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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Muthoot Finance Ltd. இன் முடிவுகள்

Mar 31, 2023

To the Members of MUTHOOT FINANCE LIMITED Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Muthoot Finance Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended, and Notes to the standalone 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, as amended (''the 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, 2023, and its profit, total comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (''SAs''), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditors'' Responsibilities for the Audit of the Standalone 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 standalone 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 on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. 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 Matter	Auditors'' Response
1. Expected Credit Loss under IND AS 109 "Financial Instruments"	â¢	Assessed the accounting policy for impairment of financial assets and its compliance with IND AS 109.
The Company recognises Expected Credit Losses (ECL) on loan assets under IND AS 109 "Financial Instrumentsâ	â¢	Company obtained an understanding of the Company''s Expected Credit Loss (ECL) calculation and the underlying assumptions.
based on the Expected Credit Loss model developed by the Company. The estimation of expected credit loss on financial instruments involves significant	_â¢	Tested the key controls over the assessment and identification of significant increase in credit risk and staging of assets.
judgement and estimates. Key estimates involve determining Exposure at Default (EAD), Probability	_â¢	Sample testing of the accuracy and appropriateness of information used in the estimation of Probability of Default (PD) and Loss Given Default (LGD).
at Default (PD) and Loss Given Default (LGD) using historical information. Hence, we have considered the estimation of ECL as a Key Audit Matter.	_â¢	Tested the arithmetical accuracy of the computation of PD and LGD and also performed analytical procedures to verify the reasonableness of the computation.
Refer Note 42 (Risk Management) to the standalone financial statements.	_â¢	Assessed the disclosure made in relation to IND AS 109 for ECL allowance. Further, we also assessed whether the disclosure of key judgements and assumptions are adequate.

Information Other than the Standalone Financial Statements and Auditors'' Report thereon (Other Information)

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Corporate Overview, Report of the Board of Directors, Management Discussion and Analysis Report, Business Responsibility Report and Report on Corporate Governance in the Annual Report of the Company for the financial year 2022-23, but does not include the standalone financial statements and our auditorsâ report thereon. The reports containing the other information as above are expected to be made available to us after the date of this auditorsâ report.

Key Audit Matter		Auditors'' Response
2.	Related Party Transactions	â¢	Evaluated the Company''s policies, processes and procedures in respect of
	We identified related party transactions as a key		identifying and disclosing related party transactions.
	audit matter due to the significance of related party	_â¢	Read the minutes of meetings of the Shareholders, Board and Audit
	transactions, regulatory compliance and risk of such		Committee regarding the Company''s assessment of related party
	transactions remaining undisclosed in the financial		transactions for armâs length pricing.
	statements.	_â¢	Assessed the compliance with the Act, including authorisation and approvals as specified in sections 177 and 188 of the Act and Rules thereon and the Securities and Exchange Board of India regulations with respect to related party transactions.
		_â¢	Tested on a sample basis related party transactions with the underlying contracts and other documents.
3.	Compliance and disclosure requirements	_â¢	Assessed the systems and processes laid down by the Company to
	Compliance and disclosure requirements under the		appropriately ensure compliance and disclosures as per the applicable Ind
	applicable Indian Accounting Standards (Ind AS),		AS, RBI guidelines and other applicable statutory, regulatory and financial
	Reserve Bank of India (RBI) guidelines and other		reporting framework.
	applicable statutory, regulatory and financial reporting	_â¢	Designed and performed audit procedures to assess the completeness
	framework.		and correctness of the details disclosed having regard to the assumptions made by the management in relation to the applicability and extent of disclosure requirements.
		â¢	Relied on internal records of the Company and external confirmations wherever necessary.
4.	Litigations	In assessing the litigations, we have:
	The Company has various tax litigations pending under	_â¢	Read the communications with the relevant tax authorities in respect to
	the Income Tax Act 1961, Goods and Services Tax Act 2017, Service Tax under Finance Act 1994 and Value Added Tax Acts of various states. The Company has disputed these in various forums and the outcome of these cases will depend on significant judgements, hence we have identified pending litigation as a Key Audit Matter.	_â¢	the pending tax litigations and also considered the submissions made by the management to the respective appellate authorities. We verified the accuracy of the disputed amounts with the relevant communication from the tax authority.
		_â¢
5.	IT Systems and Controls	_â¢	Understood the IT systems and controls over key financial accounting and
	Che Company uses Information Technology (IT)		reporting systems.
	application for financial accounts and reporting	_â¢	Tested the general IT controls for design and operating effectiveness.
	process. Any gap in the financial accounting and	_â¢	Understood the changes made in the IT environment during the year and
	reporting process may result in a misstatement, hence we have identified IT systems and controls		ascertained its effect on the financial statements controls and accounts.
	over financial rep orting as a Key Audit Matter.	_â¢	We also assessed, through sample tests, the information generated from these systems which were relied upon for our audit.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated.

When we read the reports containing the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditors'' Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorsâ 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 standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risk of material misstatement of the standalone 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;

â¢ 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in respect of financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

â¢ Conclude on the appropriateness of the 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the standalone 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 auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone 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, make it probable that the economic decisions of a reasonably knowledgeable user of the standalone 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 standalone 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 standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors'' 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 per the Companies (Auditorâs Report) Order, 2020 (''the Order''), issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, we give in ''Annexure 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 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. Since the key operations of the Company are automated with the key applications integrated to core banking system/Management Information System, the audit is carried out centrally as all the necessary records

and data required for the purposes of our audit are available therein.

c. The Standalone Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. On the basis of the written representation received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2023, 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 with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate report in âAnnexure B'' to this report;

g. With respect to the other matters to be included in the Auditors'' 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/provided by the Company to its directors during the year is in accordance with the provisions of section 197 read with Schedule V to the Act; and

h. With respect to other matters to be included in the Auditors'' report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 litigation on its financial position in its standalone financial statements - Refer Note 38 to the standalone financial statements.

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

if any, on long term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. With respect to clause (e) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended;

1. The Management has represented that, to the best of its knowledge and belief, as disclosed in the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalfofthe Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

2. The Management has represented, that, to the best of its knowledge and belief, as disclosed in the standalone financial statements, no funds have

been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

3. Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material misstatement.

v. The dividend declared/paid during the year by the Company is in compliance with section 123 of the Act.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

Mar 31, 2022

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of Muthoot Finance Limited (''the Company''), which comprise the Balance Sheet as at March 31,

2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and Notes to the standalone 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, as amended (''the 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, 2022, and its profit, total comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (''SAs''), as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ''Auditors'' Responsibilities for the Audit of the Standalone 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 standalone 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 on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe standalone financial statements of the current year. These matters were addressed in the context of our audit ofthe financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter	Auditors'' Response
1. Expected Credit Loss under IND AS 109 "Financial	â¢	Assessed the accounting policy for impairment of financial assets
Instruments"		and its compliance with IND AS 109.
The Company recognises Expected Credit Losses (ECL) on loan	â¢	Obtained an understanding of the Company''s Expected Credit
assets under IND AS 109 "Financial Instrumentsâ based on the		Loss (ECL) calculation and the underlying assumptions.
Expected Credit Loss model developed by the Company. The estimation of expected credit loss on financial instruments	_â¢	Tested the key controls over the assessment and identification of
involves significant judgement and estimates. Key estimates		significant increase in credit risk and staging of assets.
involve determining Exposure at Default (EAD), Probability	_â¢	S ample testing of the accuracy and appropriateness of
at Default (PD) and Loss Given Default (LGD) using historical		information used in the estimation of Probability of Default (PD)
information. Hence, we have considered the estimation of ECL as a Key Audit Matter.		and Loss Given Default (LGD).
	_â¢	Tested the arithmetical accuracy of the computation of PD and
Refer Note 42 (Risk Management) to the standalone financial		LGD and also performed analytical procedures to verify the
statements.		reasonableness of the computation.
	_â¢	Assessed the disclosure made in relation to IND AS 109 for ECL allowance. Further, we also assessed whether the disclosure of key judgements and assumptions are adequate.

Key Audit Matter		Auditors'' Response
2.	Related Party Transactions
	We identified related party transactions as a key audit matter due to the significance of related party transactions, regulatory compliance and risk of such transactions remaining undisclosed	â¢	Evaluated the Company''s policies, processes and procedures in respect of identifying and disclosing related party transactions. Read the minutes of meetings of the shareholders, Board and
	in the financial statements.	_â¢
			Audit Committee regarding the Company''s assessment of related
			party transactions for arm''s length pricing.
		â¢	Assessed the compliance with Companies Act 2013, including authorisation and approvals as specified in sections 177 and 188 of the Companies Act, 2013, and Rules thereon and the Securities and Exchange Board of India regulations with respect to related party transactions.
		_â¢	Tested on a sample basis related party transactions with the underlying contracts and other documents.
3.	Compliance and disclosure requirements Compliance and disclosure requirements under the applicable	_â¢	Assessed the systems and processes laid down by the Company to appropriately ensure compliance and disclosures as per the
	Indian Accounting Standards, Reserve Bank of India (RBI)		applicable Indian Accounting Standards, RBI guidelines and
	guidelines and other applicable statutory, regulatory and financial		other applicable statutory, regulatory and financial reporting
	reporting framework.		framework.
		_â¢	D esigned and performed audit procedures to assess the completeness and correctness of the details disclosed having regard to the assumptions made by the management in relation to the applicability and extent of disclosure requirements.
		_â¢	R elied on internal records of the Company and external confirmations wherever necessary.
4.	Litigations
		In assessing the litigations, we have:
	The Company has various tax litigations pending under the Income Tax Act 1961, Goods and Services Tax Act 2017, service tax under Finance Act 1994 and Value Added Tax Acts of various states. The	_â¢	Read the communications with the relevant tax authorities in respect to the pending tax litigations and also considered the
	Company has disputed these in various forums and the outcome of these cases will depend on significant judgements, hence we have		submissions made by the management to the respective appellate authorities.
	identified pending litigation as a Key Audit Matter.	_â¢	We verified the accuracy of the disputed amounts with the relevant communication from the tax authority.
5. IT Systems and Controls
	The Company uses Information Technology (IT) application for	_â¢	Understood the IT systems and controls over key financial
	financial accounts and reporting process. Any gap in the financial accounting and reporting process may result in a misstatement, hence we have identified IT systems and controls over financial reporting as a Key Audit Matter.	_â¢	accounting and reporting systems. Tested the general IT controls for design and operating effectiveness.
		_â¢	Understood the changes made in the IT environment during the year and ascertained its effect on the financial statements controls and accounts.
		_â¢	We also assessed, through sample tests, the information generated from these systems which were relied upon for our audit.

Information Other than the Standalone Financial Statements and Auditors'' Report thereon (Other Information)

The Company''s 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, Business Responsibility Report and Report on Corporate Governance in the Annual Report of the Company for the financial year 2021-22, but does not include the standalone financial statements and our auditors'' report thereon. The reports containing the other information as above are expected to be made available to us after the date ofthis auditors'' report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) ofthe Act with respect to the preparation of these standalone financial statements that give a true and fair view ofthe financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 ofthe 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 ofthe standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditors'' Responsibilities for the Audit of the Standalone Financial Statements

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 ofthese standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in respect of financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

â¢ Conclude on the appropriateness ofthe management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the standalone 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 auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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 standalone financial statements.

We also provide those charged with governance with a statement that we have compiled 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 ofthe standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors'' 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

2. As required by section 143 (3) ofthe 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. Since the key operations of the Company are automated with the key applications integrated to core banking system/MIS, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are available therein.

c. The standalone Balance sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with books of account;

e. On the basis of the written representation received from the directors as on March 31, 2022, taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2022, from being appointed as a director in terms of section 164(2) of the Act;

f. With respect to the adequacy ofthe internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate report in ''Annexure B'' to this report;

h. With respect to other matters to be included in the Auditors'' report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, as amended, 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 litigation on its financial position in its standalone financial statements - Refer Note 38 to the standalone financial statements.

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. With respect to clause (e) of Rule 11 of the companies (Audit and Auditors) Amendment Rules, 2021;

1. The Management has represented that, to the

best of its knowledge and belief, as disclosed in the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company

to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

2. The Management has represented, that, to the best of its knowledge and belief, as disclosed in the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

3. Based on the audit procedures performed that

have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material misstatement.

v. The dividend declared/paid during the year by the

Company is in compliance with section 12 3 of the Act.

For Elias George & Co., For Babu A. Kallivayalil& Co.,

Chartered Accountants Chartered Accountants

Firm Regn. No. 000801S Firm Regn. No. 005374S

Thomson Thomas Babu Abraham Kallivayalil

Partner Partner

Membership No: 025567 Membership No: 026973

UDIN: 22025567AJQJZI7055 UDIN: 22026973AJQKNM7178

May 26, 2022 May 26, 2022

Kochi Kochi

Mar 31, 2021

Responsibilities for the Audit of the Standalone 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 on the standalone financial statements.

Emphasis of matter

We draw attention to Note 57 to the standalone financial statements regarding outbreak of the COVID-19 pandemic and the consequential lock-down restrictions imposed by the Government, which, as per the assessment of the management, has not significantly impacted the operations and financial position of the Company.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone 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.

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Muthoot Finance Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Cash Flow Statement 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 ("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, 2021, its Profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

Key Audit Matters	How addressed in Audit
Ind-AS 109 (Financial Instruments) requires the Company to recognise Expected credit Loss (ECL) and impairment loss allowances on financial assets, which involves application of significant judgement and estimates including use of key assumptions such as probability of default and loss given default. The spread of the COVID - 19 pandemic during the year necessitates that the Company shall specifically consider the possible impact of uncertainties associated with the same in applying such judgement and estimates	We have evaluated the management''s process and tested key controls around the determination of expected credit loss allowances, including controls relating to: - The identification of events leading to a significant increase in risk and credit impairment events; and - The determination of the impaired credit loss allowances and the key assumptions including probability of default and loss given default on a forward-looking basis having regard to historical experiences.
Refer Note 42(1) to the standalone financial statements	We understood and assessed the appropriateness of the impairment methodology developed and used by the management at the entity level, including with reference to the possible impact of the uncertainties associated with the COVID-19 pandemic. This included assessing the appropriateness of key judgements. We tested the accuracy of key data inputs and calculations used in this regard.
	We found that these key controls as above, were designed, implemented and operated effectively, and therefore have placed reliance on these key controls and management''s assessment of financial impact associated with COVID - 19 pandemic for the purposes of our audit of ECL and impairment loss allowances.

Key Audit Matters	How addressed in Audit
Ind-AS 109 (Financial Instruments) requires the Company to recognise interest income by applying the effective interest rate (EIR) method. While estimating future cash receipts for the purpose of determining the EIR, factors including expected behaviour, life cycle of the financial asset, probable fluctuation in collateral value which may have an impact on the EIR are to be considered.	We have evaluated the management''s process in estimation of future cash receipts for the purpose of determination of EIR including identification of factors like expected behaviour, life cycle of the financial asset and probable fluctuation in collateral value. We tested the accuracy of key data inputs and calculations used in this regard.
Completeness in identification, accounting and disclosure of related party transactions in accordance with the applicable laws and financial reporting framework. Refer Note 39 to the standalone financial statements	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 entity''s 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.
Compliance and disclosure requirements under the applicable Indian Accounting Standards, RBI Guidelines and other applicable statutory, regulatory and financial reporting framework.	We have assessed the systems and processes laid down by the company to appropriately ensure compliance and disclosures as per the applicable Indian Accounting Standards, RBI Guidelines and other applicable statutory, regulatory and financial reporting framework. We have designed and performed audit procedures to assess the completeness and correctness of the details disclosed having regard to the assumptions made by the management in relation to the applicability and extent of disclosure requirements; and have relied on internal records of the company and external confirmations wherever necessary.
The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes. Refer Note 38 (A) (a) to the standalone financial statements	We have obtained details of completed tax assessments and demands for the year ended March 31, 2021 from management. We obtained opinion of experts and also considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions.
Key Information technology (IT) systems used in financial reporting process. The company''s operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily. Accordingly, our audit was focused on key IT systems and controls due to the pervasive impact on the financial statements.	We obtained an understanding of the Company''s IT control environment and key changes during the audit period that may be relevant to the audit We tested the design, implementation and operating effectiveness of the company''s General IT controls over the key IT systems which are critical to financial reporting.
	We also tested key automated and manual controls and logic for system generated reports relevant to the audit that would materially impact the financial statements.

Information Other than the Standalone Financials Statements and Auditor''s Report thereon (Other Information)

The Company''s 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, Business Responsibility Report and Report on Corporate Governance in the Annual Report of the Company for the financial year 2020-21, but does not include the standalone financial statements and our auditor''s report thereon.

The reports containing the other information as above are expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the reports containing the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.

The Company''s 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 including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian 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 judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone 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.

Those Board of Directors are responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s 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 standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone 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.

â¢ Obtain an understanding of internal control relevant to the audit, including internal audit system in vogue, 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 with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention

in our auditor''s report to the related disclosures in the standalone 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 auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements including the disclosures, and whether the standalone 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 standalone 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 standalone financial statements.

Mar 31, 2019

INDEPENDENT AUDITOR''S REPORT

To The Members of Muthoot Finance Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Muthoot Finance Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity 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 ("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, 2019, its Profit, total comprehensive income, changes in equity and its 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 Auditor''s 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 judgement 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

Indian Accounting Standards (Ind-AS) as specified under Section 133 of the Act, read with relevant rules there under have been made mandatorily applicable for specified Non-Banking Finance Companies applicable with effect from April 1st, 2018 and consequently these standalone financial statements have been prepared by the management in compliance with the Ind AS framework. As against the provisioning norms earlier prescribed by Reserve Bank of India and adopted by the company in prior years, Ind-AS 109 (Financial Instruments) requires the Company to recognise Expected credit Loss (ECL) on financial assets, which involves application of significant judgement and estimates including use of key assumptions such as probability of default and loss given default

Refer Note 45 to the Standalone Financial Statements

We have evaluated the managements process and tested key controls around the determination of expected credit loss allowances, including controls relating to:

- The identification of events leading to a significant increase in risk and credit impairment events; and

- The determination of the impaired credit loss allowances and the key assumptions including probability of default and loss given default on a forward looking basis having regard to historical experiences.

We understood and assessed the appropriateness of the impairment methodology developed and used by the management at the entity level. This included assessing the appropriateness of key judgements. We tested the accuracy of key data inputs and calculations used in this regard.

We found that these key controls as above, were designed, implemented and operated effectively, and therefore have placed reliance on these key controls for the purposes of our audit of ECL and impairment loss allowances

Completeness in identification, accounting and disclosure of related party transactions in accordance with the applicable laws and financial reporting framework.

Refer Note 38 to the Standalone Financial Statements

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 1CA1 in the Standard on Auditing (SA 550) to identify, assess and respond to the risks of material misstatement arising from the entity''s 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.

The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes.

Refer Note 37 to the Standalone Financial Statements

We have obtained details of completed tax assessments and demands for the year ended March 31 , 2019 from management. We obtained opinion of experts and also considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions.

Key Information technology (IT) systems used in financial reporting process. The company''s operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily.

Accordingly, our audit was focused on key IT systems and controls due to the pervasive impact on the financial statements.

We obtained an understanding of the Company''s IT control environment and key changes during the audit period that may be relevant to the audit

We tested the design, implementation and operating effectiveness of the company''s General IT controls over the key IT systems which are critical to financial reporting.

We also tested key automated and manual controls and logic for system generated reports relevant to the audit that would materially impact the financial statements.

Information Other than the Standalone Financials Statements and Auditor''s Report thereon (Other Information)

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Corporate Overview, Board''s 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 auditor''s report thereon. The reports containing the other information as above are expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we will 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 identified above when it becomes available 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.

When we read the reports containing the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements.

The Company''s 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 including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian 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 judgements 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.

In preparing the financial statements, management is responsible for assessing the Company''s 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.

Those Board of Directors are responsible for overseeing the Company''s financial reporting process.

Auditor''s 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 auditor''s 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 judgement and maintain professional skepticism throughout the audit. We also:

â¢ 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.

â¢ 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.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ 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.

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 auditor''s 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 (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 Companies Act, 2013, we give in "Annexure A", 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 (including Other Comprehensive Income), the Statement of Changes in Equity 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 Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued there under.

(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 "Annexure B".

(g) With respect to the other matters to be included in the Auditor''s 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/ provided 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 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 37 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.

	For Varma & Varma
	(FRN:004532S)
	Sd/-
	V. Satliyanarayanan
	Partner
	Chartered Accountants
	Membership No.21941
Place: Kochi
Date: May 13, 2019

ANNEXURE ''A'' REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MUTHOOT FINANCE LIMITED FOR THE YEAR ENDED MARCH 31, 2019

1. (a) The company is maintaining records showing full particulars, including quantitative details and situation of fixed assets, which however requires to be updated.

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

(c) According to the information and explanations given to us, the records of the company examined by us and based on the details of land and buildings furnished to us by the company, the title deeds of immovable properties are held in the name of the Company. In respect of certain immovable property acquired under a scheme of amalgamation, the title deeds continue to remain in the name of the erstwhile owners.

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

3. According to the information and explanations given to us and the records of the company examined by us, the Company has granted loans (both secured and unsecured) to three subsidiary companies during the year and the same is covered in the register maintained under section 189 of the Act.

The terms and conditions of the grant of such loans are not prejudicial to the Company''s interest. The repayment or receipts of principal and interest are as per schedule stipulated and are regular. There are no overdue amounts.

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 and making of investments. The company has not given any guarantees or provided security for which the provisions of sections 185 and 186 of the Act are applicable.

5. The Company has not accepted any deposits from the public during the year which attract the directives issued by the Reserve Bank of India. Being a Non-Banking Finance Company , the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder regarding acceptance of deposits are not applicable. Therefore, the reporting requirement under clause (v) of paragraph 3 of the Order is not applicable.

6. To the best of our knowledge and according to the information and explanations given to us, the 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, Employee''s State Insurance, Income Tax, Sales Tax, Service Tax, Goods and 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 explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were outstanding as at March 31, 2019, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed amounts due to be deposited of sales tax, Duty of Customs, Duty of Excise or Value Added Tax as at March 31, 2019.

According to the information and explanations given to us the following disputed amounts of income tax and service tax have not been deposited with the authorities as at March 31, 2019:

Nature of dues	Statute	Amount payable (net of payments made) Rs. in millions	Period to which the amount relates	Forum where the dispute is pending
Service Tax (excluding interest)	Finance Act, 1994	40.05	2003-2008	CESTAT (Bangalore)
		21.87	2010-2013	CESTAT (Bangalore)
		3004.08	2007-2008 to 2011-2012	CESTAT (Bangalore)
		2.31	2007-2013	Commissioner (Appeals), Kochi
		1.08	2008-2011	CESTAT (Bangalore)
		0.40	2013-2014	CESTAT (Bangalore)
		1.01	2013-2014	High Court of Kerala
		0.62	April- September 2014	Commissioner (Appeals), Kochi
		94.21	2014-2015	High Court of Kerala
Income tax	Income Tax Act, 1961	26.15	AY 2010-11	Commissioner of
		181.04	AY 2011-12	Income Tax (Appeals)
		469.90	AY 2012-13
		106.43	AY 2013-14
		852.73	AY 2014-15
		142.93	AY 2015-16
		261.65	AY 2016-17
		3.67	AY 2017-18

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, government or dues to debenture holders.

9. According to the information and explanations given to us and the records of the Company examined by us, the moneys raised by way of public offer of debt instruments and the term loans availed by the company have been applied for the purpose for which they were raised.

10. During the course of our examination of the books and records of the company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, there have been instances of fraud on the company by its employees amounting to Rs. 33.52 millions as included in Note 51 to the standalone financial statements.

No fraud by the company has been noticed or reported during the year, nor have we been informed of any such case by the management.

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 are not applicable.

13. According to the information and explanations given to us and the records of the Company examined by us, all transactions with the related parties are in compliance with sections 1 77 and 188 of the Act, where applicable and the details have been disclosed in Note 38 to the standalone financial statements as required by the applicable accounting standard.

14. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the reporting requirements under clause (xiv) of paragraph 3 of the Order are not applicable.

15. The company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, 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 has obtained the certificate of registration under section 45-1A of the Reserve Bank of India Act, 1934.

	For Varma & Varma
	(FRN:004532S)
	Sd/-
	V. Satliyanarayanan
	Partner
	Chartered Accountants
	Membership No.21941
Place: Kochi
Date: May 13, 2019

ANNEXURE ''B'' REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MUTHOOT FINANCE LIMITED FOR THE YEAR ENDED MARCH 31, 2019

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 control systems with reference to standalone financial statements reporting of Muthoot Finance Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to standalone 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 (''1CA1''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s 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 "Guidance Note") and the Standards on Auditing, issued by 1CA1 and deemed to be prescribed under section 143(10) of the Act, 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 1CA1. 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 auditor''s 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 Company''s internal financial controls system with reference to financial statements reporting.

Meaning of Internal Financial Controls with reference to Financial Statements reporting

A company''s 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 company''s 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 company''s 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, 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 ICAI.

	For Varma & Varma
	(FRN: 004532S)
	Sd/-
	V. Satliyanarayanan
	Partner
	Chartered Accountants
	Membership No.21941
Place: Kochi
Date: May 13, 2019

Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Muthoot Finance 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 Standalone 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 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, 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 judgements 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 standalone 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.

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

Opinion

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 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, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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 give in Annexure âAâ, 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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 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 Annexure âBâ.

(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 standalone financial statements -Refer Note 29 to the standalone 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, during the year.

ANNEXURE âAâ REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF MUTHOOT FINANCE LIMITED FOR THE YEAR ENDED MARCH 31, 2018

1. (a) The Company is maintaining records showing full particulars, including quantitative details and situation of fixed assets, which however requires to be updated.

(c) According to the information and explanations given to us, the records of the Company examined by us and based on the details of land and buildings furnished to us by the Company, the title deeds of immovable properties are held in the name of the Company. ln respect of certain immovable property acquired under a scheme of amalgamation, the title deeds continue to remain in the name of the erstwhile owners.

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

3. According to the information and explanations given to us and the records of the Company examined by us, the Company has granted loans (both secured and unsecured) to two subsidiary companies during the year and the same is covered in the register maintained under Section 189 of the Act.

The terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest. The repayment or receipts of principal and interest are as per schedule stipulated and are regular. There are no overdue amounts.

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 and making of investments. The Company has not given any guarantees or provided security for which the provisions of Sections 185 and 186 of the Act are applicable.

5. The Company has not accepted any deposits from the public during the year which attract the directives issued by the Reserve Bank of India. For the reasons stated in Note 34 to the standalone financial statements loans accepted from a person (Balance outstanding at the end of the year: Nil) is not treated as a deposit. Being a Non-Banking Finance Company, the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder regarding acceptance of deposits are not applicable. Therefore, the reporting requirement under clause (v) of paragraph 3 of the Order is not applicable.

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, Goods and 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 explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were outstanding as at March 31, 2018, for a period of more than six months from the date they became payable.

According to the information and explanations given to us the following disputed amounts of income tax and service tax have not been deposited with the authorities as at March 31, 2018:

Nature of dues	Statute	Amount ''*	Period to which the amount relates	Forum where the dispute is pending
Service Tax	Finance Act, 1994	40,047,155.00	2003-2008	CESTAT, Bangalore
(excluding interest)		21,867,738.00	2010-2013	CESTAT, Bangalore
		3,004,076,497.00	2007-2008 to 2011-2012	CESTAT, Bangalore
		2,314,085.00	2007-2013	Commissioner (Appeals), Kochi
		1,080,156.00	2008-2011	CESTAT, Bangalore
		395,523.00	2013-2014	CESTAT, Bangalore
		1,012,600.00	2013-2014	High Court of Kerala
		623,203.00	April-September 2014	Commissioner (Appeals), Kochi
Income tax	Income Tax Act, 1961	40,619,060.00	Assessment Year 2010-11	Commissioner of Income Tax (Appeals)
		27,120,000.00	Assessment Year 2012-13	Commissioner of Income Tax (Appeals)

* Amount is net of payments made.

9. According to the information and explanations given to us and the records of the Company examined by us, the moneys raised by way of public offer of debt instruments and the term loans availed by the Company have been applied for the purpose for which they were raised.

10. During the course of our examination of the books and records of the Company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, there have been instances of fraud on the Company by its employees amounting to Rs.25,848,608.00 as included in Note 37 to the standalone financial statements. No fraud by the Company has been noticed or reported during the year, nor have we been informed of any such case by the management.

12. The Company is not a Nidhi Company. Accordingly, the reporting requirements under clause (xii) of paragraph 3 of the Order are not applicable.

13. According to the information and explanations given to us and the records of the Company examined by us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable and the details have been disclosed in Note 35 to the standalone financial statements as required by the applicable accounting standard.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the reporting requirements under clause (xiv) of paragraph 3 of the Order are not applicable.

15. The Company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, 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 has obtained the certificate of registration under Section 45-1A of the Reserve Bank of India Act, 1934.

For Varma & Varma

(FRN : 0045325)

Sd/-

V. Sathyanarayanan

Partner

Chartered Accountants

Membership No. 21941

Pl ace: Kochi

Date: May 16, 2018

Mar 31, 2017

TO THE MEMBERS OF MUTHOOT FINANCE LIMITED REPORT ON THE STANDALONE FINANCIAL STATEMENTS

India, (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE 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 standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in 1ndia, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

AUDITORSâ RESPONSIBILITY

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

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

OPINION

1n our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in 1ndia, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of 1ndia in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âAâ, a statement on the matters specified in the paragraph 3 and 4 of the Order

2. As required by Section 143(3) of the Act, we report that:

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

b) 1n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

d) 1n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the Directors as on March 31, 2017, 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 âAnnexure Bâ to this report.

g) With respect to the other matters to be included in the 1ndependent Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements- Refer Note 26 to the financial statements;

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

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

iv. The Company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes as defined in

the Notification S.O. 3407 (E) dated the 8th of November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of account maintained by the Company and as produced to us by the management. Refer Note 36 to the standalone financial statements.

(i) 1n respect of the Companyâs fixed assets:

Report on Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Companies Act, 2013 (âthe Actâ) of Muthoot Finance Limited (âthe Companyâ)

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

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

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the title deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date.

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

(iii) The Company has granted unsecured loans to its subsidiary during the year and the same is covered in the register maintained under Section 189 of the Act. The terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest. The repayment or receipts of principal and interest are as per schedule stipulated and are regular. There are no overdue amounts.

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

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

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company and therefore, the provisions of the clause 3 (vi) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State 1nsurance, 1ncome Tax, Sales Tax, Service Tax, Value Added Tax, Duty of Customs, Duty of Excise, Cess and other material statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us, no undisputed statutory dues payable in respect of Provident Fund, Employees State 1nsurance, 1ncome Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were outstanding as at March 31, 2017, for a period of more than six months from the date they became payable.

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

Nature of	Amount ''. In	Period to which the amount relates	Forum where
dues	Lakhs *	Period to which the amount relates	dispute is pending
	499.21	2003-2008	CESTAT, Bangalore
	48,958.83	2007-2012	CESTAT, Bangalore
	7.90	2013-2014	Commissioner
	7.90	2013-2014	(Appeals), Kochi
	445.72	2010-2013	CESTAT, Bangalore
			Commissioner
Service	21.55	2008-2011	of Central
tax			Excise(Appeals), Kochi
			Commissioner
	53.65	2007-2013	of Central Excise(Appeals), Kochi
	110.39	2013-2014	High Court of Kerala
	68.05	April to September 2014	Commissioner (Appeals), Kochi.
1ncome	271.20	Assessment Year 2012-13	Commissioner of 1ncome Tax (Appeals)-11, Kochi
Tax	145.64	Assessment	1ncome Tax Appellate
	145.64	Year 2010-11	Tribunal, Kochi

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

(viii) According to the records of the Company examined by us and the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks, government or dues to debenture holders.

(ix) 1n our opinion and according to the information and explanations given to us, the Company has utilized the moneys raised by way of public offer of debt instruments and term loans for the purposes for which they were raised.

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

a) there have been certain instances of fraud by employees of the Company amounting to Rs, 12,827,281.00 as given in Note 34 to the financial statements; and

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

(xi) 1n our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable.

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

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

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

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

We have audited the internal financial controls over financial reporting of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of 1nternal Financial Controls Over Financial Reporting issued by the 1nstitute of Chartered Accountants of 1ndia(â1CA1â). 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.

AUDITORSâ RESPONSIBILITY

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

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

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

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Companyâs 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 Companyâs 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 Companyâs assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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

OPINION

1n our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 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 1nternal Financial Controls Over Financial Reporting issued by the 1nstitute of Chartered Accountants of 1ndia.

For Rangamani & Co

Chartered Accountants

(Firm Registration No.: 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date: 18th May, 2017 Membership No. 020566

Mar 31, 2016

We have audited the accompanying standalone financial statements of Muthoot Finance Limited, Registered and Corporate Office: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

AUDITORSâ RESPONSIBILITY

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

OPINION

1n our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in 1ndia, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of 1ndia in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure âAâ, a statement on the matters specified in the paragraph 3 and 4 of the Order

2. As required by Section 143(3) of the Act, we report that:

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

b) 1n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

d) 1n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the Directors as on March 31, 2016, taken

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

g) With respect to the other matters to be included in the 1ndependent Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements- Refer Note 27 to the financial statements;

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

if any, on long term contracts including derivative contracts;

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

(i) 1n respect of the Companyâs fixed assets:

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

the nature of its assets. We are informed that no material discrepancies were noticed on such verification.

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

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

(vi) The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, for any of the services rendered by the Company and therefore, the provisions of the clause 3 (vi) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given

to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State 1nsurance, 1ncome Tax, Sales Tax, Service Tax, Value Added Tax, Duty of Customs, Duty of Excise, Cess and other material statutory dues applicable to it with the appropriate authorities.

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

(b) According to the information and explanations

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


Nature of	Amount Rs,In	Period to	Forum where dispute is
dues	Lakhs *	which the amount relates	pending
	499.21	2003-2008	CESTAT, Bangalore
	48,958.83	2007-2012	CESTAT, Bangalore
	7.90	2013-2014	Commissioner (Appeals), Kochi
Service tax	445.72	2010-2013	CESTAT, Bangalore
Service tax	21.55	2008-2011	Commissioner of Central Excise(Appeals), Kochi
	53.64	2007-2013	Commissioner of Central Excise(Appeals), Kochi
	110.39	2013-2014	High Court of Kerala
	271.20	Assessment Year 2012-	Commissioner of 1ncome Tax (Appeals)-11, Kochi
1ncome		13
Tax	145.64	Assessment Year 201011	1ncome Tax Appellate Tribunal, Kochi

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

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

a) there have been certain instances of fraud by employees of the Company amounting to

Rs,1,62,66,785.00 as given in Note 35 to the financial statements; and

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

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable.

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

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

MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of 1nternal Financial Controls Over Financial Reporting issued by the 1nstitute of Chartered Accountants of 1ndia (the âGuidance Noteâ). 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.

AUDITORSâ RESPONSIBILITY

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

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companyâs 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 companyâs 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 companyâs assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

OPINION

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

For Rangamani & Co

Chartered Accountants

(Firm Registration No.: 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date: 27th May, 2016 Membership No. 020566

Mar 31, 2015

We have audited the accompanying standalone fnancial statements of Muthoot Finance Limited, Registered and Corporate Ofce: Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682 018, India, ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specifed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fnancial controls, that were operating efectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act , we report that:

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

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

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

d. In our opinion, the aforesaid standalone fnancial statements comply with the Accounting Standards specifed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on March 31, 2015, taken

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

f. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its fnancial position in its fnancial statements Â Refer Note 28 to the fnancial statements;

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

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

Annexure to the Independent Auditors'' Report

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CESTAT, 499.21 2003-2008 Bangalore

CESTAT, 48,958.83 2007-2012 Service tax Bangalore

Commissioner 7.90 2013-14 (Appeals),Kochi

Commissioner

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

Commissioner Assessment of Income Tax

145.64 Year 2010-11 (Appeals) , Kochi

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

(c) According to the information and explanations

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

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

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

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

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

(xi) According to the information and explanations given

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

(xii) According to the information and explanations given

to us,

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

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

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

For Rangamani & Co

Chartered Accountants

(Registration No.: 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date: 5th May, 2015 Membership No. 020566

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Service tax 117.28 Customs, Central

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For Rangamani & Co

Chartered Accountants

(FRN : 003050 S)

Sd/-

R. Sreenivasan

Place: Kochi Partner

Date : 26th May, 2014 Membership No. 020566

Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

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

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITORS'' RESPONSIBILITY

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

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

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

OPINION

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

(Sd/-)

R. Sreenivasan

Place: Kochi Partner

Date: 14th May, 2013 Membership No. 020566

Mar 31, 2012

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

R. Sreenivasan

Place: Kochi Partner

Date: May 15,2012 M. No. 020566

Mar 31, 2011

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Re. Muthoot Finance Limited

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Per Pro M/s Rangamani & Co

Chartered Accountants

(FRN : 003050 S)

Sd/- Place: Alleppey R.Sreenivasan

Date: May 26,2011 Membership No. 020566

Mar 31, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Service tax 157.29 Customs, Central Excise

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Per Pro M/s Rangamani & Co

Chartered Accountants

(FRN: 003050 S)

Sd/-

Place: Alleppey R. Sreenivasan

Date: 14.07.2010 M. No. 020566

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