Mar 31, 2022
Your Board of Directors is pleased to share with you the 25th Annual Report of Muthoot Finance Limited ("Company") enumerating the business performance along with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31, 2022.
The summarized standalone and consolidated results for the Company with the previous year''s figures are given in the table below:
'' in Millions |
||||
Standalone |
Consolidated |
|||
Particulars |
Year Ended March 31, 2022 |
Year Ended March 31, 2021 |
Year Ended March 31, 2022 |
Year Ended March 31, 2021 |
Total Income |
1,10,983.93 |
1,05,743.59 |
1,22,374.62 |
1,15,701.96 |
Total Expenses |
57,890.39 |
55,678.46 |
68,272.75 |
64,387.16 |
Profit Before Tax |
53,093.54 |
50,065.13 |
54,101.87 |
51,314.80 |
Tax expense |
13,550.50 |
12,843.35 |
13,788.64 |
13,126.10 |
Profit for the year |
39,543.04 |
37,221.78 |
40,313.23 |
38,188.70 |
Equity |
1,83,445.72 |
1,52,388.93 |
1,87,857.24 |
1,55,750.25 |
Total Liabilities |
5,22,101.16 |
4,82,260.31 |
5,75,307.50 |
5,30,664.10 |
Total Assets |
7,05,546.88 |
6,34,649.24 |
7,63,164.74 |
6,86,414.35 |
Your Board has declared an interim dividend at '' 20 per equity share (200% of face value) for the financial year 2021-22 on April 18, 2022. The dividend payout amounted to '' 8,026.90 million representing 20.30% of profit after tax for the year. The Board has decided to plow back the remaining profit after tax for business activities during the Financial Year.
The Dividend distribution policy in terms of Regulation 43 A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations") is available on the website of the Company at https://www.muthootfinance.com/sites/default/ files/2020-08/Policy%20on%20Dividend%20 Distribution.pdf The list of unpaid dividend is available on the Companyâs website at https://www. muthootfinance.com/transfer-of-shares. Shareholders are requested to check the said list and if any dividend due to them is remaining unpaid in the said list. Shareholders can approach the Company or Registrar and Transfer Agent of the Company for the release of unclaimed dividends.
Your Board of Directors has transferred an amount of '' 7,908.62 millions to the statutory reserve maintained under Section 45 IC of the Reserve Bank of India Act, 1934. Post transfer of profits to reserves, your Board proposes to retain '' 85,359.55 millions in the Retained Earnings.
During the Financial Year, Company achieved 6.24% increase in its profitability with a net profit of '' 39,543.04 millions for the year ended March 31, 2022 as compared to '' 37,221.78 millions for the year ended March 31, 2021. Profit before tax increased by 6.05% to '' 53,093.54 millions. Total Income has increased from '' 1,05,743.59 millions for the year ended March 31,2021 to '' 1,10,983.93 millions for the year ended March 31, 2022, which is mainly due to the increase in Interest Income of the Company. Interest income of the Company increased to '' 1,09,560.28 millions from the previous year''s interest income of '' 1,03,285.29 millions.
Loan Assets Portfolio of the Company increased by '' 54,308.39 millions during the year reaching '' 5,80,531.76 millions as on March 31, 2022, as against
'' 5,26,223.37 millions as on March 31, 2021. The Return on Average Loan Asset stood at 7.24% in FY 2021-22 as against 7.99% in FY 2020-21. Interest yield was 20.06% as compared to 22.17% in FY2020-21. Net Interest Margin was 13.04 % as compared to 14.24% in FY 202021. The Company remitted to exchequer '' 15,547.23 millions as taxes.
During the financial year, no preferential issue of shares with differential rights as to dividend, voting as otherwise was carried out by the Company. The Company has also not carried out any buyback of its equity shares during the financial year under review.
During the financial year, your Company allotted
1.49.410 equity shares of the face value of '' 10/- each under Muthoot ESOP 2013 pursuant to the exercise of
1.49.410 stock options at an exercise price of '' 50/- each by the employees.
The disclosures as required under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 read with SEBI Circular CIr/cFD/POLICY CELL/2/2015 dated 16th June 2015 is attached to this report as Annexure 1 and is also available on the website of the Company at https:// www.muthootfinance.com/esop-disclosure. Please refer note 46 of Notes forming part of Standalone Financial Statements for further disclosures on ESOPs. The Company does not have any scheme to fund its employees for the purchase of shares of the Company.
Your Company has received the certificate from the Secretarial Auditor of the Company certifying that the ESOP scheme is implemented in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations,
2021 and is in accordance with the resolution passed by the members of the Company. The certificate would be placed at the Annual General Meeting for inspection by members.
The Employee Stock Option Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and there have been no material changes to this plan during the Financial Year 2021-22.
Investor Education and Protection Fund
During the financial year 2021-22, the Company has transferred the unclaimed dividends of '' 6,06,782 to Investor Education and Protection Fund ("IEPF"). Further, 1,185 equity shares on which the dividends were unclaimed for seven consecutive years were transferred to IEPF during the financial year 2021-22 as per the requirements of IEPF Rules.
No claim will lie on Company on account of the dividend after the dividend is transferred to IEPF.
6. Resource Mobilization(a) Non-Convertible Debentures:
Your Company has successfully completed the 25th Issue of Non-Convertible Debentures through Public Issue during FY 2021-22 raising '' 17,000 million. The company has raised '' 15,318 millions through Private Placement of Non-Convertible Debentures during the financial year.
Subordinated Debts represent long-term source of funds for the Company and the amount outstanding as on 31st March, 2022 stood at ''1,430.79 millions. Subordinated Debts qualify as Tier II capital under the Non-Banking Financial Company- Systemically Important Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
Bank Finance remains an important source of funding for your Company. Commercial Banks continued their support to your Company during Financial Year. As of 31st March, 2022, borrowings from banks stood at '' 2,73,870.92 millions as against '' 1,95,567.63 millions in the previous year.
(c) External Commercial Borrowings
Your Company has outstanding Senior Secured Notes of 6.125% USD 450 millions issued in October 2019 for a period of 3 years and 4.40% USD 550 millions issued in March 2020 for a period of 3 % years falling under Regulation 144A / Regulation S of the US Securities Act, 1933. These Notes are listed in the International Securities Market of the London Stock Exchange.
The Company has debt credit ratings as below:
Credit Rating Agency |
Instruments |
Ratings |
|
CRISIL |
Commercial Paper |
CRISIL A1 |
|
Subordinated Debts |
CRISIL AA /Stable |
||
Non-Convertible Debentures |
CRISIL AA /Stable |
||
ICRA |
Commercial Paper |
[ICRA] A1 |
|
Short Term Bank Borrowings |
[ICRA] A1 |
||
Long Term Bank Borrowings |
ICRA AA (Stable) |
||
Subordinated Debts |
ICRA AA (Stable) |
||
Non-Convertible Debentures |
ICRA AA (Stable) |
||
International Credit Ratings: |
|||
Credit Rating Agency |
Ratings |
||
Fitch Ratings |
BB(Stable) |
||
S&P Global Ratings |
BB(Negative) |
||
Moodyâs Investor Service |
Ba2(Stable) |
8. Internal Audit and Internal Financial Control
Over the years Company has evolved a robust, proper, and adequate internal audit system in keeping with the size of the Company and its business model. Your Company has developed well documented internal audit and control system for meticulous compliance from all layers of the Company. The control system ensures that the Company''s assets are safeguarded and protected. The audit system also takes care to see that revenue leakages and losses to the Company are prevented and our income streams are protected. The control system enables reliable financial reporting.
The Company has a well-structured Audit &
Inspection department to perform timely and frequent internal audits to evaluate the adequacy of systems and procedures and also to evaluate the status of compliance with the Companyâs guidelines and other statutory requirements. The department is manned by a team of over 1000 dedicated personnel who are constantly engaged in safeguarding your Company''s assets, ensuring the quality of assets pledged, and also evaluates the adequacy of risk management systems at its operating units. In keeping with the huge network and geographic outreach of the operating units spread across the length and breadth of the country, the audit functions have been decentralized through the setting up of Regional Audit offices in important Regional centers. The Regional Audit Offices exercise field-level control over the branches through onsite visits and online audit systems. The field-level Auditors report to Regional Audit offices who in turn share their findings with the Audit & Inspection Department at the Registered Office of the Company.
The Audit Committee of the Board of Directors is the apex Audit Authority of the Company. Under the present Audit Architecture, the Internal Audit Department reports to the Audit Committee regarding significant audit findings and also preventive and corrective measures to protect the interests of the Company.
The audit committee undertakes an evaluation of the adequacy and effectiveness of internal control systems. It also oversees the implementation of audit recommendations especially involving risk management measures.
In addition to reviewing the internal control systems put in place by the Audit & Inspection Department, the Audit Committee also imparts guidance and crucial directions for the up-gradation of systems and controls on an ongoing basis.
At present, the Audit system prevalent in the Company is a completely autonomous function and built on the best corporate governance framework.
Reference is invited to Note 50 of Notes forming part of the standalone financial statements contained in the annual report regarding frauds committed by employees/customers of the Company which are dealt with according to Reserve Bank of India guidelines and are in nature of operation related frauds due to nature of business of the Company. The company has taken or is in the process of taking disciplinary/ legal action against such employees/customers.
As on March 31, 2022, the Company had 26,716 employees on its rolls at various levels of organizational structure. Our employees remain one of the company''s greatest assets. We at Muthoot, believe in recognizing and appreciating employees for their valuable contribution and loyalty. We offer equal opportunities to all our employees irrespective of gender to learn and grow in the organization. For the convenience of our employees and bringing new ways of working, we are promoting digitalization for our employees as well as our customers.
We at Muthoot, focus on creating a performance-Focus and future-ready workplace which offers our people various opportunities to learn, grow and win together. We ensure the productivity of our people and their operational compliance through our best-inClass learning & Development Function. The Program delivers training primarily through two channels i.e a) in-person (Classroom) & b) E-learning (Online). We use the E-learning channel to transfer microlearning units directly to people at regular intervals.
a. Haathi Pe Bharosa Karogey Toh Pakka Jeetogey Campaign
The marketing campaign titled "Haathi Pe Bharosa Karogey Toh Pakka Jeetogey!" is all about having belief and trust in the brand, which has two elephants in its logo which was anchored by the brand''s ambassador, Shri. Amitabh Bachchan;
b. "Muthoot Finance Sunheri Soch Season-2â
"Muthoot Finance Sunheri Soch Season-2" (golden thoughts) is a compilation of 5 truly inspiring real-life stories of common men & women, who realized their dreams by availing a gold loan from Muthoot Finance. These are people from humble backgrounds who transformed their lives & became self-reliant & successful business persons with timely help from us.
c. "Loan At Homeâ Integrated Marketing Campaign
The "Loan at Home "service launched in 2020, was actively supported by campaigns across media in FY 2021-22 also. After a strong "need" was established in the commercial films of Loan at Home, our brand ambassador Shri Amitabh Bachchan presented the brand message. The campaign showed the convenience and ease offered by our "Loan at Home" service, which allows our customers to avail of Gold Loan from Muthoot Finance, now from the comfort and safety of their homes
d. Chennai Nandanam Metro Station Branding
The semi-naming rights branding at Nandanam Metro Station in Chennai was renewed, extending the partnership with Chennai Metro Rail Limited. The partnership has aided us by establishing our brand presence in a key location in Chennai
Awards & Recognitions:
During the year, your company has received the following awards and recognitions as hereunder:
a. Exchange4media Indian Marketing Awards - Gold loan is good
b. Most Trusted Financial Services Brand for the year 2022 By TRA''s Brand Trust Report 2022
c. Best use of TV - FSI "Gold Unlocker" TV campaign
d. Best use of Integrated Marketing - BFSI "Loan at Home " Campaign
e. Recognised as one of the ''Iconic Brands of India 2021â by #ETIconicBrands
To equip the young and dynamic fresh graduates with practical knowledge and skills required in their field of work, your Company has initiated a thoughtfully designed 6 month training program called "Pathshala" in line with the National Apprenticeship Promotion Scheme. These Graduates were deployed as "Interns " for practical training purposes in the branches. Upon successful completion of the training program, Letters of proficiency are issued to them by the Company and they are posted to branches as Jr. Relationship Executive after proper assessment in each case.
At Muthoot, we encourage our employees to take up managerial positions internally through fast-track promotion. Our philosophy is to give growth opportunities to our top performers, who exhibit potential and possess the behavioral competencies to take up new challenges. This helps employees progress in their careers and take on higher roles in the organization. It enables us to place role-fit resources who exhibit our core performance values. This is a very high point to motivate employees and provide them with opportunities to aim higher and move up the ladder faster. This also ensures that we get internally trained, quality candidates who are experts in our internal processes and performance requirements and fit for promotion to the next level.
We have been going through some of the toughest challenges ever faced by humanity owing to the outbreak of Covid 19. Your Company continues to support all its employees in all possible ways and means in these tough times. To encourage vaccination among all the employees, a one-time payment of '' 1500/- was given to all the eligible employees on completion of 2 doses of vaccination. Awareness Campaign on COVID-19 Hygiene and Precautions was also carried out during the year. As assistance to families of employees who passed away due to Covid-19, your Company provided financial support through a monthly fixed amount to the affected families for up to 2 years.
10. Marketing & Promotion Initiatives
In partnership with such leading celebrities the Brand has launched many tailor-made marketing communications with the primary objectives of growing the Gold Loan Category as a whole and creating significant business impact to the brand in terms of new customer acquisition; besides creating substantial brand awareness and brand recall.
Few of the notable marketing initiatives undertaken by the Company during the financial year 2021-22 include:
Your Company''s Capital Adequacy Ratio as of March 31, 2022, stood at 29.97% of the aggregate risk-weighted assets on the balance sheet and risk-adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, the Tier I capital adequacy ratio stood at 29.10% and the Tier II capital adequacy ratio stood at 0.87%.
The Company is a Systemically Important Non-Deposit Taking NBFC and has not accepted any public deposits.
Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. Please refer note 52, 53, 54, and 55 of Notes forming part of Standalone Financial Statements for additional disclosures required under RBI Guidelines applicable to the Company.
14. Subsidiaries/ Associates/ Joint Ventures
As on March 31, 2022, your Company had seven subsidiaries namely Asia Asset Finance PLC, Muthoot Homefin (India) Limited, Muthoot Insurance Brokers Private Limited, Belstar Microfinance Limited, Muthoot Money Limited, Muthoot Asset Management Private Limited, and Muthoot Trustee Private Limited. Your Companyâs subsidiaries have been contributing to the overall growth of your Company during the year.
As required under Section 136 of the Act, the audited financial statements, including the consolidated financial statements of your Company are available on the website of the Company. The audited financial statements of each of its subsidiaries are also available on the website of the Company at https://www.muthootfinance.com/ subsidiaries. The above documents will also be available for inspection at the Registered Office of the Company during business hours.
During the year under review, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129 (3) of the Act, we have prepared the consolidated financial statements of the Company which forms part of the Annual Report. The statement containing the salient features of the financial statement of your Company''s Subsidiaries in Form AOC 1 is annexed to Standalone Financial Statements of the Company as required under Rule 5 of The Companies (Accounts) Rules, 2014.
There are no other companies that have become or ceased to be Subsidiaries/ Associates/ Joint Ventures of the Company during the Financial Year 2021-22.
There has been no material change in the nature of business of subsidiary companies during the financial year 2021-22.
The Board of Directors of your Company has formulated a policy on material subsidiary, which is displayed on the website of the Company at https:// www.muthootfinance.com/sites/default/files/2020-08/1472561568policy%20on%20material%20 subsidiary.pdf
As on March 31, 2022, Company did not have any material subsidiary.
Financial Performance & position of Subsidiaries
a. Asia Asset Finance PLC:
Asia Asset Finance PLC, (AAF), a Company listed in Colombo Stock Exchange, is a subsidiary of your Company from December 31, 2014. AAF, where your Company holds 72.92% of equity capital, is a registered Financial Company with Central Bank of Sri Lanka and is mainly engaged in Vehicle Finance and Hire Purchase Activities. The Company which has also started a business relating to lending against the collateral of gold jewellery and
microfinance is presently contributing a significant part of loan portfolio and income. AAF has operations across Sri Lanka with 59 branches as on March 31, 2022, AAF has made considerable progress in its business.
Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions)LKR/ INR as on 31.03.2022 - 0.2570685 ; Average Exchange Rate of Financial Year 2021-22 - 0.365634 |
1,163.35 |
73.96 |
43.14 |
708.35 |
4,972.16 |
4,263.81 |
Amounts in LKR (in millions) |
3,181.73 |
202.28 |
118.00 |
2,755.51 |
19,341.79 |
16,586.28 |
AAF increased its loan portfolio during the year by 23.87% at LKR 17,345.01 millions. Total Income for FY 22 stood at LKR 3,181.73 millions as against previous year total income of LKR 2,952.34 millions. It generated a profit after tax of LKR 118.00 millions during FY22 as against previous year profit after tax of LKR 45.20 millions.
b. Muthoot Homefin (India) Ltd:
M/s. Muthoot Homefin (India) Ltd (MHIL), a registered Housing Finance Company licensed by National Housing Bank is a wholly owned subsidiary of your Company. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
2,136.84 |
100.97 |
84.04 |
4,470.76 |
12,825.97 |
8,355.21 |
MHIL''s loan portfolio stood at '' 14,698.72 millions, a decrease of 14% during the year mainly on account of the cautious approach taken by the management on fresh disbursement due to uncertainities arising out of pandemic.. Total income for Financial Year 2021-22 stood at '' 2,136.84 millions as against previous year total income of '' 2,446.42 millions. It achieved a profit after tax of ''84.04 millions in Financial Year 2021-22 as against previous year profit of '' 125.51 millions.
c. Muthoot Insurance Brokers Private Limited:
Muthoot Insurance Brokers Private Limited (MIBPL), is an unlisted Private Limited Company holding a license to act as Direct Broker from Insurance Regulatory and Development Authority of India (IRDA) since 2013. MIBPL is a Wholly- Owned Subsidiary Company of your Company. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
450.12 |
371.62 |
276.44 |
1,123.21 |
1,145.30 |
22.09 |
MIBPL generated a First year premium collection amounting to ''3,268.99 millions during Financial Year 2021-22 as against '' 2,641.70 in the previous year. It generated a Profit after Tax of '' 276.44 millions during Financial Year 2021-22 as against '' 316.37 millions in the previous year.
d. Belstar Microfinance Limited:
M/s. Belstar Microfinance Limited (BML) is a micro finance Company. At end of the Financial Year 2021-22, your Company holds 60.69% of the equity capital of BML. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total |
Profit Before |
Profit |
Equity |
Total Assets |
Total |
Income |
Tax |
After Tax |
Outside Liabilities |
|||
Amount in INR (in millions) |
7,284.31 |
561.46 |
451.29 |
8,559.33 |
45,602.86 |
37,043.53 |
BML grew its loan portfolio during Financial Year 2021-22 by 32.30% reaching '' 43,657.79 millions. It achieved a profit after tax of '' 451.29 millions during Financial Year 2021-22 as against previous year profit after tax of '' 466.51 millions.
e. Muthoot Money Limited
M/s. Muthoot Money Ltd (MML), a registered Non-Banking Finance Company licensed by Reserve Bank of India is a Wholly- Owned Subsidiary Company of your Company. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
455.58 |
(88.46) |
(65.72) |
1,035.21 |
2,268.08 |
1,232.87 |
MML''s loan portfolio stood at '' 2,070.54 millions, a decrease of 44% during the year mainly on account of the cautious approach taken by the management on fresh disbursement due to uncertainities arising out of pandemic. Total
income for Financial Year 2021-22 stood at '' 455.58 millions as against previous year total income of '' 697.31 millions. It had loss of '' 65.72 millions in Financial Year 2021-22 as against previous year profit of '' 37.47 millions mainly on account of decrease in interest income consequent to post covid impact.
f. Muthoot Asset Management Private Limited
Your Company has incorporated a wholly owned subsidiary Muthoot Asset Management Private Limited ("MAMPL") which is yet to commence commercial operations. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
41.48 |
30.28 |
22.55 |
1,094.81 |
1,095.10 |
0.29 |
g. Muthoot Trustee Private Limited
Your Company has incorporated a wholly owned subsidiary Muthoot Trustee Private Limited ("MTPL") which is yet to commence commercial operations. Its major financial parameters for Financial Year 2021-22 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in thousands) |
324.35 |
225.90 |
169.05 |
9,946.54 |
9,973.54 |
27.00 |
15. Particulars of Loans, Guarantees, or Investments Under Section 186 of the Act
Pursuant to Section 186(11) (a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantees have not been disclosed in this Report. The details of the Investments of the Company are furnished under Note 9 of Notes forming part of the Standalone Financial Statements for the year ended March 31, 2022.
In accordance with the provisions of Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return of the Company is hosted on the website of the Company at https://www.muthootfinance.com/themes/bartik/pdf/ Annual-Return-2022.pdf
17. Consolidated Financial Statements
The audited consolidated financial statements of the Company along with its subsidiaries AAF, MHIL, BML, MML, MAMPL, MTPL and MIBPL prepared in accordance with the IndAS to comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, is provided in the Annual Report.
The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report. The Company has adopted and implemented a Risk Management Policy framework within the organization.
19. Corporate Social Responsibility
The Company''s CSR policy is committed towards CSR activities as envisaged in Schedule VII of the Act. The Details of CSR policy of the Company are available on the website of the Company at https:// www.muthootfinance.com/sites/default/files/pdf/ CSR_Policy_May_2021.pdf. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached to this report as Annexure 2.
Details of the Corporate Social Responsibility and Business Responsibility Committee are provided separately in the Report on Corporate Governance annexed to the Boardâs Report.
20. Business Responsibility Report
Regulation 34 of the SEBI Listing Regulations mandates the inclusion of the Business Responsibility Report ("BRR") as part of the Annual Report for top 1000 listed entities based on their market capitalization. The BRR is attached to this report as Annexure 3.
21. Particulars of Contracts or Arrangements made with Related Parties
The Board of Directors of your Company has put in place a policy for related party transactions, (Policy on Related Party Transactions and Materiality of Related Party Transactions), which has been approved by the Board of Directors. The policy provides for identification of RPTs, necessary approvals by the Audit Committee/ Board /Shareholders, reporting and disclosure requirements in compliance with the Act and provisions of the SEBI Listing Regulations. Policy is available on the website of the Company at https:// www.muthootfinance.com/sites/default/files/2022-02/ muthoot-finance-rpt-policy-v5_0.pdf.
All contracts executed by the Company during the financial year, with related parties, were on arm''s length basis and in the ordinary course of business.
All such related party transactions were entered into in accordance with the Policy on Related Party Transactions and Materiality of Related Party Transactions of the Company.
Prior omnibus approval was obtained for related party transactions, under Section 188 (1) of the Act, which are of repetitive nature and entered in the ordinary course of business and at armâs length. All related party transactions were placed before the Audit Committee for review and approval.
All transactions or arrangements with related parties referred to in Section 188 (1) of the Act, entered into during the year were on arm''s length basis or were in the ordinary course of business or with approval of the Audit Committee. During the year, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy on Related Party Transactions and Materiality of Related Party Transactions. Further, there were no material related party transactions that required approval of shareholders as required under Chapter IV of SEBI Listing Regulations. The disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is attached to this report as Annexure 4.
The details of related party transactions with the related parties entered into during the financial
year are disclosed in Notes to Standalone Financial Statements of the Company.
Your Company has constituted an Audit Committee in accordance with the requirements of the Companies Act, 2013, RBI directions, and SEBI Listing Regulations. Details on Audit committee, terms of reference and meetings appear on the Report on Corporate Governance annexed to this report. All recommendations of Audit Committee were accepted by your Board during the financial year 2021-22.
The Company has established a Vigil Mechanism/ Whistle Blower policy to enable Directors, and Stakeholders, including individual employees and their representative bodies to report, in good faith, unethical, unlawful or improper practices, acts, or activities. The said mechanism ensures that the whistleblowers are protected against victimization/ any adverse action and/ or discrimination as a result of such a reporting and provides direct access to the Chairman of the Audit Committee in exceptional cases. The Company hereby affirms that none of its personnel have been denied access to the Audit Committee. The whistle blower policy is available at website of the Company at https:// www.muthootfinance.com/vigil-mechanism.
Equity Shares of your Company are listed on National Stock Exchange of India Ltd and BSE Limited. NonConvertible Debentures issued by the Company through public issues and Private Placements are listed on BSE Ltd. Your Company has paid applicable listing fees to Stock Exchanges.
Senior Secured Notes issued by the Company are listed on the International Securities Market of London Stock Exchange.
25. Changes in Directors and Key Managerial PersonnelAppointments
Mr. Abraham Chacko was appointed as Independent Director of the Board effective September 18, 2021 pursuant to the resolution passed by the shareholders of the Company at the 24th Annual General Meeting. Further, Mr. George Muthoot George, Mr. George Muthoot Jacob, and Mr. George Alexander were appointed as Whole Time Directors on the Board with effect from December 15, 2021.
In order to comply with the Corporate Governance requirements of SEBI Listing Regulations and the Act, your Board proposes to appoint Mr. Chamacheril Abraham Mohan as Independent Director of the Company subject to approval of the shareholders in the upcoming Annual General Meeting. Mr. Chamacheril Abraham Mohan is a senior finance professional and a Chartered Accountant who has diversified experience for many years in the fields of finance and chartered accountancy. Detailed profile of Mr. Chamacheril Abraham Mohan is provided in the Notice of the AGM.
The term of office of Mr.Pratip Chaudhuri as Independent Director on the Board of the Company is expiring at the ensuing Annual General Meeting. The Board places on record its sincere appreciation and gratitude to Mr.Pratip Chaudhuri for the guidance and support extended during the two consecutive term of directorship in the Company.
Directors Liable to retire by rotation
Mr. Alexander George and Mr. George Thomas Muthoot, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for reappointment.
Your Board and the Nomination and Remuneration Committee has evaluated the eligibility criteria under RBI guidelines, the Act and Listing Regulations, of all directors seeking appointment / re-appointment at the ensuing Annual General Meeting and has recommended the appointment / re-appointments.
Your Board believes that the proposal for appointment / re-appointment of Directors will have the support of shareholders. Necessary disclosures as required under the SEBI Listing Regulations and the Act are provided in the notice calling the Annual General Meeting.
The brief profiles of Directors seeking re-appointment are also available on the website of the Company at https://www.muthootfinance.com/our-directors
All the Directors of the Company have confirmed that they satisfy the ''Fit and Proper'' Criteria as prescribed under Chapter XI of Reserve Bank of India Master Direction- Non-Banking Financial Company- Systemically Important Non-Deposit taking Company and Deposit Taking Company (Reserve Bank) Directions, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Act.
During the year under review, there were no changes in the Key Managerial Personnel appointed pursuant to Section 203 of the Companies Act, 2013.
During the Financial Year 2021-22, your Board of Directors met six times on April 12, 2021, June 02,
2021, August 06, 2021; November 04, 2021, November 19, 2021 and February 12, 2022. Details of various meetings of the Board are given in the Report on Corporate Governance which is a part of this report.
27. Declaration from Independent Directors
The Independent Directors have submitted necessary disclosures that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16 (1) (b) of the SEBI Listing Regulations.
A statement by Managing Director confirming receipt of this declaration from Independent Directors is annexed to this report as Annexure 5. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company other than the sitting fees, commission, if any and reimbursement of expenses incurred for the purpose of attending the meetings of the Board or Committees of the Company.
28. Policy on Appointment and Remuneration of Directors and Performance evaluation of Board, Committees and Directorsa) Policy on Appointment and Remuneration of Directors
Board of Directors of your Company, on the recommendation of Nomination and Remuneration Committee, has formulated a policy for selection, appointment and remuneration of the directors, senior management personnel as required under Section 178(3) of the Act. The policy is available on the Companyâs website at the weblink https:// www.muthootfinance.com/sites/default/ files/2020-08/1452753862Nomination%20and%20 Remuneration%20Policy.pdf
Terms of reference of the Nomination and Remuneration Committee and other relevant details of Nomination and Remuneration Committee are provided in the Report on Corporate Governance circulated along with this report.
b) Performance evaluation of Board, Committees and Directors
In compliance with the regulatory requirements, the Board carried out an annual evaluation of its own performance, its Committees, and of the individual Directors based on criteria and framework adopted by the Board and in accordance with regulations.
The details of training, appointment, resignation, and retirement of Directors, if any, are dealt with in the report on Corporate Governance. Brief details of profile of each director appear in the Annual Report of the Company.
c) Independent Directors Meeting
During the year, a meeting of Independent Directors was held on March 30, 2022 as required under the Act and in compliance with the requirements under Schedule IV of the Act and SEBI Listing Regulations, and discussed and deliberated matters specified therein.
29. Report on Corporate Governance
Your Company has complied with the Corporate Governance norms as stipulated in Chapter IV of SEBI Listing Regulations. As per Regulation 34 of SEBI Listing Regulations, the detailed report on Corporate Governance is attached to this Report as Annexure 6.
30. Management Discussion and Analysis Statement
Management Discussion and Analysis detailing the industry developments, segment wise/ product wise performance and other matters is attached to this Report as Annexure 7.
31. Environmental, Social, and Governance ("ESGâ)
The Board has instituted an Environmental, Social and Governance Committee ("ESG Committee") to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. Details of the constitution of the ESG Committee and its terms of reference are provided in the Report on Corporate Governance.
32. Conservation of energy, technology absorption, foreign exchange earnings and outgo:
The information pursuant to Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014 is as follows:
a) Conservation of energy
Your Company being a Non-Banking Finance Company, has no activities involving conservation of energy. However, your Company has taken adequate measures for conservation of energy and usage of alternative source of energy, wherever required.
b) Technology Absorption
Your Company being a Non-Banking Finance Company, has no activities involving adoption of any specific technology. However, your Company has been in the forefront in implementing latest information technology and tools towards enhancing our customer convenience.
Initiatives taken by the Company in information technology for improved business efficiency, ease of operation, improved risk management practice and for providing best stakeholders experience:
The Company continued its focus on various digital transformation initiatives during the year providing a great customer experience, improved business efficiencies, ease of operations, and effective risk management.
A few of the digital initiatives undertaken by the Company include:
Digital Channels and Digital Footprints
As the pioneer and leader in gold loan business, we at Muthoot Finance believe in extending the digital interface to our customers through various channels for better reach and convenience. Zero touch and transact hassle free is the vision for spreading our digital channels. Customers can perform the KYC creation process now using Video KYC, pledge the ornaments from the comfort of their homes using the Loan @Home option, top-up or repay using different digital channels and through Loan@ Home option to close the active loans. We have added BBPS (Bharath Bill Payment System) interface for allowing the customer to transact with us using any platform integrated with BBPS or even allowing cash transactions through various Agents of BBPS.
AI-powered Chat engine integrated with our core system to enhance the chat experience for the customers and allow them to do real time transactions through the WhatsApp interface. This intuitive option allows customers with just basic digital experience also be part of our digital journey. We have enabled our communication of reminders using Whatsapp/E-mail/SMS. Initiatives like "Deep Link" allow customers to make repayment with a single click from our reminder SMS links.
Gold Unlocker
This new intuitive product facilitate our customers to use the power of plastic card for all e-commerce transactions or even for ATM cash withdrawals. Partnered with Yes bank and e-Wire, we have launched this product for better customer convenience.
KYC Data refinement and customer data protection
At Muthoot Finance, the privacy and security of our customer data is of utmost importance and we constantly strengthen our applications to enhance the veracity of customer data attributes. For ensuring the accuracy of customer bank accounts, we have added multiple bank account verification channels, Digital KYC verification interfaces, Customer biometric Authentication used to ensure the customer data updates are genuine and authentic. Through our agent mobile application, we continually enhance the customer address updates.
iMuthoot application
The revamped version of iMuthoot mobile App Version 3.0 a ''One App for All Loan Application & Repayment'' offers the facility to customers to request for Gold loan, Personal Loan, from the comfort of their own homes. This enhanced version of the mobile application is a stepping stone to provide an enriched Omni channel experience to our customers. The users of the iMuthoot mobile App are offered a significant convenience of interoperability of all their digital transactions without having to visit the branch.
Loan@Home application
The loan at home is an app-based digital service, with which a customer can apply for a gold loan through the âLoan@Homeâ mobile app and web portal. As soon as the inquiry is verified and accepted, an agent gets assigned instantly. An appointment is made by the Muthoot Finance agent to visit the customerâs home. The customer can avail of a gold loan from the comfort of their home without having to visit the branch at any stage of the procedure. Using loan at home application, an agent can perform loan initiation till the disbursement of the loan by sitting at customer premises.
Muthoot online
The Online payment system is an extension portal of Muthoot Core Banking System that can act independently as an online payment system as well. It is a dynamic, independent delivery channel which can be plugged in to any Core Banking System.
c) Foreign exchange earnings and outgo
Particulars |
'' in Million |
Total Foreign Exchange earned |
Nil |
Total Foreign Exchange expended |
4,705.65 |
33. Auditsa) Statutory Audit under Section 139 of the Act
Reserve Bank of India issued guidelines on appointment of statutory auditor(s) by Non-Banking Financial Company ("NBFC") vide Circular RBI/2021-22 /25 Ref. No. DoS. CD.ARG/SEC.01/ 08.91.001/2021-22 dated April 27, 2021 ("RBI Auditor Guidelines"). Pursuant to RBI Auditor Guidelines, the Audit Firms completing a tenure of three financial years in the NBFC were not eligible to continue to hold office as Statutory Auditors of the NBFC. Since the RBI Guidelines were being implemented for the first time for NBFCs from Financial Year 2021-22 and in order to ensure that there is no disruption, the RBI had given flexibility to NBFCs to appoint new Statutory Auditors in the second half of the financial year ending March 31, 2022.
Pursuant to the RBI Auditor Guidelines, M/s Varma & Varma, Chartered Accountants, statutory auditors of the Company resigned with effect from November 10, 2021, owing to their ineligibility to continue as auditors of the Company as they have already exceeded the maximum tenure of three financial years stipulated therein for the statutory auditors of the Company.
M/s Elias George & Co (FRN: 000801S) and M/s Babu A. Kallivayalil & Co. (FRN: 05374S), Chartered Accountants, were appointed as Joint Statutory Auditors of the Company effective November 19, 2021, in compliance with the Guidelines for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) (the "Guidelines"/ "Circular"). As per the Provisions of Section 139 (8) (i) of the Companies Act, 2013, the Shareholders of the Company had also approved the Appointment of Joint Statutory Auditors vide their Ordinary resolution passed through postal ballot dated December 27, 2021.
The Joint Statutory Auditors were appointed to hold their first term of office from November 19, 2021, till the conclusion of the 25th Annual General Meeting of the Company. The Board has recommended for the approval of the Members for the re-appointment of of M/s Elias George & Co (FRN: 000801S) and M/s Babu A. Kallivayalil & Co. (FRN: 05374S), Chartered Accountants as the Joint Statutory Auditors for a further period of 2 years commencing from the conclusion of the 25th Annual General Meeting till the conclusion of the 27th Annual General Meeting of the Company to be held in the year 2024. The Audit Committee of the Company has evaluated the eligibility criteria of the Joint Statutory Auditors and has also recommended their re-appointment for conducting the statutory audits for the financial year 2022-23 and financial year 2023-24.
34. Reporting on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the requirement of the Sexual Harassment of Women at workplace (Prevention, Prohibition & Redressal) Act, 2013 (''POSH Act'') and Rules made thereunder.
With the objective of providing a safe environment, the Company has constituted Internal Committee to redress complaints received regarding sexual harassment. All employees - permanent, contractual, temporary and trainees are covered under this Policy.
Details of cases reported to Internal Complaints Committee during the financial year 2021-22 are as under:
Number of complaints pending at the beginning of the financial year 2021-22 |
0 |
Number of complaints filed during the financial year 2021-22 |
3 |
Number of complaints disposed of during the financial year 2021-22 |
3 |
Number of complaints pending as on end of the financial year 2021-22 |
0 |
The Statutory Audit Report issued by M/s Elias George & Co (FRN: 000801S) and M/s Babu A. Kallivayalil & Co. (FRN: 05374S), Joint Statutory Auditors of the Company, on the financial statements of the Company for the year 2021-22 forms part of the Annual Report.
b) Secretarial Audit under Section 204 of the Act
M/s KSR & Co., Company Secretaries LLP, Coimbatore was appointed as Secretarial Auditors of the Company for the financial year 2021-22 pursuant to Section 204 of the Act. The Secretarial Audit report issued by the Secretarial Auditors is annexed to this report as Annexure 8.
c) Annual Secretarial Compliance Report
The Company has undertaken an audit for the financial year 2021-22 for all applicable compliances as per SEBI Regulations and Circulars/ Guidelines issued thereunder.
The Annual Secretarial Compliance Report was submitted to the stock exchanges within 60 days from the end of the financial year.
d) Cost records and Cost Audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.
e) Auditors'' certificate on Corporate Governance
The Auditors'' certificate confirming compliance with the conditions of corporate governance as stipulated under the SEBI Listing Regulations for financial year 2021-22 is provided along with the Report on Corporate Governance.
f) Secretarial Auditors'' certificate on ESOP
The secretarial auditorsâ certificate on the implementation of share based schemes in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, will be made available at the AGM for inspection electronically.
g) Certificate on Non-Disqualification of Directors
Certificate on Non-Disqualification of Directors issued by M/s Sunil Sankar & Associates, Practising Company Secretaries is enclosed along with the Report on Corporate Governance.
h) Explanations or comments by the Board on qualification, reservation or adverse remark or disclaimer on audits for financial year 2021-22
There are no qualifications, reservation or adverse remark or disclaimer in the audit reports issued under Section 139 and Section 204 of the Act for financial year 2021-22.
The Disclosure required under the provisions of Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure 9. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Director''s Report. Further, the Director''s Report and the Accounts are being sent to the Members excluding the aforesaid statement. In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the Members. Any Member interested in obtaining such particulars may write to the Company Secretary.
36. Significant and material Orders passed by Regulators or Courts or Tribunals
There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of your Company and its future operations.
37. Material Changes and Commitments affecting the financial position of the Company between the end of the financial year to which Financial Statements relate and the date of the report
No material changes and commitments affecting the financial position of your Company occurred between the end of the financial year to which Financial Statements relate and the date of this report.
38. Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that -
(a) in the preparation of the annual accounts, the applicable Indian Accounting Standards had been followed. There were no material departures from applicable Indian Accounting Standards;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
39. Disclosure pursuant to Part A of Schedule V of SEBI Listing Regulations
Disclosure pursuant to Part A of Schedule V read with Regulation 34(3) and 53(f) of SEBI Listing Regulations is attached as Annexure 10 of this report.
40. Others
⢠The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, Annual General Meetings and Dividend.
⢠The Company, in the capacity of Financial Creditor, has not filed any application with National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 during the financial year 2021-22 for recovery of outstanding loans against any customer being Corporate Debtor.
⢠The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof- Not Applicable.
⢠There has been no material change in the nature of business of the Company during the year under review.
⢠During the year under review, there were no instances of any frauds reported by the Statutory Auditors under section 143(12) of the Act.
41. Acknowledgement
Your Directors thank the Company''s stakeholders including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees of your Company and its subsidiaries at all levels. Your Board reassures that in these challenging times, your Company will continue to support you and your family at all levels. Your Companyâs consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India, Securities and Exchange Board of India, Ministry of Corporate Affairs, and Stock Exchanges including various officials there at for the guidance and support received from them from time to time.
Your Directors mourn the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their safety and life to fight this pandemic.
42. Forward Looking Statements
This Report(s) contains certain forward-looking statements within the provisions of listing agreements and hence reasonable caution is to be exercised by stakeholders while relying on these statements.
For and On Behalf of the Board of Directors
Sd/- Sd/-
George Jacob Muthoot George Alexander Muthoot
Chairman & Whole Time Director Managing Director
Place: Kochi
Date: August 06, 2022
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi - 682 018
Mar 31, 2021
Your Board of Directors is pleased to share with you the 24th Annual Report of Muthoot Finance Limited ("Company") enumerating the business performance along with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31, 2021.
The summarized standalone and consolidated results for the Company with previous year''s figure are given in the table below:
'' in millions |
||||
Particulars |
Standalone |
Consolidated |
||
Year Ended March 31, 2021 |
Year Ended March 31, 2020 |
Year Ended March 31, 2021 |
Year Ended March 31, 2020 |
|
Total Income |
105,743.59 |
87,227.91 |
115,664.19 |
97,072.67 |
Total Expenses |
55,678.46 |
46,653.81 |
64,349.39 |
54,468.76 |
Profit Before Tax |
50,065.13 |
40,574.10 |
51,314.80 |
42,603.91 |
Tax expense |
12,843.35 |
10,391.10 |
13,126.10 |
10,917.10 |
Profit for the year |
37,221.78 |
30,183.00 |
38,188.70 |
31,686.81 |
Equity |
152,388.93 |
115,718.13 |
155,750.25 |
118,292.10 |
Total Liabilities |
482,260.31 |
388,878.41 |
530,664.10 |
430,524.82 |
Total Assets |
634,649.24 |
504,596.54 |
686,414.35 |
548,816.92 |
Your Board has declared an interim dividend at ''20 per equity share (200% of face value) for the financial year 2020-21 on April 12, 2021. The dividend payout amounted to ''8,023.92 million representing 21.56% of profit after tax for the year. The Board has decided to plough back the remaining profit after tax for business activities during the Financial Year.
The Dividend distribution policy in terms of Regulation 43 A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("SEBI Listing Regulations") of the Company is available on the website at https://www. muthootfinance.com/sites/default/files/2020-08/ Policy%20on%20Dividend%20Distribution.pdf The list of unpaid dividend is available on the Companyâs website at https://www.muthootfinance.com/transfer-of-shares. Shareholders are requested to check the said list and if any dividend due to them is remaining unpaid in the said list. Shareholders can approach the Company or Registrar and Transfer Agent of the Company for release of unclaimed dividend.
Your Board of Directors has transferred an amount of ''7,444.35 millions to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934. Post transfer of profits to reserves, your Board proposes to retain ''61,749.04 millions in the Retained Earnings.
During the Financial Year, Company achieved 23% increase in its profitability with a net profit of ''37,221.78 millions for the year ended March 31, 2021 as compared to ''30,183.00 millions for the year ended March 31, 2020. Profit before tax increased by 23% to ''50,065.13 millions. Total Income has increased from ''87,227.91 millions for the year ended March 31,2020 to ''1,05,743.59 millions for the year ended March 31, 2021 which is mainly due to increase in Interest Income of the Company. Interest income of the Company increased to ''1,03,285.29 millions from previous yearâs interest income of ''85,644.00 millions. Loan Assets Portfolio of the Company increased by ''110,117.32 millions during the year reaching ''526,223.37 millions as on March 31, 2021 as against ''416,106.05 millions as on March 31, 2020. The Return on Average Loan Asset stood at 7.99% in FY 2020-21 as against 8.11%in FY 2019-20. Interest yield was 22.17% as compared to 23.03% in FY 2019-20. Net Interest Margin was 14.24% as compared to 15.52% in FY 201920. The Company remitted to exchequer ''13,057.03 millions as taxes.
During the Financial year, no preferential issue of shares with differential rights as to dividend, voting as otherwise was exercised by the Company. The Company has also not carried out any buy back of its equity shares during the year under review.
During the year, your Company has allotted 1,58,530 equity shares of face value of ''10/- each under Muthoot ESOP 2013 pursuant to exercise of 1,58,330 options of ''50/- each for Growth Options and 200 options of ''10/-each for Loyalty Options by employees of the Company.
The disclosures as required under Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16th June 2015 is attached to this report as Annexure 1 and is also available on the website of the Company at https:// www.muthootfinance.com/esop-disclosure. Please refer note 46 of Notes forming part of Standalone Financial Statements for further disclosures on ESOPs. The Company does not have any scheme to fund its employees to purchase the shares of the Company.
Your Company has received the certificate from the Statutory Auditors of the Company certifying that the ESOP scheme is implemented in accordance with the applicable SEBI Regulations and is in accordance with the resolution passed by the members of the Company. The certificate would be placed at the Annual General Meeting for inspection by members.
The Employee Stock Option Schemes is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and there have been no material changes to these plans during the Financial Year 2020-21.
Investor Education and Protection Fund
During the financial year 2020-21, the Company has transferred the unclaimed dividends of ''12,87,375 to Investor Education and Protection Fund. Further, 2,309 corresponding equity shares on which the dividends were unclaimed for seven consecutive years were transferred to Investor Education and Protection Fund ("IEPF") during the financial year 2020-21 as per the requirements of IEPF rules.
No claim will lie on Company on account of dividend after the dividend is transferred to IEPF.
6. Resource Mobilization(a) Non-Convertible Debentures:
Your Company successfully completed 23rd and 24th Issue of Non-Convertible Debentures through Public Issue during FY 2020-21 raising ''22,929.86 millions. Company has raised ''36,455.00 millions through Private Placement of Non-Convertible Debentures during the financial year.
Subordinated Debts represents long term source of funds for the Company and the amount outstanding as
on 31st March, 2021 was ''2,106.48 millions. It qualifies as Tier II capital under the Non-Banking Financial Company- Systemically Important Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
Bank Finance remains an important source of funding for your Company. Commercial Banks continued their support to your Company during Financial Year. As of 31st March, 2021, borrowings from banks were ''195,567.63 million as against ''143,756.21 millions in the previous year.
(c) External Commercial Borrowings
Your Company has outstanding Senior Secured Notes of 6.125% USD 450 million issued in October 2019 for a period of 3 years and 4.40% USD 550 million issued in March 2020 for a period of 3 % years falling under Regulation 144A / Regulation S of the US Securities Act, 1933. These Notes are listed in the International Securities Market of London Stock Exchange.
The Company has debt credit ratings as below:
Credit Rating Agency |
Instruments |
Ratings |
CRISIL |
Commercial Paper |
CRISIL A1 |
Subordinated Debts |
CRISIL AA /Stable |
|
Non-Convertible Debentures |
CRISIL AA /Stable |
|
ICRA |
Commercial Paper |
[ICRA] A1 |
Short Term Bank Borrowings |
[ICRA] A1 |
|
Long Term Bank Borrowings |
ICRA AA (Stable) |
|
Subordinated Debts |
ICRA AA (Stable) |
|
Non-Convertible Debentures |
ICRA AA (Stable) |
International Credit Ratings: |
|
Credit Rating Agency |
Ratings |
Fitch Ratings |
BB(Stable) |
S&P Global Ratings |
BB(Negative) |
Moodyâs Investor Service |
Ba2(Stable) |
8. Internal Audit and Internal Financial Control
Over the years Company has evolved a robust, proper and adequate internal audit system in keeping with the size of the Company and its business model. Your Company has developed well documented internal audit and control system for meticulous compliance from all layers of the Company. The control system ensures that the Companyâs assets are safeguarded and protected. The audit system also takes care to see that revenue leakages and losses to the Company are
prevented and our income streams are protected. The control system enables reliable financial reporting.
Company has a well-structured Audit & Inspection department to perform timely and frequent internal audit to evaluate the adequacy of systems and procedures and also to evaluate the status of compliance to Company''s guidelines and other statutory requirements. The department is manned by a team of over 900 dedicated personnel who constantly engaged in safeguarding your Companyâs assets, ensures the quality of assets pledged and also evaluates the adequacy of risk management systems at its operating units. In keeping with the huge network and geographic outreach of the operating units spread across the length and breadth of the country, the audit functions have been decentralized through setting up of Regional Audit offices in important Regional centers. The Regional Audit Offices exercise field level control over the branches through onsite visits and online audit systems. The field level Auditors report to Regional Audit offices who in turn shares their findings with the Audit & Inspection Department at the Registered Office of the Company.
Audit Committee of Board of Directors is apex Audit Authority of the Company. Under the present Audit Architecture, the Internal Audit Department reports to the Audit Committee regarding significant audit findings and also preventive and corrective measures to protect the interests of the Company.
The audit Committee undertakes an evaluation of the adequacy and effectiveness of internal control systems. It also oversees the implementation of audit recommendations especially involving the risk management measures.
In addition to reviewing the internal control systems put in place by the Audit & Inspection Department, the Audit Committee also imparts guidance and crucial directions for upgradation of systems and controls on ongoing basis.
At present the Audit system prevalent in the Company is completely autonomous function and built on best corporate governance framework.
Reference is invited to Note 50 of Notes forming part of the standalone financial statements contained in the annual report regarding frauds committed by employees/customers of the Company which are dealt with according to Reserve Bank of India guidelines and are in nature of operation related frauds due to nature of business of the Company. Company has taken or is in the process of taking disciplinary/ legal action against such employees/customers.
As on March 31, 2021, the Company had 25,911 employees in its rolls at various level of organizational structure. Our employees remain one of the company''s greatest assets. We at Muthoot, believe in recognizing and appreciating employees for their valuable contribution and loyalty. We offer equal opportunities to all our employees irrespective of gender to learn and grow in the organization. For the convenience of our employees and bringing new ways of working, we are promoting digitalization for our employees as well as customers.
Recognizing the employee friendly efforts that we have put in, our Company is certified as Great Place to work for the year 2021-22. The 2021-22 certification is an indication of how well Muthoot Finance has adapted to the challenges brought about by the COVID-19 pandemic.
Since the onset of the pandemic, your Company has carried out various employee welfare measures such as providing additional paid COVID leaves to employees, salaries to employees during lockdown period to ensure their well-being. Also, during the period of pandemic, your company has ensured that no job loss occurred. We have automated various HRMS modules to bring in efficiency in practices. Your Company has committed to hiring and retaining the best talent and being among the industry''s leading employers have accelerated hiring offering them various roles in addition to promotion of existing employees during the financial year 2020-21.
During the COVID times, all the classroom training programs were moved to the virtual environment and the trainings were conducted online using video conferencing tools.
10. Major Marketing & Promotion Initiatives
As a leader in the business segment, it is incumbent upon us to take the lead in creating new consumer segments and growing the gold loan category by reinforcing and encouraging people to unlock the potential of their household gold ornaments by availing Gold Loans. And what better way to achieve this other than demonstrating inspiring stories of real men and women who had chosen to take a Gold Loan from Muthoot Finance and move ahead in life.
Our association with Shri. Amitabh Bachchan continued as we found strong relevance, correlation and fitment between the brand and Mr Bachchan''s values, pedigree, poise, respect, leadership, acceptability, association, success, philanthropy, and more attributes. The initiatives during the year were focussed on impressing upon people the prudence of
opting for Gold Loans, telling great stories of people who''ve overcome challenges with a little help from us in the form of Gold Loans and for the first time consciously communicating and reaching out to high value customers.
(a) "Gold Loan Is Goodâ - Integrated Marketing Campaign
This campaign sought to dispel common fears and apprehensions in people''s minds about Gold Loans, as also a few things that they probably did not know about Gold Loan from Muthoot Finance. The campaign captured facilities or features unique to Gold Loan from Muthoot Finance, and also assured potential and current users about the long standing pedigree of Muthoot Finance in the category. The campaign garnered a tremendous response from all quarters, including prospective customers, media and other stakeholders.
(b) "Sunheri Sochâ - Radio & Digital Marketing Campaign
This campaign captured testimonials of people whoâve benefited from Muthoot Finance Gold Loans. It brought to life extraordinary success stories of real-life people, men & women from different walks of life, across locations, economic background and other diversities. The campaign received an overwhelming response from our target customers and new loan seekers, as it inspired millions of other Indians to unlock the true potential of their emotional currency (household gold) and move ahead in life.
(c) "The Muthoot Group - Greater Kailash Metro Stationâ Branding
We extended our association with Delhi Metro Rail Corporation by renewing our semi- naming rights branding at Greater Kailash Metro Station in Delhi.
Over the least 3 years, this association helped us leverage a prominent and strategic location located on an arterial road in South Delhi; in the form of seminaming and complete branding of Greater Kailash Metro Station. The station branding beautifully showcases our Group''s impeccable corporate credentials and key products and service offerings such as our 5000 widespread branch network, 2.5 Lac customers served every day, Muthoot Big Business Loan, Muthoot Loan@Home facility.
(d) "Ayush Gold Loanâ - Integrated Marketing Campaign
The unique product created as response to the pandemic situation, was created and launched in quick time, in Q2 FY 20-21, and was followed by an integrated marketing campaign.. The campaign featured Shri Amitabh Bachchan and the IPL franchisee Chennai Super Kings. The scheme provided a double benefit to customers, as they could now avail a Gold Loan and
take care of all their financial needs and at the same time we tied up with a reputed insurance company and along with our Gold Loan product, COVID insurance was also offered. An integrated marketing campaign across Print, Digital, TV, Outdoor and BTL media was executed. Full Page newspaper ads, were released in the most prominent regional papers to spread awareness on our unique scheme.
(e) Trust Only Muthoot Finance - CSK TVC Campaign
The Muthoot Group was the Principal Team Partner of Chennai Super Kings during FY 20-21, and launched three special TVC''s during IPL 2020 (UAE), featuring Chennai Super Kings cricketing stars. Former Indian captain MS Dhoni took the lead in the these TVC''s that highlighted how in three very important aspects of the game, some chances can be taken, but not when it comes to Gold Loan, pitching in the trusted name and No. 1 status of Muthoot Finance.
(f) The Muthoot Group - Chennai Nandanam Metro Station Branding
The association with Chennai Metro Rail Limited was extended, by renewing the semi-naming rights branding at Nandanam Metro Station in Chennai. The association has helped the brand, by making our brand presence felt in a very prominent location of Chennai. The station branding includes our Group''s impeccable corporate credentials and key products and services offering such as our widespread branch network, our Loan at home facility and the unique Gold Unlocker.
(g) "Loan at Homeâ Integrated Marketing Campaign
The "Loan at Home " service was actively supported by a campaign across media. Our brand ambassador Shri Amitabh Bachchan delivers the brand message powerfully, after a strong "need" is established in the multiple commercial films. The campaign showed the convenience and ease offered by our "Loan at Home" service, which allows our customers to avail Gold Loan from Muthoot Finance, now from the comfort and safety of their homes.
Loan at Home expands the services of India''s No 1 Most Trusted Financial Services Brand - Muthoot Finance, to beyond the 4632 branch network, to almost every customer''s doorstep.
(h) "Gold Unlockerâ Integrated Marketing Campaign
Muthoot Finance Gold Unlocker campaign was launched in Q4 FY 20-21, featuring Revathy, the well known star from the film and now television industry. The campaign was focused on announcing the key nature and feature of this gold loan product, it being a
24x7 Credit Line that allows access to funds - Anytime, Anywhere. This campaign was targeted at prospects who would want to plan their expenses better, and be ready for any eventuality. Through imuthoot app, Gold Unlocker customers could have easy access to this credit line, whenever they needed it.
An integrated marketing campaign was executed across Print, TV, Digital, Outdoor and BTL media. The campaign on digital alone created a footprint of 12Cr views. The product is slowly getting accepted and changing the way people manage their finances.
(i) Awards & Recognitions
a. ''Sunehri Soch'' Radio Campaign was honoured with the Best Radio Campaign of the Year by Global Marketing Excellence Awards, 2020.
b. "Gold Loan is Good" Campaign was adjudged the Best Integrated Campaign and also for the Best Use of Celebrity / Influencer by Global Marketing Excellence Awards, 2020.
c. Extremely humbled to share that our hugely successful "Soch Badaliye" integrated marketing campaign that aimed at creating an attitudinal transformation in the way people perceive Gold Loans was awarded at the recently concluded Exchange4Media''s Indian Content Marketing Awards 2020 in the Best Branded Content Marketing on TV Category
d. Muthoot Finance Limited was awarded India''s No. 1 Most Trusted Financial Services Brand for the 5th year in a row by Brand Trust Report 2020.
e. Our "Soch Badaliye aur Life Mein Aagey Badhiye" Campaign also won the prestigious Primetime Award
2020 for one of the Best Creative Campaigns in the BFSI Sector.
Your Companyâs Capital Adequacy Ratio as of March 31,
2021 stood at 27.39% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, Tier
I capital adequacy ratio stood at 26.31% and Tier II capital adequacy ratio stood at 1.08%.
The Company is a Systemically Important Non-Deposit Taking NBFC and has not accepted any public deposits. Hence, disclosure regarding details of deposits covered under Chapter V of the Companies Act, 2013 ("Act") are not applicable.
Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. Please refer note 52, 53, 54, 55, and 56 of Notes forming part of Standalone Financial Statements for additional disclosures required under RBI Guidelines applicable to the Company.
14. Subsidiaries/ Associates/ Joint Ventures
As on March 31, 2021, your Company had seven subsidiaries namely Asia Asset Finance PLC, Muthoot Homefin (India) Limited, Muthoot Insurance Brokers Private Limited, Belstar Microfinance Limited,
Muthoot Money Limited, Muthoot Asset Management Private Limited and Muthoot Trustee Private Limited. Your Company''s subsidiaries have been contributing to the overall growth of your Company during the year. As required under Section 136 of the Act, the audited financial statements, including the consolidated financial statements of your Company are available on the website of the Company. The audited financial statements of each of its subsidiaries are also available on the website of the Company at https:// www.muthootfinance.com/subsidiaries. The above documents will also be available for inspection at the Registered Office of the Company during business hours.
During the year under review, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129 (3) of the Act, we have prepared the consolidated financial statements of the Company which form part of the Annual Report. The statement containing the salient features of the financial statement of your Company''s Subsidiaries in Form AOC 1 is annexed to Standalone Financial Statements of the Company as required under Rule 5 of The Companies (Accounts) Rules, 2014.
There are no other Companies which have become or ceased to be Subsidiaries/ Associates/ Joint Ventures ol the Company during the Financial Year 2020-21.
There has been no material change in the nature of business of subsidiary companies during the financial year 2020-21.
The Board of Directors of your Company has formulated a policy on material subsidiary, which is displayed on the web site of the Company https:// www.muthootfinance.com/sites/default/files/2020-08/1472561568policy%20on%20material%20 subsidiary.pdf.
As on March 31, 2021, Company did not have any material subsidiary.
a. Asia Asset Finance PLC:
Asia Asset Finance PLC, (AAF), a Company listed in Colombo Stock Exchange, is a subsidiary of your Company from December 31, 2014. AAF, where your Company holds 72.92% of equity capital, is a registered Financial Company with Central Bank of Sri Lanka and is mainly engaged in Vehicle Finance and Hire Purchase Activities. The Company which has also started business relating to lending against collateral of gold jewellery and micro finance is presently contributing a significant part of loan portfolio and income. AAF has operations across Sri Lanka with 48 branches as on March 31, 2021, AAF has made considerable progress in its business. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) LKR/INR as on 31.03.2021 -0.3677855; Average Exchange Rate of Financial Year 2020-21 - 0.393785 |
1,162.59 |
34.16 |
17.80 |
817.25 |
5,645.67 |
4828.42 |
Amounts in LKR (in millions) |
2,952.34 |
86.75 |
45.20 |
2,222.08 |
15,350.43 |
13,128.35 |
AAF increased its loan portfolio during the year by 1.18% at LKR 14002.23 millions. Total Income for FY 21 stood at LKR 2,952.34 millions as against previous year total income of LKR 3,332.62 millions. It generated a profit after tax of LKR 45.20 millions during FY21 as against previous year profit after tax of LKR 70.15 millions.
b. Muthoot Homefin (India) Ltd:
M/s. Muthoot Homefin (India) Ltd (MHIL), a registered Housing Finance Company licensed by National Housing Bank is a wholly owned subsidiary of your Company. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
2,408.65 |
168.66 |
125.51 |
4,386.59 |
16,783.92 |
12,397.33 |
MHIL''s loan portfolio stood at ''17,041.70 millions. Total income for Financial Year 2020-21 stood at ''2,408.65 millions as against previous year total income of ''2,876.10 millions. It achieved a profit after tax of ''125.51 millions in Financial Year 2020-21 as against previous year profit of ''317.77 millions.
c. Muthoot Insurance Brokers Private Limited:
Muthoot Insurance Brokers Private Limited (MIBPL), is an unlisted Private Limited Company holding a license to act as Direct Broker from Insurance Regulatory and Development Authority of India (IRDA) since 2013. MIBPL is a Wholly- Owned Subsidiary Company of your Company. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
467.38 |
424.09 |
316.37 |
846.99 |
863.82 |
16.83 |
MIBPL generated a First year premium collection amounting to ''2,641.70 millions during Financial Year 2020-21 as against ''2,059.02 in the previous year. It generated a Profit after Tax of ''316.37 millions during Financial Year 2020-21 as against ''103.98 millions in the previous year.
d. Belstar Microfinance Limited:
M/s. Belstar Microfinance Limited (BML) is a micro finance Company. At end of the Financial Year 2020-21, your Company holds 70.01% of the equity capital of BML. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
5,531.59 |
570.12 |
466.51 |
5,417.16 |
34,672.88 |
29,255.72 |
BML grew its loan portfolio during Financial Year 2020-21 by 25% reaching ''32,998.59 millions. It achieved a profit after tax of ''466.51 millions during Financial Year 2020-21 as against previous year profit after tax of ''989.99 millions.
e. Muthoot Money Limited
M/s. Muthoot Money Ltd (MML), a registered Non-Banking Finance Company licensed by Reserve Bank of India is a subsidiary of your Company. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
697.31 |
41.29 |
37.47 |
1,099.43 |
3,888.86 |
2,789.43 |
MML''s loan portfolio stood at ''3,668.13 millions. Total income for Financial Year 2020-21 stood at ''697.31 millions as against previous year total income of ''703.62 millions. It achieved a net profit of ''37.47 millions in Financial Year 2020-21 as against previous year profit of ''26.90 millions.
f. Muthoot Asset Management Private Limited
Your Company has incorporated a wholly owned subsidiary M/s. Muthoot Asset Management Private Limited ("MAMPL") which is yet to commence commercial operations. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
38.91 |
27.23 |
19.15 |
1,072.26 |
1,092.32 |
20.06 |
g. Muthoot Trustee Private Limited
Your Company has incorporated a wholly owned subsidiary M/s. Muthoot Trustee Private Limited ("MTPL") which is yet to commence commercial operations. Its major financial parameters for Financial Year 2020-21 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR |
523.22 |
(95.28) |
(95.00) |
9,777.49 |
9,803.24 |
25.75 |
15. Particulars Of Loans, Guarantees Or Investments Under Section 186 of Act
Pursuant to Section 186(11)(a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantee have not been disclosed in this Report. The details of the Investments of the Company are furnished under Note 9 of Notes forming part of the Standalone Financial Statements for the year ended March 31, 2021.
In accordance with the provisions of Section 92(3) read with Section 134(3) (a) of the Act, Annual Return of the Company is hosted on website of the Company at https://www.muthootfinance.com/themes/bartik/uploads/Annual_ Return_FY21.pdf
17. Consolidated Financial Statements
The audited consolidated financial statements of the Company along with its subsidiaries AAF, MHIL, BML, MML, MAMPL, MTPL and MIBPL prepared in accordance with the IndAS to comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, is provided in the Annual Report.
The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls.
The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report.
19. Corporate Social Responsibility
The Company''s CSR policy is committed towards CSR activities as envisaged in Schedule VII of the Act. The Details of CSR policy of the Company are available on the website of the Company at https:// www.muthootfinance.com/sites/default/files/pdf/ CSR_Policy_May_2021.pdf. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached to this report as Annexure 2.
The details of Corporate Social Responsibility and Business Responsibility Committee is provided in the annual report on Corporate Social Responsibility annexed to this Report.
During the year under review, the Committee met four times on June 16, 2020, August 18, 2020, November 2, 2020 and February 08, 2021 respectively.
20. Business Responsibility Report
Regulation 34 of the SEBI Listing Regulations mandates the inclusion of the Business Responsibility Report ("BRR") as part of the Annual Report for top 1000 listed entities based on their market capitalization. The BRR is attached to this report as Annexure 3.
21. Particulars Of Contracts or Arrangements made with Related Parties
The Board of Directors of your Company has put in place a policy for related party transactions, (Policy on Related Party Transactions and Materiality of Related Party Transactions), which has been approved
by the Board of Directors. The policy provides for identification of RPTs, necessary approvals by the Audit Committee/ Board /Shareholders, reporting and disclosure requirements in compliance with the Act and provisions of the SEBI Listing Regulations. Policy is available on the website of the Company at https:// www.muthootfinance.com/sites/default/files/2020-08/1472561629related-party-transaction%20policy. pdf
All contracts executed by the Company during the financial year, with related parties, were on armâs length basis and in the ordinary course of business.
All such related party transactions were entered into in accordance with the Policy on Related Party Transactions and Materiality of Related Party Transactions of the Company.
Prior omnibus approval was obtained for related party transactions, under Section 188 (1) of the Act, which are of repetitive nature and entered in the ordinary course of business and at armâs length. All related party transactions were placed before the Audit Committee for review and approval.
All transactions or arrangements with related parties referred to in Section 188 (1) of the Act, entered into during the year were on arm''s length basis or were in ordinary course of business or with approval of the Audit Committee. During the year, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy on Related Party Transactions and Materiality of Related Party Transactions. Further, there were no material related party transactions which required approval of shareholders as required under Chapter IV of SEBI Listing Regulations. The disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is attached to this report as Annexure 4.
The details of related party transactions with the related parties entered into during the financial year are disclosed in Notes to Standalone Financial Statements of the Company.
Details on Audit committee, terms of reference and meetings appear on the Report on Corporate Governance annexed to this report. All recommendations of Audit Committee were accepted by your Board during the financial year 2020-21.
The Company has established a Vigil Mechanism/ Whistle Blower policy to enable Directors, Stakeholders, including individual employees and their representative bodies to report, in good faith,
unethical, unlawful or improper practices, acts or activities. The said mechanism ensures that the whistle blowers are protected against victimization/ any adverse action and/ or discrimination as a result of such a reporting and provides a direct access to the Chairman of the Audit Committee in exceptional cases. The Company hereby affirms that none of its personnel have been denied access to the Audit Committee. The whistle blower policy is available at website of the Company at https://www.muthootfinance.com/vigil-mechanism.
Equity Shares of your Company are listed on National Stock Exchange of India Ltd and BSE Limited. NonConvertible Debentures issued by the Company through public issues are listed on BSE Ltd. Your Company has paid applicable listing fees to Stock Exchanges.
Senior Secured Notes issued by the Company are listed on the International Securities Market of London Stock Exchange.
25. Changes in Directors and Key Managerial PersonnelCessation
Mr. M G George Muthoot, Chairman of the Company ceased to be a Director due to his demise on March 05, 2021. Mr. George Jacob Muthoot has been appointed as the Chairman of the Company effective June 02, 2021.
Appointments - Independent Directors
Ms. Usha Sunny was appointed as an additional and Independent Director effective November 30, 2020 for a period of three consecutive years to the Board of the Company subject to the approval of the shareholders at the ensuing Annual General Meeting. Your Board recommends the appointment of Ms. Usha Sunny as an Independent Director on the Board of Directors of the Company. The notice convening the 24th AGM sets out the detailed profile of Ms. Usha Sunny. In the opinion of the Board, Ms. Usha Sunny brings experience, integrity, proficiency and expertise in the domain of finance that will provide valuable insights in improving overall business and governance functions of the Company.
In order to comply with the Corporate Governance requirements of SEBI Listing Regulations and the Act, your Board proposes to appoint Mr. Abraham Chacko as Independent Director of the Company subject to approval of the shareholders in the upcoming Annual General Meeting. Mr. Abraham is an experienced banker by profession and had held senior most positions in various banks in the past including Executive Director in Federal Bank Limited, a BSE &
NSE listed and one of the oldest private sector bank in India. Detailed profile of Mr. Abraham Chacko is provided in the Notice of the AGM.
Appointments - Whole Time Directors
Your Board, on the recommendation of the Nomination and Remuneration Committee, proposes the appointment of Mr. George Muthoot George, Mr George Muthoot Jacob, and Mr George Alexander as Directors liable to retire by rotation and Whole Time Directors in the Board of Directors with effect from October 01, 2021. The proposed appointment will bring in more youthful energy and experience into the Board of Directors of the Company.
As per the provisions contained in Circular DNBR (PD) CC. No. 065/03.10.001/2015-16 dated July 09, 2015, approval of the Reserve Bank of India is required for the appointment of the three whole time directors on the Board of the Company since such appointment results in change in more than 30 percent of the directors excluding the independent directors. Currently, your Board has 4 non-independent directors on the Board and the appointment of 3 new directors on the Board would result in more than 30 percent change in the Board of Directors as mentioned in the said circular. Your Company has made applications to the Reserve Bank of India seeking its approval for the proposed appointment on the Board of Directors. Hence, the appointment of Mr. George Muthoot George, Mr. George Alexander and Mr. George Muthoot Jacob as Whole Time Directors on the Board of Directors of the Company would be subject to receipt of approval from the Reserve Bank of India and will be effective from October 01, 2021 or such other date Reserve Bank of India provide its approval, whichever is later.
Necessary resolutions seeking shareholders'' approval for the proposed appointments are provided in the notice calling the Annual General Meeting.
Directors Liable to retire by rotation
Mr. George Jacob Muthoot, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.
Your Board and the Nomination and Remuneration Committee has evaluated the eligibility criteria under RBI guidelines, the Act and Listing Regulations, of all directors seeking appointment/ re-appointment at the ensuing Annual General Meeting and recommends the respective appointment/ re-appointments. Your Board believes that the proposal for appointment/ re-appointment will have the support of shareholders. Necessary disclosures as required under the SEBI
Terms of reference of the Nomination and Remuneration Committee and other relevant details of Nomination and Remuneration Committee are provided in the Corporate Governance Report circulated along with this report.
b) Performance evaluation of Board, Committees and Directors
The SEBI Listing Regulations and the Act require the evaluation of the performance of the Board, its Committees and the individual directors. The Board carried out an annual evaluation of its own performance, its Committees and individual Directors based on criteria and framework adopted by the Board and in accordance with existing regulations.
The details of training, appointment, resignation and retirement of Directors, if any, are dealt with in the report of Corporate Governance. Brief details of profile of each Directors appear in Annual Report of the Company.
c) Independent Directors Meeting
During the year, a meeting of Independent Directors was held on February 9, 2021 as required under the Act and in Compliance with requirement under Schedule IV of the Act and as per requirements of SEBI Listing Regulations and discussed matters specified therein.
29. Corporate Governance Report
Your Company has complied with the Corporate Governance norms as stipulated in Chapter IV of SEBI Listing Regulations. As per Regulation 34 of SEBI Listing Regulations, the detailed report on Corporate Governance is attached to this Report as Annexure 6.
30. Management Discussion and Analysis Statement
Management Discussion and Analysis detailing the industry developments, segment wise/ product wise performance and other matters is attached to this Report as Annexure 7.
31. Environmental, Social, and Governance ("ESGâ)
The Board instituted an Environmental, Social and Governance Committee ("ESG Committee"), with effect from August 06, 2021, to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. Details of the constitution of the ESG Committee and its terms of reference are provided in the Report on Corporate Governance.
Listing Regulations and the Act are provided in the notice calling the Annual General Meeting.
The brief profiles of Directors are available on the website of the Company at https://www. muthootfinance.com/our-directors
Pursuant to Clause C(2)(i) of Schedule V read with Regulation 34(3) of SEBI Listing Regulations, in the opinion of the Board the independent directors fulfill the conditions as specified in the Listing Regulations and are independent of the management.
During the Financial Year 2020-21, your Board of Directors met eight times on June 17, 2020, July 18, 2020, August 19, 2020; September 05, 2020; November 03, 2020, November 30, 2020, February 09, 2021 and February 19, 2021. Details of various meetings of the Board are given in the Corporate Governance Report which is a part of this report.
27. Declaration from Independent Directors
The Independent Directors have submitted necessary disclosures that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16 (1) (b) of the SEBI Listing Regulations.
A statement by Managing Director confirming receipt of this declaration from Independent Directors is annexed to this report as Annexure 5. There has been no change in the circumstances affecting their status as independent directors of the Company.
During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company other than the sitting fees, commission, if any and reimbursement of expenses incurred for the purpose of attending the meetings of the Board or Committees of the Company.
28. Policy on Appointment and Remuneration Of Directors and Performance evaluation of Board, Committees and Directorsa) Policy on Appointment and Remuneration of Directors
Board of Directors of your Company, on the recommendation of Nomination and Remuneration Committee, has formulated a policy for selection, appointment and remuneration of the directors, senior management personnel as required under Section 178(3) of the Act. The policy is available on the Company''s website at the weblink https:// www.muthootfinance.com/sites/default/ files/2020-08/1452753862Nomination%20and%20 Remuneration%20Policy.pdf
32. Conservation of energy, technologyabsorption, foreign exchange earnings and outgo:
The information pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is as follows:
Your Company being a Non-Banking Finance Company, has no activities involving conservation of energy. However, your Company has taken adequate measures for conservation of energy and usage of alternative source of energy, wherever required.
Your Company being a Non-Banking Finance Company, has no activities involving adoption of any specific technology. However, your Company has been in the forefront in implementing latest information technology and tools towards enhancing our customer convenience.
Initiatives taken by the Company in information technology for improved business efficiency, ease of operation, improved risk management practice and for providing best stakeholders experience:
The Company successfully implemented many digital transformation initiatives during the year providing great customer experience, improved business efficiencies, ease of operations and effective risk management.
A few of the IT initiatives undertaken are given below.
Seamless Integration with Multiple Partner Systems through APIs
The Company established application programming interface (API) enabling seamless and secure exchange of data between various internal and external systems. More than 150 APIs were developed and deployed by the Company for providing customers seamless experience on a real-time basis.
Despite the ferocity with which the pandemic are now hitting us, the Company was able to provide uninterrupted services to its stakeholders thereby exhibiting harmonious business continuity. With work from home becoming the new normal, utmost care was taken in ensuring that our employees enjoy a seamless work environment while working remotely. The implementation of Google Work Space across the organization has contributed tremendously to build a more tech savant environment to communicate and collaborate.
Digital Initiatives
The in-house IT team could integrate the widely used WhatsApp platform with CBS backend for reaching
out to customers through alert mechanism like, SMS, e-mail, Click-to-Call, etc for doing transactions. This has been found widely used by customers across.
KYC Data Capture & Validation
The Company has been a forerunner in using video KYC solution by integrating with its core banking and in Loan@home customer-facing application, obviating the need for them to visit the branch physically for onboarding. Other initiatives such as Digital KYC and customer bank account verification using the Penny Drop integration was completed as part of the KYC data enrichment programme.
AI Driven Development Initiative
Considering the vast array of possibilities of Artificial Intelligence (AI), your Company has initiated its usage in various areas and processes. As part of first step, signature verification in the pledge process has been performed successfully. Inception of RPA (Robotics Process Automation) in various money transfer transactions reconciliation has been a crucial step undertaken by the Company, resulting in all daily transactions reconciled with the vendor systems automatically now.
Security Surveillance System
Taking into consideration the necessity of physical security in our branches, a powerful video surveillance system was developed and implemented with central monitoring capabilities. The Smart Eye software solution has the AI and advanced computer vision technologies for effective protection of the valuable assets stored in the branches.
Mobile Applications Development and Roadmap
Mobile applications developed in-house enabled Muthoot Finance to engage with the customers in a more prudent way and identify appropriate customer touchpoints to create and enhance personalized experience. We have built a suite of mobility applications ranging from lead creation, loan repayment, loan top-up, customer onboarding, customer engagements, collections, and various add-on apps that can act as extensions of our Core Banking Software (CBS). Widely used payment channels such as PhonePe, PayTM and BBPS (Bharath Bill Payment) channels could be added for better customer convenience.
Enhancements in Intranet Portal MINE A new module was enrooted in the knowledge management intranet portal MINE for the continual updation of employees on various operational areas, new products and services. This has a dedicated facility for learning and online tests done by the HR
33. Audits
a) Statutory Audit under Section 139
On recommendation of Board of Directors of the Company, members of the Company appointed M/s. Varma & Varma, Chartered Accountants, Kochi (Firm Reg No. 004532 S) as Statutory Auditor of the Company at the 20th Annual General Meeting of the Company for a term of 5 consecutive years i.e. till the conclusion of 25th Annual General Meeting pursuant to Section 139 of the Act.
The Report given by M/s. Varma & Varma, Chartered Accountants, Statutory Auditors, on the financial statement of the Company for the FY 2020-21 is part of the Annual Report.
Reserve Bank of India on April 27, 2021 vide notification no. DoS.CO.ARG/SEC.01/08.91.001/2021-22 issued Guidelines for Appointment of Statutory Central Auditors /Statutory Auditors of Commercial Banks (excluding RRBs), UCBs and NBFCs, (including HFCs). In compliance with the guidelines, the Company is required to appoint two new statutory Auditors as "Joint Auditors" in the second half of the financial year 2021-22. In compliance with the FAQs on the above notification published by RBI, the existing statutory Auditors M/s Varma & Varma, Chartered Accountants will continue as the statutory auditor of the Company till the appointment of new statutory Auditors in the second half of the financial year 2021-22. Your Board will appoint the new Statutory Auditors in the second half of the financial year 2021-22 in due compliance with the provisions of the said guidelines issued by RBI and the relevant provisions of the Companies Act, 2013.
b) Secretarial Audit under Section 204
M/s KSR & Co., Company Secretaries LLP, Coimbatore was appointed as Secretarial Auditors of the Company for the financial year 2020-21 pursuant to Section 204 of the Act. The Secretarial Audit report submitted by them is annexed to this report as Annexure 8.
Department. Learning materials are regularly posted and updated on the platform prior to and conduct of tests. Individual scores are arrived at by the system automatically which are used by HR department for their various reviews.
c) Foreign exchange earnings and outgo
Particulars |
'' in Million |
Total Foreign Exchange earned |
Nil |
Total Foreign Exchange expended |
4,776.35 |
c) Annual Secretarial Compliance Report
The Company has undertaken an audit for the financial year 2020-21 for all applicable compliances as per SEBI Regulations and Circulars/ Guidelines issued thereunder.
The Annual Secretarial Compliance Report has been submitted to the stock exchanges within 60 days of the end of the financial year.
d) Cost records and Cost Audit
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.
e) Auditors'' certificate on Corporate Governance
The Auditors'' certificate confirming compliance with the conditions of corporate governance as stipulated under the SEBI Listing Regulations for financial year 2020-21 is enclosed as an annexure to the Boardâs report.
f) Auditors'' certificate on ESOP
The auditors'' certificate on the implementation of share based schemes in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, will be made available at the AGM for inspection electronically.
g) Explanations or comments by the Board on qualification, reservation or adverse remark or disclaimer on audits for financial year 2020-21
There are no qualifications, reservation or adverse remark or disclaimer on audits under Section 139 and Section 204 of the Act for financial year 2020-21.
34. Reporting on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the requirement of the Sexual Harassment of Women at workplace (Prevention, Prohibition & Redressal) Act, 2013 (''POSH Act'') and Rules made thereunder.
With the objective of providing a safe environment, the Company has constituted Internal Committee to redress complaints received regarding sexual harassment. All employees - permanent, contractual, temporary and trainees are covered under this Policy.
Details of cases reported to Internal Complaints Committee during the financial year 2020-21 are as under
Number of complaints pending at the beginning of the financial year 2020-2021 |
1 |
Number of complaints filed during the financial year 2020-2021 |
2 |
Number of complaints disposed of during the financial year 2020-2021 |
3 |
Number of complaints pending as on end of the financial year 2020-2021 |
0 |
35. Personnel
The Disclosure required under the provisions of Section 197 of the Act read with Rule 5 (1) & Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure 9.
36. Significant and material Orders passed by Regulators or Courts or Tribunals
There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of your Company and its future operations.
37. Material Changes and Commitments affecting the financial position of the Company between the end of the financial year to which Financial Statements relate and the date of the report
No material changes and commitments affecting the financial position of your Company occurred between the end of the financial year to which Financial Statements relate and the date of this report.
38. Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that -
(a) in the preparation of the annual accounts, the applicable Indian Accounting Standards had been followed. There are no material departures from applicable Indian Accounting Standards;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
39. Disclosure pursuant to Part A of Schedule V of SEBI Listing Regulations
Disclosure pursuant to Part A of Schedule V read with Regulation 34(3) and 53(f) of SEBI Listing Regulations is attached as Annexure 10 of this report.
40. Others
⢠The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, Annual General Meetings and Dividend.
⢠The Company, in the capacity of Financial Creditor, has not filed any application with National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 during the financial year 2020-21 for recovery of outstanding loans against any customer being Corporate Debtor.
⢠The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof- Not Applicable.
41. Acknowledgement
Your Directors place on record its respect and homage to Late Chairman Mr. M G George Muthoot. Mr. M G George Muthoot was the Mentor and Visionary leader who played pivotal leadership role through his long career in building one of the most trusted financial powerhouses in the Country.
Your Directors thank the Company''s stakeholders including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors
place on record their appreciation of the contribution made by the employees of your Company and its subsidiaries at all levels. Your Board reassures that in these challenging times, your Company will continue to support them and their family at all levels. Your Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India, Securities and Exchange Board of India, Ministry of Corporate Affairs, and Stock Exchanges including various officials thereat for the guidance and support received from them from time to time.
Your Directors mourn the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their safety and life to fight this pandemic.
42. Forward Looking Statements
This Report(s) contains certain forward-looking statements within the provisions of listing agreements and hence reasonable caution is to be exercised by stakeholders while relying on these statements.
For and on behalf of the Board of Directors
Sd/- Sd/-
George Jacob Muthoot George Alexander Muthoot
Chairman & Whole Time Director Managing Director
Place: Kochi
Date: August 06, 2021
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi - 682 018
Mar 31, 2019
REPORT OF THE BOARD OF DIRECTORS
Dear Stakeholders,
Directors of your Company have pleasure in presenting the 22nd Annual Report of the Company together with the audited financial statements (standalone and consolidated) for the year ended March 31, 2019.
1. Financial Summary
Your Company has adopted Indian Accounting Standards (Ind AS') notified under section 133 of the Companies Act 2013 ('the Act') read with the Companies (Indian Accounting Standards) Rules, 2015 from April 01, 2018 and the effective date of such transition is April 01, 2017. Such transition has been carried out from the erstwhile Accounting Standards notified under the Act, read with relevant rules issued thereunder and guidelines issued by the Reserve Bank of India ('RBI'). The financial statements have been prepared in accordance with the format prescribed for a Non-Banking Financial Company (NBFC) in compliance of the Companies (Indian Accounting Standards) Rules, 2015, in Division 111 of Notification No. GSR 1022 (E) dated October 11, 2018, issued by the Ministry of Corporate Affairs, Government of India. The financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated in Ind AS.
The financial performance of your Company for the year ended March 31, 2019 are summarized below:
 |
 |
 |
 |
Rs. in Millions |
Particulars |
Standalone |
 |
Consolidated |
 |
 |
Year Ended March 31, 2019 |
Year Ended March 31, 2018 |
Year Ended March 31, 2019 |
Year Ended March 31, 2018 |
Total Income |
68,806.30 |
63,331.52 |
76,010.49 |
67,816.85 |
Total Expenses |
38,038.14 |
34,884.66 |
43,415.21 |
38,396.07 |
Profit Before Tax |
30,768.16 |
28,446.86 |
32,595.28 |
29,420.78 |
Tax expense |
11,046.74 |
10,671.26 |
11,565.67 |
10,983.26 |
Profit for the year |
19,721.42 |
17,775.60 |
21,029.61 |
18,437.52 |
Equity |
97,927.19 |
78,120.21 |
99,312.00 |
78,565.75 |
Total Liabilities |
282,759.81 |
229,802.34 |
318,035.99 |
258,152.23 |
Total Assets |
380,687.00 |
307,922.55 |
417,347.99 |
336,717.98 |
2. Dividend
Your Board has declared an interim dividend at Rs. 12 per equity share (120% of face value) only after the end of financial year in its meeting dated April 05, 2019 for the financial year 2018-19. The dividend payout amount including the dividend distribution tax will be Rs. 5796.22 millions representing 29.39% of profit after tax for the year. Directors of your Company decided to plough back the remaining profit after tax for business activities during the Financial Year.
The Dividend Distribution Policy required as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and approved by the Board is available on the website of the Company at www.muthootfinance.com/policy/policy-investor and is attached to this report as Annexure 1.
The list of unpaid dividend is available on the Company's website www.muthootfinance.com. Shareholders are requested to check the said list and if any dividend due to them is remaining unpaid in the said list, then  shareholders can approach the Company or Registrar and Transfer Agent of the Company for release of unpaid dividend.
As per Section 124(5) of the Companies Act, 2013, the Company shall transfer the dividend that remained unclaimed for a period of seven years from the date of transfer to unpaid dividend account to the Investor Education and Protection fund (1EPF). Further as per Section 124(6) of the Companies Act, 2013, the Company shall transfer all shares in respect of which the unclaimed dividend has been transferred to 1EPF. No claim will lie on Company on account of dividend after the dividend is transferred to 1EPF.
3. Transfer to Reserves
Your Board of Directors has transferred an amount of Rs. 3,944.29 millions to the Statutory Reserve maintained under Section 451C of the RBI Act, 1934. An amount of Rs. 9,776.16 millions has been transferred to Debenture Redemption Reserve. Post transfer of profits to reserves and distribution of dividend, your Board proposes to retain Rs. 20,870.83 millions in the Retained Earnings
4. Company's Performance
During the Financial Year, Company saw 11% increase in its profitability with a net profit of Rs. 19,721.42 millions for the year ended March 31, 2019 as compared to Rs. 17,775.60 millions for the year ended March 31, 2018. Profit before tax increased by 8% to Rs. 30,768.16 millions. Total Income has increased from Rs. 63,331.52 millions for the year ended March 31, 2018 to Rs. 68,806.30 millions for the year ended March 31, 2019 which is mainly due to increase in Interest Income of the Company. Interest income of the Company increased to Rs. 67,570.12 millions from previous year's interest income of Rs. 62,021.30 millions. Loan Assets Portfolio of the Company increased by Rs. 51,041.00 millions during the year reaching Rs. 342,461.20 millions as on March 31, 2019 as against Rs. 291,420.20 millions as on March 31, 2018. The Return on Average Loans stood at 6.31% in FY 2018-19 as against 6.36% in FY 201 7-18. Interest yield was 21.63% as compared to 22.21% in FY 2017-18.Net Interest Margin was 14.47% as compared to 15.29% in FY 2017-18. The Company remitted to exchequer Rs. 11287.83 millions as taxes.
5. Resource Mobilization
(a) Non-Convertible Debentures:
Your Company successfully completed 18th and 19th Issue of Non-Convertible Debentures through Public Issue during FY 2018-19 raising Rs. 37,094.57 millions. Company has raised Rs. 5,750.00 millions through Private Placement of debentures.
Directors of your Company are thankful to all investors who have subscribed the debentures and shown their trust towards your Company.
Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2019 was Rs. 4,307.48 millions. It qualifies as Tier 11 capital under the Non-Banking Financial Company- Systemically Important Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
(b) Bank Finance:
Bank Finance remains an important source of funding for your Company. Commercial Banks continued their support to your Company during Financial Year. As of 31st March, 2019, borrowings from banks were Rs. 129,781.58 millions as against Rs. 111,831.91 millions in the previous year.
6. Credit Rating
The Company has debt credit ratings as below:
Credit Rating Agency |
Instruments |
Ratings |
CR1SIL |
Commercial Paper |
CR1SIL A1 + |
Subordinated Debts |
CRISlL AA/Stable |
|
Non-Convertible Debentures |
CRISlL AA/Stable |
|
1CRA |
Commercial Paper |
[1CRA] A1 + |
Short Term Bank Borrowings |
[1CRA] A1 + |
|
Long Term Bank Borrowings |
[1CRA] AA/(Stable) |
|
Subordinated Debts |
[1CRA] AA/(Stable) |
|
Non-Convertible Debentures |
[1CRA] AA/(Stable) |
7. Equity Sbare Issuances Employee Stock Options Schemes
During the year, your Company has allotted 620,077 equity shares of face value of Rs. 101- each under Muthoot ESOP 2013 pursuant to exercise of 7,287 options of Rs. 10/- each for Loyalty Options and 612,790 options of Rs. 50/- each for Growth Options by Employees of the Company.
The disclosures as required under SEB1 (Share Based Employee Benefits) Regulations, 2014 read with SEB1 Circular C1R/CFD/POL1CY CELL/2/2015 dated 16th June 2015 is attached to this report as Annexure 2. The same disclosure is available at Company's website www.muthootfinance.com/investors/disclosure-esop. Please refer note 46 of Notes forming part of Standalone Financial Statements for further disclosures on ESOP. The Company does not have any scheme to fund its employees to purchase the shares of the Company.
Your Company has received the certificate from the Statutory Auditors of the Company certifying that the ESOP scheme is implemented in accordance with the applicable SEB1 Guidelines/Regulations and is in accordance with the resolution passed by the members of the Company. The certificate would be placed at the Annual General Meeting for inspection by members.
The stock option schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and there have been no material changes to these plans during the Financial Year 2018-19.
8. Internal Audit and Financial Control
Over the years Company has evolved a robust, proper and adequate internal audit system in keeping with the size of the Company and its business model. Your Company has developed well documented internal audit and control system for meticulous compliance from all layers of the Company. The control system ensures that the Company's assets are safeguarded and protected. The audit system also takes care to see that revenue leakages and losses to the Company are prevented and our income streams are protected. The control system enables reliable financial reporting.
Company has a well-structured Audit & Inspection department to perform timely and frequent internal audit to evaluate the adequacy of systems and procedures and also to evaluate the status of compliance to Company's guidelines and other statutory requirements. The department is manned by a team of above 900 dedicated personnel who constantly engaged in safeguarding your Company's assets, ensures the quality of assets pledged and also evaluates the adequacy of risk management systems at its operating units. In keeping with the huge network and geographic outreach of the operating units spread across the length and breadth of the country, the audit functions have been decentralized through setting up of Regional Audit offices in important Regional centers. The Regional Audit Offices exercise field level control over the branches through onsite visits and online audit systems. The field level Auditors report to Regional Audit offices who in turn shares their findings with the Audit & Inspection Department at the Registered Office of the Company.
Audit Committee of Board of Directors is apex Audit Authority of the Company. Under the present Audit Architecture, the Internal Audit Department reports to the Audit Committee regarding significant audit findings and also preventive and corrective measures to protect the interests of the Company. The audit Committee undertakes an evaluation of the adequacy and effectiveness of internal control systems. It also oversees the implementation of audit recommendations especially involving the risk management measures.
In addition to reviewing the internal control systems put in place by the Audit & Inspection Department, the Audit Committee also imparts guidance and crucial directions for upgradation of systems and controls on ongoing basis.
At present the Audit system prevalent in the Company is completely autonomous function and built on best corporate governance framework.
Reference is invited to Note 51 of Notes forming part of the standalone financial statements contained in the annual report regarding frauds committed by employees/customers of the Company which are dealt with Reserve Bank of India guidelines and are in nature of operation related forms due to nature of business of the Company. Company has taken or is in the process of taking disciplinary/ legal action against such employees/customers.
9. Human Resources
As on March 31, 2019, the Company had 24,224 employees in its rolls at various level of organizational structure. Your Company is always committed in providing employees with ample opportunities to learn and advance in career.
Based on performance of the employees, management has introduced new means of payouts and increased the percentage of payout for existing incentives. The management is also rewarding employees with foreign trips to exquisite locations based on their achievement.
Exclusive Staff Welfare Officer were positioned in Regional Offices to support our employees to draw the benefits offered under statutory provisions - ESI, Medi-claim etc. Regional HR Managers were positioned in selected Regional Offices and they will act as a link between the employee and the management to represent any grievances / discomforts of employees pertaining to human resource related matters. These officers also arranges staff engagement programs to create unity among our employee community.
Your Company has offered multiple training programs to employees to help in their development. The programs includes product/process related trainings, soft skill trainings, leadership trainings and certification trainings for different group of employees. Company imparts training through two premium training establishments of the Company and 74 Regional Learning Centers.
Your Company has robust mechanism for identifying performers and Performance Score card method of performance assessment has been implemented for a structured and unbiased performance assessment model. Company has taken steps to promote eligible employees to the next level based on the above performance assessment model. .
Your Company offers various other benefits to employees including Employee Stock Options and various Statutory and Non Statutory Staff Welfare Measures. All eligible employees are covered under statutory provisions namely EPF, ESI, Maternity Benefits, Gratuity etc. Employees were enrolled under the National Pension System (NPS) with Company also making contribution along with their contribution.
10. Major Marketing & Promotion Initiatives
i) AB-CSK Marketing Campaign
During the year 2018-19 company continued its association with the biggest and legendary superstar of Bollywood and entertainment industry, Padma Vibhushan Shri Amitabh Bachchan who has a huge fan following not just in India but all over the world.
Company has also continued its association with the one of the most successful IPL teams of all times -Chennai Super Kings, led by the legendary former Indian
Captain Padma Bhushan Shri Mahendra Singh Dhoni as "Prinicipal Team Partner". This association allowed us to reach closer to our customers as well as to the huge cricket fans of this country and even abroad, in a more exciting & acceptable manner more especially in the southern part of India.
ii) Muthoot Vishwas Ki Tijori:
Kumbh 2019 was the largest congregation of human beings on planet Earth with more than 24 Crore people converging at Prayaagraj. It was observed that often people coming for Kumbh find it a major challenge to keep their valuables safely, before they could have a holy dip. They often leave their personal belongings unattended on the banks of the river and find it hard to focus or enjoy in having a peaceful holy dip. Identifying this problem, Muthoot Finance decided to leverage on its core asset of "Trust" and offer a unique solution. This is for the first time in the history of Kumbh that locker services were being offered to all visitors to keep their personal belongings safe before they proceeded to have their holy dip.
'Muthoot Vishwaas Ki Tijori' (free locker service for all pilgrims) was powered by a specially designed mobile App, online e-KYC was done while availing this service, photographs of the visitors' belongings were taken and a physical confirmation document along with the photograph of their belongings was also given to them, providing them an added layer of assurance. The lockers were also equipped with 24x7 CCTV surveillance systems, security guards, metal detectors, alarm systems, fire extinguishers and other essentials to ensure their belongings are absolutely safe and secure. On their return, their belongings and identity were re-verified and handed over to them in the same pristine condition with utmost respect. To sweeten their experience, all their belongings were returned in Muthoot branded biodegradable non-plastic bags along with some interesting goodies.
In addition to the above, innovative Muthoot Boat Services were also introduced for ferrying people from the river bank to the Sangam and back. Free transit shelter homes (Rein Basera Camps) were also organised at multiple city locations for countless devotees to have a peaceful overnight stay at no cost. And for those overseas visitors who converged at Prayag for experiencing the divinity & largeness of Kumbh, there was Muthoot Forex helping them with instant foreign exchange services.
During the activation, more than 10,000 beneficiaries availed this free service, thereby letting more than 50,000 family members have a peaceful holy dip during their Kumbh visit. Furthermore, countless number of pilgrims availed the Muthoot Boat Services, and millions of them were benefitted by the Free Transit Shelter Homes (Rein Basera Camps).
This Kumbha campaigns were Awarded Silver at ABBY Awards 2019, awarded Gold at Golden Mikes Award 2019 and awarded Gold at Flame Awards Asia 2019, for Best Experiential Marketing Campaign of the Year
iii) Jaipur Pink Panther, Pro Kabbadi League Season 6 Association:
Your Company partnered with the Jaipur Pink Panthers team of the Pro Kabaddi League as its associate sponsor for the League's Season 6, for the second consecutive year.
Your Company has always supported sports and celebrated the spirit of sportsmanship, while in the past we have been associated with several other sports like cricket and football, Kabaddi is particularly significant to us owing to its rural appeal as your company has more than 60% of its branch network in rural and semi urban areas of the country. The association further helped us realise our aim of supporting aspirations of the rural population of the country while promoting a spirit of sportsmanship and fair play.
iv) Association with Wheel Chair Cricket India as a Title Sponsor:
This initiative particularly was an important part of Muthoot Finance's larger vision of contributing back to the society. Acknowledging the notable work being done by Wheelchair Cricket India, your company decided to support a noble cause by sponsoring an international tri-nation cricket series being played at Dubai. This association and financial support helped the players fly to Dubai and play Cricket against the Wheelchair Cricket teams from Pakistan and Bangladesh and come back with pride after winning the trophy. Your Company values and salutes the spirit of committed players who in spite of being differently-abled, believed in pursuing their dream and emerge victorious.
11. Capital Adequacy
Your Company's Capital Adequacy Ratio as of March 31, 2019 stood at 26.05% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, Tier 1 capital adequacy ratio stood at 25.61% and Tier 11 capital adequacy ratio stood at 0.44%.
12. Public Deposits
The Company is a Systemically Important Non-Deposit Taking NBFC and hence has not accepted any public deposits.
13. RBI Guidelines
Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. Please refer note 52 and 53 of Notes forming part of Standalone Financial Statements for  additional disclosures required under RBI Guidelines applicable to the Company.
14. Subsidiaries/ Associates/ Joint Ventures
As on March 31, 2019 your Company has seven subsidiaries namely M/s. Asia Asset Finance PLC, M/s. Muthoot Homefin (India) Limited, M/s. Muthoot Insurance Brokers Private Limited, M/s. Belstar Investment and Finance Private Limited, M/s. Muthoot Money Limited, M/s. Muthoot Asset Management Private Limited and M/s. Muthoot Trustee Private Limited. Your Company's subsidiaries have considerably contributed to the overall growth of your  Company during the year. As per Section 136 of the Companies Act, 2013 the audited financial statements, including the consolidated financial statements of your Company and the audited accounts of each of its subsidiaries are available on the website of the Company at www.muthootfinance.com/corporate/our_subsidary. The above documents will also be available for inspection at the Registered Office of the Company during business hours.
The Board of Directors of your Company has formulated a policy on material subsidiary, which is displayed on the web site of the Company at www.muthootfinance.com/policy/policy-investor.
Financial Performance & position of Subsidiaries a. Asia Asset Finance PLC:
Asia Asset Finance PLC, (AAF), a Company listed in Colombo Stock Exchange, is a subsidiary of your Company from December 31, 2014. AAF, where your Company holds 69.17% of equity capital, is a registered Financial Company with Central Bank of Sri Lanka and is mainly engaged in Vehicle Finance and Hire Purchase Activities. The Company which has also started business relating to lending against collateral of gold jewellery and micro finance is presently contributing a significant part of loan portfolio and income. AAF has operations across Sri Lanka with 23 branches as on March 31, 2019. AAF has made considerable progress in its business. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) LKR/lNR as on 31.03.2019-0.395775 /Average Exchange Rate -0.40657* |
1,166.35* |
38.18* |
41.04* |
772.91 |
5,501.07 |
4,728.17 |
Amounts in LKR (in millions) |
2,868.76 |
93.91 |
100.93 |
1,952.89 |
13,899.49 |
11,946.61 |
AAF increased its loan portfolio during the year by 26% at LKR 12,568.87 millions. Total Income for FY19 stood at LKR 2,868.76 millions as against previous year total income of LKR 2,572.37 millions. It generated a profit after tax of LKR 100.93 millions during FY19 as against previous year profit after tax of LKR 178.23 millions.
b. Muthoot Homefin (India) Ltd:
M/s. Muthoot Homefin (India) Ltd (MH1L), a registered Housing Finance Company licensed by National Housing Bank is a wholly owned subsidiary of your Company. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
2,257.29 |
511.45 |
362.65 |
3941.78 |
19,472.45 |
15,530.67 |
MHIL increased its loan portfolio by Rs. 4,486.40 millions at Rs. 19,075.01 millions during the year. Total income for Financial Year 2018-19 stood at Rs. 2,257.29 millions as against previous year total income of Rs. 1170.61 millions. It achieved a profit after tax of Rs. 362.65 millions in Financial Year 2018-19 as against previous year profit of Rs. 222.56 millions.
c. Muthoot Insurance Brokers Private Limited:
Muthoot Insurance Brokers Private Limited (MIBPL), is an unlisted Private Limited Company holding a license to act as Direct Broker from Insurance Regulatory and Development Authority of India (1RDA) since 2013. MIBPL is
Wholly- Owned Subsidiary Company of your Company. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
251.16 |
215.45 |
150.46 |
426.62 |
446.05 |
19.42 |
MIBPL generated a First year premium collection amounting to Rs. 1,737.66 millions during Financial Year 2018-19 as against Rs. 1,106.53 in the previous year. It generated a Profit after Tax of Rs. 150.46 millions during Financial Year 2018-19 as against Rs. 105.39 millions in the previous year.
d. Belstar Investment and Finance Private Limited:
M/s. Belstar Investment and Finance Private Limited (B1FPL) is a micro finance Company. At end of the Financial Year 2018-19, your Company holds 70.01% of the equity capital of BIFPL. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
3,680.68 |
1,030.98 |
728.53 |
4,001.75 |
20,438.71 |
16,436.96 |
B1FPL grew its loan portfolio during Financial Year 2018-19 by 62% reaching Rs. 18,419.36 millions. It achieved a profit after tax of ? 728.53 millions during Financial Year 2018-19 as against previous year profit after tax of Rs. 270.50 millions. Its Stage 111 Asset on Gross Loan Asset % as on March 31, 2019 stood at 1.15%.
e. Muthoot Money Limited
M/s. Muthoot Money Ltd (MML), a registered Non-Banking Finance Company licensed by Reserve Bank of India is a subsidiary of your Company. During the Financial Year 2018-19, your Company acquired 100% of the equity capital making it wholly owned subsidiary. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
156.19 |
7.20 |
2.82 |
1,034.93 |
3,352.29 |
2,317.36 |
MML increased its loan portfolio by Rs. 3,042.69 millions at Rs. 3,107.49 millions during the year. Total income for Financial Year 2018-19 stood at Rs. 156.19 millions as against previous year total income of Rs. 11.15 millions It achieved a net profit of ? 2.83 millions in Financial Year 2018-19 as against previous year profit of Rs..2.37 millions
f. Muthoot Asset Management Private Limited
Your Company has incorporated a wholly owned subsidiary M/s. Muthoot Asset Management Private Limited which is yet to commence commercial operations. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in millions) |
8.27 |
3.27 |
2.23 |
512.23 |
513.71 |
1.47 |
g. Muthoot Trustee Private Limited
Your Company has incorporated a wholly owned subsidiary M/s. Muthoot Trustee Private Limited which is yet to commence commercial operations. Its major financial parameters for Financial Year 2018-19 are as follows:
Parameters |
Total Income |
Profit Before Tax |
Profit After Tax |
Equity |
Total Assets |
Total Outside Liabilities |
Amount in INR (in thousands) |
7.74 |
4.01 |
2.76 |
1,002.76 |
1,004.62 |
1.86 |
The statement containing the salient features of the financial statement of your Company's Subsidiaries is attached as Annexure to Standalone Financial Statements of the Company as required under Rule 5 of The Companies (Accounts) Rules 2014.
There are no other Companies which have become or ceased to be Subsidiaries/ Associates/ Joint Ventures of the Company during the Financial Year 2018-19.
15. Particulars of Loans, Guarantees or Investments Under Section 186 of The Companies Act, 2013
Pursuant to Section 186(11)(a) of the Companies Act, 2013 (the 'Act') read with Rule 11 (2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantee have not been disclosed in this Report. The details of the Investments of the Company are furnished under Note 8 of Notes forming part of the Standalone Financial Statements for the year ended March 31, 2019.
16. Extract of Annual Return
Extract of Annual Return as required under Companies Act, 2013 is annexed as Annexure 3.
17. Consolidated Financial Statements
The audited consolidated financial statements of the Company along with its subsidiaries AAF, MHIL, BIFPL, MML, MAMPL, MTPL and MIBPL prepared in accordance with the IndAS to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 , is provided in the Annual Report.
18. Risk Management and Risk Management Policy
Your Company has a Board approved Risk Management Policy which has laid down a framework for identifying, assessing, measuring various elements of risk involved in the business and formulation of procedures and systems for mitigating such risks.
Risk Management Committee of the Board of Directors of your Company constituted in accordance with the Reserve Bank of India guidelines has overall responsibility for overseeing the risk management activities of the Company, approving measurement methodologies and appropriate risk management procedures across the organization.
The Risk Management Committee comprises of:
Risk Management Department periodically places its report on risk management to the Risk Management and Audit Committee of the Board of Directors. During the year, your Company has incorporated various practices and suggestion as directed by the Risk Management and Audit Committee which helped the Company in attaining an improved vigilance and security system, improved security of gold jewellery and cash, improved system of grading of branches, Regional Offices etc. IT based risk management initiatives are discussed in section related to 'Technology Absorption' in this report of Board of Directors.
Your company has aligned function of Risk Management committee which was originally constituted under Reserve Bank of India guidelines to the requirements of SEB1 LODR 2015 as well. Your Board believes this will help company in more robust Risk Management system.
19. Corporate Social Responsibility
Your Board has constituted a Corporate Social Responsibility (CSR) & Business Responsibility Committee to support the Company in achieving the CSR objectives of the Company. The CSR and Business Responsibility Committee of the Board of Directors comprises of the following:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
Jose Mathew |
Chairman |
Independent Director |
John K Paul |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
George Joseph |
Chairman |
Independent Director |
Jose Mathew |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
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The Company's CSR policy is committed towards CSR activities as envisaged in Schedule Vll of the Companies Act, 2013. The Details of CSR policy of the Company are available on the website of the Company atwww.muthootfinance.com/policy/policy-investor. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached to this report as Annexure 4.
In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014 as amended ("CSR Rules") and in accordance with CSR Policy, during the year, the Company has spent Rs. 282.92 millions towards CSR projects/ programs.
20. Business Responsibility Report
The Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations,
2015 mandates the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on their market capitalization. The BRR is attached to this report as Annexure 5.
21. Particulars Of Contracts or Arrangements made with Related Parties
The Board of Directors of your Company has formulated a policy on related party transactions, which is displayed on the web site of the Company atwww.muthootfinance.com/policy/policy-investor. This policy deals with review of the related party transactions and regulates all transactions between the Company and its Related Parties.
Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at arm's length. All related party transactions are placed before the Audit Committee for review and approval.
All transactions or arrangements with related parties referred to in Section 188 (1) of the Act, entered into during the year were on arm's length basis or were in ordinary course of business or with approval of the Audit Committee. During the year, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Further, there were no material related party transactions which required approval of shareholders as required under Chapter IV of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is attached to this report as Annexure 6.
The details of related party and transactions with the related parties as required under chapter IV of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 appears on the Note no. 38 of the Notes forming part of the Standalone Financial Statements of the Company.
22. Audit Committee
The Audit Committee comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
George Joseph |
Chairman |
Independent Director |
John K Paul |
Member |
Independent Director |
Jose Mathew |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
All recommendations of Audit Committee are accepted by your Board and details on Audit committee appear on the report on Corporate Governance.
23. Vigil Mechanism
To conduct affairs of your Company and its various constituents in a fair and transparent manner and as part of Vigil Mechanism, and providing whistle blowers
a safe and reliable way of sharing information, your Company has formulated a Whistle Blower Policy in compliance with Companies Act, 2013 and SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is graded reporting structure under the Policy and also provides provision for direct access to Chairman of Audit Committee. The whistle blower policy is available at website of the Company at www.muthootfinance.com/policy/policy-investors.
24. Listing
Equity Shares of your Company are listed on National Stock Exchange of India Ltd. and BSE Ltd. Your company has paid required listing fees to Stock Exchanges.
25. Changes in Directors and Key Managerial Personnel
The term of Mr. George Joseph and Mr. John K Paul, as Independent Directors is getting completed at the ensuing 22nd Annual General Meeting and hence they are retiring at the Annual General Meeting this year.
Mr. K George John passed away following a brief illness on June 30, 2019. He was due to retire as Independent Director in forthcoming Annual General meeting to be held this year, after completion of his tenure. Board of Directors and employees of Muthoot Finance Limited pay respectful homage to the departed soul.
Mrs. Pamela Anna Mathew, Mr. Jose Mathew and Mr. Jacob Benjamin Koshy were appointed as Independent Directors and hence shall not be liable to retire by rotation.
Mr. M G George Muthoot, Whole- time Director and Mr. George Jacob Muthoot, Whole Time Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
On recommendation of Nomination and Remuneration committee, your Board has considered induction of three directors - Mr. Ravindra Pisharody, Mr. V A George and Mr. Pratip Chaudhuri in the Board as Independent Directors to be appointed by members in the ensuing 22nd Annual General Meeting. Board has recommended the re-appointment of Mr. Pratip Chaudhuri as Independent Director for a second term.
Mr. Ravindra Pisharody is a corporate business leader and management professional with over 35 years of experience across diverse industries. Currently, he is a Non- Executive Director on the Boards of 3 companies, and is an advisor to 2 other companies. He also undertakes Coaching and Mentoring assignments. Ravi is a graduate engineer from 11T Kharagpur and did his MBA from the Indian Institute of Management (11M), Calcutta. His expertise is in sales and marketing, as well as Business
Strategy. He has also been active in industry bodies- he has been a member of the Advertising Standards Council of India (ASCI), a council member and subsequently Chairman of the Audit Bureau of Circulation (ABC), and Vice President of the Society of Indian Automobiles Manufacturers (S1AM) in 2016-17. Your Board believes that his appointment will benefit your Company through his role as Independent Director.
Mr. V A George is a certified Director in Corporate Governance by INSEAD, Paris. He has more than 4 decades experience in the corporate world, both Public and Private sectors. He was the past Chairman of Equipment Leasing Association of India and also a Member of the Advisory Committee of Reserve Bank of India. Alumni of 1MD Lausanne and INSEAD France, Mr. V A George has participated in the Management Programmes of Business Schools of Harvard and Stanford. An Adjunct Faculty at Loyola Institute of Business Administration, Chennai and Rajagiri Business School, Kochi. Currently, Mr. V A George is the Managing Director of Thejo Engineering Limited, Chennai. Your Board believes his appointment will benefit the Company through his role as Independent Director.
Mr. Pratip Chaudhuri is the former Chairman of State Bank of India. He held several important positions during his 38 years career in SBI. Your Board believes his appointment will benefit the Company through his role as Independent Director.
After evaluating the eligibility criteria under Reserve Bank of India guidelines, Companies Act, 2013 and SEB1 LODR Regulations 2015, your Board recommends appointment of Mr. Ravindra Pisharody, Mr. V A George and Mr. Pratip Chaudhuri as Independent Directors of the Company. Detailed profile of proposed Directors as required under SEB1 LODR is annexed to the notice calling Annual General Meeting of members of the Company.
Mr George Alexander Muthoot was appointed as Managing Director for a period of 5 years with effect from 01.04.2015 and his present term is getting completed on March 31, 2020. Mr. George Alexander Muthoot is a Key contributor in overall Management of the Company. His vast experience and his association would be of immense benefit to the Company and it is desirable to continue to avail his services as Managing Director. Your Board believes his re- appointment will benefit the Company through his role as Managing Director.
Mr. M. G. George Muthoot, Mr. George Thomas Muthoot, Mr. George Jacob Muthoot were appointed as Whole Time Directors for a period of 5 years with effect from 01.04.2015 and their present term is getting completed on March 31, 2020. Mr. M. G. George Muthoot, Mr. George Thomas Muthoot and Mr. George Jacob Muthoot are Key contributors in overall Management of the Company. Their vast experience and their association would be of immense benefit to the Company and it is desirable to continue to avail their services as Whole-time Directors of the Company. The Board of Directors considers that their appointment as Whole Time Directors will be beneficial to the Company.
After evaluating the eligibility criteria under Reserve Bank of India guidelines, Companies Act, 2013 and SEB1 LODR Regulations 2015, your Board recommends re-appointment of George Alexander Muthoot as Managing Director and M G George Muthoot, George Jacob Muthoot and George Thomas Muthoot as Whole-time directors of the Company. Detailed profile of the above Directors is annexed to the notice calling Annual General Meeting of members of the Company.
26. Meeting of the Board
During the Financial Year 2018-19, your Board of Directors met Eight times on 16.05.2018, 30.06.2018, 30.07.2018,14.08.2018,04.09.2018,10.11.2018, 06.12.2018 and 06.02.2019.
27. Declaration from Independent Directors
The Independent Directors have submitted disclosure that they meet the criteria of independence as provided under Section 149(6) of Companies Act, 2013 and SEB1 Regulations. A statement by Managing Director confirming receipt of this declaration from Independent Directors is annexed to this report as Annexure 7.
28. Policy on Appointment and Remuneration Of Directors and Performance evaluation of Board, Committees and Directors
a) Policy on Appointment and Remuneration Of Directors Board of Directors of your Company, on recommendation of Nomination and Remuneration Committee, has formulated a policy for selection, appointment and remuneration of the directors, senior management personnel as required under Section 1 78(3) of Companies Act, 2013. Details of the said Policy is annexed to this report as Annexure 8.
The Nomination and Remuneration Committee which was reconstituted on April 05, 2019 comprises of the following directors:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
John K Paul |
Chairman |
Independent Director |
Jacob Benjamin Koshy |
Member |
Independent Director |
Jose Mathew |
Member |
Independent Director |
Terms of reference of trie Nomination and Remuneration Committee include the following:
1. Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with Criteria as laid down and recommend to Board their appointment and removal.
2. Ensure persons proposed to be appointed on the Board do not suffer any disqualifications for being appointed as a director under the Companies Act, 2013.
3. Ensure that the proposed appointees have given their consent in writing to the Company;
4. Review and carry out every Director's performance, the structure, size and composition including skills, knowledge and experience required of the Board compared to its current position and make recommendations to the Board with regard to any changes;
5. Plan for the succession planning for directors in the course of its work, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future;
6. Be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise;
7. Keep under review the leadership needs of the organization, both executive and non-executive, with a view to ensuring the continued ability of the organization to compete efficiently in the market place; and
8. Ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of committee services and involvement outside board meetings.
9. Determine and agree with the Board the framework for broad policies for criteria for determining qualifications, positive attitudes and independence of a director and recommend to the Board policies, relating to remuneration for the Directors, Key Managerial Personnel and other employees.
10. Review the on-going appropriateness and relevance of the remuneration policy.
11. Ensure that contractual terms of the agreement that Company enters into with Directors as part of their employment in the Company are fair to the individual and the Company.
12. Ensure that all provisions regarding disclosure of remuneration and Remuneration Policy as required under the Companies Act, 2013 or such other acts, rules, regulations or guidelines are complied with.
13. Formulate ESOP plans and decide on future grants.
14. Formulate terms and conditions for a suitable Employee Stock Option Scheme and to decide on followings under Employee Stock Option Schemes of the Company:
(i) the quantum of option to be granted under ESOP Scheme(s) per employee and in aggregate;
(ii) the condition under which option vested in employees may lapse in case of termination of employment for misconduct;
(iii) the exercise period within which the employee should exercise the option and that option would lapse on failure to exercise the option within the exercise period;
(iv) the specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee;
(v) the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period;
(vi) the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of rights issues, bonus issues and other corporate actions;
(vii) the grant, vest and exercise of option in case of employees who are on long leave; and
(viii) the procedure for cashless exercise of options.
15. Any other matter, which may be relevant for administration of ESOP Scheme including allotment of shares pursuant to exercise of options from time to time.
b) Performance evaluation of Board, Committees and Directors
The SEB1 (Listing Obligations and Disclosures Requirements) Regulations, 2015 and the Companies Act, 2013 require the evaluation of the performance of the Board, its Committees and the individual directors. The Board carried out annual evaluation of its own performance, its Committees and individual Directors based on criteria and framework adopted by trie Board and in accordance with existing regulations. The details of training, appointment, resignation and retirement of Directors, if any, are dealt with in the report of Corporate Governance. Brief details of profile of each Director appear in Annual Report of the Company.
c) Independent Directors Meeting
During the year, a meeting of Independent Directors was held as required under Companies Act, 2013 and in Compliance with requirement under Schedule IV of the Act and as per requirements of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and discussed matters specified therein.
29. Corporate Governance Report
Your Company has complied with the Corporate Governance norms as stipulated in Chapter IV of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per Regulation 34 of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Detailed report on Corporate Governance is attached to this Report as Annexure 9.
30. Management Discussion and Analysis Statement
Management Discussion and Analysis on the business of the Company is attached to this Report as Annexure 10.
31. Conservation of energy, technology absorption, foreign exchange earnings and outgo:
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is as follows:
a) Conservation of energy
Your Company being a Non-Banking Finance Company, its activities are not energy intensive. However, your Company has taken adequate measures for conservation of energy and usage of alternative source of energy, wherever required.
b) Technology Absorption
Your Company being a Non-Banking Finance Company, its activities do not require adoption of any specific technology. However, your Company has been in the forefront in implementing latest information technology and tools towards enhancing our customer convenience.
Few of the initiatives taken by the company in information technology for improved business efficiency, ease of operation, improved risk management practice and for providing best stakeholders experience based are as follows: Leveraging the power of information technology, we have been continuing our digital transformation initiatives across all areas of operations to provide better customer experience as also to increase our operational efficiency, control and productivity. The powerful Core Banking Solution (CBS) has been continually enhanced and seamlessly integrated with independent external systems through suitable APIs, enabling straight through processing for better service speed and accuracy of data. The large customer data being built through the CRM system has been churned to cross sell and upsell our varied products& services fine-tuned to suit the needs of the customer.
A number of user friendly mobile apps have been developed and deployed for the customers to access necessary information and doing transactions online on a 24 by 7 basis.
A few of our key digital initiatives focusing the customer convenience are given below.
a) iMuthoot Mobile App on Android and loS Platforms
The iMuthoot mobile App is testimony to our commitment to provide world-class products and services combined with cutting edge technology. Muthoot customers can login to iMuthoot App with their username and password. Customers who are not registered with may register a new account on the mobile app and avail all the features and functionalities available. Some of the services that can be availed from the iMuthoot App are: View Gold Loan details; Remit Interest and Principal repayments on loans; Online Gold Loan (OGL) facility to Withdraw / Top-up enhanced eligible amount and Renew loans. Useful information required by customers such as latest Gold Loan schemes, Gold Loan Calculator, Al powered Chatbot are made available. Helpline and FAQ are provided for clarifying customer queries Currently more than one million customers have downloaded the App and around 5 lakh customers have registered for availing of gold loan services through the iMuthoot channel.
b) Smart Eye
Securing large amount of gold in the remote Branches has been a challenge where we have been exploring the latest technology tools and advances continually. Smart Eye application software has been developed and implemented for this which will enable effective surveillance management centrally and cost effectively too.
The system is facilitated with a Dashboard that displays the health of all the DVRs connected at the branches of the Company. The health of the DVRs is continuously monitored every 5 seconds automatically by the system.
c) API Integrations with Service Providers and Business Verticals
AP1 integration has been enabled in Core Banking Solution during last year for Gold Loan disbursement with MFIN Associated Banks Outward Remittance & Inward Remittance API's, International Money Transfers, Domestic Money Transfers, Health Insurance, Vehicle Insurance, Traditional Insurance Products, etc.
d) Virtual Bank Account for Gold Loans
This facilitates customers to remit their Gold Loan repayments through various payment channels such as IMPS, NEFT, RTGS etc with their Virtual bank account number provided in the Gold Loan pledge form.
e) Online Gold Loan (OGL) Integration with C-DAC & NSDL eSign Functionality OGL has been enabled for 24x7 availability for all Gold Loan customers through iMuthoot Mobile App and Muthoot Online portal. Customers can map their Bank Accounts to their Gold Loan Account without visiting MFIN Branches using more secured Aadhaar enabled eSign from NSDL.
f) Internal Credit Rating platform
The existing CBS computing engine has been enhanced to generate Credit Scores of customers. Accordingly, the system can also allocate loyalty points to the customers.
g) Mobile App Development
The inhouse Mobile App development team has been developing various Apps in both in Android and loS platforms for B2C and B2E Enterprise Mobility Platforms and internal process automations. A few of the features of the Apps are given below.
Map Me 2: App is used to GeoCoding the entire Branches/Offices across India.
iMSecure: The application recognizes the existing customer of the branch there by reducing the fraudulent activities by the visitors. The security person who has been appointed should have a mobile app to verify the contact number of the customer with photo who comes to the branch.
SaleslNxt-Sales App: Application for Muthoot Finance loan sales team for generating instant leads. Sale team can create lead/ Customer through this app and follow-up it.
iMCollect -EMI collections ( Personal Loan):
Mobile application for personal loan Emi collection integrated with PL - Loan Management System ( LMS) .Collection agent need to remit money at branch before EOD.
h) Loan@Home for Customer/Enterprise
This provides flexibility to the customer to avail of gold loan without visiting a branch.
i) Data Loss/Leakage Prevention
With the growth in business and competition seen in the industry, we need to have a robust information security system in place to prevent any critical data loss/ leakage. DLP has been successfully rolled out for all our controlling offices and have enabled policies. The DLP support team do continuous monitoring of the connected systems so as to prevent leakage of data.
c) Total Foreign Exchange Earned : Nil
Total Foreign Exchange Used : Rs. 0.86 millions
32. Audits
a) Statutory Audit under section 139
On recommendation of Board of Directors of the Company, members of the Company appointed M/s. Varma & Varma, Chartered Accountants, Kochi (Firm Reg No. 004532 S) as Statutory Auditor of the Company at the 20th Annual General Meeting of the Company for a term of 5 consecutive years i.e. till the conclusion of 25th Annual General Meeting pursuant to Section 139 of the Companies Act, 2013.
Pursuant to notification issued by the Ministry of Corporate Affairs on May 07, 2018, amending section 139 of the Companies Act 2013, the mandatory requirements for ratification of appointment of auditors by the members at every AGM does not arise.
The Company has received a certificate from the above Auditors to the effect that they are eligible to continue as Auditors in accordance with the provisions of Section 141 of the Companies Act, 2013.
The Report given by M/s. Varma & Varma, Chartered Accountants, Statutory Auditors, on the financial statement of the Company for the year 2018-19 is part of the Annual Report.
b) Secretarial Audit under Section 204
The Board had appointed M/s KSR & Co., Company Secretaries LLP, Coimbatore to conduct Secretarial Audit for the Financial Year 2018-19. The Secretarial Audit report is annexed to this report as Annexure 11.
c) Explanations or comments by the Board on qualification, reservation or adverse remark or disclaimer on audits for financial year 2018-19
There are no qualifications, reservations or adverse remark or disclaimer on audits under section 139 and section 204 of Companies Act, 2013 except in one instance observation made in the Secretarial Audit Report relating to non-filing of Form MGT-14. The management has decided to file condonation of delay in this matter.
33 Reporting on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Internal Complaints Committee constituted by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 looks into the complaints of aggrieved women employees, if any, and is instrumental in:
⢠promoting gender equality and justice and the universally recognized human right to work with dignity
⢠prevention of sexual harassment of women at the workplace
There were 3 reported cases of sexual harassment in FY 2018-19, wherein lady officials had complained against harassment by the official in their Branch/Region. Action taken was prompt following investigation by the Internal Complaints Committee. Evidence was examined and the erring officials were heard. Where substance was found in the complaints, a Report was sent to HRD Department. Disciplinary action was initiated promptly based on the Report, against the officials concerned and disciplinary procedures were completed speedily.
34. Personnel
The Disclosure required under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure 12.
35. Significant and material Orders passed by Regulators or Courts or Tribunals
There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of your Company and its future operations.
36. Material Changes and Commitments affecting the financial position of the Company between the end of the financial year to which Financial Statements relate and the date of the report
No material changes and commitments affecting the financial position of your Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
37. Directors' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 with regard to Director's Responsibility Statement, Directors state that: â
(a) in the preparation of the annual accounts, the applicable Indian Accounting Standards had been followed . There are no material departures from applicable Indian Accounting Standards;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
38. Disclosure pursuant to Part A of Schedule V of SEB1 LODR
Disclosure pursuant to Part A of Schedule V read with Regulation 34(3) and 53(f) of SEB1 is attached as Annexure 13 of this report.
39. Acknowledgement
Your Directors thank the Company's stakeholders in large including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees of your Company and its subsidiaries at all levels.
Your Company's consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India, Securities and Exchange Board of India and Ministry of Corporate Affairs for the guidance and support received from them including officials there at from time to time.
40. Forward Looking Statements
This Report(s) contains certain forward-looking statements within the provisions of Listing agreements and hence reasonable caution is to be exercised by stakeholders while relying on these statements.
For and on behalf of the Board of Directors |
|
Sd/- |
Sd/- |
M.G. George Muthoot |
George Alexander Muthoot |
Chairman |
Managing Director |
Place: Kochi |
 |
Date: 12th August, 2019 |
 |
Registered Office: 2nd Floor, Muthoot Chambers, Opposite Saritha Theatre Complex, Banerji Road, Kochi -682018 |
 |
Annexure-1
MUTHOOT FINANCE LTD
 Policy for Distribution of Dividends
[Pursuant to Regulation 43A of the SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015]
The Policy for Distribution of Dividends shall come into effect from the date it is approved by the Board of Directors.
The Policy is being framed in compliance with the requirement stipulated under Regulation 43A of the SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) for distribution of dividends, based on the following parameters:
Objective
This Policy intents to create a framework for deciding distribution of profits created by the Company as dividend to its equity shareholders.
Timing of Dividend Declaration
The Board of Directors may declare one or more interim dividends any time during the financial year. The Board may recommend final dividend after approval of the audited financial statements by the Board and will be paid after approval of shareholders in the Annual General Meeting. Board will consider Financial and other parameters stated in the policy for declaring both interim dividend and also for recommending final dividend.
Financial Parameters to be Considered while Declaring Dividend
1. The Board of Directors may declare dividend after considering various financial parameters. Financial parameter will include but not limited to profit for the period, availability and need of liquidity in the Company, Capital to Risk Assets Ratio, Leverage ratio, Net Interest Margin , Operating Expenses Ratio , Return on Assets , requirement of maintaining reserves including statutory reserves prescribed by various regulators such as Debenture redemption reserve, fund requirement for future expansion etc.
2. Dividends shall generally be declared out of the Standalone Profit After Tax of the Company relating to the current financial year, subject to any other regulatory provisions that may be introduced from time to time. The consolidated performance will be not considered for declaration or recommendation of dividend.
3. The Board will generally endeavour to maintain an even dividend per share every year but this shall be subject to review by Board on various parameters including financial parameters at the time of declaration or recommendation of dividend.
Internal and External Factors to be Considered for Declaration of Dividend
The factors, internal and external, to be considered by the Board, for determining the declaration of dividend, will include the following:
a) Internal Factors
⢠Business growth
⢠Yield on Loans
⢠Cost of Borrowing
⢠Operating Expenses
⢠Quality of assets and NPA
⢠Profitability of the Company
⢠Asset-Liability Management Position
⢠Ability to raise or availability of Debt capital
⢠Future fund requirements in business
⢠Carried forward balance in P & L account
⢠Accumulated reserves
b) External Factors
⢠Macro-economic environment
⢠Overall retail credit growth in the economy.
⢠Liquidity position in the economy
⢠Performance and Outlook of the Gold Loan sector
⢠Monetary policy of Reserve Bank Of India
⢠Changes in government policies
⢠Regulatory changes
⢠Change in tax structure applicable on dividend both for the Company as well as Shareholders.
Circumstances Under Which The Shareholders Of The Company May Or May Not Expect Dividends
Shareholders of the Company may not expect declaration of dividend in below mentioned circumstances-
i) Expectation of growth opportunity in the existing business and capital is required to be conserved for meeting the growth
ii) In the event of an opportunity for acquisition and/or strategic investment in existing lines of business or new business where company may be required to allocate capital
iii) In the event of requirement of working capital in business
iv) In the event of inadequacy of cashflow available for distribution of dividend
v) In the event of absence or inadequacy of profits
Policy Guidelines on Utilization of the Retained Earnings
The retained earnings of the Company may be used, inter alia, for one or more of the following purposes:
i) Business Growth ;
ii) Capital expenditure;
iii) Working capital requirements;
iv) Acquisition of businesses/entities including new lines of business
v) Declaration of dividend vi) Buyback of shares
vii) Issue of Bonus Shares
viii) Investment in new lines of business
ix) Repayment of debt;
x) Meeting contingency plans; and
xi) Any other purpose as may be permitted by law
Parameters to be Adopted with Regard to Various Classes of Shares
Company has only one class of equity shares and hence there will be no differential treatment in dividend.
Review
The Board shall have right to modify or amend any or all of the clauses of this policy in accordance with the provisions of the applicable laws. In case of any change in applicable laws which make any of the clauses or provisions of this policy inconsistent with changes then such changes will prevail over this policy and policy shall deemed to be amended accordingly from the date of effect of change in applicable laws.
Disclosures
The Company shall make necessary disclosures in compliance with the provisions of the Listing Regulations, in particular disclosures required in Annual Report and website of the Company.
In case, Company proposes to declare dividend on the basis of parameters in addition those specified under this policy or proposes to change such additional parameters, it shall disclose such changes along with rationale for the same in its annual report and on its website.
Disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as at March 31, 2019.
 |
ESOP 2013- Tranche 1 |
ESOP 2013 -Tranche 2 |
ESOP 2013 -Tranche 3 |
|||||
Particulars |
Loyalty |
Grant A |
Grant B |
Loyalty |
Grant A |
Grant B |
Grant A |
|
1 |
Date of shareholder's approval |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
2 |
Number of options granted |
1,571,075 |
3,711,200 |
1,706,700 |
6,100 |
456,000 |
380,900 |
325,000 |
3 |
Exercise price (Rs.) |
10/- |
50/- |
50/- |
10/- |
50/- |
50/- |
50/- |
4 |
Source of shares |
Primary |
Primary |
Primary |
Primary |
Primary |
Primary |
Primary |
5 |
Vesting period |
1 -2 years |
1 -5 years |
2-6 years |
1 -2 years |
1 -5 years |
2-6 years |
1 -5 years |
6 |
Vesting requirements |
In a graded manner over a 2 year period with 50% vesting at the end of 1 2 months from the date of grant and the remaining 50% of the grants vesting at the end of 24 months from the date of grant |
In a graded manner over a 5 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 12 months from the date of grant |
In a graded manner over a 6 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 24 months from the date of grant |
In a graded manner over a 2 year period with 50% vesting at the end of 1 2 months from the date of grant and the remaining 50% of the grants vesting at the end of 24 months from the date of grant |
In a graded manner over a 5 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 12 months from the date of grant |
In a graded manner over a 6 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 24 months from the date of grant |
In a graded manner over a 5 year period with 10%, 15%, 20%, 25% and 30% of the grants vesting in each year commencing from the end of 12 months from the date of grant |
7 |
Options outstanding at the beginning of the year |
17,662 |
438,600 |
136,395 |
- |
159,865 |
48,200 |
223,750 |
8 |
Options granted during the year |
- |
- |
- |
- |
- |
 |
 |
9 |
Options exercised during the year |
4,400 |
352,380 |
48,490 |
- |
70,505 |
8,755 |
70,000 |
10 |
Number of shares arising as a result of |
4,400 |
352,380 |
48,490 |
 |
70,505 |
8,755 |
70,000 |
 |
exercise of option |
 |
 |
 |
 |
 |
 |
 |
11 |
Options vested during the year |
 |
396,210 |
55,700 |
 |
70,525 |
11,660 |
81,250 |
12 |
Forfeited/Lapsed during the year |
13,262 |
39,170 |
25,945 |
 |
2,150 |
8,870 |
- |
13 |
Options outstanding at the end of the year |
- |
47,050 |
61,960 |
- |
87,210 |
30,575 |
153,750 |
14 |
Options exercisable |
- |
47,050 |
8,530 |
- |
5,640 |
5,715 |
56,250 |
15 |
Money realised by exercise of options (Rs |
44,000/- |
17,619,000/- |
2,424,500/- |
 |
3,525,250/- |
437, 750/- |
3,500,000/- |
Â
Particulars |
ESOP 2013 -Tranche 4 |
ESOP 2013 -Tranche 5 |
|||||
Loyalty |
Grant A |
Grant B |
Loyalty |
Grant A |
Grant B |
||
1 |
Date of shareholders approval |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
27.09.2013 |
2 |
Number of options granted |
8,150 |
390,400 |
728,300 |
1,150 |
248,200 |
342,900 |
3 |
Exercise price (?) |
10/- |
50/- |
50/- |
10/- |
50/- |
50/- |
4 |
Source of shares |
Primary |
Primary |
Primary |
Primary |
Primary |
Primary |
5 |
Vesting period |
1 -2 years |
1 -5 years |
2-6 years |
1 -2 years |
1 -5 years |
2-6 years |
6 |
Vesting requirements |
In a graded manner over a 2 year period with 50% vesting at the end of 12 months from the date of grant and the remaining 50% of the grants vesting at the end of 24 months from the date of grant |
In a graded manner over a 5 year period with 10%,15%,20%, 25% and 30% of the grants vesting in each year commencing from the end of 12 months from the date of grant |
In a graded manner over a 6 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 24 months from the date of grant |
In a graded manner over a 2 year period with 50% vesting at the end of 12 months from the date of grant and the remaining 50% of the grants vesting at the end of 24 months from the date of grant |
In a graded manner over a 5 year period with 10%,15%,20%,25% and 30% of the grants vesting in each year commencing from the end of 12 months from the date of grant |
In a graded manner over a 6 year period with )10%, 15%, 20%, 25% and 30% of the grants vesting in each year commencing from the end of 24 months from the date of grant |
7 |
Options outstanding at the beginning of the year |
4,087 |
254,220 |
330,300 |
1,150.00 |
226,100.00 |
231,000.00 |
8 |
Options granted during the year |
- |
- |
- |
- |
 |
 |
9 |
Options exercised during the year |
2,512 |
32,890 |
11,180 |
375 |
18,590 |
 |
10 |
Number of shares arising as a result of exercise of option |
2,512 |
32,890 |
11,180 |
375 |
18,590 |
 |
11 |
Options vested during the year |
3,262 |
41,145 |
33,030 |
575 |
22,610 |
- |
12 |
Forfeited/Lapsed during the year |
200 |
32,085 |
145,890 |
- |
8,610 |
64,900 |
13 |
Options outstanding at the end of the year |
1,375 |
189,245 |
173,230 |
775 |
198,900 |
166,100 |
14 |
Options exercisable |
1,375 |
9,620 |
7,990 |
200 |
3,510 |
- |
15 |
Money realised by exercise of options (?) |
25,120/- |
1 ,644,500/- |
559,000.00 |
3,750.00 |
929,500.00 |
- |
Annexure- 2
Other details are as under :- |
||||
16 |
Directors and Employees to whom options were granted during the year :- |
 |
 |
 |
 |
i) Director(s) including Managing Director and Senior Managerial personnel |
Nil |
 |
 |
 |
ii) Other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year |
None |
 |
 |
 |
iii) Identified employees who were granted option during the year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant |
None |
 |
 |
17 |
Variations of terms of Options |
Nil |
 |
 |
18 |
Diluted Earnings Per Share (EPS) |
Rs.49.18/- per Share |
 |
 |
19 |
i) Method of calculation of employee compensation cost |
Fair value method |
 |
 |
 |
ii) Difference between the employee compensation and cost so computed at i) above and the employee compensation cost that shall have been recognised if it had used the fair value of the options |
Not Applicable |
 |
 |
 |
iii) The impact of this difference on profits and on EPS of the company |
Not Applicable |
 |
 |
20 |
Weighted Average exercise price of options whose:- |
Loyalty |
Grant A |
Grant B |
 |
i) Exercise price either equals market price (?) or |
Nil |
Nil |
Nil |
 |
ii) Exercise price greater than market price (?) or |
Nil |
Nil |
Nil |
 |
iii) Exercise price less than market price (?) |
10/- |
50/- |
50/- |
21 |
Weighted Average fair price of options whose:- |
Loyalty |
Grant A |
Grant B |
 |
i) Exercise price either equals market price (?) or |
Nil |
Nil |
Nil |
 |
ii) Exercise price greater than market price (?) or |
Nil |
Nil |
Nil |
 |
iii) Exercise price less than market price (?) |
 |
 |
 |
 |
Tranche 1 |
100.33/- |
70.95/- |
71.20/- |
 |
Tranche 2 |
164.23/- |
128.48/- |
126.92/- |
 |
Tranche 3 |
NA |
159.37/- |
NA |
 |
Tranche 4 |
259.93/- |
220.05/- |
217.46/- |
 |
Tranche 5 |
449.68/- |
409.38/- |
406.32/- |
Impact of fair value method on net profit and on EPS :-
Particulars |
As at 31.03.2019 |
Net Profit as reported (Rs. In lacs) |
197,285.88 |
Proforma Net Profit based on fair value approach (Rs. In lacs) |
197,285.88 |
Basic EPS as reported (?) |
49.27/- per Share |
Basic EPS ( Proforma) (Rs) |
49.27/- per Share |
Diluted EPS as reported (?) |
49.18/-per Share |
Diluted EPS ( Proforma) (Rs.) |
49.18/- per Share |
In computing the above information, certain estimates and assumptions have been made by the management which has been relied upon by the auditors.
22 Description of the method and significant assumptions used to estimate fair value: -
The Securities Exchange Board of India (SEB1) has prescribed two methods to account for employee stock options; (1)the intrinsic value method; (2) the fair value method. The company adopts the fair value method to account for the stock options it grants to the employees. Intrinsic value is the amount, by which the quoted closing market price of the underlying shares as on the date of grant exceeds the exercise price of the option. The fair value of the option is estimated on the date of grant using Black Scholes options pricing model with following assumptions:-
 |
Year ended 31-03-2019 |
||||||
Particulars |
ESOP 2013- Tranche 1 |
ESOP 2013 -Tranche 2 |
ESOP 2013-Tranche 3 |
||||
 |
Loyalty option |
Grant A |
Grant B |
Loyalty option |
Grant A |
Grant B |
Grant A |
i) Exercise Price per share (?) |
10/- |
50/- |
50/- |
10/- |
50/- |
50/- |
50/- |
ii) Vesting Period (Years) |
1-2 |
1-5 |
2-6 |
1-2 |
1-5 |
2-6 |
1-5 |
iii) Price of Share in market at the time of Grant of options (?) |
117.30/- |
117.30/- |
117.30/- |
184.30/- |
184.30/- |
184.30/- |
219.05 |
iv) Weighted Average fair price of options (?) |
100.33/- |
70.95/- |
71.20/- |
164.23/- |
128.48/- |
126.92/- |
159.37/- |
v) Expected Volatility (%) |
57.68 |
57.68 |
57.68 |
53.96 |
53.96 |
53.96 |
34.5 |
vi) Expected Life of the options granted ( years ) |
1.5-2.5 |
1.5-5.5 |
2.5-6.5 |
1.5-2.5 |
1.5-5.5 |
2.5-6.5 |
1.5-5.5 |
vii) Weighted Average Contractual Life of the options granted ( years ) |
2 |
4 |
5 |
2 |
4 |
5 |
4 |
viii) Average Risk Eree Interest rate (% p.a ) |
8.4-8.45 |
8.4-8.8 |
8.4-8.95 |
8.32-8.35 |
8.26-8.35 |
8.24-8.32 |
7.45-7.60 |
ix) Expected Dividend Yield (%) |
3.84 |
3.84 |
3.84 |
3.26 |
3.26 |
3.26 |
2.74 |
 |
 |
||||||
 |
 |
Year ended 31-03-2019 |
|||||
Particulars |
 |
ESOP 2013 -Tranche 4 |
ESOP 2013 |
- Tranche 5 |
|||
 |
 |
Loyalty option |
Grant A |
Grant B |
Loyalty option |
Grant A |
Grant B |
i) Exercise Price per share (?) |
 |
10/- |
50/- |
50/- |
10/- |
50/- |
50/- |
ii) Vesting Period (Years) |
 |
1-2 |
1-5 |
2-6 |
1-2 |
1-5 |
2-6 |
iii) Price of Share in market at the time of Grant of options (?) |
 |
280.35/- |
280.35/- |
280.35/- |
473/- |
473/- |
473/- |
iv) Weighted Average fair price of options (?) |
 |
259.93/- |
220.05/- |
217.46/- |
449.68/- |
409.38/- |
406.32/- |
v) Expected Volatility (%) |
 |
36.98 |
36.98 |
36.98 |
40.24 |
40.24 |
40.24 |
vi) Expected Life of the options granted ( years ) |
 |
1.5-2.5 |
1.5-5.5 |
2.5-6.5 |
1.5-2.5 |
1.5-5.5 |
2.5-6.5 |
vii) Weighted Average Contractual Life of the options granted (years) |
 |
2 |
4 |
5 |
2 |
5 |
6 |
viii) Average Risk Eree Interest rate (% p.a ) |
 |
6.91-7.08 |
6.91-7.41 |
7.08-7.47 |
6.16-6.27 |
6.16-6.59 |
6.27-6.67 |
ix) Expected Dividend Yield (%) |
 |
2.14 |
2.14 |
2.14 |
1.27 |
1.27 |
1.27 |
Annexure- 3
FORM NO. MGT 9
Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Company (Management and Administration ) Rules, 2014.
Extract of Annual Return as on the Financial Year ended on 31st March, 2019
1 |
Registration and other Details: |
 |
i |
C1N : |
L65910KL1997PLC011300 |
ii |
Registration Date : |
14/03/1997 |
iii |
Name of the Company : |
MUTHOOT FINANCE LIMITED |
iv |
Category/ Sub-Category of the Company : |
Company Limited by Shares/ Non-govt company |
V |
Address of the Registered office & contact details |
 |
 |
Address : |
2nd Floor, Muthoot Chambers, Opposite Saritha Theatre Complex, Banerji Road |
 |
Town / City : |
Ernakulam -682018 |
 |
State : |
Kerala |
 |
Country Name : |
India |
 |
Telephone (with STD Code) : |
0484-2394712 |
 |
Fax Number : |
0484 2396506 |
 |
Email Address : |
|
 |
Website, if any: |
www.muthootfinance.com |
vi |
Whether listed company: |
Yes |
vii |
Name and Address of Registrar & Transfer Agents ( RTA ):- |
 |
 |
Name of RTA: |
LINK INTIME INDIA PRIVATE LIMITED |
 |
Address : |
Surya 35, Mayflower Avenue, Behind Senthil Nagar, Sowripalayam Road |
 |
Town /City : |
Coimbatore |
 |
State : |
Tamil Nadu |
 |
Pin Code: |
641028 |
 |
Telephone : |
0422 2314792 |
 |
Fax Number : |
0422 2314792 |
 |
Email Address : |
11. Principal Business Activity of the Company
All the business activities contributing 10 % or more of the total turnover of the company shall be stated :-
SI.No. |
Name and Description of main products / services |
NIC Code of the Product / service |
% to total turnover of the company |
1 |
Loan (Financing) against collateral of Gold Jewellery |
64-649 |
97.32% |
111. Particulars of Holding, Subsidiary and Associate Companies -
No. of Companies for which information is being filled 7
SI.No. |
NAME AND ADDRESS OF THE COMPANY |
C1N/GLN |
Holding/ Subsidiary / Associate |
% of shares held |
Applicable Section |
1 |
ASIA ASSET FINANCE PLC No.76/1, Dharmapala Mawatha, Colombo 03, Sri Lanka |
NA |
FOREIGN SUBSIDIARY |
69.1 7% |
Section 2(87) |
2 |
MUTHOOT HOMEF1N (INDIA) LIMITED, Muthoot Chambers, Kurians Tower, Banerji Road, Ernakulam, Kerala -682018, India |
U65922KL2011PLC029231 |
SUBSIDIARY |
100% |
Section 2(87) |
3 |
MUTHOOT INSURANCE BROKERS PRIVATE LIMITED, 3rd Floor, Muthoot Chambers, Kurians Tower, Banerji Road, Ernakulam, Kerala - 682018, India |
U67200KL2002PTC015200 |
SUBSIDIARY |
100% |
Section 2(87) |
4 |
MUTHOOT MONEY LIMITED, 41 4108 A 18 OPP Saritha Theatre Banerji Road, Ernakulam Kerala- 682018, India |
U65910KL1994PTC008454 |
SUBSIDIARY |
100% |
Section 2(87) |
5 |
MUTHOOT TRUSTEE PRIVATE LIMITED 206, 2ND FLOOR, SABAR1 SAMR1DDH1, MA1TR1 PARK, ST. BUS STAND, S T ROAD, CHEMBUR, MUMBA1, Mumbai City MH 400071 India |
U67100MH2019PTC320254 |
SUBSIDIARY |
100% |
Section 2(87) |
6 |
MUTHOOT ASSET MANAGEMENT PRIVATE LIMITED 206, 2ND FLOOR, SABAR1 SAMR1DDH1, MA1TR1 PARK, ST. BUS STAND, S T ROAD, CHEMBUR, MUMBAI, Mumbai City MH 400071 India. |
U65990MH2019PTC319547 |
SUBSIDIARY |
100% |
Section 2(87) |
7 |
BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED, New No. 33, Old No. 14, 48th Street, 9th Avenue, Ashok Nagar, Chennai, Tamil Nadu - 600083, India |
U06599TN1988PTC081652 |
SUBSIDIARY |
70.01% |
Section 2(87) |
IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
i. Category-wise Share Holding
Category of Shareholders |
No. of Shares held at the beginning of the year |
No. of Shares held at the end of the year |
% Change during the year |
||||||
Demat |
Physical |
Total |
% of Total Shares |
Denial |
Physical |
Total |
% of Tolal Shares |
||
A. Promoters |
|||||||||
(1) Indian |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) Individual/ HUF |
294463872 |
0 |
294463872 |
73.608% |
294463872 |
0 |
294463872 |
73.494% |
-0.114% |
b) Central Govt |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
c) State Govt(s) |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
d) Bodies Corp. |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
e) Banks / Fl |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
f) Any other |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
Sub Total (A)(1) |
294463872 |
0 |
294463872 |
73.608% |
294463872 |
0 |
294463872 |
73.494% |
-0.114% |
(2) Foreign |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) NRl - Individual |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
b) Other - Individual |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
c) Bodies Corp. |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
d) Banks / Fl |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
e) Any Others |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
Sub Total (A)(2) |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
Total shareholding of Promoter (A) = (A) (1) + (A) (2) |
294463872 |
0 |
294463872 |
73.608% |
294463872 |
0.00 |
294463872 |
73.494% |
-0.114% |
Annexure- 3
Category of Shareholders |
No. of Shares held at the beginning of the year |
No. of Shares held at the end of the year |
% Change during the year |
||||||
Demat |
Physical |
Total |
% of Total Shares |
Demat |
Physical |
Total |
% of Total Shares |
||
B. Public Shareholding |
 |
 |
 |
 |
 |
 |
 |
 |
 |
1. Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) Mutual Funds |
41549925 |
0 |
41549925 |
10.386% |
37473648 |
0 |
37473648 |
9.353% |
-1.033% |
b) Banks / Fl |
35206 |
0 |
35206 |
0.009% |
61169 |
0 |
61169 |
0.015% |
0.006% |
c) Centra] Govt |
400546 |
0 |
400546 |
0.100% |
0 |
0 |
0 |
0.000% |
-0.100% |
d) State Govt(s) |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
e) Venture Capita] Funds |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
f) Insurance Companies |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
g) Foreign institutional Investors/ Foreign Portfolio Investor/ Foreign Companies |
44395155 |
0 |
44395155 |
11.098% |
49496330 |
0 |
49496330 |
12.354% |
1.256% |
h) Foreign Venture Capital Funds |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
i) Others (specify) |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
i) Alternate Investment Funds |
1661809 |
0 |
1661809 |
0.415% |
1825339 |
0 |
1825339 |
0.456% |
0.041% |
Sub-total (B)(1) |
88042641 |
0 |
88042641 |
22.008% |
88856486 |
0 |
88856486 |
22.178% |
0.170% |
2. Non-Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
a) Bodies Corp. |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Indian |
2900759 |
0 |
2900759 |
0.725% |
2776719 |
0 |
2776719 |
0.693% |
-0.032% |
ii) Overseas |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
b) Individuals |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Individual shareholders holding nominal share capital upto Rs. 1 lakh |
8183412 |
142 |
8183554 |
2.046% |
7366530 |
142 |
7366672 |
1.839% |
-0.207% |
ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh |
4944584 |
0 |
4944584 |
1.236% |
5449784 |
0 |
5449784 |
1.360% |
0.124% |
c) Others (specify) |
 |
 |
 |
 |
 |
 |
 |
 |
 |
i) Trusts |
27555 |
0 |
27555 |
0.007% |
25220 |
0 |
25220 |
0.006% |
-0.001% |
iii) Non Resident Indians (Non Repat) |
253733 |
0 |
253733 |
0.063% |
281741 |
0 |
281741 |
0.070% |
0.007% |
iv) Non Resident Indians (Repat) |
379209 |
0 |
379209 |
0.095% |
330839 |
0 |
330839 |
0.083% |
-0.012% |
v) Clearing Member |
513116 |
0 |
513116 |
0.128% |
898764 |
0 |
898764 |
0.224% |
0.096% |
vi) Hindu Undivided Family |
328174 |
0 |
328174 |
0.082% |
207896 |
0 |
207896 |
0.052% |
-0.030% |
vii) Foreign Nationals |
4042 |
0 |
4042 |
0.001% |
3323 |
0 |
3323 |
0.001% |
0.000% |
viii) Foreign Portfolio Investor (Individual) |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
ix) Foreign Companies |
0 |
0 |
0 |
0.000% |
0 |
0 |
0 |
0.000% |
0.000% |
Sub-total (B)(2) |
17534584 |
142 |
17534726 |
4.383% |
17340816 |
142 |
17340958 |
4.328% |
-0.055% |
Total Public Shareholding (B)=(B)(1) + (B)(2) |
105577225 |
142 |
105577367 |
26.391% |
106197302 |
142 |
106197444 |
26.506% |
0.115% |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
C. Shares held by Custodian for GDRs & ADRs |
0 |
0 |
0 |
0.000% |
0.00 |
0 |
0 |
0.000% |
0.000% |
Grand Total (A+B+C) |
400041097 |
142 |
400041239 |
100% |
400661174 |
142 |
400661316 |
100% |
- |
ii Shareholding of Promoters
 |
 |
Shareholding at the beginning of the year 01.04.2018 |
Share holding at the end of the year 31.03.2019 |
% change in share holding during the year |
||||
SINo. |
Shareholder's Name |
No. of Shares |
% of total Shares of the company |
% of Shares Pledged / encumbered to total shares |
No. of Shares |
% of total Shares of the company |
% of Shares Pledged / encumbered to total shares |
|
1 |
M G George Muthoot |
46551632 |
11.637% |
0.000% |
46551632 |
11.619% |
0 |
-0.018% |
2 |
George Alexander Muthoot |
43630900 |
10.907% |
0.000% |
43630900 |
10.890% |
0 |
-0.017% |
3 |
George Jacob Muthoot |
43630900 |
10.907% |
0.000% |
43630900 |
10.890% |
0 |
-0.017% |
4 |
George Thomas Muthoot |
43630900 |
10.907% |
0.000% |
43630900 |
10.890% |
0 |
-0.017% |
 |
TOTAL |
177444332 |
44.358% |
0.000% |
177444332 |
44.289% |
0 |
-0.069% |
iii Change in Promoters' Shareholding
There are no changes in the Promoters' shareholding during the Financial Year 2018-19. The percentage change in the Promoters holding as on 31/03/2019 is due to increase in the paid up share capital of the Company.
iv Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
 |
Shareholding at the beginning of the year |
 |
Increase/ Decrease in shareholding |
 |
Cumulative Shareholding during of the year |
||
Sl. No. Shareholder's Name |
No. of shares at beginning of year |
% of total shares of the company at beginning of year |
Date |
Reason |
No. of shares |
% of total shares of the company |
|
1 RELIANCE CAPITAL TRUSTEE COMPANY LIMITED A/C RELIANCE GROWTH FUND |
11950677 |
2.9827 |
01 Apr 2018 |
 |
 |
11950677 |
2.9827 |
 |
 |
06 Apr 2018 |
(12) |
 |
11950665 |
2.9827 |
|
 |
 |
20 Apr 2018 |
(8) |
 |
11950657 |
2.9827 |
|
 |
 |
 |
27 Apr 2018 |
9000 |
 |
11959657 |
2.9850 |
 |
 |
 |
04 May 2018 |
(9000) |
 |
11950657 |
2.9827 |
 |
 |
 |
11 May 2018 |
139457 |
 |
12090114 |
3.0175 |
 |
 |
 |
18 May 2018 |
55730 |
 |
12145844 |
3.0314 |
 |
 |
 |
25 May 2018 |
32025 |
 |
12177869 |
3.0394 |
 |
 |
 |
01 Jun 2018 |
63338 |
 |
12241207 |
3.0553 |
 |
 |
 |
08 Jun 2018 |
265571 |
 |
12506778 |
3.1215 |
 |
 |
 |
15 Jun 2018 |
765025 |
 |
13271803 |
3.3125 |
 |
 |
 |
22 Jun 2018 |
(98100) |
 |
13173703 |
3.2880 |
 |
 |
 |
30 Jun 2018 |
(350723) |
 |
12822980 |
3.2005 |
 |
 |
 |
06 Jul 2018 |
(29252) |
 |
12793728 |
3.1932 |
 |
 |
 |
13 Jul 2018 |
14485 |
 |
12808213 |
3.1968 |
 |
 |
 |
20 Jul 2018 |
6820 |
 |
12815033 |
3.1985 |
 |
 |
 |
27 Jul 2018 |
17300 |
 |
12832333 |
3.2028 |
 |
 |
 |
03 Aug 2018 |
3930 |
 |
12836263 |
3.2038 |
 |
 |
 |
10 Aug 2018 |
4754 |
 |
12841017 |
3.2050 |
 |
 |
 |
17 Aug 2018 |
12600 |
 |
12853617 |
3.2081 |
 |
 |
 |
31 Aug 2018 |
(10244) |
 |
12843373 |
3.2055 |
 |
 |
 |
07 Sep 2018 |
(380200) |
 |
12463173 |
3.1107 |
 |
 |
 |
14 Sep 2018 |
(405093) |
 |
12058080 |
3.0095 |
 |
 |
 |
21 Sep 2018 |
(460) |
 |
12057620 |
3.0094 |
 |
 |
 |
29 Sep 2018 |
(1) |
 |
12057619 |
3.0094 |
 |
 |
 |
05 Oct 2018 |
239404 |
 |
12297023 |
3.0692 |
 |
 |
 |
12 Oct 2018 |
150293 |
 |
12447316 |
3.1067 |
 |
 |
 |
26 Oct 2018 |
222700 |
 |
12670016 |
3.1623 |
 |
 |
 |
02 Nov 2018 |
1 |
 |
12670017 |
3.1623 |
 |
 |
 |
09 Nov 2018 |
(100000) |
 |
12570017 |
3.1373 |
 |
 |
 |
16 Nov 2018 |
(23200) |
 |
12546817 |
3.1315 |
 |
 |
 |
23 Nov 2018 |
(100000) |
 |
12446817 |
3.1066 |
 |
 |
 |
30 Nov 2018 |
(109839) |
 |
12336978 |
3.0792 |
 |
 |
 |
14 Dec 2018 |
(1376500) |
 |
10960478 |
2.7356 |
Annexure- 3
 |
 |
Shareholding at the beginning of the year |
 |
Increase/ Decrease in shareholding |
 |
Cumulative Shareholding during of the year |
||
SI. No. |
Shareholder's Name |
No. of shares at beginning of year |
% of total shares of the company at beginning of year |
Date |
Reason |
No. of shares |
% of total shares of the company |
|
 |
 |
 |
 |
21 Dec 2018 |
(1550000) |
 |
9410478 |
2.3487 |
 |
 |
 |
 |
28 Dec 2018 |
(331465) |
 |
9079013 |
2.2660 |
 |
 |
 |
 |
31 Dec 2018 |
(200000) |
 |
8879013 |
2.2161 |
 |
 |
 |
 |
04 Ian 2019 |
(126000) |
 |
8753013 |
2.1846 |
 |
 |
 |
 |
11 Ian 2019 |
(983000) |
 |
7770013 |
1.9393 |
 |
 |
 |
 |
18 Ian 2019 |
(7500) |
 |
7762513 |
1.9374 |
 |
 |
 |
 |
25 Ian 2019 |
(188000) |
 |
7574513 |
1.8905 |
 |
 |
 |
 |
01 Feb 2019 |
(718364) |
 |
6856149 |
1.7112 |
 |
 |
 |
 |
08 Feb 2019 |
750716 |
 |
7606865 |
1.8986 |
 |
 |
 |
 |
15 Feb 2019 |
(296717) |
 |
7310148 |
1.8245 |
 |
 |
 |
 |
01 Mar 2019 |
(418362) |
 |
6891786 |
1.7201 |
 |
 |
 |
 |
08 Mar 2019 |
4944 |
 |
6896730 |
1.7213 |
 |
 |
 |
 |
15 Mar 2019 |
(274063) |
 |
6622667 |
1.6529 |
 |
 |
 |
 |
22 Mar 2019 |
(199750) |
 |
6422917 |
1.6031 |
 |
 |
 |
 |
29 Mar 2019 |
(224102) |
 |
6198815 |
1.5471 |
 |
 |
 |
 |
 |
 |
 |
12282189 |
3.0702 |
 |
 |
 |
 |
 |
 |
 |
11950689 |
2.9874 |
 |
 |
 |
 |
 |
 |
 |
11950677 |
2.9874 |
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
11950677 |
2.9874 |
2 |
ICICI PRUDENTIAL BALANCED ADVANTAGE FUND |
7372977 |
1.8402 |
01 Apr 2018 |
 |
 |
7372977 |
1.8402 |
 |
 |
 |
11 May 2018 |
176 |
 |
7373153 |
1.8402 |
|
 |
 |
 |
25 May 2018 |
253811 |
 |
7626964 |
1.9036 |
|
 |
 |
 |
08 Iun 2018 |
23287 |
 |
7650251 |
1.9094 |
|
 |
 |
 |
15 Iun 2018 |
898692 |
 |
8548943 |
2.1337 |
|
 |
 |
 |
 |
22 Jun 2018 |
445558 |
 |
8994501 |
2.2449 |
 |
 |
 |
 |
30 Jun 2018 |
477158 |
 |
9471659 |
2.3640 |
 |
 |
 |
 |
06 Jul 2018 |
26156 |
 |
9497815 |
2.3705 |
 |
 |
 |
 |
13 Jul 2018 |
(127357) |
 |
9370458 |
2.3387 |
 |
 |
 |
 |
20 Jul 2018 |
60000 |
 |
9430458 |
2.3537 |
 |
 |
 |
 |
27 Jul 2018 |
117627 |
 |
9548085 |
2.3831 |
 |
 |
 |
 |
03 Aug 2018 |
(835283) |
 |
8712802 |
2.1746 |
 |
 |
 |
 |
07 Sep 2018 |
(656396) |
 |
8056406 |
2.0108 |
 |
 |
 |
 |
21 Sep 2018 |
(308886) |
 |
7747520 |
1.9337 |
 |
 |
 |
 |
29 Sep 2018 |
(1) |
 |
7747519 |
1.9337 |
 |
 |
 |
 |
05 Oct 2018 |
(120419) |
 |
7627100 |
1.9036 |
 |
 |
 |
 |
12 Oct 2018 |
(1104205) |
 |
6522895 |
1.6280 |
 |
 |
 |
 |
19 Oct 2018 |
(268922) |
 |
6253973 |
1.5609 |
 |
 |
 |
 |
26 Oct 2018 |
(62590) |
 |
6191383 |
1.5453 |
 |
 |
 |
 |
02 Nov 2018 |
(52962) |
Transfer |
6138421 |
1.5321 |
 |
 |
 |
 |
23 Nov 2018 |
(3160) |
 |
6135261 |
1.5313 |
 |
 |
 |
 |
30 Nov 2018 |
(57000) |
 |
6078261 |
1.5171 |
 |
 |
 |
 |
14 Dec 2018 |
(147680) |
 |
5930581 |
1.4802 |
 |
 |
 |
 |
21 Dec 2018 |
(67124) |
 |
5863457 |
1.4634 |
 |
 |
 |
 |
31 Dec 2018 |
(254237) |
 |
5609220 |
1.4000 |
 |
 |
 |
 |
04 Ian 2019 |
(40254) |
 |
5568966 |
1.3899 |
 |
 |
 |
 |
11 Ian 2019 |
(69836) |
 |
5499130 |
1.3725 |
 |
 |
 |
 |
18 Ian 2019 |
(123319) |
 |
5375811 |
1.3417 |
 |
 |
 |
 |
25 Ian 2019 |
(215742) |
 |
5160069 |
1.2879 |
 |
 |
 |
 |
01 Feb 2019 |
(186289) |
 |
4973780 |
1.2414 |
 |
 |
 |
 |
08 Feb 2019 |
(52942) |
 |
4920838 |
1.2282 |
 |
 |
 |
 |
15 Feb 2019 |
(105663) |
 |
4815175 |
1.2018 |
 |
 |
 |
 |
01 Mar 2019 |
(88531) |
 |
4726644 |
1.1797 |
 |
 |
 |
 |
08 Mar 2019 |
(219324) |
 |
4507320 |
1.1250 |
 |
 |
 |
 |
15 Mar 2019 |
(524694) |
 |
3982626 |
0.9940 |
 |
 |
 |
 |
22 Mar 2019 |
(100241) |
 |
3882385 |
0.9690 |
 |
 |
 |
 |
29 Mar 2019 |
(996627) |
 |
2885758 |
0.7202 |
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
2885758 |
0.7202 |
Â
 |
 |
Shareholding at the beginning of the year |
Increase/ Decrease in shareholding |
 |
Cumulative Shareholding during of the year |
|||
SI. No. |
Shareholder's Name |
No. of shares at beginning of year |
% of total shares of the company at beginning of year |
Date |
Reason |
No. of shares |
% of total shares of the company |
|
3 |
ADITYA BIRLA SUN LIFE TRUSTEE PRIVATE LIMITED A/C ADITYA BIRLA SUN LIFE FRONTLINE EQUITY FUND |
6346274 |
1.5839 |
01 Apr 2018 |
 |
 |
6346274 |
1.5839 |
 |
 |
18 May 2018 |
(213000) |
 |
6133274 |
1.5308 |
||
 |
 |
25 May 2018 |
(363400) |
 |
5769874 |
1.4401 |
||
 |
 |
08 Jun 2018 |
45000 |
 |
5814874 |
1.4513 |
||
 |
 |
06 Jul 2018 |
(12000) |
 |
5802874 |
1.4483 |
||
 |
 |
20 Jul 2018 |
(6000) |
 |
5796874 |
1.4468 |
||
 |
 |
07 Sep 2018 |
(989589) |
 |
4807285 |
1.1998 |
||
 |
 |
14 Sep 2018 |
(172000) |
Transfer |
4635285 |
1.1569 |
||
 |
 |
29 Sep 2018 |
(325000) |
 |
4310285 |
1.0758 |
||
 |
 |
05 Oct 2018 |
(90000) |
 |
4220285 |
1.0533 |
||
 |
 |
01 Mar 2019 |
(56000) |
 |
4164285 |
1.0394 |
||
 |
 |
08 Mar 2019 |
(74000) |
 |
4090285 |
1.0209 |
||
 |
 |
15 Mar 2019 |
(130000) |
 |
3960285 |
0.9884 |
||
 |
 |
22 Mar 2019 |
(181000) |
 |
3779285 |
0.9433 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
3779285 |
0.9433 |
4 |
SBI EQUITY HYBRID FUND |
5637048 |
1.4069 |
 |
 |
 |
5637048 |
1.4069 |
 |
 |
06 Apr 2018 |
235980 |
 |
5873028 |
1.4658 |
||
 |
 |
13 Apr 2018 |
22270 |
 |
5895298 |
1.4714 |
||
 |
 |
27 Apr 2018 |
146516 |
 |
6041814 |
1.5080 |
||
 |
 |
04 May 2018 |
26250 |
 |
6068064 |
1.5145 |
||
 |
 |
25 May 2018 |
(66718) |
 |
6001346 |
1.4979 |
||
 |
 |
15 Iun 2018 |
876 |
 |
6002222 |
1.4981 |
||
 |
 |
22 Iun 2018 |
1400 |
 |
6003622 |
1.4984 |
||
 |
 |
30 Jun 2018 |
2436908 |
 |
8440530 |
2.1066 |
||
 |
 |
06 Jul 2018 |
346300 |
 |
8786830 |
2.1931 |
||
 |
 |
20 Jul 2018 |
1172348 |
 |
9959178 |
2.4857 |
||
 |
 |
27 Jul 2018 |
151620 |
 |
10110798 |
2.5235 |
||
 |
 |
03 Aug 2018 |
1223698 |
 |
11334496 |
2.8289 |
||
 |
 |
07 Sep 2018 |
54000 |
 |
11388496 |
2.8424 |
||
 |
 |
05 Oct 2018 |
(154500) |
 |
11233996 |
2.8039 |
||
 |
 |
12 Oct 2018 |
(411000) |
 |
10822996 |
2.7013 |
||
 |
 |
19 Oct 2018 |
(54000) |
Transfer |
10768996 |
2.6878 |
||
 |
 |
26 Oct 2018 |
(161431) |
 |
10607565 |
2.6475 |
||
 |
 |
02 Nov 2018 |
(412569) |
 |
10194996 |
2.5445 |
||
 |
 |
09 Nov 2018 |
(12000) |
 |
10182996 |
2.5415 |
||
 |
 |
16 Nov 2018 |
(102629) |
 |
10080367 |
2.5159 |
||
 |
 |
23 Nov 2018 |
(454847) |
 |
9625520 |
2.4024 |
||
 |
 |
30 Nov 2018 |
165966 |
 |
9791486 |
2.4438 |
||
 |
 |
07 Dec 2018 |
64500 |
 |
9855986 |
2.4599 |
||
 |
 |
21 Dec 2018 |
(70000) |
 |
9785986 |
2.4425 |
||
 |
 |
04 Jan 2019 |
56000 |
 |
9841986 |
2.4564 |
||
 |
 |
11 Ian 2019 |
(6000) |
 |
9835986 |
2.4549 |
||
 |
 |
18 Ian 2019 |
(69000) |
 |
9766986 |
2.4377 |
||
 |
 |
25 Ian 2019 |
154000 |
 |
9920986 |
2.4762 |
||
 |
 |
01 Feb 2019 |
6510 |
 |
9927496 |
2.4778 |
||
 |
 |
08 Mar 2019 |
(700) |
 |
9926796 |
2.4776 |
||
 |
 |
29 Mar 2019 |
(332000) |
 |
9594796 |
2.3947 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
9594796 |
2.3947 |
Annexure- 3
SI. |
No. Shareholder's Name |
Shareholding at the beginning of the year |
 |
Increase/ Decrease in shareholding |
 |
Cumulative Shareholding during of the year |
||
No. of shares at beginning of year |
% of total shares of the company at beginning of year |
Date |
Reason |
No. of shares |
% of total shares of the company |
|||
5 |
TATA MUTUAL FUND-TATA EQUITY P/E FUND |
4311600 |
1.0761 |
01 Apr 2017 |
 |
 |
4311600 |
1.0761 |
 |
 |
06 Apr 2018 |
155000 |
 |
4466600 |
1.1148 |
||
 |
 |
13 Apr 2018 |
35000 |
 |
4501600 |
1.1235 |
||
 |
 |
27 Apr 2018 |
59500 |
 |
4561100 |
1.1384 |
||
 |
 |
04 May 2018 |
(25000) |
 |
4536100 |
1.1322 |
||
 |
 |
11 May 2018 |
35000 |
 |
4571100 |
1.1409 |
||
 |
 |
18 May 2018 |
96000 |
 |
4667100 |
1.1648 |
||
 |
 |
01 Jun 2018 |
225000 |
 |
4892100 |
1.2210 |
||
 |
 |
08 Jun 2018 |
(200000) |
 |
4692100 |
1.1711 |
||
 |
 |
22 Jun 2018 |
15000 |
 |
4707100 |
1.1748 |
||
 |
 |
30 Jun 2018 |
100000 |
 |
4807100 |
1.1998 |
||
 |
 |
03 Aug 2018 |
(25000) |
 |
4782100 |
1.1936 |
||
 |
 |
31 Aug 2018 |
(6500) |
 |
4775600 |
1.1919 |
||
 |
 |
07 Sep 2018 |
(15000) |
 |
4760600 |
1.1882 |
||
 |
 |
21 Sep 2018 |
170000 |
 |
4930600 |
1.2306 |
||
 |
 |
05 Oct 2018 |
100000 |
 |
5030600 |
1.2556 |
||
 |
 |
26 Oct 2018 |
(24000) |
 |
5006600 |
1.2496 |
||
 |
 |
02 Nov 2018 |
24000 |
 |
5030600 |
1.2556 |
||
 |
 |
14 Dec 2018 |
200000 |
 |
5230600 |
1.3055 |
||
 |
 |
21 Dec 2018 |
100000 |
 |
5330600 |
1.3305 |
||
 |
 |
04 Jan 2019 |
(11500) |
 |
5319100 |
1.3276 |
||
 |
 |
18 Ian 2019 |
(55000) |
 |
5264100 |
1.3139 |
||
 |
 |
15 Feb 2019 |
100000 |
 |
5364100 |
1.3388 |
||
 |
 |
22 Mar 2019 |
(101900) |
 |
5262200 |
1.3134 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
5262200 |
1.3134 |
6 |
GOLDMAN SACHS INDIA LIMITED |
4291130 |
1.0710 |
01 Apr 2018 |
 |
 |
4291130 |
1.0710 |
 |
 |
22 Jun 2018 |
(45772) |
 |
4245358 |
1.0596 |
||
 |
 |
30 Jun 2018 |
(2417622) |
Transfer |
1827736 |
0.4562 |
||
 |
 |
18 Ian 2019 |
(303409) |
 |
1524327 |
0.3805 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
1524327 |
0.3805 |
7 |
ACACIA INSTITUTIONAL PARTNERS, LP |
3360000 |
0.8386 |
01 Apr 2018 |
 |
 |
3360000 |
0.8386 |
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
3360000 |
0.8386 |
8 |
ACACIA PARTNERS, LP |
2852000 |
0.7118 |
01 Apr 2018 |
 |
 |
2852000 |
0.7118 |
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
2852000 |
0.7118 |
9 |
L AND T MUTUAL FUND TRUSTEE LTD-L AND T INDIA VALUE FUND |
2778404 |
0.6935 |
01 Apr 2018 |
 |
 |
2778404 |
0.6935 |
 |
 |
04 May 2018 |
30826 |
 |
2809230 |
0.7011 |
||
 |
 |
15 Jun 2018 |
(777500) |
 |
2031730 |
0.5071 |
||
 |
 |
27 Jul 2018 |
69000 |
 |
2100730 |
0.5243 |
||
 |
 |
10 Aug 2018 |
45000 |
Transfer |
2145730 |
0.5355 |
||
 |
 |
14 Sep 2018 |
(344830) |
 |
1800900 |
0.4495 |
||
 |
 |
29 Sep 2018 |
(114000) |
 |
1686900 |
0.4210 |
||
 |
 |
07 Dec 2018 |
(437400) |
 |
1249500 |
0.3119 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
1249500 |
0.3119 |
10 |
ACACIA CONSERVATION FUND LP |
2400000 |
0.5999 |
01 Apr 2018 |
 |
 |
2400000 |
0.5999 |
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
2400000 |
0.5999 |
Â
 |
 |
Shareholding at the beginning of the year |
 |
Increase/ Decrease in shareholding |
 |
Cumulative Shareholding during of the year |
||
SI. No. |
Shareholder's Name |
No. of shares at beginning of year |
% of total shares of the company at beginning of year |
Date |
Reason |
No. of shares |
% of total shares of the company |
|
11 |
UTI -MID CAP FUND |
1351713 |
0.3374 |
01 Apr 2018 |
 |
 |
1351713 |
0.3374 |
 |
 |
06 Apr 2018 |
135354 |
 |
1487067 |
0.3712 |
||
 |
 |
13 Apr 2018 |
8547 |
 |
1495614 |
0.3733 |
||
 |
 |
27 Apr 2018 |
11500 |
 |
1507114 |
0.3762 |
||
 |
 |
25 May 2018 |
100000 |
 |
1607114 |
0.4011 |
||
 |
 |
08 Jun 2018 |
225000 |
 |
1832114 |
0.4573 |
||
 |
 |
15 Jun 2018 |
25000 |
 |
1857114 |
0.4635 |
||
 |
 |
20 Jul 2018 |
(10000) |
 |
1847114 |
0.4610 |
||
 |
 |
27 Jul 2018 |
49500 |
 |
1896614 |
0.4734 |
||
 |
 |
17 Aug 2018 |
5077 |
 |
1901691 |
0.4746 |
||
 |
 |
24 Aug 2018 |
(171854) |
 |
1729837 |
0.4317 |
||
 |
 |
31 Aug 2018 |
(22500) |
 |
1707337 |
0.4261 |
||
 |
 |
07 Sep 2018 |
(47000) |
 |
1660337 |
0.4144 |
||
 |
 |
14 Sep 2018 |
79896 |
 |
1740233 |
0.4343 |
||
 |
 |
29 Sep 2018 |
598500 |
Transfer |
2338733 |
0.5837 |
||
 |
 |
05 Oct 2018 |
374605 |
 |
2713338 |
0.6772 |
||
 |
 |
19 Oct 2018 |
14176 |
 |
2727514 |
0.6808 |
||
 |
 |
26 Oct 2018 |
215683 |
 |
2943197 |
0.7346 |
||
 |
 |
02 Nov 2018 |
7000 |
 |
2950197 |
0.7363 |
||
 |
 |
16 Nov 2018 |
12073 |
 |
2962270 |
0.7393 |
||
 |
 |
30 Nov 2018 |
186822 |
 |
3149092 |
0.7860 |
||
 |
 |
14 Dec 2018 |
148498 |
 |
3297590 |
0.8230 |
||
 |
 |
21 Dec 2018 |
(5000) |
 |
3292590 |
0.8218 |
||
 |
 |
28 Dec 2018 |
200000 |
 |
3492590 |
0.8717 |
||
 |
 |
18 Ian 2019 |
(2500) |
 |
3490090 |
0.8711 |
||
 |
 |
01 Mar 2019 |
77500 |
 |
3567590 |
0.8904 |
||
 |
 |
08 Mar 2019 |
77873 |
 |
3645463 |
0.9099 |
||
 |
 |
15 Mar 2019 |
(30000) |
 |
3615463 |
0.9024 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
3615463 |
0.9024 |
12 |
MIRAE ASSET EMERGING BLUECHIP FUND |
0 |
0.0000 |
01 Apr 2018 |
 |
 |
0 |
0.0000 |
 |
 |
21 Dec 2018 |
649791 |
 |
649791 |
0.1622 |
||
 |
 |
28 Dec 2018 |
710000 |
 |
1359791 |
0.3394 |
||
 |
 |
04 Jan 2019 |
162054 |
 |
1521845 |
0.3798 |
||
 |
 |
11 Ian 2019 |
250078 |
 |
1771923 |
0.4422 |
||
 |
 |
18 Ian 2019 |
100000 |
Transfer |
1871923 |
0.4672 |
||
 |
 |
25 Ian 2019 |
117405 |
1989328 |
0.4965 |
|||
 |
 |
01 Feb 2019 |
65000 |
 |
2054328 |
0.5127 |
||
 |
 |
08 Feb 2019 |
100000 |
 |
2154328 |
0.5377 |
||
 |
 |
15 Feb 2019 |
270000 |
 |
2424328 |
0.6051 |
||
 |
 |
01 Mar 2019 |
(185000) |
 |
2239328 |
0.5589 |
||
 |
Shareholding at the end of the year |
 |
 |
31 Mar 2019 |
 |
 |
2239328 |
0.5589 |
v Shareholding of Directors and Key Managerial Personnel:
 |
 |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
Shareholding at the end of the year * |
|||
SI. No. |
Name of director/Key Managerial Personnel (KMP) |
No. of shares |
% of total shares of the company |
No. of shares |
% of total shares of the Company |
No. of shares |
% of total shares of the Company |
 |
A. DIRECTORS |
 |
 |
 |
 |
 |
|
1 |
M G George Muthoot Chairman & Whole time Director |
46551632 |
11.637% |
- |
- |
46551632 |
11.619% |
2 |
George Alexander Muthoot Managing Director |
43630900 |
10.907% |
- |
- |
43630900 |
10.890% |
3 |
George Jacob Muthoot Whole Time Director |
43630900 |
10.907% |
- |
 |
43630900 |
10.890% |
4 |
George Thomas Muthoot Whole Time Director |
43630900 |
10.907% |
- |
 |
43630900 |
10.890% |
5 |
Alexander M George Whole Time Director |
6772500 |
1.693% |
- |
- |
6772500 |
1.690% |
6 |
George Joseph Independent Director |
1134 |
0.000% |
 |
 |
1134 |
0.000% |
7 |
John K Paul Independent Director |
- |
 |
- |
 |
- |
 |
8 |
K George John Independent Director |
- |
- |
- |
- |
- |
- |
9 |
Jose Mathew Independent Director |
- |
- |
- |
- |
- |
- |
10 |
Pamela Anna Mathew Independent Director |
- |
 |
- |
 |
- |
 |
11 |
Jacob Benjamin Koshy Independent Director |
- |
 |
- |
 |
- |
 |
 |
B. KEY MANAGERIAL PERSON |
 |
 |
 |
 |
 |
|
1 |
Oommen K Mammen Chief Financial Officer |
18734 |
0.005% |
 |
 |
 |
 |
 |
Increase of 20000 shares by way of ESOP Allotment on 15/05/2018 |
- |
 |
38734 |
0.010% |
 |
 |
 |
Increase of 14281 shares by way of market purchase on 10/07/2018 to 12/07/2018 |
- |
 |
53015 |
0.013% |
- |
 |
Increase of 2000 shares by way of market purchase on 13/07/2018 |
- |
- |
55015 |
0.014% |
 |
 |
|
 |
Increase of 2400 shares by way of ESOP Allotment 18/12/2018 |
- |
- |
57415 |
0.014% |
57415 |
0.014% |
2 |
Maxin James Company Secretary |
- |
 |
- |
 |
- |
 |
 |
Increase of 670 shares by way of ESOP Allotment on 19/09/2018 |
- |
 |
670 |
0.00% |
- |
 |
 |
Decrease of 400 shared by way of market sale on 27/09/2018 |
- |
- |
(450) |
0.00% |
- |
- |
 |
Decrease of 270 shared by way of market sale on 09/10/2018 |
- |
- |
(270) |
0.00% |
- |
- |
*The percentage change in the Promoters holding as on 31/03/2019 is due to increase in the paid up share capital of the Company.
V Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
VI. Remuneration of Directors and key Managerial Personnel
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
in Millions)
 |
Secured Loans excluding deposits |
Unsecured Loans |
Deposits |
Total Indebtedness |
Indebtedness at the beginning of the financial year |
 |
 |
 |
 |
i) Principal Amount |
164,106.33 |
47,882.87 |
 |
211,989.20 |
ii) Interest due but not paid - |
 |
|||
iii) Interest accrued but not due |
4,073.04 |
7,941.13 |
- |
12,014.17 |
Total (i+ii+iii) |
168,179.37 |
55,824.00 |
- |
224,003.37 |
Change in Indebtedness during the financial year |
 |
 |
 |
 |
* Addition |
47,864.15 |
6,068.10 |
- |
53,932.25 |
* Reduction |
- |
 |
- |
- |
Net Change |
47,864.15 |
6,068.10 |
- |
53,932.25 |
Indebtedness at the end of the financial year |
 |
 |
 |
 |
i) Principal Amount |
210,177.36 |
58,793.52 |
 |
268,970.88 |
ii) Interest due but not paid |
 |
 |
 |
 |
iii) Interest accrued but not due |
5,866.16 |
3,098.58 |
 |
8,964.74 |
Total (i+ii+iii) |
216,043.52 |
61,892.10 |
- |
277,935.62 |
Â
 |
 |
 |
 |
 |
 |
 |
(Rs. in Millions) |
SI. |
 |
Name of MD/WTD/ Manager |
 |
||||
no. Particulars of Remuneration |
M G George Muthoot |
George Alexander Muthoot |
George Thomas Muthoot |
George Jacob Muthoot |
Alexander M George |
Total Amount |
|
1 |
Gross salary |
 |
 |
 |
 |
 |
 |
 |
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 |
133.19 |
133.19 |
133.19 |
133.19 |
14.64 |
547.40 |
 |
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 |
0.04 |
0.04 |
0.04 |
0.04 |
0.04 |
0.20 |
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 |
 |
 |
 |
 |
|||
2 |
Stock Option |
- |
- |
 |
 |
- |
 |
3 |
Sweat Equity |
- |
- |
 |
 |
- |
 |
4 |
Commission |
- |
- |
 |
 |
- |
 |
- as % of profit |
- |
 |
- |
- |
|||
- others, specify |
- |
 |
- |
- |
|||
5 |
Others, please specify |
- |
- |
 |
- |
- |
- |
 |
Total (A) |
133.23 |
133.23 |
133.23 |
133.23 |
14.68 |
547.60 |
Â
 |
Ceiling as per the Act |
Rs. 3076.82 millions being 10% of the Net Profit of the Company calculated as per Section 198 of the Companies Act, 2013. |
||||||
B. |
Remuneration to other directors: |
 |
 |
 |
 |
 |
(Rs in Millions) |
|
Sl. No. |
Particulars of Remuneration |
Name of Directors |
Total Amount |
|||||
George Joseph |
John K Paul |
K George John |
Pamela Anna Mathew |
Jose Mathew |
Jacob Benjamin Koshy |
|||
1 |
Independent Directors |
 |
 |
 |
 |
 |
 |
 |
 |
Fee for attending board committee meetings |
0.72 |
0.70 |
0.50 |
0.40 |
0.82 |
0.58 |
3.72 |
 |
Commission |
1.00 |
1.00 |
1.00 |
1.00 |
1.00 |
1.00 |
6.00 |
Others, please specify |
- |
- |
- |
- |
- |
|||
 |
Total (1) |
1.72 |
1.70 |
1.50 |
1.40 |
1.82 |
1.58 |
9.72 |
2 |
Other Non-Executive Directors |
 |
 |
 |
 |
 |
||
Fee for attending board committee meetings |
- |
 |
- |
- |
- |
|||
Commission |
- |
 |
- |
- |
 |
|||
Others, please specify |
- |
 |
- |
- |
 |
|||
Total (2) |
- |
 |
- |
- |
 |
|||
 |
Total (B)=(1+2) |
1.72 |
1.70 |
1.50 |
1.40 |
1.82 |
1.58 |
9.72 |
 |
Ceiling as per the Act |
Rs. 307.68 millions being 1% of the Net Profit of the Company calculated as per Section 198 of the Companies Act, 2013 |
||||||
 |
Total Managerial Remuneration |
- |
- |
 |
- |
- |
 |
557.32 |
 |
Overall Ceiling as per the Act |
Rs. 3384.50 millions being 11% of the Net Profit of the Company calculated as per Section 198 of the Companies Act, 2013 |
C. Remuneration to Key Managerial Personnel Other than MD/Manager/WTD
 |
 |
 |
(In millions) |
SI. |
 |
Key Managerial Personnel |
|
no. |
 |
CFO |
Company Secretary |
1 |
Gross salary |
 |
 |
 |
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 |
7.83 |
3.49 |
 |
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 * |
- |
- |
 |
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 |
- |
- |
2 |
Stock Option** |
8.83 |
0.24 |
3 |
Sweat Equity |
- |
 |
4 |
Commission |
- |
 |
 |
- as % of profit |
 |
 |
 |
- others, specify... |
 |
 |
5 |
Others, please specify |
 |
 |
 |
Total |
16.66 |
3.73 |
*Excludes the value of perquisite on exercise of stock options **Value of perquisite on exercise of stock options
Vll. Penalties / Punishment/ Compounding of Offences:
Type |
Section of the Companies Act |
Brief Description |
Details of Penalty / Punishment/ Compounding fees imposed |
Authority [RD/NCLT/ COURT] |
Appeal made, if any (give Details) |
|
A. |
Company |
 |
 |
 |
 |
 |
 |
Penalty |
 |
 |
 |
 |
 |
 |
Punishment |
 |
 |
 |
 |
 |
 |
Compounding |
 |
 |
 |
 |
 |
B. |
Directors |
 |
 |
 |
 |
 |
 |
Penalty |
 |
 |
 |
 |
 |
 |
Punishment |
 |
 |
NIL |
 |
 |
 |
Compounding |
 |
 |
 |
 |
 |
C. |
Other Officers in Default |
 |
 |
 |
 |
 |
 |
Penalty |
 |
 |
 |
 |
 |
 |
Punishment |
 |
 |
 |
 |
 |
 |
Compounding |
 |
 |
 |
 |
 |
Â
For and on behalf of the Board of Directors |
For and on behalf of the Board of Directors |
M G George Muthoot |
George Alexander Muthoot |
Chairman |
Managing Director |
(DIN: 00018201) |
(D1N:00016787) |
Kochi, |
 |
12th August, 2019 |
 |
Annexure- 4
Annual Report on Corporate Social Responsibility (CSR) Activities
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
1. CSR vision and policy of the Company is aimed to create a nationwide social impact by constantly giving back to the community by identifying and facilitating growth in areas which are less privileged. The Company has focused on women empowerment, health awareness, improving the quality of life and education initiatives and is in process of expanding its CSR activities at pan India Level.
Company have undertaken CSR activities through Muthoot M George Foundation, a charity foundation for CSR activities of the Company and through Muthoot M George Charitable Trust, Delhi. During the year the Company was mostly focused on disaster management, flood relief assistance to flood affected areas of Kerala, Educational support to under privileged and medical support given for healthcare like expenditure for treatments like cancer, dialysis, surgeries through a project called 'Snehasraya'.
The Company's CSR policy is committed towards CSR activities as envisaged in Schedule Vll of the Companies Act, 2013. The Details of CSR policy of the Company are available on the website of the Company at www.muthootfinance.com/policy/policy-investor
2. The CSR Committee was constituted by our Directors by a board resolution dated August 11, 2014 and further re-constituted as CSR and Business Responsibility Committee on April 05, 2019 and comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
Jose Mathew |
Chairman |
Independent Director |
John K Paul |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
3. Average net profit of the company for last three financial years: Rs. 20,274.70 millions
4. Prescribed CSR Expenditure: Rs. 405.49 millions
5. Details of CSR spent during the financial year.
(a) Total amount spent for the financial year: Rs. 282.92 millions
(b) Amount unspent, if any: Rs. 122.57 millions
(c) Manner in which the amount spent during the financial year is detailed below.
SI. No |
CSR project or activity identified |
Sector in which the project is covered |
Projects or programs. |
Amount outlay (budget) project or programs wise |
Amount spent on the projects or programs |
Cumulative expenditure up to the reporting period (Rs.) |
Amount spent: Direct or through implementation agency |
||
 |
 |
Local area or other |
Specify the State and district where projects or programs was undertaken |
Direct expenditure on projects or programs (Rs.) |
overheads |
||||
1 |
Muthoot M George Excellence Award (1000 schools in Kerala, Andhra Pradesh, Telengana, Karnataka states were covered under this program. Toppers of these schools are given cash award and a certificate signed by Government School authorities and Chairman Muthoot M. George Foundation. Majority of these children are coming from low income group or lower middle class families. This program is implemented with a clear vision to make progress in forming an equitable and sustainable society by uplifting the younger generation) |
Promotion of Education |
Local Area & Others |
Kerala, Andhra Pradesh, Telengana, Karnataka |
40,00,000 |
27,60,108 |
 |
27,60,108 |
Muthoot M George Foundation, Implementation agency for CSR activities |
2 |
Muthoot Higher Education Scholarship (Muthoot Higher Education Scholarship is for supporting the students who are perusing their professional studies like MBBS, Engineering, Nursing, B Com, etc. Our support will continue till the completion of their courses which is normally for 3-4 years. |
Promotion of Education |
Kerala |
Kerala |
25,00,000 |
6,96,81,000 |
 |
6,96,81,000 |
Muthoot M George Foundation, Implementation agency for CSR activities |
3 |
Other Educational Assistance (Conducting motivational & personality development activities for economically deprived students of govt and aided schools) |
Promotion of Education |
All India |
All India |
6,00,000 |
45,27,800 |
 |
45,27,800 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
4 |
YMCA Mumbai (promotion of education and academic activities of students from schools and colleges of Mumbai |
Promotion of Education |
Others |
Mumbai |
15,00,000 |
500,000 |
 |
500,000 |
Muthoot M George Foundation, Implementation agency for CSR activities |
5 |
Muthoot Vivaha Sahayam project (The project is to assist widowed mothers to get their daughters married, their by assuring the families a secured life. For this purpose we render financial assistance depending on the requirement of these deprived families). |
Improving quality of life |
Kerala |
Kerala |
65,00,000 |
71,72,000 |
 |
71,72,000 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
6 |
Skill Development programmes |
Improving quality of life |
All India |
All India |
50,00,000 |
20,00,000 |
 |
20,00,000 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
7 |
Snehasraya & Anbin Nizhal (Muthoot Snehasraya' is a Mobile Laboratory intended for Prevention and early detection of Kidney related diseases, diabetes and Hyper tension ailments. The mobile ambulance is being operated across Tamil Nadu & Kerala and facilitates blood & urine tests and create awareness among people about the dreaded disease. Exclusive camps are held at various centres in Kerala & Tamil Nadu, where the blood sample of participants will be collected and tested for possible kidney related diseases. The camps are being organised with the help of local agencies, clubs, etc. The project in Kerala up to March 2019 have conducted 1400 camps touching the lives of 164114 people. The project in Tamil Nadu up to March 2018 have conducted 1173 camps touching the lives of 115162 people) |
Improving Quality of life |
Local area & Others |
Kerala & Tamil Nadu |
25,00,000 |
21,66,272 |
 |
21,66,272 |
Muthoot M George Foundation, Implementation agency for CSR activities |
8 |
Medical Assistance (To needy and financially weak applicants. Cases processed through the applications received in MMGF & MMGCT through branches for Heart ailments, Liver ailments, Cancer ailments, chemotherapy, Kidney Transplantation, Renal, medicines) |
Poverty Alleviation |
All India |
All India |
11,35,00,000 |
14,56,05,434 |
 |
14,56,05,434 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
9 |
Muthoot Snehasammanam Project (a project introduced for supporting artists, who are struggling to take their life forward. The recipients of this support scheme are all artists and performers who have contributed immensely in their respective art forms) |
Promotion of Traditional Arts & Crafts |
Kerala |
Kerala |
11,25,011 |
14,48,000 |
 |
14,48,000 |
Muthoot M George Foundation, Implementation agency for CSR activities |
10 |
Chief Minister's Relief fund |
 |
Kerala |
Kerala |
150,00,000 |
150,00,000 |
 |
150,00,000 |
Muthoot M George Foundation, Implementation agency for CSR activities |
11 |
Muthoot Aashiyana house construction project |
Disaster Management |
Kerala |
Kerala |
10,00,000 |
1,39,48,852 |
 |
1,39,48,852 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
12 |
Flood relief assistance |
 |
Kerala |
Kerala |
10,00,000 |
30,86,631 |
 |
30,86,631 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
13 |
Stainless steel water bottle distibution (5000 stainless steel water bottles were distributed to the students of govt/aided schools) |
Environmental protection |
All India |
All India |
20,00,000 |
8,45,600 |
 |
8,45,600 |
Muthoot M George Foundation, Implementation agency for CSR activities |
14 |
Support given to old age homes, orphanages, etc |
Poverty Alleviation |
All India |
All India |
600,000 |
38,99,000 |
 |
38,99,000 |
Muthoot M George Charitable Trust, Delhi Implementation agency for CSR activities |
15 |
Others (support given to NGOs, & institution who take care of physically and mentally challenged special individuals) |
Improving Quality of life |
All India |
All India |
30,00,000 |
1,02,83,049 |
 |
1,02,83,049 |
Muthoot M George Foundation, & Muthoot M George Charitable Trust, Delhi Implementation agencies for CSR activities |
Total |
 |
25,88,25,011 |
28,29,23,746 |
 |
28,29,23,746 |
 |
 |
 |
 |
Â
Â
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6. The Company has spent Rs. 282.92 millions in promoting education, improving quality of life, management, flood relief assistance to flood affected areas of Kerala, medical aid and others. Amount spent in the previous year on CSR activities was Rs. 197.28 millions. There is a considerable increase in CSR expenditure in comparison to the previous year. However, the amount spent is short of amount required to be spend under Section 135 of Companies Act, 2013, as the Company was unable to identify suitable projects within its CSR Policy and in few instances Company was not able to fully utilise the budgeted amount due to specified standard of eligibility criteria, etc. Hence your Company was not able to spend entire Rs. 405.49 millions. Your Company is focused on creating sustainable and long term CSR model and hence your Company will be able to spend more amount for CSR expenditure in future.
7. CSR Committee of Board affirms that CSR activities are implemented in accordance with CSR objectives of Companies Act, 2013 and CSR Policy of your Company.
Date: August 12, 2019 |
George Alexander Muthoot |
Jose Mathew |
Place: Kochi |
Managing Director |
Chairman - CSR Committee |
Annexure- 5
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year ended on March 31, 2019 Muthoot Finance Ltd has embraced The Muthoot Group's core value of building ethical, inclusive, sutainable business by creating wealth for its stakeholders especially our customers and investors; improving lives of communities especially by way of extending loan to less privileged or not covered by formal banking system and by caring for society. Company has offered better line of financial products and services, practiced and established effective risk management capabilities, created improved system to check and control bad debts and non performing assets with better understanding of its customer segments especially segments neglected by banks, most importantly by accessible and affordable financial services which is not only complimenting the banking sector but many times substituting it. The Company has created a value based system and a responsible business with respect to all of its stakeholders and most important among them are customers and investors which placed their faith in responsible and financially inclusive business. Comany has continued its sustainable business model by sticking to its core values even in tough times and we endevour to continue our business in same spirit.
 |
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY |
|
1 |
Corporate Identity Number (C1N) of the Company |
L65910KL1997PLC011300 |
2 |
Name of the Company |
Muthoot Finance Limited |
3 |
Registered address |
Muthoot Chambers, Opposite Saritha Theatre Complex, 2nd Floor, Banerji Road, Kochi 682018, India |
4 |
Website |
www.muthootfinance.com |
5 |
E-mail id |
|
6 |
Financial Year reported |
2018-19 |
7 |
Sector(s) that the Company is engaged in (industrial activity code-wise) |
NIC Code: 64-649 |
 |
 |
 |
Â
8 |
List three key products/services that the Company manufactures/ provides (as on March 31 , 2019) |
Please refer section titled "Multiple Offerings" of Corporate Overview Page of this Annual Report |
9 |
Total number of locations where business activity is undertaken by the Company (as on March 31 , 2019) |
 |
 |
(a) Number of International Locations (Provide details of major 5) |
Nil |
 |
(b) Number of National Locations (as on March 31, 2019) |
4480 branches in 24 States and 5 Union Territories |
10 |
Markets served by the Company - Local/State/ National/International |
National |
 |
 |
|
 |
SECTION B: FINANCIAL DETAILS OF THE COMPANY |
|
1 |
Paid up Capital (1NR in millions) |
4006 |
2 |
Total Turnover (1NR in millions) |
68,806 (Total Revenue) |
3 |
Total profit after taxes (1NR in millions) |
19,721 |
4 |
Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) (Standalone) |
Rs. 282.92 millions representing 1.43% of standalone Profit After Tax. |
5 |
List of activities in which expenditure in 4 above has been incurred:- |
Promoting Education, Medical Aid and others. ( For more detail please refer to CSR Activities attached as part of Report of Board of Directors) |
 |
 |
 |
 |
SECT1ON C: OTHER DETAILS |
|
1 |
Does the Company have any Subsidiary Company/ Companies? |
Yes |
2 |
Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) |
No |
3 |
Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%] |
No |
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SECTION D: BR INFORMATION |
||
1 |
Details of Director/Directors responsible for BR |
DIN - 00016787 |
 |
(a) Details of the Director/Directors responsible for implementation of the BR policy/policies |
George Alexander Muthoot Managing Director |
 |
(b) Details of the BR head |
Telephone number: 0484-2394712 [email protected] |
2 Principle-wise (as per NVGs) BR Policy/policies (a) Details of compliance (Reply in Y/N)
SI |
Questions |
P1 |
P2 |
P3 |
P4 |
P5 |
P6 |
P7 |
P8 |
P9 |
1 |
Do you have a policy/ policies for... |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
2 |
Has the policy being formulated in consultation with the relevant stakeholders? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
3 |
Does the policy conform to any national / international standards? If yes, specify? (50 words) * |
N |
N |
N |
N |
N |
N |
N |
N |
N |
4 |
Has the policy being approved by the Board? Is yes, has it been signed by MD/ owner/ CEO/ appropriate Board Director? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
5 |
Does the company have a specified committee of the Board/ Director/ Official to oversee the implementation of the policy? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
6 |
Indicate the link for the policy to be viewed online? |
** |
 |
 |
 |
 |
 |
 |
 |
 |
7 |
Has the policy been formally communicated to all relevant internal and external stakeholders? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
8 |
Does the company have in-house structure to implement the policy/ policies. |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
9 |
Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders' grievances related to the policy/ policies? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
10 |
Has the company carried out independent audit/ evaluation of the working of this policy by an internal or external agency? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Â
(P1) |
P2 |
P3 |
Businesses should conduct and govern themselves with Ethics, Transparency and Accountability |
Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle |
Businesses should promote the wellbeing of all employees |
P4) |
P5 |
P6 |
Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. |
Businesses should respect and promote human rights |
Business should respect, protect, and make efforts to restore the environment |
P7 |
P8 |
P9 |
Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner |
Businesses should support inclusive growth and equitable development |
Businesses should engage with and provide value to their customers and consumers in a responsible manner |
(b) If answer to the question at serial number 1 against any principle, is 'No', please explain why: (Tick up to 2 options)
Not Applicable
* Some of the policies and principles have been put into practice by the Founder Late Shri. M. George Muthoot decades back. The Company has not tested the policies for adherence to any National or International Standards. However , these policies are now framed based on applicable regulations and general practices.
** http://www muthootfinance.com/policy/policy-investor
3 Governance related to BR
(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year. Annually
(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?
Yes. BR is available at http://www.muthootfinance.com/investors/annual-reports. The report is published annually.
SECTION E: PRINCIPLE-WISE PERFORMANCE
Principle 1
1 Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others?
Yes. The policy covers only the company. It does not extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others.
2 How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.
Nil
Principle 2
1 List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities.
Gold Loan - The flagship product of the Company ie., loan against security of gold jewellery provides access to credit within a reasonable time to a person who otherwise do not have access to credit or access to credit within a reasonable time. We service about 2 lakh customers per day. This supports social well being as well as business activities.
e-KYC - To facilitate easier compliance to KYC norms by customers, we launched 'e-KYC facility'. It is a customer-friendly and convenient digital KYC process based on Aadhaar with direct UlDAl link. The verification procedure is conducted by using customers' fingerprints.
This paperless and highly secure system enables faster loan processing and ensures 100% integrity in KYC verification. We are the first 'Gold Loan NBFC' to introduce this facility, with over 50% adoption rate in the first roll out.
iMuthoot- Mobile App - We developed a new mobile application called iMuthoot that allows customers to transact through their smartphones. This is our major initiative towards building a branch-less banking ecosystem for our customers. The app is available on Google Play and Apple Store. iMuthoot allows existing customers to view their loan statements and balance as well as Online Gold Loan facility. New customers can see our latest loan schemes, calculate loan eligibility, locate branches and fix appointments with their nearest branch officials and apply for gold loans. It is available in six languages. This app along with online payment facility has helped us a lot to move towards more and more digital transaction.
2 For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product(optional):
(a) Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain?
(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year? Not Applicable
3 Does the company have procedures in place for sustainable sourcing (including transportation)?
(a) If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so. Not Applicable
4 Has the company taken any steps to procure goods and services from local& small producers, including communities surrounding their place of work?
(a) If yes, what steps have been taken to improve their capacity and capability of local and small vendors? Not Applicable
5 Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as< 5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.
Not Applicable
Principle 3 |
 |
|
1 |
Please indicate the Total number of employees as on March 31, 2019 |
24224 |
2 |
Please indicate the Total number of employees hired on temporary/contractual/casual basis. |
Nil |
3 |
Please indicate the Number of permanent women employees. |
4219 |
4 |
Please indicate the Number of permanent employees with disabilities |
The company does not specifically track the information of employees with disability or make any discrimination on disability. Hence such an information is not available with the Company. |
5 |
Do you have an employee association that is recognized by management. |
No |
6 |
What percentage of your permanent employees is members of this recognized employee association? |
Not Applicable |
7 |
Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. |
 |
Â
SI |
Category |
No of complaints filed during the financial year |
No of complaints pending as on end of the financial year |
1 |
Child labour/forced labour/involuntary labour |
Nil |
Nil |
2 |
Sexual harassment |
3 |
0 |
3 |
Discriminatory employment |
Nil |
Nil |
8 |
What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year? |
||
(a) |
Permanent Employees |
All employees with the Company are covered by skill upgradation training programmes conducted through our "Regional Learning Centers" and "Muthoot Management Academies" |
|
(b) |
Permanent Women Employees |
All employees with the Company are covered by skill upgradation training programmes conducted through our "Regional Learning Centers" and "Muthoot Management Academies" |
|
(c) |
Casual/Temporary/Contractual Employees |
Not Applicable |
|
(d) |
Employees with Disabilities |
Please refer Sl.No.4 under Principle 3 |
1 Has the company mapped its internal and external stakeholders?
Yes
2 Out of the above, has the company identified the disadvantaged, vulnerable& marginalized stakeholders.
Yes
3 Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof, in about 50 words or so.
Though we have identified the above stakeholders , we have not created any product or services specifically for them. Since loan against security of gold jewellery provides access to credit within a reasonable time to a person who otherwise do not have access to credit or access to credit within a reasonable time , we believe that our services will address the needs of the above stakeholders. Our presence through 4480 branches in 24 States and 5 Union Territories again will address the needs of the above stakeholders. However , we have taken special initiatives to address the needs of the above stakeholders through our CSR activities details of which are available in the Annual Report on CSR activities in the Annual Report
Principle 5
1 Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers/ Contractors/NGOs/Others?
The policy covers only the company
2 How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?
Nil
Principle 6
1 Does the policy related to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/ Contractors/NGOs/others.
The policy covers only the company
2 Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc.
No
3 Does the company identify and assess potential environmental risks? Y/N No
4 Does the company have any project related to Clean Development Mecbanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, wbether any environmental compliance report is filed?
No
5 Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc.
We have three windmills installed in Tamilnadu with a combined power generation capacity of 3.75Megawatt
6 Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported?
Not Applicable
7 Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.
Not Applicable
Principle 7
1 Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with:
(a). Kerala Chamber of Commerce & Industries
(b). Federation of Indian Chamber of Commerce & Industries
(c). Kerala Management Association
(d) Association of Gold Loan Companies
(e) Confederation Of Indian Industry
(f) Kerala Non-Banking Finance Companies Association
2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)-No
Principle 8
Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof.
The flagship product of the Company ie., loan against security of gold jewellery provides access to credit within a reasonable time to a person who otherwise do not have access to credit or access to credit within a reasonable time.Hence this will support inclusive growth and equitable development. Our presence through 4480 branches in 24 States and 5 Union Territories again will address the needs of larger section Indian population. Please refer to Annual Report on CSR Activities attached in the Annual Report.
Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other organization?
Programmes/projects are undertaken primarily through the trust M/s. Muthoot M George Foundation and Muthoot M George Charitable
Trust. Please refer to Annual Report on CSR Activities attached in the Annual Report.Have you done any impact assessment of your initiative?
Programmes are reviewed periodically for its effectiveness and whether its desired objectives are met.
What is your company's direct contribution to community development projects- Amount in INR and the details of the projects undertaken.
Amount Spent on CSR activities is Rs. 282.92 millions. Please refer to Annual Report on CSR Activities attached in the Annual Report
Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.
CSR activities are constantly monitored for implementation and fresh support is given only where adoptions are at a better level. Please refer to Annual Report on CSR Activities attached in the Annual Report.
Principle 9
1 What percentage of customer complaints/consumer cases are pending as on the end of financial year. 18%
2 Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/ No/N.A. /Remarks(additional information)
Yes
3 Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so.
No
4 Did your company carry out any consumer survey/ consumer satisfaction trends? Yes. Done periodically at select geographies
Annexure- 6
AOC-2
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014:
1. Details of contracts or arrangements or transactions not at arm's length basis: Nil
2. Details of material contracts or arrangement or transactions at arm's length basis:
Name(s) of the related party and nature of relationship |
Nature of contracts/ arrangement/ transactions |
Duration of the contracts / arrangements/ transactions |
Salient terms of the contracts or arrangements or transactions including the value, if any: |
Date(s) of approval by the Board, if any: |
Amount paid as advances, if any: |
 |
 |
 |
 |
 |
 |
 |
 |
NIL |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
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For and on behalf of the Board of Directors |
 |
M G George Muthoot |
George Alexander Muthoot |
Chairman |
Managing Director |
(DIN: 00018201) |
(D1N:00016787) |
Ernakulam, |
 |
August 12, 2019 |
 |
Annexure- 7
Declaration Regarding Receipt of Certificate of Independence from all Independent Directors
1 hereby confirm that the Company has received from all the independent directors namely Mr. George Joseph, Mr. John K Paul, Mr. K George John, Justice (Retd.) Jacob Benjamin Koshy, Mr. Jose Mathew and Ms. Pamela Anna Mathew, a certificate stating their independence as required under Section 149(6) of the Companies Act, 2013 and SEB1 (LODR) 2015.
Place: Kochi |
George Alexander Muthoot |
Annexure- 8
Nomination and Remuneration Policy
Board of Directors of Muthoot Finance Limited ("the Company") in order to align with the provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges has constituted a Committee as "Nomination and Remuneration Committee."
Objective
The Nomination and Remuneration Committee (NRC) and this Policy are in compliance with the Companies Act, 2013, Reserve Bank of India Guidelines including read along with the applicable rules thereto and SEB1 (LODR) 2015 and Policy Guidelines of Muthoot Finance Limited.
The Key Objectives of the Committee would be:
a) to guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
b) to evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board and recommending the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.
c) to ensure that all provisions regarding Remuneration Policy and duties of Committee as required under the Companies Act, 2013, Reserve Bank of India guidelines, SEB1 (LODR) 2015 or such other applicable Acts, rules, regulations or guidelines are complied with.
Definitions
(a) Key Managerial Personnel: Chief Executive Officer, Executive Directors, Chief Financial Officer and Company Secretary or any other personnel as prescribed under Companies Act, 2013.
(b) Senior Management: Senior Management means personnel of the company who are members of its core management team excluding the Board of Directors. This would also include all members of management one level below the executive directors including all functional heads.
Role and Responsibilities
The role of the Committee inter alia will be the following:
a. Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with Criteria as laid down and recommend to Board their appointment and removal.
b. Ensure persons proposed to be appointed on the Board do not suffer any disqualifications for being appointed as a director under the Companies Act, 2013.
c. Ensure that the proposed appointees have given their consent in writing to the Company;
d. Review and carry out every Director's performance, the structure, size and composition including skills, knowledge and experience required of the Board compared to its current position and
Annexure- 8
make recommendations to the Board with regard to any changes;
e. Plan for the succession planning for directors in the course of its work, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future;
f. Be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise;
g. Keep under review the leadership needs of the organization, both executive and non-executive, with a view to ensuring the continued ability of the organization to compete efficiently in the market place; and
h. Ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of committee services and involvement outside board meetings.
i. Determine and agree with the Board the framework for broad policy for criteria for determining qualifications, positive attitudes and independence of a director and recommend to the Board a policy, relating to remuneration for the Directors, Key Managerial Personnel and other employees.
j. Review the on-going appropriateness and relevance of the remuneration policy.
k. Ensure that contractual terms of the agreement that Company enters into with Directors as part of their employment in the Company are fair to the individual and the Company.
1. Ensure that all provisions regarding disclosure of remuneration and Remuneration Policy as required under the Companies Act, 2013, Reserve Bank of India Guidelines, provisions of SEB1 (LODR) 2015 or such other acts, rules, regulations or guidelines are complied with.
Constitution Members:
a. The Committee shall consist of a minimum 3 non-executive directors, majority of them being independent.
b. Minimum two (2) members shall constitute a quorum for the Committee meeting.
c. Membership of the Committee shall be disclosed in the Annual Report.
d. Term of the Committee shall be continued unless terminated by the Board of Directors.
Chairman:
a. Chairman of the Committee shall be an Independent Director.
b. Chairman of the Committee shall be decided by Board of Directors of the Company.
c. In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman.
Frequency of Meetings
The meeting of the Committee shall be held at such regular intervals as may be required by the Committee or as directed by Board of Directors of the Company.
Guiding Principles
Committee while exercising its functions as described in ROLE AND RESPONSIBILITIES of the Committee in this policy, will be guided by following broad principles:
a. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
b. The relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
c. The remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
d. In case, subject matter is related to appointment/remuneration of Independent Directors, the requirement under Code of Conduct of Independent Directors and other Statutory Requirements are met.
e. In case, subject matter is related to appointment/remuneration of Directors other than
Independent Directors, Key Managerial Persons, Senior Management, the requirement under Code of Conduct of Senior Management of the Company is met.
A member of the Committee is not entitled to be present when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. The Committee may invite such executives including Key Managerial Persons and Senior Management, as it considers appropriate, to be present at the meetings of the Committee.
'Fit and Proper Criteria as per guidelines of Reserve Bank of India, will be most fundamental guidelines for appointment of Directors and due diligence in this regard will be carried out. Committee will be required to carry out all functions/duties in compliance of Companies Act, 2013, SEB1 (LODR) 2015 and Reserve Bank of India Guidelines. procedures mentioned below are followed and minimum criteria fulfilled by the persons before they are appointed on the Boards:
(a) NRC should undertake a process of due diligence to determine the suitability of the person for appointment / continuing to hold appointment as a director on the Board, based upon qualification, expertise, track record, integrity and other 'fit and proper criteria.
(b) NRC should obtain necessary information and declaration from the proposed / existing directors for the purpose as prescribed by Reserve Bank of India.
(c) The process of due diligence should be undertaken at the time of appointment / renewal of appointment.
(d) NRCs to scrutinize the declarations and ensure necessary deeds of covenants as prescribed by Reserve Bank of India is executed by nominated/elected Directors.
(e) Based on the information provided in the signed declaration, Nomination Committees should decide on the acceptance or otherwise of the directors, where considered necessary.
Decision Making And Voting
a. Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.
b. In the case of equality of votes, the Chairman of the meeting will have a casting vote.
c. Committee may refer any matter for consideration and decision by full Board of Directors of the Company,
if majority of members deem the matter fit for the said purpose. Such matters which are referred by the Committee will be deemed to be agenda of the meeting of Board of Directors.
Minutes of Committee Meeting
Proceedings of all meetings must be minuted and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent meeting after circulation of the same.
Review and Alteration of Nomination and Remuneration Policy
The Nomination and Remuneration Committee of the Company will be guided by this policy and subject to the power granted to/ terms of reference of the Committee as decided by Board of Directors of Company from time to time and requirement under the Companies Act, 2013 or such other acts, rules, regulations or guidelines including Listing Agreement with Stock Exchanges. Nomination and Remuneration Committee of the Company may review this policy from time to time as it may deem fit. Any modification and Change in this policy will be subject to approval of Board of Directors based on recommendation of Nomination and Remuneration Committee of the Company.Â
Mar 31, 2018
Dear Stakeholders,
Directors of your Company have pleasure in presenting the 21st Annual Report of the Company together with the audited financial statements (standalone and consolidated) for the year ended March 31, 2018.
1. Financial Summary
The financial performance of your Company for the year ended March 31, 2018 are summarized below:
(Rs. in Crores)
Particulars |
Standalone |
Consolidated |
||
Year ended 31st March, 2018 |
Year ended 31st March, 2017 |
Year ended 31st March, 2018 |
Year ended 31st March, 2017 |
|
Total Revenue |
6,243 |
5,747 |
6,705 |
5,938 |
Total Expenses |
3,486 |
3,826 |
3,833 |
3,980 |
Profit Before Tax |
2,757 |
1,921 |
2,872 |
1,958 |
Tax expense |
1037 |
741 |
1,074 |
751 |
Profit for the year |
1,720 |
1,180 |
1,799 |
1,207 |
Shareholdersâ Funds |
7,760 |
6,516 |
7,842 |
6,538 |
Total Liabilities |
23,621 |
24,197 |
26,463 |
25,646 |
Total Assets |
31,381 |
30,713 |
34,305 |
32,184 |
2. Dividend
Directors of your Company has during the year at their meeting dated February 8, 2018 had declared an interim dividend of Rs.10/- per equity share (100% of face value).
The dividend payout amount including the dividend distribution tax will be Rs.481Crs representing 27.97% of profit after tax for the year
Directors of your Company decided to plough back the remaining profit after tax for business activities and hence have not recommended any dividend for approval of shareholders in Annual General Meeting.
Directors of your Company has approved a Dividend Distribution Policy as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 .The Details of the policy is available on the website of the Company at www.muthootfinance.com/policy/policy-investor and is attached to this report as Annexure 1.
The list of unpaid dividend is available on the Companyâs website www.muthootfinance.com. Shareholders are requested to check the said list and if any dividend due to them is remaining unpaid in the said list, then shareholders can approach the Company or Registrar and Transfer Agent of the Company for release of unpaid dividend.
As per Section 124(5) of the Companies Act, 2013, the Company shall transfer the dividend that remained unclaimed for a period of seven years from the date of transfer to unpaid dividend account to the Investor Education and Protection fund (1EPF). Further as per Section 124(6) of the Companies Act, 2013, the Company shall transfer all shares in respect of which the unclaimed dividend has been transferred to 1EPF. No claim will lie on Company on account of dividend after the dividend is transferred to 1EPF.
3. Transfer to Reserves
Your Board of Directors has transferred an amount of Rs.344 Crores to the Statutory Reserve maintained under Section 451C of the RB1 Act, 1934. An amount of Rs.501 Crores has been transferred to Debenture Redemption Reserve. Post transfer of profits to reserves and distribution of dividend, your Board proposes to retain Rs.1,449 Crores in the Profit and Loss Account.
4. Companyâs Performance
During the Financial Year, Company saw 46% increase in its profitability with a net profit of Rs.1,720 Crores for the year ended March 31, 2018 as compared to Rs.1,180 Crores for the year ended March 31, 2017. Profit before tax increased by 44% to Rs.2,757 Crores. Total Income has increased from Rs.5,747 Crores for the year ended March 31, 2017 to Rs.6,243 Crores for the year ended March 31, 2018 which is mainly due to increase in Interest Income of the Company. Interest income of the Company increased to Rs.6,053 Crores from previous yearâs interest income of Rs.5,654 Crores. Loan Assets Portfolio of the Company increased by Rs.1,860 Crores during the year reaching Rs.29,138 Crores as on March 31, 2018 as against Rs.27,278 Crores as on March 31, 2017. The Return on Average Loan Assets increased to 6.16% in FY 2017-18 as compared to 4.47% in FY 2016-17. The cost of funds declined to 6.95% compared to 8.69% in fiscal 2016-17. Interest yield increased to 21.70% as compared to 21.43% in FY 2016-17. On account of the above, the Net Interest Margin improved to 14.75% as against 12.74% in FY 2016-17. The Company remitted to exchequer Rs.1140 Crores as taxes.
5. Resource Mobilization
(a) Non-Convertible Debentures:
Your Company successfully completed 17th Issue of Non-Convertible Debentures through Public Issue during FY 2017-18 raising Rs.1,969 Crores.
Directors of your Company are thankful to all investors who have subscribed the debentures through Public Issue and shown their trust towards your Company.
Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2018 was Rs.1,124 Crores. It qualifies as Tier II capital under the Non-Banking Financial Company- Systemically Important Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
(b) Bank Finance:
Bank Finance remains an important source of funding for your Company. Commercial Banks continued their support to your Company during Financial Year. As of 31st March, 2018, borrowings from banks were Rs.11,183 Crores as against Rs.9,202 Crores in the previous year
6. Equity Share Issuances
Employee Stock Options Schemes During the year, your Company has allotted 5,65,690 equity shares of face value of Rs.10/- each under Muthoot ESOP 2013 pursuant to exercise of 13,425 options of Rs.10/- each for Loyalty Options and 5,52,265 options of Rs.50/- each for Growth Options by Employees of the Company.
The disclosures as required under SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16th June 2015 is attached to this report as Annexure 2. The same disclosure is available at Companyâs website www. muthootfinance.com/investors/disclosure-esop. Please refer note 26(d) of Notes on Accounts in Standalone Financial Statements for further disclosures on ESOP The Company does not have any scheme to fund its employees to purchase the shares of the Company.
Your Company has received the certificate from the Statutory Auditors of the Company certifying that the ESOP scheme is implemented in accordance with the applicable SEBI Guidelines/Regulations and is in accordance with the resolution passed by the members of the Company. The certificate would be placed at the Annual General Meeting for inspection by members.
The stock option schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and there have been no material changes to these plans during the Financial Year 2017-18.
7. Credit Rating
Your Companyâs debt instruments are rated by 1CRA and CR1S1L, two of the leading Credit Rating Agencies in the country.
The Credit Ratings assigned to various instruments of the Company as of now are as follows:
Credit Rating Instruments Agency |
Ratings |
Limit in Rs. in Crores |
CR1S1L Commercial Paper |
CR1S1L A1 |
4,000 |
Subordinated Debts |
CR1S1L AA/Stable |
100 |
Non Convertible Debentures |
CR1S1L AA/Stable |
2,000 |
1CRA Commercial Paper |
1CRA A1 |
4,000 |
Short Term Bank Borrowings* |
1CRA A1 |
13,213 |
Long Term Bank Borrowings* |
1CRA AA/Stable |
10,037 |
Subordinated Debts |
1CRA AA/Stable |
100 |
Non Convertible Debentures |
1CRA AA/Stable |
2,000 |
*subject to overall rating of Rs.14,115 Crores for line of credit.
8. Internal Audit and Financial Control
In keeping with the size of the Company and its business model, your Company has developed over the years, a proper, adequate and well documented internal audit and control system. The control system ensures that the Companyâs assets are safeguarded and protected. The audit system also takes care to see that revenue leakages and losses to the Company are prevented and our income streams are protected. The control system enables reliable financial reporting.
Company has a well-structured Audit & Inspection department to perform timely and frequent internal audit to evaluate the adequacy of systems and procedures and also to evaluate the status of compliance to Companyâs guidelines and other statutory requirements. The department has on its rolls around 960 dedicated personnel who relentlessly safeguard the safety of your Companyâs assets, ensures the quality of assets pledged and also evaluates the adequacy of risk management systems at its operating units. In keeping with the huge network and geographic outreach of the operating units spread across the length and breadth of the country, the audit functions have been decentralized through setting up of Regional Audit offices in important Regional centers. The Regional Audit Offices exercise field level control over the branches through onsite visits and online audit systems. The field level Auditors report to Regional Audit offices who in turn shares their findings with the Audit & Inspection Department at the Registered Office of the Company.
Audit Committee of Board of Directors is apex Audit Authority of the Company. Under the present Audit Architecture, the Internal Audit Department reports to the Audit Committee regarding significant audit findings and also preventive and corrective measures to protect the interests of the Company. The audit Committee undertakes an evaluation of the adequacy and effectiveness of internal control systems. 1t also oversees the implementation of audit recommendations especially involving the risk management measures.
In addition to reviewing the internal control systems put in place by the Audit & Inspection Department, the Audit Committee also imparts guidance and crucial directions for upgradation of systems and controls on ongoing basis. The Audit system prevalent in the Company is reasonably autonomous function and built on best corporate governance framework.
Reference is invited to Note no.37 to the standalone financial statements contained in the annual report regarding frauds committed by employees of the Company. Company has taken or is in the process of taking disciplinary/ legal action against such employees.
9. Human Resources
As on March 31, 2018, the Company had 23,455 employees in its rolls at various level of organizational structure. Your Company is always committed in providing employees with ample opportunities to learn and advance in career.
Based on performance of the employees, management has introduced new means of payouts and increased the percentage of payout for existing incentives. The management is also rewarding employees with foreign trips to exquisite locations based on their achievement.
Your Company has offered multiple training programs to employees to help in their development. The programs includes product/process related trainings, soft skill trainings, leadership trainings and certification trainings for different group of employees. Company imparts training through two premium training establishments of the Company and 70 Regional Learning Centers .
Your Company has robust mechanism for identifying performers and Performance Score card method of performance assessment has been implemented for a structured and unbiased performance assessment model. Company has taken steps to promote eligible employees to the next level based on the above performance assessment model. .
Your Company offers various other benefits to employees including Employee Stock Options and various Statutory and Non Statutory Staff Welfare Measures. All eligible employees are covered under statutory provisions namely EPF, ES1, Maternity Benefits, Gratuity etc. Employees were enrolled under the National Pension System (NPS) with Company also making contribution along with their contribution.
10. Major Marketing & Promotion Initiatives AB-CSK Marketing Campaign
The year 2018 started with the grand association of The Muthoot Group with the biggest and legendary superstar of Bollywood and entertainment industry, Padma Vibhushan Shri Amitabh Bachchan who has a huge fan following not just in India but world over. He touches the heart and soul of one and all.
In yet another one of its kind partnership, The Muthoot Group has signed the one of the most successful 1PL teams of all times - Chennai Super Kings, led by the legendary former Indian Captain Padma Bhushan Shri Mahendra Singh Dhoni as âPrinicipal Team Partnerâ. Team CSK was coming back into 1PL after a gap of two years. This association allowed us to reach closer to our customers as well as the huge cricket fans of this country and even abroad, in a more exciting & acceptable manner more especially in the southern part of India.
These two major associations of the year with two mega stars - Shri Amitabh Bachchan and Chennai Super Kings, cover two of the most followed passions in our country -Bollywood and Cricket thereby giving us the opportunity to leverage these associations and touch the lives of millions of more Indians across North, East, West and South India.
11. Capital Adequacy
Your Companyâs Capital Adequacy Ratio as of March 31, 2018 stood at 26.59% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, Tier 1 capital adequacy ratio stood at 24.75% and Tier 11 capital adequacy ratio stood at 1.84%.
12. Public Deposits
The Company is a Systemically Important Non-Deposit Taking NBFC and hence has not accepted any public deposits.
13. RBI Guidelines
Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of India from time to time. Please refer note 41 and 42 of Notes on Accounts in Standalone Financial Statements for additional disclosures required under RB1 Guidelines applicable to the Company.
14. Subsidiaries/ Associates/ Joint Ventures
As on March 31, 2018 your Company has four subsidiaries namely M/s. Asia Asset Finance PLC, M/s. Muthoot Homefin (India) Limited, M/s. Muthoot Insurance Brokers Private Limited and M/s. Belstar Investment and Finance Private Limited. Your Companyâs subsidiaries have considerably contributed to the overall growth of your Company during the year. As per Section 136 of the Companies Act, 2013 the audited financial statements, including the consolidated financial statements of your Company and the audited accounts of each of its subsidiaries are available on the website of the Company at www.muthootfinance.com/ corporate/our_subsidary. The above documents will also be available for inspection at the Registered Office of the Company during business hours.
The Board of Directors of your Company has formulated a policy on material subsidiary, which is displayed on the web site of the Company at www.muthootfinance.com/ policy/policy-investor.
Financial Performance & position of Subsidiaries
a. Asia Asset Finance PLC:
Asia Asset Finance PLC, (AAF), a Company listed in Colombo Stock Exchange, is a subsidiary of your Company from December 31, 2014. AAF, where your Company holds 60% of equity capital, is a registered Financial Company with Central Bank of Sri Lanka and is mainly engaged in Vehicle Finance and Hire Purchase Activities. The Company which has also started business relating to lending against collateral of gold jewellery and micro finance is presently contributing a significant part of loan portfolio and income. AAF has operations across Sri Lanka with 17 branches as on March 31, 2018. AAF has made considerable progress in its business. 1ts major financial parameters for Financial Year 201718 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Funds |
Total Assets |
Total Outside Liabilities |
Amount in INR (in Crores)LKR/InR as on 31.03.2018-0.417365 / Average Exchange Rate -0.42017* |
108* |
11* |
8* |
78 |
513 |
435 |
Amounts in LKR (in Crores) |
257 |
22 |
18 |
186 |
1173 |
987 |
AAF increased its loan portfolio during the year by 15% at LKR 995crs. Total revenue for FY18 stood at LKR 256crs as against previous year total revenue of LKR 213crs . 1t generated a profit after tax of LKR 18crs during FY18 as against previous year profit after tax of LKR 28crs.
b. Muthoot Homefin (India) Ltd:
M/s. Muthoot Homefin (India) Ltd (MH1L), a registered Housing Finance Company licensed by National Housing Bank is a subsidiary of your Company. During the Financial Year 2017-18, your Company increased its shareholding in MH1L to 100% of the equity capital making it wholly owned subsidiary. 1ts major financial parameters for Financial Year 2017-18 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Funds |
Total Assets |
Total Outside Liabilities |
Amount in INR (in Crores) |
126 |
42 |
28 |
216 |
1587 |
1371 |
MHIL increased its loan portfolio by Rs.1024crs at Rs.1465crs during the year. Total revenue for Financial Year 2017-18 stood at Rs.126crs as against previous year total revenue of Rs.24cr. 1t achieved a net profit of Rs.28crs in Financial Year 2017-18 as against previous year profit of Rs.3crs.
c. Muthoot Insurance Brokers Private Limited:
Muthoot Insurance Brokers Private Limited (MIBPL), is an unlisted Private Limited Company holding a license to act as Direct Broker from Insurance Regulatory and Development Authority of India (1RDA) since 2013. MIBPL is a Wholly- Owned Subsidiary Company of your Company. 1ts major financial parameters for Financial Year 2017-18 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Total Assets Funds |
Total Outside Liabilities |
Amount in INR (in Crores) |
18 |
15 |
11 |
27 29 |
2 |
MIBPL generated a First year premium collection amounting to Rs.101crs during Financial Year 2017-18 as against Rs.70crs in the previous year. It generated a Profit after Tax of Rs.11crs during Financial Year 2017-18 as against Rs.6crs in the previous year
d. Belstar Investment and Finance Private Limited:
M/s. Belstar Investment and Finance Private Limited (BIFPL) is a micro finance Company. At end of the Financial Year 2017-18, your Company holds 66.61% of the equity capital of BIFPL. 1ts major financial parameters for Financial Year 2017-18 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Funds |
Total Assets |
Total Outside Liabilities |
Amount in INR (in Crores) |
219 |
50 |
34 |
159 |
1342 |
1183 |
BIFPL grew its loan portfolio during Financial Year 201718 by 97% reaching Rs.1137crs. 1t achieved a profit after tax of Rs.34crs during Financial Year 2017-18 as against previous year profit after tax of Rs.10crs. 1ts Gross and Net NPA stood at 0.76% and 0.30% as on March 31,2018.
The statement containing the salient features of the financial statement of your Companyâs Subsidiaries is attached as Annexure - A to Standalone Financial Statements of the Company as required under Rule 5 of The Companies (Accounts) Rules 2014.
There are no other Companies which have become or ceased to be Subsidiaries/ Associates/ Joint Ventures of the Company during the Financial Year 2017-18.
15. Particulars Of Loans, Guarantees Or Investments Under Section 186 of The Companies Act, 2013
Pursuant to Section 186(11)(a) of the Companies Act, 2013 (the âActâ) read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantee have not been disclosed in this Report.
The details of the Current Investments and Non- Current Investments of the Company are furnished under Note no. 10 forming part of the Standalone Financial Statements for the year ended March 31, 2018.
16. Extract of Annual Return
Extract of Annual Return as required under Companies Act, 2013 is annexed as Annexure 3.
17. Consolidated Financial Statements
The audited consolidated financial statements of the Company along with its subsidiaries AAF, MH1L, BIFPL and MIBPL prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 is provided in the Annual Report.
18. Risk Management and Risk Management Policy
Your Company has a Board approved Risk Management Policy which has laid down a framework for identifying, assessing, measuring various elements of risk involved in the business and formulation of procedures and systems for mitigating such risks.
Risk Management Committee of the Board of Directors of your Company constituted in accordance with the Reserve Bank of India guidelines has overall responsibility for overseeing the Risk Management activities of the Company, approving measurement methodologies and appropriate risk management procedures across the organization.
The Risk Management Committee comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
George Joseph |
Chairman |
Independent Director |
Jose Mathew |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
Risk Management Department periodically places its report on risk management to the Risk Management and Audit Committee of the Board of Directors. During the year, your Company has incorporated various practices and suggestion as directed by the Risk Management and Audit Committee which helped the Company in attaining an improved vigilance and security system, improved security of gold jewellery and cash, improved system of grading of branches, Regional Offices etc. 1T based risk management initiatives are discussed in section related to âTechnology Absorptionâ in this report of Board of Directors.
19. Corporate Social Responsibility
Your Board has constituted a Corporate Social Responsibility (CSR) & Business Responsibility Committee to support the Company in achieving the CSR objectives of the Company. The CSR and Business Responsibility Committee of the Board of Directors comprises of the following:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
K. George John |
Chairman |
Independent Director |
John K Paul |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
The Companyâs CSR policy is committed towards CSR activities as envisaged in Schedule V11 of the Companies Act, 2013. The Details of CSR policy of the Company are available on the website of the Company at www. muthootfinance.com/policy/policy-investor. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached to this report as Annexure 4.
In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014 as amended (âCSR Rulesâ) and in accordance with CSR Policy, during the year, the Company has spent Rs.20 Crores towards CSR projects/ programs.
20. Business Responsibility Report
The Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 mandates the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on their market capitalization. The BRR is attached to this report as Annexure 5.
21. Particulars Of Contracts or Arrangements made with Related Parties
The Board of Directors of your Company has formulated a policy on related party transactions, which is displayed on the web site of the Company at www. muthootfinance.com/policy/policy-investor. This policy deals with review of the related party transactions and regulates all transactions between the Company and its Related Parties.
Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at armâs length.
All related party transactions are placed before the Audit Committee for review and approval.
All transactions or arrangements with related parties referred to in Section 188 (1) of the Act, entered into during the year were on armâs length basis or were in ordinary course of business or with approval of the Audit Committee.
During the year, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Further, there were no material related party transactions which required approval of shareholders as required under Chapter 1V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.
The details of related party and transactions with the related parties as required under chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 appears on the Note no. 35 of the Notes to Accounts of the Standalone Financial Statements of the Company.
22. Audit Committee
The Audit Committee of our Board was reconstituted vide board resolution dated November 08, 2017 pursuant to Section 177 of the Companies Act 2013. The Audit Committee comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
George Joseph |
Chairman |
Independent Director |
John K Paul |
Member |
Independent Director |
Jose Mathew |
Member |
Independent Director |
George Alexander Muthoot |
Member |
Managing Director |
All recommendations of Audit Committee are accepted by your Board and details on Audit committee appear on the report on Corporate Governance.
23. Vigil Mechanism
To conduct affairs of your Company and its various constituents in a fair and transparent manner and as part of Vigil Mechanism, and providing whistle blowers a safe and reliable way of sharing information, your Company has formulated a Whistle Blower Policy in compliance with Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is graded reporting structure under the Policy and also provides provision for direct access to Chairman of Audit Committee. The whistle blower policy is available at website of the Company at www.muthootfinance.com/ policy/policy-investors.
24. Listing
Equity Shares of your Company are listed on NSE India Ltd and BSE Ltd. Your company has paid required listing fees to Stock Exchanges.
25. Changes in Directors and Key Managerial Personnel
Mr. John K Mathew, Independent Director of your Company retired at the 20th Annual General Meeting of shareholders held during the Financial Year 2017-18.
Term of Ms. Pamela Anna Mathew as Independent Director expired at the 20th Annual General Meeting was re-appointed as Independent Director for a further period of three years.
On recommendation of Board, shareholders have inducted three new directors - Mr. Jacob Benjamin Koshy, Mr. Pratip Chaudhuri and Mr. Jose Mathew in the Board as Independent Directors in the 20th Annual General Meeting. However, Mr. Pratip Chaudhuri was unable to join Board of Directors of your Company post his induction by members and has submitted his resignation during the Financial Year 2017-18 and Board of Directors has accepted his resignation.
After evaluating the eligibility criteria under Reserve Bank of India guidelines, Companies Act, 2013 and SEBI LODR Regulations 2015, your Board recommends reappointment of George Alexander Muthoot and George Thomas Muthoot as Directors of the Company who are retiring by rotation and eligible for reappointment and has offered themselves for re-appointment. Detailed profile of the above Directors is annexed to the notice calling Annual General Meeting of members of the Company.
26. Meeting of the Board
During the Financial Year 2017-18, your Board of Directors met six times on 18.05.2017, 08.08.2017, 08.11.2017, 08.02.2018, 13.03.2018 and 31.03.2018.
27. Declaration from Independent Directors
The Independent Directors have submitted disclosure that they meet the criteria of independence as provided under Section 149(6) of Companies Act, 2013 and SEBI Regulations. A statement by Managing Director confirming receipt of this declaration from Independent Directors is annexed to this report as Annexure 6.
28. Policy on Appointment and Remuneration Of Directors and Performance evaluation of Board, Committees and Directors
a) Policy on Appointment and Remuneration Of Directors
Board of Directors of your Company, on recommendation of Nomination and Remuneration Committee, has formulated a policy for selection, appointment and remuneration of the directors, senior management personnel as required under Section 178(3) of Companies Act, 2013. Details of the said Policy is annexed to this report as Annexure 7.
The Nomination and Remuneration Committee which was reconstituted on November 08, 2017 comprises of the following directors:
Name of the |
Designation in |
Nature of |
Director |
the Committee |
Directorship |
John K Paul |
Chairman |
Independent Director |
K. George John |
Member |
Independent Director |
Jose Mathew |
Member |
Independent Director |
Terms of reference of the Nomination and Remuneration Committee include the following:
1. Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with Criteria as laid down and recommend to Board their appointment and removal.
2. Ensure persons proposed to be appointed on the Board do not suffer any disqualifications for being appointed as a director under the Companies Act, 2013.
3. Ensure that the proposed appointees have given their consent in writing to the Company;
4. Review and carry out every Directorâs performance, the structure, size and composition including skills, knowledge and experience required of the Board compared to its current position and make recommendations to the Board with regard to any changes;
5. Plan for the succession planning for directors in the course of its work, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future;
6. Be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise;
7. Keep under review the leadership needs of the organization, both executive and non-executive, with a view to ensuring the continued ability of the organization to compete efficiently in the market place; and
8. Ensure that on appointment to the Board, nonexecutive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of committee services and involvement outside board meetings.
9. Determine and agree with the Board the framework for broad policies for criteria for determining qualifications, positive attitudes and independence of a director and recommend to the Board policies, relating to remuneration for the Directors, Key Managerial Personnel and other employees.
10. Review the on-going appropriateness and relevance of the remuneration policy.
11. Ensure that contractual terms of the agreement that Company enters into with Directors as part of their employment in the Company are fair to the individual and the Company.
12. Ensure that all provisions regarding disclosure of remuneration and Remuneration Policy as required under the Companies Act, 2013 or such other acts, rules, regulations or guidelines are complied with.
13. Formulate ESOP plans and decide on future grants.
14. Formulate terms and conditions for a suitable Employee Stock Option Scheme and to decide on followings under Employee Stock Option Schemes of the Company:
(i) the quantum of option to be granted under ESOP Scheme(s) per employee and in aggregate;
(ii) the condition under which option vested in employees may lapse in case of termination of employment for misconduct;
(iii) the exercise period within which the employee should exercise the option and that option would lapse on failure to exercise the option within the exercise period;
(iv) the specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee;
(v) the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period;
(vi) the procedure for making a fair and reasonable adjustment to the number of options and
to the exercise price in case of rights issues, bonus issues and other corporate actions;
(vii) the grant, vest and exercise of option in case of employees who are on long leave; and
(viii) the procedure for cashless exercise of options.
15. Any other matter, which may be relevant for administration of ESOP Scheme including allotment of shares pursuant to exercise of options from time to time.
b) Performance evaluation of Board, Committees and Directors
The SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 and the Companies Act, 2013 require the evaluation of the performance of the Board, its Committees and the individual directors. The Board carried out annual evaluation of its own performance, its Committees and individual Directors based on criteria and framework adopted by the Board and in accordance with existing regulations. The details of training, appointment, resignation and retirement of Directors, if any, are dealt with in the report of Corporate Governance. Brief details of profile of each Director appear in Annual Report of the Company.
c) Independent Directors Meeting
During the year, a meeting of Independent Directors was held as required under Companies Act, 2013 and in Compliance with requirement under Schedule 1V of the Act and as per requirements of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and discussed matters specified therein.
29. Corporate Governance Report
Your Company has complied with the Corporate Governance norms as stipulated in Chapter 1V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per Regulation 34 of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Detailed report on Corporate Governance is attached to this Report as Annexure 8.
30. Management Discussion and Analysis Statement
Management Discussion and Analysis on the business of the Company is attached to this Report as Annexure 9.
31. Conservation of energy, technology absorption, foreign exchange earnings and outgo:
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is as follows:
a) Conservation of energy
Your Company being a Non-Banking Finance Company, its activities are not energy intensive. However, your Company has taken adequate measures for conservation of energy and usage of alternative source of energy, wherever required.
b) Technology Absorption
Your Company being a Non-Banking Finance Company, its activities do not require adoption of any specific technology. However, your Company has been in the forefront in implementing latest information technologies & tools towards enhancing our customer convenience.
Few of the initiatives taken by the company in IT for improved business efficiency, ease of operation, improved risk management practice and for providing best stakeholders experience based are as follows:
Through the implementation and continuous enhancement of the core banking solution (CBS) and customer relationship management(CRM) systems across our branches over the last couple of years, the Company could achieve substantially improved efficiency, control and customer convenience. With a view to leveraging technology and moving towards paperless systems for the preservation of the environment, the Company has transitioned to the digital platforms, mainly the Web and Android based, for automation of various processes involved in our business operations.
A few of the key initiatives that are strengthened our digital capabilities are given below.
a. API Integrations with Service Providers and Business Verticals: API integration has been enabled in Core Banking Solution during last year for International Money Transfers, Domestic Money Transfers, and other services etc.
b. Virtual Bank Account for Gold Loan: This facilitates Customer to remit their Gold Loan repayments through various banking channels such as 1MPS, NEFT, RTGS etc with their Virtual bank account number provided in the Gold Loan pledge form.
c. Online Gold Loan (OGL) Integration with C-DAC & NSDL eSign Functionality: OGL has been enabled for 24x7 availability of Gold Loan for customers through iMuthoot Mobile App and Muthoot Online portal.
d. eKYC: The eKYC project has been enabled for customer onboarding through the CRM Solution. Presently most of new KYCs are being created through eKYC.
e. B2C Self Service Platforms: Online Gold Loan through Customer Bank Account and 1VR based Gold-ATM facility has been provided. Using this facility, customers having difficulty in accessing Internet can withdraw the money from any 1MT enabled ATMs across India.
f. Internal Credit Rating platform: The existing CBS computing engine has been enhanced to generate Credit Scores of customers. Accordingly, the system can also allocate loyalty points to the customers.
g. Mobile App Development
The inhouse Mobile App development team has been developing various Apps in both in Android and 1oS platforms for B2C and B2E Enterprise Mobility Platforms and internal process automations. A few of the features of the Apps are given below.
- iMuthoot: Gold Loan customers can login to iMuthoot App with their existing web online username and password. Currently more than 5 lakh customers have downloaded the App and around 3 lakh have registered for availing gold loan services through the iMuthoot channel.
- Loan@Home for Customer/Enterprise: This provides flexibility to the customer to avail of gold loan without visiting a branch.
- MapMe: Branch GPS mapping for our branches for the convenience of customers.
- MIS: Business position and trend chart for managers and senior executives
- HRMS: E mployees can apply for leave through the Android App.
- CBS Transaction Approval: This help the mangers and approving authorities to approve the CBS transaction requests while on the move.
- DigiMuthoot Security Access: This is designed as a common Security framework for all individual modules of Muthoot mobile digital plat form ensuring access controls and management for all Muthoot digital platforms.
32. Audits
a) Statutory Audit under section 139
On recommendation of Board of Directors of the Company, members of the Company appointed M/s. Varma & Varma, Chartered Accountants, Kochi (Firm Reg No. 004532 S) as Statutory Auditor of the Company at the 20th Annual General Meeting of the Company for a term of 5 consecutive years i.e till the conclusion of 25th Annual General Meeting pursuant to Section 139 of the Companies Act, 2013.
Pursuant to notification issued by the Ministry of Corporate Affairs on May 07, 2018, amending section 139 of the Companies Act 2013, the mandatory requirement for ratification of appointment of auditors by the members at every AGM does not arise.
The Company has received a certificate from the above Auditors to the effect that they are eligible to continue as Auditors in accordance with the provisions of Section 141 of the Companies Act, 2013.
The Report given by M/s M/s. Varma & Varma, Chartered Accountants, Statutory Auditors on the financial statement of the Company for the year 2017-18 is part of the Annual Report.
b) Secretarial Audit under Section 204
The Board had appointed M/s KSR & Co., Company Secretaries LLP, Coimbatore to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit report is annexed to this report as Annexure 10.
c) Explanations or comments by the Board on qualification, reservation or adverse remark or disclaimer on audits for financial year 2017-18
There are no qualifications, reservation or adverse remark or disclaimer on audits under Section 139 and Section 204 of Companies Act, 2013 for financial year 2017-18.
33. Reporting on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Internal Complaints Committee constituted by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 looks into the complaints of aggrieved women employees, if any, and is instrumental in:
- promoting gender equality and justice and the universally recognized human right to work with dignity
- prevention of sexual harassment of women at the workplace
There were 6 reported cases of sexual harassment, wherein lady officials had complained against harassment by their senior official in their Branch/Region. Action taken was prompt following investigation by the Internal Complaints Committee. Evidence was examined and the erring officials were heard. On finding truth in the complaints, a Report was sent to HRD Department. Disciplinary action was initiated based on the Report, against the officials concerned and disciplinary procedures were completed speedily.
34. Personnel
The Disclosure required under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure 11.
35. Significant and material Orders passed by Regulators or Courts or Tribunals
There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of your Company and its future operations.
36. Material Changes and Commitments affecting the financial position of the Company between the end of the financial year to which Financial Statements relate and the date of the report
No material changes and commitments affecting the financial position of your Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
37. Directorsâ Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 with regard to Directorâs Responsibility Statement, Directors state that: â
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
38. Disclosure pursuant to Part A of Schedule V of SEBI LODR
Disclosure pursuant to Part A of Schedule V read with Regulation 34(3) and 53(f) of SEBI is attached as Annexure 12 of this report.
39. Acknowledgement
Your Directors thank the Companyâs stakeholders in large including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees of your Company and its subsidiaries at all levels. Your Companyâs consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of India, Securities and Exchange Board of India and Ministry of Corporate Affairs for the guidance and support received from them including officials there at from time to time.
40. Forward Looking Statements
This Report(s) contains certain forward looking statements within the provisions of Listing agreements and hence reasonable caution is to be exercised by stakeholders while relying on these statements.
For and on behalf of the Board of Directors
M. G. George Muthoot George Alexander Muthoot
Chairman Managing Director
Place: Kochi
Date: August 14, 2018
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi - 682 018
Mar 31, 2017
Dear Stakeholders,
Directors of your Company have pleasure in presenting the 20th Annual Report of the Company together with the audited financial statements (standalone and consolidated) for the year ended 31st March, 2017.
1. FINANCIAL SUMMARY
The financial performance of your Company for the year ended 31st March, 2017 are summarized below:
(Rs, in Crores)
Standalone |
Consolidated |
|||
Particulars |
Year ended 31st March, 2017 |
Year ended 31st March, 2016 |
Year ended 31st March, 2017 |
Year ended 31st March, 2016 |
Total Revenue |
5,747 |
4,875 |
5,938 |
4,941 |
Total Expenses |
3,826 |
3,558 |
3,980 |
3,614 |
Profit Before Tax |
1,921 |
1,317 |
1,958 |
1,327 |
Tax expense |
741 |
507 |
751 |
509 |
Profit for the year |
1,180 |
810 |
1,207 |
818 |
Shareholdersâ Funds |
6,516 |
5,619 |
6,538 |
5,622 |
Total Liabilities |
24,197 |
21,430 |
25,646 |
21,773 |
Total Assets |
30,713 |
27,049 |
32,184 |
27,395 |
2. DIVIDEND
The Company has during the year 2016-17 paid an interim dividend of Rs, 6/- per equity share (60% of face value).
The dividend payout amount including the dividend distribution tax will be Rs, 288 crs representing 24.45% of profit after tax for the year
Directors of your Company decided to plough back the remaining profit after tax for business activities and hence have not recommended any final dividend.
Directors of your Company has approved a Dividend Distribution Policy as per Securities and Exchange Board of 1ndia (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Details of the policy is available on the website of the Company at www.muthootfinance.com/policy/policy-investor and is attached to this report as Annexure 1.
The list of unpaid dividend is available on the Companyâs website www.muthootfinance.com. Shareholders are requested to check the said list and if any dividend due to them is remaining unpaid in the said list, then shareholders can approach the Company or Registrar and Transfer Agent of the Company for release of unpaid dividend.
As per Section 124(5) of the Companies Act, 2013, the Company shall transfer the dividend that remained unclaimed for a period of seven years from the date of transfer to unpaid dividend account to the 1nvestor Education and Protection fund (1EPF). Further as per Section 124(6) of the Companies Act, 2013, the Company shall transfer all shares in respect of which the unclaimed dividend has been transferred to 1EPF. No claim will lie on Company on account of dividend after the dividend is transferred to 1EPF.
3. TRANSFER TO RESERVES
Your Board of Directors has transferred an amount of Rs, 236 Crores to the Statutory Reserve maintained under Section 451C of the RB1 Act, 1934. An amount of Rs, 482 Crores has been transferred to Debenture Redemption Reserve. Post transfer of profits to reserves and distribution of dividend, your Board proposes to retain Rs, 1,056 Crores in the Profit and Loss Account.
4. ECONOMIC SCENARIO
The 1ndian economy has weathered many challenges successfully in recent times. Two important domestic policy developments in 1ndia: a constitutional amendment making way for the Goods and Service Tax (GST) and withdrawal of the highest denomination notes (Rs, 500 and Rs, 1000) which intends to curb black money and running of a parallel economy.
Demonetization is also very unusual in its monetary consequences. 1t has reduced sharply, the supply of one type of moneyâcashâwhile increasing almost to the same extent another type of moneyâdemand deposits. This also helped in increasing transactions through digital money.
With a slow start in 2016, the economic momentum recovered towards the middle of the year. While this growth momentum was temporarily impacted with demonetization, the 1ndian economy appears to be recovering fast and will continue as one of the fastest growing nations. Fixed investment rate in the economy has consistently declined in the past few years, more so the private investment. Raising the growth rate of the economy will to a great extent depend on quickly reversing this downward trend in the investment. The economy is expected to grow by 7.7 per cent in the current year.
The Goods and Services Tax (GST) - constitution amendment bill, passed by the government, effective from July 1st, 2017 showed a significant impact on the taxation structure in the country. The GST will create a common 1ndian market, improve tax compliance and governance, and boost investment and growth; it is also a bold new experiment in the governance of 1ndiaâs cooperative federalism. What will be critical is the efficiency in relation to its implementation. Your
Company believes that in the medium run it will lead to more digitalization and will help in effective governance.
5. COMPANYâS PERFORMANCE
During the Financial Year, Company saw 46% increase in its profitability with a net profit of Rs, 1,180 Crores for the year ended March 31, 2017 as compared to Rs, 810 Crores for the year ended March 31, 2016. Profit before tax increased by 46% to Rs,1,921 Crores. Total 1ncome has increased from Rs, 4,875 Crores for the year ended March 31, 2016 to Rs, 5,747 Crores for the year ended March 31, 2017 which is mainly due to increase in 1nterest 1ncome of the Company. 1nterest income of the Company increased to Rs, 5,655 Crores from previous yearâs interest income of Rs, 4,813 Crores. Loan Portfolio of the Company increased by Rs, 2,899 Crores during the year reaching Rs, 27,278 crores as on March 31, 2017 as against Rs, 24,379 Crores as on March 31, 2016. The Return on Average Loan Assets increased to 4.47% in FY 2016-17 as compared to 3.32% in FY 2015-16. The cost of funds declined to 8.69% compared to 9.25% in fiscal 2015-16. 1nterest yield increased to 21.43% as compared to 19.72% in FY 2015-16. On account of the above, the Net 1nterest Margin improved to 12.74% as against 10.47% in FY 2015-16. The Company remitted to exchequer Rs, 804 crores as taxes.
6. RESOURCE MOBILIZATION
(a) Non-Convertible Debentures:
Your Company successfully completed 15th and 16th 1ssue of Non-Convertible Debentures through Public 1ssue during FY 2016-17 raising Rs, 1,832 Crores.
Directors of your Company are thankful to all investors who have subscribed the debentures through Public 1ssue and shown their trust towards your Company.
Subordinated Debts represents long term source of funds for the Company and the amount outstanding as on 31st March, 2017 was Rs, 1,912 Crores. 1t qualifies as Tier 11 capital under the Non-Banking Financial Company- Systemically 1mportant Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
(b) Bank Finance:
Bank Finance remains an important source of funding for your Company. Commercial Banks continued their support to your Company during Financial Year. As of 31st March, 2017, borrowings from banks were Rs, 9,202 Crores as against Rs, 7,687 Crores in the previous year
7. EQUITY SHARE ISSUANCES Employee Stock Options Schemes
During the year, your Company has allotted 4,73,217 equity shares of face value of Rs, 10/- each under Muthoot ESOP 2013 pursuant to exercise of 36,307 options of Rs, 10/- each for Loyalty Options and 4,36,910 options of Rs, 50/- each for Growth Options by Employees of the Company.
The disclosures as required under SEB1 (Share Based Employee Benefits) Regulations, 2014 read with SEB1 Circular C1R/CFD/POL1CY CELL/2/2015 dated 16th June 2015 is attached to this report as Annexure 2. The same disclosure is available at Company''s website www. muthootfinance.com/investors/disclosure-esop. Please refer note 24(c) of Notes on Accounts in Standalone Financial Statements for further disclosures on ESOP The Company does not have any scheme to fund its employees to purchase the shares of the Company.
Your Company has received the certificate from the Statutory Auditors of the Company certifying that the ESOP scheme is implemented in accordance with the applicable SEB1 Guidelines/Regulations and is in accordance with the resolution passed by the members of the Company. The certificate would be placed at the Annual General Meeting for inspection by members.
The Credit Ratings assigned to various instruments of the Company as of now are as follows:
Credit Rating Agency |
Instruments |
Ratings |
Limit in '' in Crores |
CR1S1L |
Commercial Paper |
CR1S1L A1 |
4000 |
Subordinated Debts |
CR1S1L AA/Stable |
100 |
|
Non Convertible Debentures |
CR1S1L AA/Stable |
500 |
|
1CRA |
Commercial Paper |
1CRA A1 |
200 |
Short Term Bank Borrowings* |
1CRA A1 |
10,818 |
|
Long Term Bank Borrowings* |
1CRA AA/Stable |
9,337 |
|
Subordinated Debts |
1CRA AA/Stable |
100 |
|
Non Convertible Debentures |
1CRA AA/Stable |
200 |
*subject to overall rating of Rs, 12,760 Crores for line of credit.
The stock option schemes are in compliance with Securities and Exchange Board of 1ndia (Share Based Employee Benefits) Regulations, 2014 and there have been no material changes to these plans during the Financial Year 2016-17.
8. CREDIT RATING
Your Companyâs debt instruments are rated by 1CRA and CR1S1L, two of the leading Credit Rating Agencies in the country. 1n July 2016 CR1S1L and in August 2016 1CRA upgraded your Companyâs Long Term Debt rating from AA-/Stable to AA/Stable.
The rating upgrade is a reflection of consistent performance in spite of going through turbulent times in the last four years as well as improvement in financial performance. This upgrade is a recognition of the efforts of âTeam Muthootâ. We believe that, under AA category, we enter a different league of credit rated companies. We hope this upgrade will enable us to get finer rates from financial institutions and banks enabling us to reduce our cost of borrowings.
9. INTERNAL AUDIT AND FINANCIAL CONTROL
1n keeping with the size of the Company and its business model, your Company has developed over the years, a proper, adequate and well documented internal audit and control system. The control system ensures that the Companyâs assets are safeguarded and protected. The audit system also takes care to see that revenue leakages and losses to the Company are prevented and our income streams are protected. The control system enables reliable financial reporting .
A fully fledged Audit and 1nspection Department has been set up to conduct timely and frequent internal audit to evaluate the adequacy of systems and procedures and also to evaluate the status of compliance to Companyâs guidelines and other statutory requirements. The department has on its rolls around 945 dedicated personnel who relentlessly safeguard the safety of your Companyâs assets, ensures the quality of assets pledged and also evaluates the adequacy of risk management systems at its operating units. 1n keeping with the huge network and geographic outreach of the operating units spread across the length and breadth of the country, the audit functions have been decentralized through setting up of Regional Audit offices in important Regional centers. The Regional Audit Offices exercise field level control over the branches through onsite visits and online audit systems. The field level Auditors report to Regional Audit offices who in turn shares their findings with the Audit & 1nspection Department at the Registered Office of the Company.
Under the present Audit Architecture, the 1nternal Auditor(s) at the Registered Office reports to the Audit Committee regarding significant audit findings and also preventive and corrective measures to protect the interests of the Company. The audit Committee undertakes an evaluation of the adequacy and effectiveness of internal control systems. 1t also oversees the implementation of audit recommendations especially involving the risk management measures.
Apart from monitoring the internal control measures adopted by the Audit department, the Committee also imparts guidance and constructive suggestions for improvement of the audit function in the Company. The Audit architecture now prevalent in the Company enjoys independence in its functioning and embodies best Corporate Governance standards.
Reference is invited to Note no. 34 to the standalone financial statements contained in the annual report regarding frauds committed by employees of the Company. Company has taken or is in the process of taking disciplinary / legal action against such employees.
10. HUMAN RESOURCES
Your Company has always considered its employees as an important resource of the Company and is aimed at providing employee satisfaction, enabling them to deliver better results year over year.
As on March 31, 2017, the Company had 24,205 employees in its rolls at various level of organizational structure. Your Company is always committed in providing employees with ample opportunities to learn and advance in career. 1n quest for having a satisfied work force, your Company focused on four major areas for employee engagement during the last financial year
Rewards & Recognition
Based on performance of the employees, management has introduced new means of payouts and increased the percentage of payout for existing incentives. An ex-gratia payment along with Festival bonus, which is almost equal to One month pay of employees at each grade were paid to employees. Management also took steps to increase the payout of 1ncentive for Gold Loan Portfolio Growth and for 1nterest Collection. The management is also rewarding employees with foreign trips to exquisite locations based on their achievement.
Training and Development
Your Company has offered multiple training programs to employees to help in their development. The programs includes product/process related trainings, soft skill trainings, leadership trainings and certification trainings for different group of employees. Training imparted through two premium training establishments of the Company and 68 Regional Learning Centers, in the last financial year was to the tune of 63,088 mandays.
Promotions
Your Company has robust mechanism for identifying performers and has taken all steps to promote eligible employees to the next level.
Performance Management
Your Company had formulated a Performance Score card method of performance assessment for all employees in the branch model. A pre-defined score card was used to capture performance of employees on a quarterly basis and all related corrective measure and fine tuning of performance was done using this method. The company also encouraged low performing employees through well-defined performance growth programs. Use of Performance Score cards has helped in improving role clarity and objectiveness to performance assessment. Performance score is used as an important parameter for deciding the Annual 1ncrements of the employees.
Your Company offers various other benefits to employees including Employee Stock Options and various Statutory and Non Statutory Staff Welfare Measures. All eligible employees are covered under statutory provisions namely EPF, ES1, Maternity Benefits, Gratuity etc. Employees were enrolled under the National Pension System (NPS) with Company also making contribution along with their contribution .
11. MAJOR MARKETING & PROMOTION INITIATIVES Inbound Call Management System
Your Company introduced the 1nbound Call Management System designed to bring down the turnaround time while reaching out to customers.
This platform has enabled your Company to reach out to potential customers almost instantly. Once a customer observes our advertisement he/she attempts to contact Muthoot Finance by calling our Toll Free Number. He will be asked to feed the pincode of his location and thereafter he is directly connected to the nearest Muthoot Finance branch . This prompt response mechanism has helped your Company to upgrade its customer service levels.
Introduction of state-of-the-art CRM
Your Company launched the State of the art CRM Software in pan 1ndia. This has enabled to understand and profile our customers better and deliver increased value to them. This new system will help us evolve better schemes and products tailor-made for different customer groups.
Association with Indian Super League
Your Company continue its association with 1ndian Super League (1SL) as the Official Referee Partner and Fair Play Award Sponsor. Your Company have always been in the forefront to promote sports and celebrate sportsmanship. Association with 1ndian Super League has given the Muthoot brand an exposure to the young 1ndian diaspora. As soccer is gaining popularity in 1ndia, an association like this has further helped your Company present its fair and trustworthy credentials as a financial supermarket with a business legacy of over 130 years.
Mission Lead Demonetization
During the time of demonetization when customers were struggling with problems precipitated by the shortage of currency, your Company stepped up and launched an initiative across North, East and West 1ndia that entailed meeting and interacting with people while they were waiting in long serpentine queues. Objective was to educate them on the various modes of financial assistance that could be provided by Muthoot Finance across cash and cashless channels. These include various digital offerings like Muthoot WebPay, iMuthoot mobile app, utilization of Muthoot Finance DCB V1SA Card for availing gold loans directly on card, direct bank credits, use of POS machines for repayments, Aadhar enabled e-KYC. etc.
12. CAPITAL ADEQUACY
Your Companyâs Capital Adequacy Ratio as of March 31, 2017 stood at 24.88% of the aggregate risk weighted assets on balance sheet and risk adjusted value of the off-balance sheet items, which is well above the regulatory minimum of 15%. Out of the above, Tier 1 capital adequacy ratio stood at 21.78% and Tier 11 capital adequacy ratio stood at 3.10%.
13. PUBLIC DEPOSITS
The Company is a Systemically 1mportant Non-Deposit Taking NBFC and hence has not accepted any public deposits.
14. RBI GUIDELINES
Your Company has complied with all the applicable regulations prescribed by the Reserve Bank of 1ndia from time to time. Please refer note 41 and 42 of Notes on Accounts in Standalone Financial Statements for additional disclosures required under RB1 Guidelines applicable to the Company.
15. SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
As on March 31, 2017 your Company has four subsidiaries namely M/s. Asia Asset Finance PLC,
M/s. Muthoot Homefin (1ndia) Limited, M/s. Muthoot 1nsurance Brokers Private Limited and M/s. Belstar 1nvestment and Finance Private Limited. Your Companyâs subsidiaries have considerably contributed to the overall growth of your Company during the year. As per Section 136 of the Companies Act, 2013 the audited financial statements, including the consolidated financial statements of your Company and the audited accounts of each of its subsidiaries are available on the website of the Company at www.muthootfinance.com/ corporate/our_subsidary. The above documents will also be available for inspection at the Registered Office of the Company during business hours.
The Board of Directors of your Company has formulated a policy on material subsidiary, which is displayed on the web site of the Company at www.muthootfinance.com/ policy/policy-investor.
Financial Performance & position of Subsidiaries
a. Asia Asset Finance PLC:
Asia Asset Finance PLC, (AAF), a Company listed in Colombo Stock Exchange, is a subsidiary of your Company from December 31, 2014. Company increased its shareholding in Asia Asset Finance PLC from 59.70% to 60% during the year. AAF is a registered Financial Company with Central Bank of Sri Lanka and is mainly engaged in Vehicle Finance and Hire Purchase Activities. The Company also started business relating to lending against collateral of gold jewellery and micro finance and is presently contributing a significant part of loan portfolio and income. AAF has operations across Sri Lanka with 15 branches as on March 31, 2017. AAF has made considerable progress in its business. 1ts major financial parameters for Financial Year 2016-17 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Funds |
Total Assets |
Total Outside Liabilities |
Amount in Rs, (in Crores)LKR/'' as on 31.03.2017-0.42621 |
97* |
14* |
13* |
74 |
444 |
370 |
/ Average Exchange Rate -0.45423* |
||||||
Amounts in LKR (in crores) |
213 |
31 |
28 |
174 |
1003 |
829 |
The total income of AAF has increased by 48% at Rs, 97crs, which has contributed to the overall improvement of its profitability by 51% reaching Rs,13crs. 1ts asset base grew by 25% reaching Rs,444crs. Directors of your Company are hopeful that AAF will be showing continuous growth in the coming years and will contribute significantly to consolidated profit of your Company.
b. Muthoot Homefin (India) Ltd:
M/s. Muthoot Homefin (1ndia) Ltd (MH1L), a registered Housing Finance Company licensed by National Housing Bank is a subsidiary of your Company. During the Financial Year 2016-17, your Company increased its shareholding in MH1L by acquiring 26,700,000 shares for a consideration of Rs, 30Crores. Post-acquisition your Company holds 88.27% of the equity capital of MH1L.
1ts major financial parameters for Financial Year 2016-17 are as follows:
During the year, its loan portfolio increased by Rs, 409crs at Rs, 441crs. Total revenue for FY17 stood at Rs, 24crs as against previous year total revenue of Rs,2crs. 1t achieved a profit after tax of Rs, 3crs during FY17 as against previous year profit after tax of Rs,0.01crs. We believe that housing finance sector is the next best secured lending opportunity after gold loan and with the central government making a major push for affordable housing , we expect your Subsidiary Company to tap this opportunity in the coming years and to contribute significantly to the consolidated profit of your Company.
c. Muthoot Insurance Brokers Private Limited:
Muthoot 1nsurance Brokers Private Limited (M1BPL), is an unlisted Private Limited Company holding a license to act as Direct Broker from 1nsurance Regulatory and Development Authority of 1ndia (1RDA) since 2013. During the Financial Year 2016-17, your Company acquired 100% equity shares of M1BPL from the existing shareholders for a consideration of Rs, 20 Crores. Post-acquisition M1BPL is a Wholly-Owned Subsidiary Company. 1ts major financial parameters for Financial Year 2016-17 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
ShareholderRs,s Funds |
Total Assets |
Total Outside Liabilities |
Amount in Rs, (in Crores) |
12 |
9 |
6 |
17 |
18 |
1 |
M1BPL generated a First year premium collection amounting to Rs, 70crs during FY17 as against Rs, 49 Crores during previous year. 1ts total revenue increased by 16% at Rs,12crs as against previous year. 1ts profit after tax increased by 18% at Rs,6crs as against previous year.
d. Belstar Investment and Finance Private Limited:
M/s. Belstar 1nvestment and Finance Private Limited (B1FPL) is a micro finance Company.
During the Financial Year 2016-17, your Company acquired 15,017,459 equity shares of B1FPL, by investing Rs, 63 Crores. Post-acquisition your Company holds 64.60% of the equity capital of B1FPL thus making it a Subsidiary Company.
1ts major financial parameters for Financial Year 2016-17 are as follows:
Parameters |
Total Income |
Profit Before Taxation |
Profit After Taxation |
Shareholderâs Funds |
Total Assets |
Total Outside Liabilities |
Amount in Rs, (in Crores) |
103 |
16 |
10 |
90 |
763 |
673 |
During the year, its loan portfolio grew by 115% at Rs, 567crs. 1t achieved a profit after tax of Rs,10crs during the year as against previous year profit after tax of Rs,6crs. 1ts Gross and Net NPA stood at 0.09% and 0.02% respectively as on March 31, 2017.
The statement containing the salient features of the financial statement of your Companyâs Subsidiaries is attached as Annexure - A to Standalone Financial Statements of the Company as required under Rule 5 of The Companies (Accounts) Rules, 2014.
There are no other Companies which have become or ceased to be Subsidiaries/ Associates/ Joint Ventures of the Company during the Financial Year 2016-17.
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Pursuant to Section 186(11)(a) of the Companies Act, 2013 (the âActâ) read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of 1ndia are exempt from the applicability of provisions of Section 186 of the Act. As such the particulars of loans and guarantee have not been disclosed in this Report. The details of the Current 1nvestments and NonCurrent 1nvestments of the Company are furnished under Note no. 10 forming part of the Standalone Financial Statements for the year ended March 31, 2017.
17. EXTRACT OF ANNUAL RETURN
Extract of Annual Return as required under Companies Act, 2013 is annexed as Annexure 3.
18. CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company along with its subsidiaries AAF, MH1L, B1FPL and M1BPL prepared in accordance with the Generally Accepted Accounting Principles in 1ndia (1ndian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 is provided in the Annual Report.
19. RISK MANAGEMENT AND RISK MANAGEMENT POLICY
Your Company has a Board approved 1ntegrated Risk Management Policy which has laid down a framework for identifying, assessing, measuring various elements of risk involved in the business and formulation of procedures and systems for mitigating such risks. During the Financial Year, your Directors have approved the updated Risk Management Framework of the Company which has incorporated various new practices and risk control measures.
Risk Management Committee of the Board of Directors of your Company constituted in accordance with the Reserve Bank of 1ndia guidelines has overall responsibility for overseeing the Risk Management activities of the Company, approving measurement methodologies and appropriate risk management procedures across the organization.
The Risk Management Committee Comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
K. George John |
Chairman |
1ndependent Director |
Justice K John Mathew |
Member |
1ndependent Director |
George Jacob Muthoot |
Member |
Whole- time Director |
Risk Management Department periodically places its report on risk management to the Risk Management and Audit Committee of the Board of Directors. During the year, your Company has incorporated various practices and suggestion as directed by the Risk Management and Audit Committee which helped the Company in attaining an improved vigilance and security system, improved security of gold jewellery and cash, improved system of grading of branches, Regional Offices etc.
1T based risk management initiatives are discussed in section related to âTechnology Absorptionâ in this report of Board of Directors.
20. CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of Companies Act, 2013, your Board has constituted a Corporate Social Responsibility (CSR) committee to support the Company in achieving the CSR objectives of the Company. The CSR committee of the Board of Directors comprises of the following:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
K. George John |
Chairman |
1ndependent Director |
John K. Paul |
Member |
1ndependent Director |
George Alexander Muthoot |
Member |
Managing Director |
The Companyâs CSR policy is committed towards CSR activities as envisaged in Schedule V11 of the Companies Act, 2013. The Details of CSR policy of the Company are available on the website of the Company at www. muthootfinance.com/policy/policy-investor. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached to this report as Annexure 4.
1n terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014 as amended (âCSR Rulesâ) and in accordance with CSR Policy, during the year, the Company has spent '' 15 crores towards CSR projects/ programs.
21. BUSINESS RESPONSIBILITY REPORT
The Securities and Exchange Board of 1ndia (Listing Obligations and Disclosures Requirements) Regulations,
2015 mandates the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on their market capitalization. The BRR is attached to this report as Annexure 5.
22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The Board of Directors of your Company has formulated a policy on related party transactions, which is displayed on the web site of the Company at www. muthootfinance.com/policy/policy-investor. This policy deals with review of the related party transactions and regulates all transactions between the Company and its Related Parties.
Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at armâs length.
All related party transactions are placed before the Audit Committee for review and approval.
All transactions or arrangements with related parties referred to in Section 188 (1) of the Act, entered into during the year were on armâs length basis or were in ordinary course of business or with approval of the Audit Committee.
During the year, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Further, there were no material related party transactions which required approval of shareholders as required under Chapter 1V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of related party transactions as required under Section 134(3)
(h) of the Companies Act, 2013 in Form AOC 2 is not applicable to your Company.
The details of related party and transactions with the related parties as required under chapter 1V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 appears on the Note no. 32 of the Notes to Accounts of the Standalone Financial Statements of the Company.
23. AUDIT COMMITTEE
The Audit Committee of our Board was reconstituted vide board resolution dated May 26, 2014 pursuant to Section 177 of the Companies Act 2013. The Audit Committee comprises of:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
George Joseph |
Chairman |
1ndependent Director |
John K. Paul |
Member |
1ndependent Director |
George Alexander Muthoot |
Member |
Managing Director |
All recommendations of Audit Committee are accepted by your Board and details on Audit committee appear on the report on Corporate Governance.
24. VIGIL MECHANISM
To conduct affairs of your Company and its various constituents in a fair and transparent manner and as part of Vigil Mechanism, and providing whistle blowers a safe and reliable way of sharing information, your Company has formulated a Whistle Blower Policy in compliance with Companies Act, 2013 and SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is graded reporting structure under the Policy and also provides provision for direct access to Chairman of Audit Committee. The whistle blower policy is available at website of the Company at www.muthootfinance.com/ policy/policy-investors.
25. LISTING
Equity Shares of your Company are listed on NSE 1ndia Ltd and BSE Ltd. Your Company has paid required listing fees to Stock Exchanges.
26. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The term of Mr. John K Mathew as 1ndependent Director is expiring at the ensuing 20th Annual General Meeting and hence he is retiring at the Annual General Meeting this year
Mr. George Joseph, Mr. K George John, and Mr. John K Paul were appointed as 1ndependent Directors and hence shall not be liable to retire by rotation.
Term of Ms. Pamela Anna Mathew as 1ndependent Director is expiring at the ensuing 20th Annual General Meeting and Board recommends her re-appointment as 1ndependent Director for a further period of three years.
Mr. George Jacob Muthoot, Whole- time Director and Mr. Alexander M George, Whole Time Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.
On recommendation of Nomination and Remuneration committee, your Board has considered induction of three new directors - Mr. Jacob Benjamin Koshy, Mr. Pratip Chaudhuri and Mr. Jose Mathew in the Board as 1ndependent Directors to be appointed by members in the ensuing 20th Annual General Meeting.
Mr. Jacob Benjamin Koshy is the retired Chief Justice of Patna High Court. He also served as the Acting Chief Justice Of High Court Of Kerala. He was also the Chairman of the Kerala State Human Rights Commission. Your Board believes that his appointment will benefit your Company through his role as 1ndependent Director.
Mr. Pratip Chaudhuri is the former Chairman of State Bank of 1ndia. He held several important positions during his 38 years career in SB1. Your Board believes his appointment will benefit the Company through his role as 1ndependent Director.
Mr. Jose Mathew is a Chartered Accountant by profession and is also a distinguished entrepreneur in the field of Tourism. He has served in various capacities like General Manager of Kerala State 1ndustrial Enterprises and Managing Director of Kerala State
Drugs and Pharmaceuticals Ltd. Your Board believes his appointment will benefit the Company through his role as 1ndependent Director.
After evaluating the eligibility criteria under Reserve Bank of 1ndia guidelines, Companies Act, 2013 and SEB1 LODR Regulations 2015, your Board recommends appointment of Mr. Jacob Benjamin Koshy, Mr. Pratip Chaudhuri and Mr. Jose Mathew as 1ndependent Directors of the Company. Detailed profile of proposed Directors as required under SEB1 LODR is annexed to the notice calling Annual General Meeting of members of the Company.
27. MEETING OF THE BOARD
During the Financial Year 2016-17, your Board of Directors met seven times on 12.04.2016, 27.05.2016,
28.07.2016, 23.08.2016, 11.11.2016, 13.02.2017 and
23.03.2017.
28. DECLARATION FROM INDEPENDENT DIRECTORS
The 1ndependent Directors have submitted disclosure that they meet the criteria of independence as provided under Section 149(6) of Companies Act, 2013 and SEB1 Regulations. A statement by Managing Director confirming receipt of this declaration from 1ndependent Directors is annexed to this report as Annexure 6.
29. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS
a) Policy on Appointment and Remuneration Of Directors
Board of Directors of your Company, on recommendation of Nomination and Remuneration Committee, has formulated a policy for selection, appointment and remuneration of the directors, senior management personnel as required under Section 178(3) of Companies Act, 2013. Details of the said Policy is annexed to this report as Annexure 7.
The Nomination and Remuneration Committee which was reconstituted on January 28, 2016 comprises of the following directors:
Name of the Director |
Designation in the Committee |
Nature of Directorship |
John K Paul |
Chairman |
1ndependent Director |
Kariath George John |
Member |
1ndependent Director |
K John Mathew |
Member |
1ndependent Director |
Terms of reference of the Nomination and Remuneration
Committee include the following:
- 1dentifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with Criteria as laid down and recommend to Board their appointment and removal.
- Review and carry out every Directorâs performance, the structure, size and composition including skills, knowledge and experience required of the Board compared to its current position and make recommendations to the Board with regard to any changes;
- Determine and agree with the Board the framework for broad policy for criteria for determining qualifications, positive attitudes and independence of a director
and recommend to the Board a policy, relating to remuneration for the Directors, Key Managerial Personnel and other employees.
- Review the on-going appropriateness and relevance of the remuneration policy.
- Ensure that all provisions regarding disclosure of remuneration and Remuneration Policy as required under the Companies Act, 2013 or such other acts, rules, regulations or guidelines are complied with.
- To administrate Employee Stock Options of the Company.
b) Performance evaluation of Board, Committees and Directors
The SEB1 (Listing Obligations and Disclosures Requirements) Regulations, 2015 and the Companies Act, 2013 require the evaluation of the performance of the Board, its Committees and the individual directors. The Board carried out annual evaluation of its own performance, its Committees and individual Directors based on criteria and framework adopted by the Board and in accordance with existing regulations. The details of training, appointment, resignation and retirement of Directors, if any, are dealt with in the report of Corporate Governance. Brief details of profile of each Director appear in Annual Report of the Company.
c) Independent Directors Meeting
During the year, a meeting of 1ndependent Directors was held as required under Companies Act, 2013 and in Compliance with requirement under Schedule 1V of the Act and as per requirements of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and discussed matters specified therein.
30. CORPORATE GOVERNANCE REPORT
Your Company has complied with the Corporate Governance norms as stipulated in Chapter 1V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per Regulation 34 of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Detailed report on Corporate Governance is attached to this Report as Annexure 8.
31. MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT
Management Discussion and Analysis on the business of the Company is attached to this Report as Annexure 9.
32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is as follows:
a) Conservation of energy
Your Company being a Non-Banking Finance Company, its activities are not energy intensive. However, your Company has taken adequate measures for conservation of energy and usage of alternative source of energy, wherever required.
b) Technology Absorption
Your Company being a Non-Banking Finance Company, its activities do not require adoption of any specific technology. However, your Company has been in the forefront in implementing latest information technologies & tools towards enhancing our customer convenience.
Few of the initiatives taken by the company are as follows:
Core Banking Solution(CBS)
The in-house developed and maintained core banking solution(CBS) has been providing very high(99.99%) uptime which handles the transactions processing, back office and M1S for the Companyâs entire branches and offices. The CBS has been continually updated so as to meet the varied business changes as also to comply with the operational and control requirements.
The critical CBS system is collocated at the high availability 1T1-Trimax data center in Bangalore. The disaster recovery(DR) systems are set up in 1nfopark, Kochi so as to ensure business continuity in case of a major disaster in Data Centre.
Online Payment Channel for Customers
As one of our digital initiative, the online facility for payment of 1nterest and principal has been widely accepted by the customers. This has immensely helped the company and the customers during the post-demonetization period. The online channel has become very popular among the customers due to its availability anywhere, on a 24 by 7 basis.
Customers can use any of the multiple options for payment such as Debit card, Direct debit through online banking, Prepaid cards, Mobile wallets, UP1, etc. Also POS machines are enabled in our Branches to enable our customers do cashless transactions. For loan amount payout to customer bank accounts, we have enabled 1MT, RTGS, NEFT, 1MPS.
Online Gold Loan (OGL)
Online Gold Loan is a convenient product launched to meet the urgent loan requirement of a customer who can avail of the same anytime, anywhere. The loan amount will be directly credited to the customerâs bank account and has facility to repay through online. The loan is disbursed on the basis of the value of gold already pledged at the branch.
Aadhaar-based Electronic KYC
The Company being an approved KYC User Agency (KUA) by U1DA1, it can accept customer Aadhaar number and complete KYC verification with Customer fingerprint image with high security . This e-KYC facility available across the Branches is found convenient to customers and helps us in ensuring the authenticity of the KYC data and effective risk management. Presently around 86% of New KYCs are through e-KYC.
Mobile App iMuthoot
We have developed and implemented a new Mobile Application in Android & iOS and enabled transactions through the convenient channel for customers. Multiple local language option also has been made available. Presently the 1nterest payment, availing Gold loans online, Live Chat with Support Desk & Helpline, Google Maps to locate nearest branch & Book Appointment with branch are made available in iMuthoot.
CRM System
The Company has implemented a functionally rich, highly scalable CRM solution across its Branches and offices. The CRM is tightly integrated with the core banking solution(CBS). AP1s are used for integrating CRM with the different business applications running in the Group.
With the 360-degree view of the customers provided by the CRM, we can manage their relationship more effectively. Also it is expected to help us in cross selling and upwelling the various products & services offered by the business divisions in the Group.
Auto Debit for EMI Products
Enabled NPC1âs automated debiting system of Gold Loan installment scheme. This channels electronic transactions which are repetitive and periodic in nature with a robust, secure and scalable are provided to customers on transaction updates. 1t is highly flexible and convenient to customers platform with end-to-end transaction processing capabilities.
API Integrations
We have developed a strong AP1 integration platform and integrated more than 100 AP1s for banking segments, money transfer, insurance providers and other external partners. This has taken care of multiple transaction concurrency and meets the needs of systems integration for other Divisions of the company.
CCTV Surveillance System
The solution enables live streaming of visuals from cameras installed at branches and offices from ROs/
HO. 1t provides a 360 degree dashboard on the data and KP1s of health of surveillance devices. Facilitates close monitoring of working status of surveillance devices and has instant data recording facility and playback options.
c) Total Foreign Exchange Earned : N1L
Total Foreign Exchange Used : '' 0.10 Crores
33. AUDITS
a) Statutory Audit under section 139
As per Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules,
2014, the term of the Companyâs auditors M/s Rangamani & Co. (Firm Reg No. 003050 S), Chartered Accountants, Alleppey as Statutory Auditors of the Company expires at the conclusion of the ensuing 20th Annual General Meeting of the Company and hence will be retiring at the Annual General Meeting.
The Board of Directors of the Company at its meeting held on 08th August, 2017, based on the recommendation of the Audit Committee, have recommended for appointment of M/s. Varma & Varma, Chartered Accountants, Kochi (Firm Reg No. 004532 S) as the Auditors of the Company by the Members at the 20th Annual General Meeting of the Company for a term of 5 consecutive years. Accordingly, a resolution proposing appointment of M/s Varma & Varma as the Auditors of the Company for a term of five year from the conclusion of 20th Annual General Meeting till the conclusion of 25th Annual General Meeting pursuant to Section 139 of the Companies Act, 2013, forms part of the Notice of the 20th Annual General Meeting of the Company.
The Company has received a certificate from the above Auditors to the effect that if they are appointed, it shall be in accordance with the provisions of Section 141 of the Companies Act, 2013.
The Report given by M/s Rangamani & Co., Statutory Auditors on the financial statement of the Company for the year 2016-17 is part of the Annual Report. The Board place on record its appreciation for the services rendered by M/s Rangamani & Co., as the Auditors of the Company.
b) Secretarial Audit under Section 204
The Board had appointed M/s KSR & Co., Company Secretaries LLP, Coimbatore to conduct Secretarial Audit for the Financial Year 2016-17. The Secretarial Audit report is annexed to this report as Annexure 10.
c) Explanations or comments by the Board on qualification, reservation or adverse remark or disclaimer on audits for financial year 2016-17
There are no qualifications, reservation or adverse remark or disclaimer on audits under Section 139 and Section 204 of Companies Act, 2013 for financial year 2016-17.
34. REPORTING ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The 1nternal Complaints Committee constituted by your Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 looks into the complaints of aggrieved women employees, if any, and is instrumental in:
- promoting gender equality and justice and the universally recognized human right to work with dignity
- prevention of sexual harassment of women at the workplace
There were 8 reported cases of sexual harassment, wherein lady officials had complained against harassment by their senior official in their Branch/
Region. Action taken was prompt following investigation by the 1nternal Complaints Committee. Evidence was examined and the erring officials were heard. On finding truth in the complaints, a Report was sent to HRD Department. Disciplinary action was initiated based on the Report, against the officials concerned and disciplinary procedures were completed speedily.
35. PERSONNEL
The Disclosure required under the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure 11.
36. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of your Company and its future operations.
37. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of your Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
38. DIRECTORSâ RESPONSIBILITY STATEMENT
1n accordance with the provisions of Section 134(5) of the Companies Act, 2013 with regard to Directorâs Responsibility Statement, Directors state that: â
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
39. DISCLOSURE PURSUANT TO PART A OF SCHEDULE V OF SEBI LODR
Disclosure pursuant to Part A of Schedule V read with Regulation 34(3) and 53(f) of SEB1 is attached as Annexure 12 of this report.
40. ACKNOWLEDGEMENT
Your Directors thank the Companyâs stakeholders in large including investors, customers, banks, financial institutions, rating agencies, debenture holders, debenture trustees and well-wishers for their continued support during the year. Your Directors place on record their appreciation of the contribution made by the employees of your Company and its subsidiaries at all levels. Your Companyâs consistent growth was made possible by their hard work, solidarity, cooperation and support. The Board sincerely expresses its gratitude to Reserve Bank of 1ndia, Securities and Exchange Board of 1ndia and Ministry of Corporate Affairs for the guidance and support received from them including officials there at from time to time.
41. FORWARD LOOKING STATEMENTS
This Report(s) contains certain forward looking statements within the provisions of Listing agreements and hence reasonable caution is to be exercised by stakeholders while relying on these statements.
For and On Behalf of the Board of Directors
M G George Muthoot George Alexander Muthoot
Chairman Managing Director
Kochi,
08th August, 2017
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi - 682 018
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting the 17th Annual Report of
the Company together with the audited financial statements for the year
ended 31st March, 2014.
1. Financial Results
The financial results of your company for the year ended 31st March,
2014 are summarised below:
Rs. in Crores
Particulars FY 2013-14 FY 2012-13
Income from Operations 4,928 5,359
Other Income 20 28
Total Expenditure 3,754 3,876
Profit Before Depreciation and Other
Non Cash Charges 1,241 1,557
Depreciation and Other Non Cash Charges 47 45
Profit Before Tax 1,194 1,511
Tax Expenses 413 507
Profit After Tax 780 1,004
Share Capital and Reserves 4,265 3,736
Subordinated Debt 2,635 2,310
Secured Non-Convertible Debentures 10,631 11,247
Borrowings from Banks/FIs 5,803 10,136
Gross Retail Loan Assets under
Management 21,862 26,387
2. Dividend
Based on Company''s performance, your Directors are pleased to recommend
for approval of the shareholders a dividend of 10% for Equity Shares of
face value of Rs. 10 each (T 1/- per share) of the Company for the
financial year 2013-14 which is payable on obtaining the approval of the
shareholders of the Company on the 17th Annual General Meeting.
The Company has during the year paid interim dividend aggregating to Rs.
5 per equity share (50% of face value). The total dividend declared for
the year 2013-14 is ^ 6 per equity share (60% of face value). The
dividend pay-out amount including dividend distribution tax will be Rs.
260.93 Crores.
The list of unpaid dividend is available on the Company''s website
www.muthootfinance.com. Shareholders are requested to check the said
list and if any dividend is due to them is remaining unpaid in the said
list, they can approach the company for release of unpaid dividend.
3. Transfer to Reserves
Your Board proposes to transfer Rs. 78.01 Crores to the General Reserve
in accordance with the Companies (Transfer of Profit to Reserves) Rules,
1975. Your Board also proposes to transfer Rs. 156.01 Crores to the
Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934.
An amount of Rs. 663.70 Crores has been transferred to Debenture
Redemption Reserve. Post transfer of Profits to reserves and
distribution of dividend, your Board proposes to retain Rs. 990.18 Crores
in the Profit and Loss Account.
4. Economic Scenario
The Global operating environment improved considerably in FY 2013-14,
as economic activity strengthened and spending in most economies began
to recover, however, in a sporadic manner. Whilst the advanced
economies, particularly the US and UK, led the rebound, as growth
became broader and more entrenched, Europe saw the frst tentative signs
of recovery after a long and painful slowdown.
India''s economic growth rate in the current financial year remained weak
at 4.7% (Previous Year: at 4.5%). The Industrial activity remained weak
and the stagnation was broad based. Mining and manufacturing output
remained negative and the economy witnessed decline in investment in
new projects in line with slowdown in overall growth. Macroeconomic
situation in 2013-14 had to balance the concerns of containing elevated
infation and at the same time promoting growth. It also involved
managing a volatile external situation characterised by a sharp
depreciation of the Rupee witnessed till the second quarter of 2013-14.
High interest rates, retail infation, lack of policy direction,
combined with uncomfortably high fiscal and current account defcits,
left the policy makers with very few options. RBI had to increase the
repo rate by 75 bps during the year.
Your Board of Directors is hopeful that the new government will be able
to accelerate reform process and remove various bottlenecks in
implementation of various stalled projects and get back the economy on
growth mode.
5. Company''s Performance
During the year, RBI further tightened the LTV cap of 60% by clarifying
that LTV has to be calculated based on the gold price and not on the
value of jewellery. This further impacted customer interest and we saw
further erosion in our Customer base. Majority of the customers
approached unorganised sector for better terms than us and some to
banks. Since there were no LTV norms applicable to banks, absence of
level playing feld created a disequilibrium in gold loan business. In
whole, during the year, disbursements came down and our gold loan
portfolio declined by 17% from Rs. 26000 Crores to Rs. 21618 Crores. Only
188 branches were added during the year as against 404 branches in the
previous year. Total income declined by 8% to Rs. 4947 Crores. Profit
Before Tax declined by 21% to Rs. 1194 Crores and Profit After Tax by 22%
to Rs. 780 Crores. The Return on Average Retail Loans declined to 3.22%
as compared to 4.05% in fiscal 2012-13. The cost of borrowed funds
declined to 11.88% compared to 12.42% in fiscal 2012-13. Interest yield
declined to 20.27% as compared to 21.66% in fiscal 2012-13. On account
of the above, the Net Interest Margin declined to 9.42% as against
10.28% in fiscal 2012-13. The Company remitted to exchequer Rs. 458 Crores
as taxes.
However, in January 2014, RBI relaxed the LTV cap to 75% of gold price
as per the recommendations of the KUB Rao
Committee of RBI. Further, RBI made these regulations applicable for
banks, regional rural banks and co-operative banks paving way for a
level playing feld in the organised sector. We believe that these
regulatory changes can positively impact our business in the future.
6. Resource Mobilisation
(a) Non Convertible Debentures:
Reserve Bank of India vide its circular RBI/2012- 13/560 DNBD(PD) CC
No. 330/03.10.001/2012-13 dated June 27, 2013 and RBI/2013-14/115
DNBS(PD) CC No.349/03.10.001/2013-14 dated July 02, 2013 issued certain
guidelines with respect to raising money through private placement by
NBFCs in the form of non-convertible debentures. These guidelines
include restrictions on number of investors in an issue to 49
investors, minimum subscription amount for a single investor of Rs. 25
Lakhs, prohibition on providing loan against own debentures etc. The
above directions limits Company''s ability to mobilise resources through
private placement as in the past for investments less than Rs. 25 Lakhs.
Company is, hence, focusing on ensuring that upon maturity of existing
privately placed debentures, holders subscribe to debentures issued
through Public Issue route. Accordingly, Company has successfully
completed Public Issue of 5th, 6th and 7th Issue of Non-Convertible
Debentures during Financial Year 2013-14 raising Rs.1100 Crores. Your
Company is thankful to all investors who have subscribed the debentures
through Public Issue and endorsed their Trust towards the Company.
Subordinated Debts represents long term source of funds for the Company
and the amount outstanding as on 31st March, 2014 was Rs. 2635 Crores. It
qualifies as Tier II capital under the Non-Banking Financial (Non-
Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank
Directions), 2007.
(b) Bank Finance:
Commercial Banks continued their support to the Company during
Financial Year. As of 31st March, 2014, borrowings from banks were Rs.
5803 Crores as against Rs. 10136 Crores in the previous year. The
reduction in borrowings were on account of the decline in gold loan
portfolio of Rs. 4383 Crores during the year.
Availment of these limits will increase as and when there is
corresponding increase in the loan portfolio.
Your Company''s rated short term debt instruments were also placed with
various institutions at competitive rates enabling the company to
reduce the overall cost of liabilities.
7. Ratings
Your Company''s debt instruments are rated by ICRA and CRISIL, two of
the leading Credit Rating Agencies in the country. The Credit Ratings
assigned to various instruments of the Company are as follows:
Credit
Rating Agency Instruments Ratings Limit in Rs. in Crores
CRISIL Commercial
Paper CRISIL A1 4000
Subordinated
Debts CRISIL AA-/
Stable 100
Non Convertible
Debentures CRISIL AA-/Stable 500
ICRA Commercial
Paper ICRAA1 200
Short Term Bank
Borrowings* ICRAA1 5712
Subordinated
Debts ICRA AA-/Stable 100
Non Convertible
Debentures ICRA AA-/Stable 200
Long Term Bank
Borrowings* ICRA AA-/Stable 7186
*subject to overall rating of Rs. 11,134 Crores for line of credit
8. Internal Control
The Company has a well placed proper and adequate internal control
system commensurate with the size and nature of its business. The
primary objective of the internal control system is to ensure that all
its assets are safeguarded and protected and prevent any revenue
leakage and losses to the Company.
The Company has an Audit and Inspection Department which conducts
regular internal audits to examine the adequacy and compliance with
policies, plans and statutory requirements. The Department through a
team of 1124 personnel ensures quality of the assets pledged and
adherence to various risk management practices at all the operating
units. The audit functions are decentralised to match the requirements
of exercising proper control over nationwide network of the Company.
The Internal Audit Team directly reports to the Audit Committee of the
Company. significant audit observations and follow up actions thereon
are reported to the Audit Committee. The Audit Committee reviews
adequacy and effectiveness of the Company''s internal control
environment and monitors the implementation of audit recommendations,
including those relating to strengthening of the Company''s risk
management policies and systems.
The Audit Committee oversees the functioning of the audit team and
reviews the effectiveness of internal control at all levels apart from
laying down constructive suggestions for improving the audit function
in the Company. The present reporting structure ensures independence of
the internal audit function and embodies best corporate governance
practices.
9. Human Resources
The factor that makes an organisation to move from Good to Great is its
"HUMAN CAPITAL"; and your company has realised this long ago and
invests every year in building this human capital to greater heights.
Your company''s focus area for the year was talent management,
capability building, leadership development and employee engagement.
The company quickened the dream of growth for many of the employees by
automating the fast track promotion process, allowed them to move into
a sales-oriented structure so that they can grow faster, encouraged
lateral movements of employee so talent is managed within the group,
became a proud organisation where 38% of the workforce is women, took
quantum leap in providing state-of-art training centres so as to
improve the quality of the training delivery. It also introduced the
Employee Stock Option Plan (ESOP) to create a sense of ownership among
employees and as recognition of their efforts towards the organisation
growth and development.
As of 31st March, 2014, the company had 25012 employees in its rolls at
various organisational levels. The company has also heavily invested in
training its people assets by a humongous figure of 1,77,000 training
man-days, which shows your company''s commitment towards its human
resources
Apart from the statutory welfare measures like ESI, PF, Maternity
benefits, many staff welfare benefits are provided to employees by the
Company in the form of indirect compensation in order to motivate
employees to perform better. Rs. 27.5 Lakhs was disbursed to 1351
employees by way of Awards & Presentations like Marriage Presentation,
First Time Parent Presentation and Children''s Educational Award. 8327
Employees (outside the purview of ESI) are covered under a Group
Mediclaim Insurance Policy which is of immense benefit to employees and
their families for their hospitalisation needs. 1200 Senior Citizen
employees were given Medical Reimbursements amounting to Rs. 30 Lakhs. A
Onetime Compassionate Payment Scheme and a Personal Accident
Compensation Scheme extended financial compensation of Rs. 31.5 Lakhs to
the next of kin of employees who died while in harness.
The Details of ESOP is annexed to report of Board of Directors of the
Company and is essential part of this report.
10. Public deposits
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
11. Capital adequacy
Your Company''s Capital Adequacy Ratio as of 31st March, 2014 stood at
24.69% of the aggregate risk weighted assets on balance sheet and risk
adjusted value of the off-balance sheet items, which is well above the
regulatory minimum of 15%. Out of the above, Tier I capital ratio
stood at 18.01%.
12. RBI Guidelines
Your Company has complied with all the applicable regulations
prescribed by the Reserve Bank of India from time to time.
13. Directors
During the year under review, Mr. K. George John was appointed as
Director of your Company in place of Mr. P George Varghese who retired
at previous Annual General Meeting.
Mr. George Thomas Muthoot and Mr. George Jacob Muthoot are retiring at
the ensuing Annual General Meeting and being eligible offers themselves
for reappointment. Board of Directors of your company recommends their
reappointment at the Annual General Meeting. Your Board of Directors
recommend appointment of Mr. George Joseph , Justice K John Mathew, Mr.
John K Paul and Mr. K. George John as Independent Directors in
compliance with Section 149 of Companies Act, 2013 and clause 49 of
listing agreement with Stock Exchange (s) for a period of two years
continuing till second Annual General Meeting from date of appointment.
Further, the existing term of appointment of Mr. M.G George Muthoot,
Whole Time Director & Chairman ; Mr. George Thomas Muthoot ,Whole Time
Director ; Mr. George Jacob Muthoot ,Whole Time Director and Mr. George
Alexander Muthoot, Managing Director are expiring on 31st March, 2015.
Your Board of Directors recommends their re-appointment for a further
period of 5 years from 1st April, 2015.
14. Auditors
M/s Rangamani & Co., Chartered Accountants, [Firm Registration No:
003050S] the Statutory Auditor of the Company, hold office in accordance
with the provisions of the Act upto the conclusion of the forthcoming
Annual General Meeting and are eligible for re-appointment.
16. Directors'' Responsibility Statement
As required under the provisions contained in Section 217(2AA) of the
Companies Act, 1956 ("the Act"), your Directors hereby confirm that:
1. In the preparation of Annual Accounts for the financial year
2013-14, the applicable Accounting Standards have been followed and
there are no material departures;
2. They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the Profit of the
Company for financial year;
3. They have taken proper and suffcient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities; and
4. The annual accounts have been prepared on a going concern basis.
17. Corporate Governance Report and Management discussion and analysis
Statement
Your Company has complied with the Corporate Governance norms as
stipulated under Clause 49 of the Listing Agreements entered into with
the Stock Exchanges. Detailed reports on Corporate Governance and
Management Discussion and Analysis are attached to this Report.
18. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Since your Company does not carry on manufacturing activities,
disclosure requirements under Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1956 in this connection are
not applicable. However, your Company, being a responsible corporate
citizen, has been taking various measures for reducing the energy
consumption.
Total Foreign Exchange Earned : NIL
Total Foreign Exchange Used : Rs. 1,25,93,695.27
19 Material Changes affecting the Company after 31st March, 2014
On 29th April, 2014, your Company allotted 2,53,51,062 shares of Rs. 10
each for cash at a premium of Rs. 155 per equity share aggregating to Rs.
41,829.25 Lakhs, pursuant to Institutional Placement Programme (IPP)
under Chapter VIII A of the SEBIICDR Regulations complying with the
minimum public shareholding requirement under Rule 19 (2) (b) (ii) of
the Securities Contracts (Regulations) Rules, 1957.
On July 8, 2014 The ESOP committee of Board of Directors of your
Company has granted second tranche of ESOP of 6100 options @ Rs. 10/- per
option and 836900 options @ Rs. 50/- per option to the permanent
employees of the Company as per ESOP 2013 scheme of the Company.
20. Acknowledgement
Your Directors thank the Company''s stakeholders in large including
investors, customers, banks, financial institutions, rating agencies,
debenture holders, debenture trustees and well-wishers for their
continued support during the year. Your Directors place on record
their appreciation of the contribution made by the employees of your
Company at all levels. Your Company''s consistent growth was made
possible by their hard work, solidarity, cooperation and support. The
Board sincerely expresses its gratitude to Reserve Bank of India,
Securities and Exchange Board of India and Ministry of Corporate
Affairs for the guidance and support received from them including
offcials there at from time to time.
For and On Behalf of the Board of Directors
M G George Muthoot
Chairman
Kochi, 11th August, 2014
Registered office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi  682 018
Mar 31, 2013
Dear Shareholder,
The Directors have pleasure in presenting the 16th Annual Report of the
Company together with the audited financial statements for the year
ended 31st March, 2013.
1. FINANCIAL RESULTS
The financial results for the year ended 31st March, 2013 are
summarised below:
(Amount in Rs. Crore)
Particulars 2012-13 2011-12
Income from Operations 5,359 4,537
Other Income 28 12
Total Expenditure 3,876 3,218
Profit Before Depreciation and Other Non Cash 1,557 1,364
Charges
Depreciation and Other Non Cash Charges 45 33
Profit Before Tax 1,511 1,331
Tax Expenses 507 439
Profit After Tax 1,004 892
Share Capital and Reserves 3,736 2,926
Subordinated Debt 2,310 1,480
Secured Non-Convertible Debentures 11,247 7,863
Bank Borrowings 10,136 9,232
Gross Retail Loan Assets under Management 26,387 24,674
2. DIVIDEND
Based on Company''s performance, your Directors are pleased to
recommend for approval of the shareholders a dividend of 45% for Equity
Shares of face value of Rs. 10 each (Rs. 4.50 per share) of the Company
for the financial year 2012-13 which is payable on obtaining the
approval of the shareholders of the Company on the 16th Annual General
Meeting. The dividend payout amount including dividend distribution tax
will be Rs. 194 Crore The dividend payout ratio for the current year,
inclusive of dividend distribution tax is 19%. The list of unpaid
dividend is available on the Companies website www.
muthootfinance.com. Shareholders are requested to check the said list
and if any dividend is due to them is remaining unpaid in the said
list, they can approach the Company for release of unpaid dividend.
3. TRANSFER TO RESERVES
Your Board proposes to transfer Rs. 100 Crore to the General Reserve in
accordance with the Companies (Transfer of Profit to Reserves) Rules,
1975. Your Board also proposes to transfer Rs. 201 Crore to the
Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934.
An amount of Rs. 97 Crore has been transferred for creation of
Debenture Redemption Reserve Account as required under the Companies
Act, 1956. Post transfer of profits to reserves and distribution of
dividend, your Board proposes to retain Rs. 1,368 Crore in the Profit
and Loss Account.
4. ECONOMIC SCENARIO
Global growth continues to remain uneven and slow. In Advanced
Economies activity has weakened further adversely impacting growth in
Emerging and Developing Economies.
The announcement by US Federal Reserve of tapering of Quantitative
Easing has resulted in large sell-offs in the financial markets of
these economies due to safe haven flight of capital and also on
expectation of increase in real interest rates in the US. Consequent to
it, there has been a rapid appreciation of the US Dollar and
corresponding depreciation in Emerging and Developing Economies
currencies.
The economic activity in the Indian Economy has further weakened in the
first quarter of FY 2014. Industrial Production remained muted and
Capital Goods production contracted reflecting deteriorating investment
conditions. Growth in services and exports has remained sluggish on
account of global slowdown. Though headline inflation measured by
Wholesale Price Index declined from an average of 8.9 percent in
2011-12 and 7.3 percent in 2012-13 to 4.9 percent in first quarter of
FY 2014, the retail inflation measured by Consumer Price Index remained
high at average of 10.2 percent in 2012-13 and continuing at those
levels in the first quarter of FY 2014. Though fiscal deficit has been
contained at 5.2% of the GDP, Current Account Deficit of 5.1% poses
serious challenge to the economy since it is much above the sustainable
level of 2.5% of GDP. RBI has further revised its growth projections
for the current year further from 5.7 percent to 5.5 percent. Though
the government has taken several positive policy initiatives in the
last few quarters, unless these policies are transformed to real
actions removing various bottlenecks across various layers, achieving
the above growth will be an insurmountable task.
5. COMPANY''S PERFORMANCE
In the wake of change in regulatory environment on account of 60% cap
on Loan to Value ratio and resultant negative perceptions created in
the market, to provide more comfort to the regulator as well as other
stakeholders, Company consciously decided to reduce the pace of its
growth and consolidate its operations during the year, focussing on
improving customer service, staff training and internal controls while
maintaining profitability. The branch network was increased only by 11%
reaching 4082 branches compared to addition of 35% in the previous
year. Though immediately after the regulatory change in March 2012,
Retail Loan Asset Under Mangement declined by 5% in the first quarter
of FY 2013, on account of the positive views expressed by the KUB Rao
Committee on the role of the sector in the economy, Company achieved a
marginal YOY growth of 7% reaching Rs. 26,386 Crore as of March 2013.
Total income grew by 18% to Rs. 5,387 Crore . Profit Before Tax rose by
14% to Rs. 1,511 Crore and Profit After Tax by 13% to Rs. 1,004 Crore
The Return on Average Retail Loans declined to 4.05% as compared to
4.40%in fiscal 2011-12. The cost of borrowed funds went upto 12.42%
compared to 12.20% in fiscal 2011-12. On account of the above, the Net
Interest Margin declined to 10.27% as against 10.65% in fiscal 2011-12.
The Company remitted to the exchequer Rs. 517 Crore as income tax.
6. RESOURCE MOBILISATION
(a) Secured Debentures
With a view to diversify the funding profile of the Company, Your
Company successfully completed third and fourth series of public issues
of Secured Non-Convertible Debentures during the year and mobilised Rs.
535 Crore. NCDs offered in the public issue are listed in the BSE
Limited and/or National Stock Exchange of India Limited. The Company
raised Rs. 2,849 Crore net of repayments, through private placement of
Secured Non-Convertible Debentures. Funds raised through this route
continue to be a substantial resource base for the Company.
Reserve Bank of India vide its circular RBI/2012-13/560 DNBD(PD) CC No.
330/03.10.001/2012-13 dated 27th June, 2013 and RBI/2013-14/115
DNBS(PD) CC No.349/03.10.001/2013-14 dated 02 July, 2013 issued certain
guidelines with respect to raising money through private placement by
NBFCs in the form of non-convertible debentures. These guidelines
include restrictions on number of investors in an issue to 49
investors, minimum subscription amount for a single investor of Rs. 25
Lakhs, prohibition on providing loan against own debentures etc.
Though the above directions limits Company''s ability to mobilise
resources through private placement like earlier for investments less
than Rs. 25 Lakhs, Company intends to fill the gap through public
issuance of listed and rated instruments primarily focusing on retail
investors with investment of less than Rs. 25 Lakhs. The existing
debentures already taken under private placement route will continue
till its maturity.
(b) Bank Finance
Commercial Banks continued their support of the Company''s asset
growth. As of 31st March, 2013, borrowings from banks were Rs. 10,136
Crore Your Company''s rated short term debt instruments were also
placed with various mutual funds at competitive rates enabling the
Company to reduce the overall cost of liabilities.
(c) Subordinated Debts
Subordinated Debts continue to be another source for funding the
operations of your Company. Subordinated Debts represents long term
source of funds for the Company and the amount outstanding as on 31st
March, 2013 was Rs. 2,310 Crore. It qualifies as Tier II capital under
the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank Directions), 2007. The above includes
privately placed Rated Unsecured Redeemable Non-Covertible Listed
Subordinated Debt of Rs 10 Crore which is listed in the Debt Segment of
BSE limited.
7. RATINGS
Your Company''s debt instruments are rated by ICRA and CRISIL, two of
the leading Credit Rating Agencies in the country. The Credit Ratings
assigned to various instruments of the Company are as follows:
Credit Rating Instruments Ratings Limit in
Rs. in Crore
Agency
Commercial Paper CRISIL A1 4,000
CRISIL Subordinated Debts CRISIL AA-/Negative 100
Non Convertible Debentures CRISIL AA-/Negative 500
Commercial Paper ICRA A1 200
Short Term Bank
Borrowings* ICRA A1 4751
ICRA Subordinated Debts ICRA AA-/Negative 100
Non Convertible Debentures ICRA AA-/Negative 200
Long Term Bank Borrowings* ICRA AA-/Negative 6975
*subject to overall rating of Rs. 10428 Crore for line of credit
8. INTERNAL CONTROL
The Company has a well placed proper and adequate internal control
system commensurate with the size and nature of its business .The
primary objective of the internal control system is to ensure that all
its assets are safeguarded and protected and prevent any revenue
leakage and losses to the Company. The Company has an Audit and
Inspection Department which conducts regular internal audits to examine
the adequacy and compliance with policies, plans and statutory
requirements. The Department through a team of 1119 personnel ensures
quality of the assets pledged and adherence to various risk management
practices at all the operating units. The audit functions are
decentralised to match the requirements of exercising proper control
over nation wide network of the Company.
The Internal Audit Team directly reports to the Audit Committee of the
Company. Significant audit observations and follow up actions thereon
are reported to the Audit Committee. The Audit Committee reviews
adequacy and effectiveness of the Company''s internal control
environment and monitors the implementation of audit recommendations,
including those relating to strengthening of the Company''s risk
management policies and systems. The Audit Committee oversees the
functioning of the audit team and reviews the effectiveness of internal
control at all levels apart from laying down constructive suggestions
for improving the audit function in the Company. The present reporting
structure ensures independence of the internal audit function and
embodies best corporate governance practices.
9. HUMAN RESOURCES
Your Company understands the strength of Company''s workforce whose
collective commitment and passion towards work has helped the
organisation to scale new pinnacles. Your Company''s human capital
agenda for the year was focused on two main areas: building a vigorous
and varied talent pipeline and also invest in progressive employee
relations practices and ensure building of capability at grass root
level through continued training programmes. The Company aim to create
and nourish the best and help in the inclusive growth of their
individual and organisational career prospects. As of 31st March, 2013,
your company had 24,881 employees on its rolls at various
organisational levels. Employee training at all levels is a key
priority. Major steps have been initiated to augment the capacity of
the in house training system both quantitatively and qualitatively. A
total of 79,245 staffs were trained cumulatively under various sessions
during the year 2012-13. To recognise and provide opportunity to
competent employees to reach higher cadres, opportunity is provided to
participate in ''Fast Track Channel Promotion''. We have several
staff welfare schemes like Group Mediclaim Insurance Cover, Personal
Accident Insurance Cover, Contributory National Pension Scheme with 50%
contribution by the Company, Educational Awards, Marriage Presentation,
Presentation for First Time Parents, Compassionate payment to the kith
and kin of employees who die in harness etc ., in addition to statutory
benefits such as ESIC Scheme, Provident Fund, Maternity Benefits etc.
10. PUBLIC DEPOSITS
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
11. CAPITAL ADEQUACY
Your Company''s Capital Adequacy Ratio as of 31st March, 2013 stood at
19.62% of the aggregate risk weighted assets on balance sheet and risk
adjusted value of the off-balance sheet items, which is well above the
regulatory minimum of 15%.Out of the above, Tier I capital ratio stood
at 13.41%.
12. RBI GUIDELINES
Your Company has complied with all the applicable regulations
prescribed by the Reserve Bank of India from time to time.
13. DIRECTORS
Pursuant to the Provisions of the Companies Act, 1956 and in accordance
with the Article 110 of the Articles of Association of the Company, Mr.
George Thomas Muthoot and Mr. P George Varghese retire by rotation at
the ensuing Annual General Meeting.
At the Meeting of the Board of Directors of the Company held on 25th
July, 2013, Mr. P George Varghese expressed his intention to relinquish
his position as Director of the Company and requested the Board to
accept his request and make his retirement effective at the Conclusion
of the next Annual General Meeting. The Board Members placed on record
their deep sense of gratitude and appreciation for the invaluable
contribution and guidance provided by Mr. P George Varghese.
Mr. George Thomas Muthoot, being eligible, offers himself for
reappointment at the Annual General Meeting.
14. AUDITORS
M/s Rangamani & Co., Chartered Accountants, [Firm Registration No:
003050 S] the Statutory Auditor of the Company, hold office in
accordance with the provisions of the Act upto the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
15. PERSONNEL
Particulars of employees drawing remuneration beyond the monetary
ceilings prescribed under Section 217 (2A) of the Companies Act, 1956
are as follows
16. DIRECTORS'' RESPONSIBILITY STATEMENT
As required under the provisions contained in Section 217(2AA) of the
Companies Act, 1956 ("the Act"), your Directors hereby confirm that:
1. In the preparation of Annual Accounts for the financial year
2012-13, the applicable Accounting Standards have been followed and
there are no material departures;
2. They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for financial year;
3. They have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities; and
4. The annual accounts have been prepared on a going concern basis.
17. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
STATEMENT
Your Company has complied with the Corporate Governance norms as
stipulated under Clause 49 of the Listing Agreements entered into with
the Stock Exchanges. Detailed reports on Corporate Governance and
Management Discussion and Analysis are attached to this Report.
18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Since the Company does not carry on manufacturing activities,
disclosure requirements under Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1956 in this connection are
not applicable. However, your Company, being a responsible corporate
citizen, has been taking various measures for reducing the energy
consumption.
Total Foreign Exchange Earned : NIL
Total Foreign Exchange Expended : Rs. 58,55,090.88
19. ACKNOWLEDGEMENT
Your Directors thank the Company''s share holders, investors,
customers, banks, financial institutions, rating agencies, debenture
holders, debenture trustees and well wishers for their continued
support during the year. Your Directors place on record their
appreciation of the contribution made by the employees at all levels.
Your Company''s consistent growth was made possible by their hard
work, solidarity, cooperation and support. The Board sincerely
expresses its gratitude to Reserve Bank of India and Ministry of
Corporate Affairs for the guidance and support received from them
including officials thereat from time to time.
For and on Behalf of the Board of Directors
M G George Muthoot
Chairman
Kochi, 25th July, 2013
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,B
anerji Road,
Kochi - 682 018
Mar 31, 2012
The Directors have pleasure in presenting the 15th Annual Report of
the Company together with the audited financial statements for the year
ended 31st March, 2012.
1. Financial Results
The financial results for the year ended 31st March, 2012 are
summarized below:
(Amount in Rs. Lakhs)
Particulars 2011-12 2010-11
Income from Operations 454,906 231,587
Total Expenditure 314,289 150,238
Profit Before Depreciation 140,617 81,349
Depreciation and Other Non Cash Charges 7,492 5,228
Profit Before Tax 133,125 76,121
Provision for Tax/Deferred Taxes 43,922 26,703
Profit After Tax 89,202 49,418
Share Capital and Reserves 292,573 133,441
Subordinated Debt 148,011 71,059
Secured Non-Convertible Debentures 786,284 419,823
Bank Borrowings 923,197 605,283
Gross Retail Loan Assets under Management 2,467,360 1,586,845
2. Economic Scenario
The fall in values of investments triggered primarily by the
deceleration in economic growth and high inflation characterized the
economic scenario in the year gone by. The huge fiscal and current
account deficits in the context of declining export growth led to
substantial erosion in the exchange rate of Indian rupee and triggered
a sovereign rating reduction by some of the rating agencies. These
developments throw a dark shadow on the growth prospects of the country
in the fiscal 2012-13 and despite a huge consumption demand, the
nation's GDP growth reaching 8% looks improbable.
3. Business
Increase in foot print, aggressive marketing efforts and tweaking of
products in response to market conditions enabled the Company to
improve its loan book by 55% taking the outstanding to Rs. 2,467,360
Lakhs. The cost of borrowed funds went upto 12.20% compared to 8.87% in
fiscal 2010-11. Despite this, we could, thanks to overall control on
expenditure, efficient collection of interest and control on NPAs,
retain the Net Interest Margin at 10.65%. Total income grew by a very
creditable 96% to Rs. 454,906 lakhs. Profit Before Tax rose by 75% to
Rs. 133,125 lakhs and Profit After Tax by 80% to Rs. 89,202 lakhs. The
Return on Average Retail Loans rose to 4.40% as compared to 4.24% in
fiscal 2010-11.
Financial Year 2011-12 flags a significant mile stone in the gold loan
industry as it marks the beginning of a consolidation phase and your
Company too has taken cautious steps in moving towards such a positive
direction. The Gross Retail Loan Assets under Management as on 31st
March, 2012 stood at Rs. 2,467,360 lakhs registering a year over year
growth of 55%. While the total income grew by 96% to reach at Rs.
454,906 lakhs on 31st March, 2012, Profit After Tax stood at Rs. 89,202
lakhs as against a figure of Rs. 49,418 lakhs reported during the
previous financial year.
945 new branches were opened during the financial year taking the
branch network as on 31st March, 2012 to 3,678 branches spread across
21 states and 4 union territories. The average gold loan outstanding
per branch has increased from Rs. 5.75 crores to Rs. 6.64 crores as on
March 31, 2012.
4. Dividend
Based on Company's performance, your Directors are pleased to recommend
a maiden dividend of 40% on the equity shares (Rs. 4 per Equity Share)
of the Company which is payable on obtaining the approval of the
shareholders of the Company in the 15th Annual General Meeting. The
dividend payout amount for the current year inclusive of additional tax
on dividend will be Rs. 172.81 Crores.
5. Appropriations
Your Board proposes to transfer Rs. 892,024,022/- to the General
Reserve in accordance with the Companies (Transfer of Profit to
Reserves) Rules, 1975. Your Board also proposes to transfer Rs.
1,784,048,044/- to the Statutory Reserve maintained under Section 45 IC
of the RBI Act, 1 934. An amount of Rs. 742,038,311/- has been
transferred for creation of Debenture Redemption Reserve Account as
required under the Companies Act, 1956. Post transfer of profits to
reserves and distribution of dividend, your Board proposes to retain
Rs. 9,569,275,904/- in the Profit and Loss Account. The expenses
incurred for Initial Public Offer amounting to Rs. 291,490,445/- have
been written off against Securities Premium as per Section 78(2) of the
Companies Act, 1956.
6. Regulatory Developments
The Reserve Bank of India vide circular no: DNBS.CC.PD.No.
265/03.10.01/2011-12 dated March 21, 2012 has directed all NBFCs
engaged in lending against the security of gold jewellery to maintain a
Loan To Value ratio not exceeding 60% of the value of Gold Jewellery.
As a matter of abundant caution, we had been progressively reducing our
lending rates per gram as a risk management measure, seeing the
volatility in the gold prices during the last couple of months. We are
complying to this direction from RBI. RBI also reduced the exposure
ceiling of banks to a single NBFC having gold loans to the extent of
50% or more of its financial assets from 10% to 7.50% of the banks
Total Capital Funds. The minimum Tier-I capital requirement of these
NBFCs will be increased from 10% presently to 12% by 1st April, 2014.
7. Resource Mobilization
(a) Secured Debentures
With a view to diversify the funding profile of the Company, your
Company successfully completed two public issues of Secured
Non-Convertible Debentures during the year and moped up Rs. 115,260
lakhs. NCDs offered in the public issue are listed in the BSE Limited
and/or National Stock Exchange of India Limited Company raised Rs.
661,024 Lakhs, net of repayments, through private placement of Secured
Non-Convertible Debentures. Funds raised through this route continue to
be a substantial resource base for the Company. Your Company has also
privately placed Secured Non-Convertible Debentures to the tune of Rs.
10,000 Lakhs which are listed in the Wholesale Debt Segment of the
National Stock Exchange of India Limited.
(b) Bank Finance
Commercial Banks continued their support of the Company's asset growth.
As of 31st March, 2012, borrowings from banks were Rs. 923,197 lakhs.
The company also raised resources through sale of gold loan portfolio
and the outstanding amount of gold loan sold under such bilateral sales
as of 31st March, 2012 was Rs. 333,521 lakhs. Your Company's rated
short term debt instruments were also placed with various mutual funds
at competitive rates enabling the company to reduce the overall cost of
liabilities.
(c) Subordinated Debts
Subordinated Debts continue to be another source for funding the
operations of Company. Subordinated Debts represents long term source
of funds for the Company and the amount outstanding as on 31st March,
2012 was Rs. 148,011 lakhs. It will qualify as Tier II capital under
the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank Directions), 2007.
8. Ratings
Your Company's debt instruments are rated by ICRA and CRISIL, two of
the leading Credit Rating Agencies in the country. The Credit Ratings
assigned to various instruments of the Company are as follows:
Credit
Rating
Agency Instruments Ratings Limit in
Rs.(Lakhs)
CRISIL Commercial Paper CRISIL A1 400,000
Subordinated Debts CRISIL AA-(Stable) 10,000
Non Convertible
Debentures CRISIL AA-(Stable) 50,000
ICRA Commercial Paper ICRA A1 20,000
Short Term Bank
Borrowings ICRA A1 480,300
Subordinated Debts ICRA AA-(Stable) 10,000
Non Convertible
Debentures ICRA AA-(Stable) 20,000
Long Term Bank Borrowings ICRA AA-(Stable) 567,500
9. Internal Control
The Audit and Inspection Department of the Company through a team of
964 personnel ensures quality of the assets pledged and adherence to
various risk management practices at all the operating units. The
structure of the audit teams have been totally recast with
decentralization of functions to match with the expansion in footprint
without compromising control.
The Internal Audit Team directly reports to the Audit Committee of the
Company. The Audit Committee oversees the functioning of the audit team
and reviews the effectiveness of internal control at all levels apart
from laying down constructive suggestions for improving the audit
function in the Company. The present reporting structure ensures
independence of the internal audit function and embodies best corporate
governance practices.
10. Human Resources
Being a service oriented Company; your company considers human resource
capital as its most valuable asset. As of March 31, 2012, your company
had 25,351 employees on its rolls at various organizational levels.
Your Company offers employees the opportunity to harness their inherent
skills and to brave newer frontiers at every phase of their growth.
Your management is committed to providing a wholesome work environment
and support with excellent training programs and workshops. Your
Company provides extensive training to branch employees through
training programs that are tailored to acquiring and honing their
skills in all operational matters. While every new employee is
introduced to the business through an orientation program and through
training programs covering job-relevent topics, experienced branch
employees receive additional training for upgradation of skills on an
ongoing basis.
As of date, your company has established two Staff Training Colleges,
one each in Cochin and in New Delhi, and 57 Regional Learning Centers
located at Regional Offices spread across the country.
11. Public Deposits
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
12. Capital Adequacy
Your Company's Capital Adequacy Ratio as of March 31, 2012 stood at
18.29% of the aggregate risk weighted assets on balance sheet and risk
adjusted value of the off-balance sheet items, which is well above the
regulatory minimum of 15%.
13. RBI Guidelines
Your Company has complied with all the applicable regulations
prescribed by the Reserve Bank of India from time to time.
14. Directors
In accordance with Article 110 of the Articles of Association of the
Company, Mr. George Joseph and Mr. John K Paul retire by rotation at
the ensuing Annual General Meeting. Both of them being eligible seek
re-appointment at the Annual General Meeting.
15. Auditors
M/s Rangamani & Co., Chartered Accountants, [Firm Registration No:
003050S] the Statutory Auditor of the Company, hold office in
accordance with the provisions of the Act upto the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
16. Personnel
Particulars of employees drawing remuneration beyond the monetary
ceilings prescribed under Section 217 (2A) of the Companies Act, 1956
are as follows:
Sl Name of Employee Age Designation Date of
No (yrs) Commencement of
employment
1 Mr. M G George 62 Whole Time 28.07.2000
Muthoot Director & Chairman
2 Mr. George Alexander 56 Managing Director 28.07.2000
Muthoot
3 Mr. George Thomas 61 Whole Time Director 16.08.2005
Muthoot
4 Mr. George Jacob 59 Whole Time Director 16.08.2005
Muthoot
Name of Employee Gross Qualification Total Last
Remuneration Experience employment
(Rs.in Lakhs)
Mr M G George Rs. 480 B. Tech 38 years Muthoot
Muthoot Bankers
Mr George Alexander Rs. 480 FCA 32 years Muthoot
Muthoot Bankers
Mr George Thomas Rs. 480 Under 37 years Muthoot
Muthoot Graduate Bankers
Mr George Jacob Rs. 480 B. Tech 35 years Muthoot
Muthoot Bankers
17. Directors' Responsibility Statement
As required under the provisions contained in Section 217(2AA) of the
Companies Act, 1956 ("the Act"), your Directors hereby confirm that:
1. In the preparation of Annual Accounts for the financial year
2011-12, the applicable Accounting Standards have been followed and
there are no material departures;
2. They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for financial year;
3. They have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities; and
4. The annual accounts have been prepared on a going concern basis.
18. Corporate Governance Report and Management Discussion and Analysis
Statement
Your Company has complied with the Corporate Governance norms as
stipulated under Clause 49 of the Listing Agreements entered into with
the Stock Exchanges. Detailed reports on Corporate Governance and
Management Discussion and Analysis are attached to this Report.
19. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Since the Company does not carry on manufacturing activities,
disclosure requirements under Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1956 in this connection are
not applicable. However, your Company, being a responsible corporate
citizen, has been taking various measures for reducing the energy
consumption.
Total Foreign Exchange Earned : NIL
Total Foreign Exchange Expended : 20.96 Lakhs
20. Acknowledgement
Your Directors thank the Company's share holders, investors, customers,
banks, financial institutions, rating agencies, debenture holders,
debenture trustees and well wishers for their continued support during
the year. Your Directors place on record their appreciation of the
contribution made by the employees at all levels. Your Company's
consistent growth was made possible by their hard work, solidarity,
cooperation and support. The Board sincerely expresses its gratitude to
Reserve Bank of India and Ministry of Corporate Affairs for the
guidance and support received from them including officials thereat
from time to time.
For and On Behalf of the Board of Directors
Kochi, M G George Muthoot
July 30, 2012 Chairman
Registered Office:
2nd Floor, Muthoot Chambers, Opposite Saritha Theatre
Complex, Banerji Road, Kochi - 682 018
Mar 31, 2011
To the Members
The Directors have pleasure in presenting the 14th Annual Report of the
Company together with the audited financial statements for the year
ended 31st March, 2011.
1. Financial Results
The financial results for the year ended 31st March. 2011 are summarized
below:
(Amount in Rs. Lacs)
Particulars 2010-11 2009-10
Income from Operations 231,587 108,938
Total Expenditure 150,435 72,684
Profit Before Depreciation 81,152 36,254
Depreciation and Other Non Cash Charges 5,031 1,699
Profit Before Tax 76,121 34,555
Provision for Tax/Deferred Taxes 26,703 11,798
Profit After Tax 49,418 22,757
Share Capital and Reserves 133,441 58,455
Subordinated Debt 71,059 32,457
Secured Non-Convertible Debentures 419,823 271,925
Bank Borrowings 605,282 212,787
Gross Retail Loan Assets under Management 1586,845 743,815
2. Business
Financial Year 2010-11 has been a landmark year for your Company for
the Gross Retail Loan Assets Under Management crossing the land mark
figure of Rs. 1500000 lacs. Gross Retail Loan Assets Under Management
stood at Rs. 1586045 lacs as of 31" March, 2011 registenng a growth of
113% as against Rs. 743815 lacs reported during the financial year
ended 31" March, 2010. Interest Income registered a growth of 113% to
reach at Rs 229834 lacs for the financial year 2010-11 as compared to
Rs. 10774$ lacs reported during the previous financial year Profit
Before Tax amounted to Rs. 76121 lacs for the financial year 2010- 11
as compared to Rs. 34555 lacs registering a growth of 120% as compared
to the previous financial year.
1128 new branches were opened across the country during the year white
efforts were put in ensuring deeper penetration into the rural
heartlands of the Country. The average gold loan outstanding per branch
has increased from Rs. 457.43 lacs to Rs. 575.49 lacs as on March
31,2011.
3. Dividend
Your Board of Directors has decided to plough back the entire profit
for the year and retain the same in the Profit and Loss Account further
strengthening your Company's net owned funds position.
4. Resource Mobilization
(a) Secured Debentures
During the year, Company raised Rs. 126397 Lacs, net of repayments,
through private placement of Secured Non-Convertible Debentures. Funds
raised through this routs continue to be a substantial resource base
for the Company. Company has also privately placed Secured
Non-Convertible Debentures to the tune of Rs. 21500 lacs which are
listed in the Wholesale Debt Segment of the National Stock Exchange of
India Limited.
(b) Bank Finance
Commercial Banks continued their support of the company's aggressive
asset growth. As of 31" March. 2011, borrowings from banks held at Rs.
605282 lacs. The company also raised resources through sell down of
gold loan portfolio such that the outstanding amount of gold loan sold
under bilateral assignment as of 31' March. 2011 was Rs. 41G639 lacs.
Your company's rated short term debt instruments were also placed with
various mutual funds at competitive rates enabling the company to
reduce the overall cost of liabilities.
(c) Subordinated Debts
Subordinated Debts continue to be another source for funding the
operations of Company. Subordinated Debts represents long term source
of funds for the Company and the amount outstanding as on 31* March,
2011 was Rs. 71050 lacs. It will qualify as Tier II capital under the
Non- Ban king Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank Directions). 2007.
5. Ratings
The company is rated by CRISIL for Rs.4000 crones of Short Term Debt
Programme with a rating of "CRISIL A1 " This is the highest credit
quality rating assigned by CRISIL to short term debt instruments.
"CRISIL A1 " rating indicates that the degree of safety with regard to
timely payment of interest and principal is very strong. CRFSIL has
also assigned the company with a long term rating of CRTSIL AA- /
(stable)" for Rs.500 crores Non-Convertible Debenture issue and for
Rs.100 crones Subordinated Debt issue. This rating Indicates high
degree of safety with regard to timely payment of interest and
principal on the Instrument.
The company is also rated by ICRA for Rs.200 crores of Short Term Debt
Programme with a rating of "[ICRA] A1 ", This is the highest credit
quality rating assigned by ICRA to short term debt instruments which
indicates Lowest credit Risk and stronger credit quality. ICRA has also
assigned the company for Rs.200crs Non-Convertible Debenture issue and
for Rs.100crs Subordinated Debt issue with a long term rating of
"[ICRA) AA-1 Stable*. Instruments rated in this category carry lowest
credit risk and it indicates high quality credit rating. Further, ICRA
has also assigned the company with Long Term/Short Term rating of
"[ICRA] AA- '/"[ICRA] A1 ' respectively for Rs.6000 crones of Bank
loans which indicates high quality credit rating and lowest credit risk
/ stronger credit quality and Lowest credit Risk respectively.
6. Initial Public Offer
During the month of April, 2011, your Company has completed an Initial
Public Offer of 5.15.00,000 Equity Shares of Rs. 10/- each at a price
of Rs. 175/- raising Rs. 901.25 crores. The issue had seen an
overwhelming success with an oversubscription of 24.33 times. The
shares of the Company were listed on National Stock Exchange of India
Limited and Bombay Stock Exchange Limited on 6th May 2011.
7. Internal Control
The Audit and Inspection Department of the company through a team of
704 personnel ensures quality of the assets pledged and adherence to
various risk management practices at the branch and regional office
level. The structure of the audit teams has been totally recast with
decentralization of functions to match with the expansion in footprint
without compromising control.
The internal audit team directly reports to the Audit Committee of the
Company The audit committee oversees the functioning of the audit team
and reviews the effectiveness of internal control at all levels apart
from laying down constructive suggestions for improving the audit
function in the Company. The present reporting structure ensures
independence of the internal audit function and embodies best corporate
governance practices.
8. Human Resources
Being a service oriented Company, your company consider human resource
capital as the biggest asset. As of March 31, 2011, your company has
16668 employees on payroll at various management levels, Your Company
offer employees the opportunity to harness their Inherent skills and to
brave newer frontiers at every phase of their growth. Your management
is committed In providing a wholesome work environment and support with
excellent training programs and workshops. Your Company provides
extensive training to branch employees through training programs that
are tailored to appraising the gold content in gold jewellery. Anew
employee is introduced to the business through an orientation program
and through training programs covering job-appropriate topics. The
experienced branch employee receives additional training and an
introduction to the fundamentals of management to acquire the skills
necessary to move into management positions within the organization.
Manager training involves a program that includes additional management
principles and more extensive training in topics such as income
maximization, business development, staff motivation, customer
relations and cost efficiency.
As of date, your company has established two staff training colleges,
one each in Cochin and in New Delhi, and three regional training
centers located in Chennai, Hyderabad and in Bangalore, and is in the
process of establishing staff training colleges at other region
allocations as well
9. Public Deposits
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
10. Capital Adequacy
As at 31st March. 2011. the capital adequacy of the company stood at
15.82% as against the statutory requirement of 15%.
11. RBI Guidelines
Your Company has complied with all the applicable regulations
prescribed by the Reserve Bank of India from time to time.
12. Directors
Mr, George Joseph and Mr John K Paul have joined the Board of Directors
as independent Directors during the year. Mrs. Anna Alexander and Mrs.
Sana George have resigned from the Board of Directors effective July
21, 2010. Board place on record their deep sense of appreciation for
the services rendered by them during their tenure in the Boa rd of
Directors of the Company.
In accordance with Article 110 of the Articles of Association of the
Company, Mr K John Mathew and Mr. George Jacob Muthoot retire by
rotation at the ensuing Annual General Meeting. Both of them being
eligible seek, re-appointment at the Annual General Meeting.
13. Auditors
M/s Rangamani & Co., Chartered Accountants, the Statutory Auditor of
the Company, hold office in accordance with the provisions of the Act
upto the conclusion of the forthcoming Annual General Meeting and are
eligible for re-appointment.
14. Personnel
Particulars of employees drawing remuneration beyond the monetary
ceilings prescribed under Section 217 (2A) of the Companies Act. 1956
are as follows:
SL Name of
Employee Age Designation Date of Gross Qualifica
-tion Total Last
No: (yrs} Commenc
-ement Remune
ration Experie
-nce employment
of
employ
-ment (Re. In
Lacs)
1 Mr.M G
George
Muthoot 61 Whole Time
Director &
Chairman 28.07.
2000 Rs.480 B.Tech 37
years Muthoot
Bankers
2 Mr. George
Aisaandar Managing
Muthoot 55 Director 28.07.
2000 Rs.480 FCA 31
years Muthoot
Bankers
3 Mr George
Thomas Whole Under
Muthoot 60 Time
Director 16.08.
2005 Rs.480 Graduate 36
years Muthoot
Bankers
4 Mr George
Jacob 56 Whole Time 16.08.
2005 Rs.480 B.Tech 34
years Muthoot
Bankers
Muthoot Director
15. Directors' Responsibility Statement
As required under the provisions contained in Section 217(2AA) of the
Companies Act, 1956 ("the Act"), your Directors hereby confirm that:
1. In the preparation of Annual Accounts for the financial year
2010-11, the applicable Accounting Standards have been followed and
there are no material departures;
2. They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for financial year;
3. They have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the Company and for preventing and detecting frauds and other
irregularities; and
4. The annual accounts have been prepared on a going concern basis
16. Corporate Governance Report and Management Discussion and Analysis
Statement
Your Company has complied with the Corporate Governance norms as
stipulated under the Listing Agreement entered into with the Stock
Exchanges. Detailed reports on Corporate Governance and Management
Discussion and Analysis are annexed to this Report.
17. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Since the Company does not carry on manufacturing activities,
disclosure requirements under Companies [Disclosure of Particulars in
the Report of Board of Directors) Rules, 1956 in this connection are
not applicable. However, your Company, being a responsible corporate
citizen, has been taking various measures for reducing the energy
consumption.
Total Foreign Exchange Earned : NIL
Total Foreign Exchange Expended : NIL
18, Acknowledgement
Your Directors thank the Company's share holders, investors,
customers, banks, financial institutions, rating agencies, debenture
holders, debenture trustees and well wishers for their continued
support during the year. Your Directors place on record their
appreciation of the contribution made by the employees at all levels.
Your Company's consistent growth was made possible by their hard work,
solidarity, cooperation and support. The Board sincerely expresses its
gratitude to Reserve Bank of India and Ministry of Corporate Affairs
for the guidance and support received from them including staff
officials thereat from time to time.
For and On Behalf of the Board of Directors
Sd/-
M G George Muthoot
Chairman
Kochi, July 27, 2011
Registered Office:
2nd Floor, Muthoot Chambers.
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi 682 018
Mar 31, 2010
The Directors have pleasure in presenting the 13th Annual Report of
the Company together with the audited financial statements for the year
ended 31st March 2010.
Financial Results
The financial results for the year ended 31st March 2010 are summarized
below:
(Amount in Rs. Lakhs)
Particulars Yr. ended Yr. ended
31.03.10 31.03.09
Income from Operations 108938 62,040
Total Expenditure 72684 46,167
Profit Before Depreciation 36254 15,873
Depreciation and Other Non Cash 1699 1,056
Charges
Profit Before Tax 34555 14,817
Provision for Tax/Deferred Taxes 11798 5,045
Profit After Tax 22757 9,772
Share Capital and Reserves 58455 37,117
Subordinated Debt 32467 10,991
Secured Non-Convertible Debentures 271925 190,198
Bank Borrowings 212787 110,676
Gross Retail Loan Assets under 743815 336,900
Management
Directors
In accordance with the provisions of Section 255 & 256 of the Companies
Act, 1956, Mr. M. G. George Muthoot, Whole Time Director and Mr. P.
George Varghese, Director retire by rotation at the ensuing Annual
General Meeting and are eligible for re-appointment.
Auditors
M/s Rangamani & Co., Chartered Accountants, the Statutory Auditor of
the Company retires at the conclusion of the ensuing Annual General
Meeting and has expressed their willingness to be appointed as the
Auditors for a further period of one year. The Company has received a
letter from the Auditor to the effect that, if they are appointed,
appointment will be within the statutory limits prescribed under the
Companies Act, 1956.
Energy Conservation, Foreign Exchange Earnings and Outgo
Since the Company does not carry on manufacturing activities,
disclosure requirements under Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1956 in this connection are
not applicable. However, your Company, being a responsible corporate
citizen, has been taking various measures for reducing the energy
consumption.
Total Foreign Exchange Earned : NIL
Total Foreign Exchange Expended : Rs. 139.84 lakhs
Directors Responsibility Statement
As required under the provisions contained in Section 217(2AA) of the
Companies Act, 1956, your Directors hereby confirm mat:
1. In the preparation of Annual Accounts, the applicable Accounting
Standards have been followed and there have been no material
departures;
2. They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period;
3. They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; and
4. The annual accounts have been prepared on a going concern basis.
Acknowledgement
Your Directors thank the Companys customers, banks, rating agency,
debenture holders, debenture trustees and well wishers for their
continued support during the year. Your Directors place on record their
appreciation of the contribution made by the employees at all levels.
Your Companys consistent growth was made possible by their hard work,
solidarity, cooperation and support. The Board sincerely expresses its
gratitude to Reserve Bank of India and Ministry of Corporate Affairs
for the guidance and support received from them from time to time.
For and On Behalf of the Board of Directors
Sd/-
M G George Muthoot
Chairman
Kochi, 19th August, 2010
Registered Office:
2nd Floor, Muthoot Chambers,
Opposite Saritha Theatre Complex,
Banerji Road,
Kochi-682 018