To the Members of Muthoot Capital Services Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying nancial statements of Muthoot Capital Services Limited (“the Company”), which comprise the balance sheet as at 31 March 2024, and the statement of Pro t and Loss (including other comprehensive income), statement of changes in equity and statement of cash ows for the year then ended, and notes to the nancial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as “ nancial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid nancial statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, its pro t and other comprehensive income, changes in equity and its cash ows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) speci ed under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the nancial statements under the provisions of the Act and the Rules thereunder, and we have ful lled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is suf cient and appropriate to provide a basis for our opinion on the nancial statements.
Emphasis of matter
We draw attention to Note 52 to the Financial statements on write back of additional management overlay of 13,871.62 Lakhs and retention of balance additional management overlay of 6,150 Lakhs.
Our opinion is not modi ed in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signi cance in our audit of the nancial statements of the current period. These matters were addressed in the context of our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
| S No. | Key audit matters |
How our audit addressed the key audit matter |
| 1 | Impairment of nancial assets |
|
Ind-AS 109 (Financial Instruments) requires the Company to recognize Expected credit loss (ECL), on nancial assets, which involves application of signi cant judgement and estimates including use of key assumptions such as probability of default, loss given default and exposure at default. |
Our audit procedures in relation to expected credit losses were focused on obtaining suf cient appropriate audit evidence as to whether the expected credit losses recognised in the nancial statements were reasonable and the related disclosures in the nancial statements made by the management were adequate. |
|
These procedures included, but not limited, to the following: |
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We examined Board Policy approving the methodology for computation of ECL that address policies, procedures and controls for assessing and measuring credit risk on all lending exposures commensurate with the size, complexity and risk pro le speci c to the Company; |
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We obtained an understanding of the model adopted by the Company for calculation of expected credit losses including the appropriateness of the data on which the calculation is based; |
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We evaluated the design and operating effectiveness of controls across the processes relevant to ECL. These controls, among others, included controls over the allocation of assets into stages; |
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We tested, on samples basis, the input and historical data used for determining the PD and LGD rates, model validation and agreed the data with the underlying books of accounts and records; |
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We tested the arithmetical calculation of the workings of the expected credit losses; |
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We evaluated that the Company s impairment allowance is derived in accordance with Ind AS 109 which also include considering the impact of RBIs regulations/ circulars; |
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We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 on ECL especially in relation to judgements used in estimation of ECL provision. |
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Directors report, Management Discussion and Analysis Report and Business Responsibility Report but does not include the nancial statements and our auditors report thereon. The Directors report is expected to be made available to us after the date of this auditors report.
Our opinion on the nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the nancial statements or our knowledge obtained during the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. When we read the Directors report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of the Management and Board of Directors for Financial Statements
The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these nancial statements that give a true and fair view of the state of affairs, pro t and other comprehensive income, changes in equity and cash ows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) speci ed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the nancial statements, Management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companys nancial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to in uence the economic decisions of users taken on the basis of these nancial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suf cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal nancial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(I) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal nancial controls with reference to the nancial statements in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
Conclude on the appropriateness of Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signi cant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern; and Evaluate the overall presentation, structure and content of the nancial statements, including the disclosures, and whether the nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi cant audit ndings, including any signi cant de ciencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most signi cance in the audit of the nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest bene ts of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the “Annexure A” a statement on the matters speci ed in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matter stated in the paragraph (h (vi)) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
(c) The Balance Sheet, the Statement of Pro t and Loss (including other comprehensive income), the Statement of Changes in Equity and the statement of cash ows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid nancial statements comply with the (Ind AS) speci ed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disquali ed as on 31 March 2024 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal nancial controls with reference to the nancial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
(g) The observation relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph (b) and paragraph (h (vi)) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its nancial position in its nancial statements - Refer Note 44 to the nancial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024; and
iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in Note 78.5, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identi ed in any manner whatsoever by or on behalf of the company (“Ultimate Bene ciaries”) or provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries
(b) The management has represented, that, to the best of its knowledge and belief, as disclosed in Note 78.5, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identi ed in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Bene ciaries”) or provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries
(c) Based on such audit procedures that we have considered reasonable and appropriate in the circumstances; nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The Company has not paid/declared any dividend during the nancial year. Accordingly, reporting on compliance with the provisions of Section 123 of the Act is not applicable.
vi. According to the information and explanations given to us by the Company and based on our examination which included test checks, the Company has used the accounting software for maintaining its books of account which has a feature of audit trail (edit log) facility and the same has operated throughout the year for all the relevant transactions recorded in such software, except
1. Feature of audit trail (edit log) facility at database level has not been enabled.
For accounting software for which audit trail feature is enabled, the audit trail facility has been operating throughout the period for all relevant transactions recorded in the software and we did not come across any instance of audit trail feature being tampered with during the course of our audit.
3. With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act: In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.
For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firms Registration No.003990S/S200018
Viswanadh VNSS Kuchi Partner Membership No. 210789 UDIN: 24210789BKGFFF7171
Place of Signature: Hyderabad Date: 23rd May 2024
Annexure A
Referred to in paragraph 1 on ‘Report on Other Legal and Regulatory Requirements of our report of even date to the members of Muthoot Capital Services Limited (“the Company”) on the nancial statements as of and for the year ended 31 March 2024.
(I) (a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangible assets.
(b) The Company has a regular programme of physical veri cation of its Property, Plant and Equipment by which all Property, Plant and Equipment are veri ed in a phased manner over a period of three years. In our opinion, this periodicity of physical veri cation is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain Property, Plant and Equipment were physically veri ed by the management during the year. In our opinion, and according to the information and explanations given to us, no material discrepancies were noticed on such veri cation.
(c) According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, the title deeds, comprising all the immovable properties disclosed in the nancial statements are held in the name of the Company as at Balance Sheet date.
(d) The Company has not revalued its Property, Plant and Equipment and intangible assets during the year and hence this clause is not applicable to the Company.
(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) (a) The Company does not have any inventory. Accordingly, the provisions of clause 3(ii) of the order are not applicable.
(b) Based on our audit procedures & according to the information and explanation given to us, the Company has been sanctioned working capital limits in excess of ve crore rupees, in aggregate, from banks or nancial institutions on the basis of security of current assets. Quarterly returns or statements led by the company with such banks or nancial institutions are in agreement with the books of account of the Company.
(iii) The Company has made investments in and granted loans or advances in the nature of Loans, secured or unsecured, to companies, rms, limited liability partnerships or any other parties in respect of which,
(a) Companys principal business is to give loans and hence this sub-clause is not applicable.
(b) Based on our audit procedures & according to the information and explanation given to us, the investments made are not prejudicial to the Companys interests.
(c) In respect of loans granted or advances in the nature of loans provided by the Company, the schedule of repayment of principal and payment of interest has been stipulated. Note 6.1 (vii) to the Financial Statements explains the Companys accounting policy relating to impairment of nancial assets which include loans assets. In accordance with that policy, loan assets with balances as at March 31, 2024, aggregating 20,503.67 Lakhs were categorised as credit impaired including interest accrued and due (“Stage 3”) and 6,572.72 Lakhs were categorised as those where the credit risk has increased signi cantly since initial recognition (“Stage 2”). Disclosures in respect of such loans have been provided in Note 10.1 and Note 10.2 to the Financial Statements. Additionally, out of loans and advances in the nature of loans with balances as at the year-end aggregating
1,74,669.41 Lakhs, where credit risk has not signi cantly increased since initial recognition (categorised as “Stage 1”), delay in the repayment of interest and/or principal in respect of loans aggregating to 11,556.51 Lakhs were also identi ed. In all other cases, the repayment of principal and interest is regular. Having regard to the nature of the Companys business and the volume of information involved, it is not practicable to provide an itemised list of loan assets where delinquencies in the repayment of principal and interest have been identi ed.
(d) The total amount overdue for more than ninety days, in respect of loans and advances in the nature of loans, as at the year-end is 17,866.35 Lakhs including interest accrued and due. Reasonable steps are being taken by the Company for recovery of the principal and interest as stated in the applicable Regulations and Loan agreements.
(e) The Companys principal business is to give loans, and hence reporting under clause 3(iii)(e) of the Order is not applicable.
(f) According to information and explanations given to us and based on the audit procedures performed, the Company has not granted any loans or advances during the year in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii)(f) is not applicable.
(iv) Based on our audit procedures and according to the information and explanation given to us, the Company has neither given any loan, guarantees and security nor made any investment during the year covered under section 185 and 186 of the Act. Therefore paragraph 3(iv) of the Order is not applicable to the Company.
(v) In our opinion and according to the information and explanations given to us, the Company being a Non-banking nancial company registered with the Reserve Bank of India, the provisions of section 73 to 76 or any other relevant provision of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted are not applicable to the Company. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India, to the extent applicable, have been complied with. According to the information and explanations given to us by the management, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in respect of the aforesaid deposits.
(vi) The Company is not required to maintain cost records speci ed by the Central Government under sub section (1) of section 148 of the Act. Accordingly, paragraph 3(vi) of the Order is not applicable to the Company.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company has been regular in depositing undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Incometax, Sales-tax, Service tax, Duty of Customs, Duty of Excise, Value added tax, Cess and any other material statutory dues as applicable with the appropriate authorities.
According to the information and explanation given to us and the records of the Company examined by us, no undisputed amounts payable in respect of statutory dues were in arrears, as at 31 March 2024 for a period of more than six months from the date they became payable except as given below.
| Nature of the Statute | Nature of the Dues |
Amount demanded ( In Lakhs) |
Amount Paid ( In Lakhs) |
Period to which it relates |
Due date |
Date of payment |
Remarks, if any |
| Assam Professions, Trades, Callings and Employment Taxation Act, 1947 | Professio- nal Tax |
0.05 |
Nil |
April 2023 to October 2023 |
Last day of succeedi- ng month |
Not Paid |
Due to issues w.r.t registration under Assam Professional tax |
| Madhya Pradesh Professional Tax Act, 1995 | Professio- nal Tax |
0.04 |
Nil |
April 2023 to October 2023 |
Last day of succeedi- ng month |
Not Paid |
Due to issues w.r.t registration under Madhya Pradesh department |
| Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000 | Professio- nal Tax |
0.14 |
Nil |
April 2023 to October 2023 |
Last day of succeedi- ng month |
Not Paid |
Due to issues w.r.t registration under Odisha department |
| The Punjab State Development Tax Act, 2018. | Professio- nal Tax |
0.06 |
Nil |
April 2023 to October 2023 |
Within 10 days of succeedi- ng month |
Not Paid |
Due to issues w.r.t registration under Punjab department |
| The West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 | Professio- nal Tax |
0.26 |
Nil |
April 2023 to October 2023 |
Within 21 days of succeedi- ng month |
Not Paid |
Due to issues w.r.t registration under West Bengal department |
| The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 | Professio- nal Tax |
0.33 |
Nil |
April 2023 to October 2023 |
Last day of the month |
Not Paid |
Issues w.r.t registration under Maharashtra. However, the PT is being paid to Kerala department |
(b) There are no statutory dues referred to in sub-clause (a) which have not been deposited on account of any dispute.
(viii) As per the information and explanations given by the management and on the basis of our examination of the records of the Company, no amount has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Accordingly, paragraph 3(viii) of the order is not applicable to the Company.
(ix) (a) Based on our audit procedures and as per the information and explanations given by the management, the Company has not defaulted in repayment of loans or other borrowings or in payment of interest thereon to any lender.
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared willful defaulter by any bank or nancial institution or government or government authority.
(c) According to the information and explanations given to us and the records of the Company examined by us, term loans were applied for the purpose for which the loans were obtained.
(d) According to the information and explanations given to us and the records of the Company examined by us, no funds raised on short term basis have been utilized for long term purposes.
(e) According to the information and explanations given to us and the records of the Company examined by us, the Company does not have any subsidiary, associate or joint venture and hence the question of the Company taking loan from any entity or person on account of or to meet the obligations of its subsidiaries, joint ventures or associate companies does not arise. Accordingly, paragraph 3(ix)(e) of the Order is not applicable to the Company.
(f) According to the information and explanations given to us and the records of the Company examined by us, the Company does not have any subsidiary, associate or joint venture and hence the question of the Company raising any loans during the year on pledge of securities held in its subsidiaries, joint ventures or associate companies does not arise. Accordingly, paragraph 3(ix)(f) of the Order is not applicable to the Company.
(x) (a) The Company has not raised any money during the year by way of initial public offer/further public offer (including debt instruments) hence, the requirement to report on clause 3(x)(a) of the Order is not applicable to the Company.
(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause (x)(b) of the Order is not applicable to the Company.
(xi) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we report 45 instances of fraud amounting to 44.06 Lakhs on the Company has been noticed or reported during the year out of which 15.11 Lakhs has been recovered by the company till the date of issue of this report.
(b) According to the information and explanations given to us including the representation made to us by the management of the Company, no report under sub-section 12 of Section 143 of the Act has been led by secretarial auditor or by us in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014, with the Central Government of India for the period covered by our audit.
(c) To the best of our knowledge and belief and according to the information and explanations given to us, we report that no whistle blower complaints were received during the year by the Company.
(xii) The Company is not a Nidhi company in accordance with Nidhi Rules 2014. Accordingly, paragraph 3(xii)(a) to (c) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable, and the details of the related party transactions have been disclosed in the nancial statements as required by the applicable accounting standards.
(xiv) (a) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.
(b) We have considered the reports of the Internal Auditors for the period under audit.
(xv) On the basis of the information and explanations given to us, in our opinion, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(xvi) (a) Based on our audit procedures and according to the information and explanations given to us, the Company is required to be registered under Section 45-IA of Reserve Bank of India Act, 1934 (2 of 1934).
(b) Based on our audit procedures and according to the information and explanations given to us, the Company has conducted Non-Banking Financial activities with a valid Certi cate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934.
(c) Based on our audit procedures and according to the information and explanations given to us, the Company is not a Core Investment Company (CIC) as de ned in the regulations made by the Reserve Bank of India and hence the questions of ful lling criteria of a CIC, and in case the Company is an exempted or unregistered CIC, whether it continues to ful ll such criteria, do not arise. Accordingly, paragraph 3(xvi)c of the Order is not applicable to the Company.
(d) Based on our audit procedures and according to the information and explanations given to us, none of the group companies are Core Investment Company (CIC) and hence the question of number of CICs which are part of the Group does not arise. Accordingly, paragraph 3(xvi)(d) of the Order is not applicable to the Company.
(xvii) Based on our audit procedures and according to the information and explanations given to us, the Company has not incurred cash losses in the nancial year and in the immediately preceding nancial year.
(xviii) There has been no resignation of the statutory auditors during the year and accordingly this clause is not applicable.
(xix) According to the information and explanations given to us and on the basis of the nancial ratios, ageing and expected dates of realisation of nancial assets and payment of nancial liabilities, other information accompanying the nancial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.
Also refer to the Other Information paragraph of our main audit report which explains that the other information comprising the information included in the Directors report is expected to be made available to us after the date of this auditors report.
(xx) Based on our audit procedures and according to the information and explanations given to us, the company is not required to spend the amount for corporate social responsibilities and Accordingly, paragraph 3(xx)(a) and 3(xx)(b) of the Order is not applicable to the Company.
For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firms Registration No.003990S/S200018
Viswanadh VNSS Kuchi Partner Membership No. 210789 UDIN: 24210789BKGFFF7171
Place of Signature: Hyderabad Date: 23rd May 2024
Annexure B
Referred to in paragraph 2(f) on ‘Report on Other Legal and Regulatory Requirements of our report of even date Report on the Internal Financial Controls with reference to the aforesaid nancial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
We have audited the internal nancial controls with reference to nancial statements of Muthoot Capital Services Limited (“the Company”) as of 31 March 2024 in conjunction with our audit of the nancial statements of the Company for the year ended on that date.
Managements and Board of Directors Responsibility for Internal Financial Controls
The Companys Management and the Board of Directors are responsible for establishing and maintaining internal nancial controls based on the internal control with reference to nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”). These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and ef cient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable nancial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal nancial controls with reference to nancial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal nancial controls with reference to nancial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls with reference to nancial statements were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal nancial controls with reference to nancial statements and their operating effectiveness. Our audit of internal nancial controls with reference to nancial statements included obtaining an understanding of internal nancial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the nancial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our audit opinion on the Companys internal nancial controls with reference to nancial statements.
Meaning of Internal Financial Controls with reference to nancial statements
A Companys internal nancial control with reference to nancial statements is a process designed to provide reasonable assurance regarding the reliability of nancial reporting and the preparation of nancial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal nancial control with reference to nancial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly re ect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the nancial statements.
Inherent Limitations of Internal Financial Controls with reference to nancial statements
Because of the inherent limitations of internal nancial controls with reference to nancial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal nancial controls with reference to nancial statements to future periods are subject to the risk that the internal nancial control with reference to nancial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal nancial controls with reference to nancial statements and such internal nancial controls were operating effectively as at 31 March 2024, based on the internal control with reference to nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
For PKF Sridhar & Santhanam LLP
Chartered Accountants
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Place of Signature: Hyderabad Date: 23rd May 2024
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