Company, funds raised on
short-term basis have not been used for long-term investment.
16. According to the explanations and information given to us, during
the year under audit the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act.
17. According to the explanations and information given to us, the
Company has created securities in respect of the secured redeemable
non-convertible bonds issued and outstanding at the year-end.
18. The Company has not raised money by public issues during the year.
19. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the explanations and
information given to us, we have neither come across with any instance
of fraud on or by the Company being noticed or reported during the
year, nor have we been informed of such case by the management.
20. In our opinion and according to the information and explanations
given to us, the nature of the Companys business/activities during the
year have been such that clauses (viii) and (xiii) of paragraph 4 of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company for the year.
For K. VENKATACHALAM AIYER & Co
Chartered Accountants
Firm Registration Number: 004610S
A.GOPALAKRISHNAN
(Partner)
Membership No.18159
Place: Kochi
Date: 12.05.2010
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