Board of Directors
Dear Members,
Your directors have pleasure in presenting the
30th Annual Report on your Companys business and operations together with audited ?nancial statements of the Company for the ?nancial year ended March 31, 2024.A snapshot on key performance highlights of your Company showcasing the rebound in terms of all parameters, whether Business, Operational or Financial front establishing the fact that the Company is on its road to recovery is given below.
The summarized ?nancial results of your Company for the FY 2023-2024 are given below:
( in lakhs, except earnings per share)|
Particulars Total Income |
2023-2024 |
2022-2023 44,310.31 |
40,140.77 |
||
| Total Expenses | 33,291.54 |
33,430.36 |
| Pro?t Before Exceptional items and Tax | 6,849.23 |
10,879.95 |
| Exceptional items | (9,584.65) |
- |
| Pro?t Before Tax (PBT) | 16,433.89 |
10,879.95 |
| Tax Expense | 4,168.09 |
3,011.84 |
| Pro?t After Tax (PAT) (including OCI) | 12,249.46 |
7,792.58 |
| Basic Earnings Per Share (EPS) | 74.58 |
47.84 |
The Company was able to conclude the
year ended March 31, 2024, by re-visiting all the business parameters which helped the
company in creating an additional disbursement of
During the Financial Year 2023-24, your Company achieved a net pro?t of
12,249 lakhs for the year ended March 31, 2024, as compared to 7,792 lakhs for the year ended March 31, 2023, an increase of 57%. Pro?t before tax was at 16,434 lakhs for the year ended March 31, 2024, as compared to 10,880 lakhs for the year ended March 31, 2023. Total Income has declined from 44,310 lakhs for the year ended March 31,2023 to 40,141 lakhs for the year ended March 31, 2024. The Net Interest Margin (NIM) is reported at 58% for the current ?nancial year as against 67% in Financial Year 2023- 2024.As on March 31, 2024, the gross NPA and net NPA in the books of your Company stood at
20,504 lakhs and 6,368 lakhs respectively. The Provision Coverage on the entire on-book loan stood at 8.1% against 19.5% as on March 31, 2023. The Asset quality was the parameter which was given the top- most signi?cance throughout the past few Financial Years. A considerable reduction can be seen in the year-on-year numbers. The Companys Non-performing asset as of March 31st 2024 stood at20,504 lakhs while the same were 46,349 lakhs as of March 31st 2023. The Overall collection
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ef?ciencies have signi?cantly improved in all the buckets. In spite of overall improvement, the Company is carrying management overlay of
6,150 lakhs where in NNPA is 3.40%.The net worth of your Company stood at
61,175 lakhs as against 48,925 lakhs in the previous year. It increased on account of pro?t earned during the year amounting to 12,249 lakhs. The Companys total Capital Adequacy Ratio (CRAR) as on March 31, 2024 stood at 31.24% of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the - Balance Sheet items, which is signi?cantly above the statutory minimum of 15 %. Out of the above, Tier I CRAR stood at 30.59 % and Tier II CRAR stood at 0.65 %. The CRAR as on March 31, 2023 was at 27.92%.Earnings Per Share of your Company during the year under review is reported at
74.58 against earning of 47.84 as on March 31, 2023. Return on Equity was at 22.3% for the current ?nancial year.To ensure availability of capital for the future growth of the Company, your Board of Directors, are of the view that ploughing back of pro?t after tax into the business is a necessity of time. Hence the Board does not recommend any dividend for the Financial Year 2023-24.
The Dividend distribution policy containing the requirements mentioned in 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.muthootcap. com/wp-content/uploads/2021/12/Policy-on-Distribution-of-Dividends.pdf. The list of unclaimed dividends is available on the Companys website at https://www.muthootcap.com/investors/#tab9. 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.Investor Education and Protection Fund
During the ?nancial year 2023-24, the Company has transferred an amount of 769,048.50/- to Investor Education and Protection Fund (IEPF) Authority, being unclaimed and unpaid dividend for the ?nancial year 2015-16. Since the amount has been transferred to IEPF Authority, no claim for unclaimed and unpaid dividends for the ?nancial year 2015-16 shall lie against the Company. Further, in compliance with the provisions of Companies Act, 2013 (“Act”) and Rules made thereunder, the Company had transferred the shares pertaining to the shareholders whose dividend were remaining unclaimed and overdue for a period of seven consecutive years to the IEPF Authority. As per the provisions of IEPF Authority (Accounting, inspection, Transfer and Refund) Rules, 2016 (as amended), the shareholder may lodge the claim to the IEPF Authority for such dividends and shares by submitting an online application in Form IEPF- 5 available on the website www.iepf.gov.in.
The Company has transferred an amount of
2,450 lakhs to the Statutory Reserve maintained under Section 45-IC of the Reserve Bank of India Act, 1934. The Company has not transferred any amount to the General Reserve for the ?nancial year ended March 31, 2024. Post transfer of pro?ts to reserves, your Board has decided to retain 9,799 Lakhs as surplus in the pro?t & loss account.The authorized share capital of the Company is
2500 lakhs, and the paid-up share capital of the Company is 1645 lakhs. The Company had not issued any equity shares either with or without differential rights during the Financial Year 2023- 2024 and hence, the disclosure requirements underSTATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesSection 43 and Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.
During the period under review, no stock options have been issued by the Company and hence disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Bene?ts and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 shall not apply.
During the year under review, your Company issued
199 crores listed, senior, secured, redeemable, Non-Convertible Debentures (NCDs). Your Company has redeemed secured redeemable NCDS aggregating to an amount of 50 crores. The NCDs are listed on the debt market segment of the BSE Limited. As speci?ed in the respective offer documents, the funds raised from NCDs are being utilized for various ?nancing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time. The Company has been regular in making payments of interest on all the NCDs issued by the Company on a private placement basis as and when due. As on March 31, 2024, the residual portion of Secured Redeemable non-convertible principal protected market linked and NCDs under private placement including those issued during earlier years along with interest accrued is 43,509 lakhs. The debentures issued are secured by way of paripassu and exclusive charge on the current assets of the Company. The NCDs of your Company are rated as “A +/ Stable” by CRISIL.Trustees for Debenture Holders for ensuring and protecting the interests of debenture holders:
Your Company is a Non - Banking Financial Company (NBFC), registered with Reserve Bank of India (RBI) having a Deposit Taking License. The Company started accepting ?xed deposits during FY 2013 - 2014. The ?xed deposits of the Company are rated as “A+/Stable” by CRISIL.
The outstanding number of ?xed deposits as on March 31, 2024, received by the Company including interest accrued at that date is
3,381 lakhs.As on March 31, 2024, there are 46 accounts of ?xed deposits amounting to
98.16 lakhs which have become due for payment but have not been claimed by the depositors.Being an NBFC registered with RBI, the provisions of Chapter V of the Act, relating to acceptance of deposits by Companies, is not applicable to the Company.
Communication to Deposit Holders:
The Company has the practice of sending communication by registered post to the deposit holders whose accounts are about to mature, two months prior to the date of maturity. If the deposit holders do not respond to the communication, the Company contacts the depositors in person, instructing them to surrender the ?xed deposit certi?cate and claim the amount. In case, the depositors are not traceable due to change in address/phone numbers, another regular communication is sent to the deposit holder and other modes to contact the deposit holders are also initiated till the deposits are repaid.#MuthootBlue
Trustees for Deposit Holders:
Based on the RBI Guidelines for trustees of deposit holders of the NBFC, your Company has appointed IDBI Trusteeship Services Limited, as trustees for protecting the interests of deposit holders.In compliance with the Master Circular - Miscellaneous Instruction to all NBFCs dated July 01, 2014, your Company has created a ?oating charge on the Statutory Liquid Assets in favour of IDBI Trusteeship Services Limited, as trustee on behalf of the depositors as required under the extant provisions.
The Company, in the current year has not raised money through issue of subordinated debts. As of March 31, 2024, the total amount of outstanding subordinated debts, including accrued interest was
1,138 lakhs as against 1,354 lakhs in the previous year.
The subordinated debts and public deposits contribute to 2.7% of our total funding.
The Company raises funds for its working capital requirements mainly from banks. Commercial Banks continued their support to your Company during Financial Year. As on March 31, 2024 the total outstanding amount of credit facilities from Banks were
86094.01 lakhs as against 109637.29 lakhs as on March 31, 2023, excluding accrued interest.Apart from the above, the Company has been sourcing funds through Securitization. During the year under review, the Company has sourced
14449.08 lakhs (net of MRR) (previous year 62659.16 lakhs). The same has been invested into by various kinds of entities and the value remaining outstanding as on March 31, 2024, was 24429.46 lakhs (previous year 48036.33 lakhs).During the year under review, your Company has raised funds for its working capital requirements by issue of Commercial Papers. The Commercial Papers of your Company are rated as A1+ by CRISIL.
The outstanding amount of Commercial Paper as on March 31, 2024, is
7,860.17 Lakhs.As on March 31, 2024, the Board of your Company consisted of the following seven Directors:
|
Category |
Name of Directors |
| Executive Director | Mr. Thomas George Muthoot, Managing Director (DIN: 00011552) |
| Non - Executive - Non - Independent Directors | Mr. Thomas
John Muthoot, Chairman (DIN: 00011618) Mr. Thomas Muthoot, Director (DIN: 00082099) |
| Non - Executive Independent Directors | Mr. Kurian
Peter Arattukulam (DIN: 00008022) Ms. Shirley Thomas (DIN: 08586100) Mr. Thomas Mathew (DIN: 01277149) Ms. Divya Abhishek (DIN: 08709050) |
The composition of the Board is in line with the requirements of the Act and the Listing Regulations. All the Directors have vast knowledge and experience in their relevant ?elds and the Company has bene?ted immensely by their presence on the Board. The key Board quali?cations, expertise, attributes are given in detail in the Report on Corporate Governance which forms part of this Report.
STATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesKey Managerial Personnel:
Mr. Thomas George Muthoot, Managing Director, Mr. Ramandeep Singh, Chief Finance Of?cer, Mr. Mathews Markose, Chief Executive Of?cer and Mr. Srikanth G Menon, Company Secretary and Compliance Of?cer are the Key Managerial Personnels of the Company, as recorded by the Board as on March 31, 2024.
All appointments of Directors and KMPs are made in accordance with the relevant provisions of the
Act, the Listing Regulations, the RBI Directions and other laws, rules, guidelines as may be applicable to the Company. The Nomination & Remuneration Committee (“NRC”) exercises due diligence inter- alia to ascertain the ‘?t and proper person status of the person who is proposed to be appointed on the Board of Directors of the Company, and if deemed ?t, recommends their candidature to the Board of Directors for consideration.
In line with succession planning for the Company and considering the knowledge, relevant expertise and experience of Mr. Mathews Markose and on recommendation of the NRC, the Board of Directors of the Company at its meeting held on May 13, 2023, approved the appointment of
Mr. Mathews Markose as the Chief Executive Of?cer with effect from May 19, 2023.
The Board of Directors of the Company, on the recommendation of the NRC, appointed Mrs. Divya Abhishek (DIN: 08709050) as an Additional Non - Executive Independent Director on the Board on August 08, 2023, for a period of 5 years and her appointment as the Non - Executive Independent Director was approved by the shareholders at 29th AGM of the Company through special resolution.
During the year under review, Mr. Srikanth G Menon, was appointed as Company Secretary & Chief Compliance Of?cer with effect from March 28, 2024.
Mr. Thomas Mathew (DIN: 01277149) was re-appointed as Non-Executive Independent Director for a period of 5 years with effect from 01st April 2024 vide Special Resolution passed by Shareholders via Postal Ballot on 15th June, 2024.
Cessation
During the year under review, Ms. Deepa G resigned as Company Secretary and Compliance of?cer of the Company with effect from close of business hours of March 27, 2024.
Resignation of Independent Director(s)
During the year under review, none of the Independent Director(s) on the Board of Directors of the Company had resigned before the expiry of their respective tenure(s).
Director Retiring by Rotation
In terms of Section 152(6) of the Act read with the Articles of Association of the Company, Mr. Thomas Muthoot, Director (DIN: 00082099), shall retire by rotation and being eligible, have offered themselves for re-appointment at the ensuing Annual General Meeting (“AGM”) of the Company. The detailed pro?le of Mr. Thomas Muthoot has been included in the notice convening the ensuing 30th AGM.
Pursuant to the provisions of Section 149 of the Act and Regulation 25(8) of the Listing Regulations, the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company. Further, the Board is satis?ed of the integrity, expertise, and experience (including pro?ciency in terms of Section 150(1) of the Act and
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applicable rules thereunder) of all Independent Directors on the Board. The Independent Directors have con?rmed that they have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Quali?cation of Directors) Rules, 2014.
The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and the Code of Conduct for Directors and Senior Management Personnel formulated by the Company.
A declaration by Managing Director con?rming the receipt of this declaration from Independent Directors is enclosed to this report as
Annexure I.Non-Disquali?cation of Directors
A certi?cate bearing Unique Document Identi?cation Number (UDIN): F003050F000900201 from Puzhankara Sivakumar, Managing Partner, M/s. SEP & Associates, Company Secretaries (C.P No. 2210), con?rming that none of the Directors on the Board of the Company as on March 31, 2024 have been debarred or disquali?ed from being appointed or continuing as Director on the Board of the Company by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any such statutory authority, forms part of the Corporate Governance Report which is annexed to and forms an integral part of this Directors Report.
The Policy on Board Diversity approved and adopted by the Company contains the followings:
The management of the Company has immensely bene?tted from the guidance, support and mature advice from members of the Board of Directors who are also members of various committees. The Board consists of directors possessing diverse skill, rich experience to enhance quality of its performance. The Company has adopted a Policy on Board Diversity formulated by the NRC. The Policy on Nomination and Remuneration is framed in terms of section 178(3) of the Companies Act,2013 which contains the criteria for determining quali?cations, positive attributes, independence of a director and other related matters. It also includes the details relating to the remuneration of Directors (Executive and Non-Executive), Key Managerial Personnel and Senior Management Personnel in line with the requirement of the Section 178 of the Act, Regulation 19 read with Part D of Schedule II of the Listing Regulations and directions issued by the RBI and as per the Guidelines on Compensation of Key Managerial Personnel and Senior Management in NBFCs issued by RBI. This Policy is available on the Companys website at the weblink:
https://www. muthootcap.com/wp- content/uploads/2023/05/Policy-on-Nomination-and-Remuneration.pdf. The Company has formulated policy on Succession Planning for Directors and Key Managerial Personnel for continuity and smooth functioning of the Company.STATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesBased on the Policy on Nomination and Remuneration, the Board has carried out an annual evaluation of its own performance, its Committees and Independent Directors, excluding the Director being evaluated.
The detailed note on the annual board evaluation process undertaken in compliance with the provisions of the Act and Listing Regulations is given in the Report on Corporate Governance, which forms part of this Report.
During the Financial Year 2023-2024, your Board of Directors met seven times. Further details about the meetings of the Board are given in the Report on Corporate Governance, which forms a part of this Report.
The details of the Committees of the Board, their composition, terms of reference and the activities during the year are elaborated in the Report on Corporate Governance forming part of this Report.
The Company has no subsidiary/joint venture/associate company. Hence consolidation and the provisions relating to the same under the Act and Rules made thereunder are not applicable to the Company.
There are no companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.
During the year under review, there is no change in business of the Company. The Company is mainly into the business of providing vehicle loans (two-wheeler and used cars), for which, during the year under review the Company has disbursed loans to the extent of
125,635 lakhs and as on March 31, 2024, the total outstanding amount was 183,650 lakhs. The Company had disbursed business / corporate loans to the extent of 182 lakhs and as on March 31, 2024, the outstanding amount is 18167 lakhs.The sourcing of two-wheeler and used car business of the Company takes place mainly at the dealer points for two wheelers where Company representatives are present and through branches of its group company, Muthoot FinCorp Limited. The Company is sourcing its customers through its mobile app.
There were no material changes and commitments affecting the ?nancial position of the Company between the end of ?nancial year and the date of this Report except passing of a Special Resolution by the members for the alteration of Object clause of the Memorandum of Association of the Company to include the below-mentioned sub-clause under the Main Objects clause:
“To carry on the business of selling, distribution, marketing as a Corporate Insurance agent and brokers, of all kinds of insurance products of various companies in various ?elds of insurance such as life, pension & employee bene?t, health, ?re, marine, cargo, marine hull, aviation, oil & energy engineering, accident, liability, motor vehicles, transit & other products of non-life insurance business and provide advisory and consultancy services relating to insurance business.”
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Your directors con?rm that there were no signi?cant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.
The Board oversees the risk management functions of the Company and a separate Risk Management Committee of the Board supervises the risk management functions. Apart from this, the Company has a separate Risk Management Department that co-ordinates and administers the risk management functions thereby setting up a top to down focus on the risk management.
The Risk Management Committee of the Company has not identi?ed any elements of risk which in their opinion may threaten the existence of your Company. Details of the risks and concerns relevant to the Company are discussed in detail in the Management Discussion and Analysis Report which forms part of the Annual Report.
The Company had appointed Mrs. Umadevi Pazhoor Unnikrishnan as the Chief Risk Of?cer (“CRO”) and a policy on Independence of the CRO is in place. In order to ensure that the Company maintains high standards of risk management practices, the CRO functions independently with no relationship with business verticals of the Company and reports to the Risk Management Committee. The CRO is inter-alia entrusted with the responsibility of identifying, measuring and mitigating risks which may affect the Company and putting in place and monitoring the risk management policies and practices of the Company.
The Company believes that risk resilience is key to achieving higher growth. To this effect, the Company has a well-de?ned Risk Management Policy in place to create and protect shareholder value by minimizing threats or losses and identifying and maximizing opportunities and thereby to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The policy lays down broad guidelines for timely identi?cation, assessment and prioritization of risks affecting the Company in the short and foreseeable future. The Policy suggests framing an appropriate response action for the key risks identi?ed, so as to make sure that risks are adequately addressed or mitigated. The said policy is approved by the Board and reviewed from time to time.
The risk management framework in the Company is periodically reviewed by the Risk Management Committee of the Board. The Internal Auditors are also having a complete review of risk assessments and associated management action plans. All material risks of the Company emerging in the course of its business are identi?ed, assessed and monitored and necessary action are taken on a regular basis.
The Company conducts Internal Capital Adequacy Assessment Process (ICAAP) on annual basis to assess the suf?ciency of its capital funds to cover the risks speci?ed under Pillar II of Basel guidelines. The adequacy of Companys capital funds to meet the future business growth is also assessed in the ICAAP Document. Capital requirement for current business levels and framework for assessing capital requirement for future business levels has been made. Capital requirement and Capital optimisation are monitored periodically by the Committee of Senior Management (ALCO). The Senior Management deliberates on various options available for capital augmentation in tune with business growth. Based on these reports submitted by Senior Management, the Board of Directors evaluates the available capital sources, forecasts the capital requirements and capital adequacy of MCSL and ensures that the capital available for the Company at all times is in line with the Risk Appetite of the Company.
Details of the Risk Management Framework and Policy have been provided in the Corporate Governance Report which is annexed to and forms an integral part of this Directors Report.
STATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesThe Company has in place a stabilized and effective Internal Audit and Financial Controls system calibrated to the risk appetite of the Company and aligned to the size, scale and complexity of the business operations of the Company. The said ?nancial controls of the Company are evaluated by the Audit Committee as per Part C of Schedule II of the Listing Regulations.
Apart from Statutory Audit and Concurrent Audit, your Company, in compliance with Section 138 of the Companies Act, 2013. The Board of Directors at its meeting held on 26th March 2024, appointed Mr.
Vijayakumar V, as the Chief Internal Auditor, with effect from 22nd February 2024, for a period of three years. The scope and authority of the Internal Audit function is de?ned in the Audit Policy of the Company, duly approved and recommended by the Audit Committee of the Board and approved and adopted by the Board of Directors. The Internal Audit function essentially validates and ensures that the Company has in place adequate controls, procedures and policies, ensuring orderly and ef?cient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable ?nancial information. The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the Companys internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management protect the Company and its reputation.
The Audit Committee oversees and reviews the functioning of the entire audit team and the effectiveness of internal control system at all levels and monitors the implementation of audit recommendations. During the year, such control systems were assessed and no reportable material weaknesses in the design or operation were observed. Improvements suggested are tracked with identi?ed timelines for its completion. Accordingly, your Board is of the opinion that the Companys internal ?nancial controls were adequate and effective during Financial Year 2023-2024.
Corporate Social Responsibility activities at Company encompasses much more than social outreach programmes. The Company believes that CSR is a way of creating shared value and contributing to social and environmental good. With this philosophy, the CSR activities of the Company is centered around a theme called HEEL i.e., Health, Education, Environment and Livelihood. Aligning with its vision, your Company has been continuing to increase value in the community in which it operates, through its services and CSR initiatives, so as to stimulate well-being for the community, in ful?llment of its role as a responsible corporate citizen. The Board has constituted a Corporate Social Responsibility Committee (CSR Committee) to oversee and monitor the CSR activities of the Company. The CSR Committee of the Company has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The Companys CSR Policy is committed towards CSR activities as envisaged in Schedule VII of the Companies Act, 2013. The CSR Policy is available on the website of the Company at
https://www. muthootcap.com/wp-content/uploads/2024/02/CSRPolicy.pdf.
During the year, the Company spent an amount of
144.62 lakhs identi?ed as CSR activities including for ongoing projects from ?nancial years 2020-21 and 2021-22. The details of the CSR Policy and CSR Committee of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure 2 to this Report in the format prescribed as per the Companies (Corporate Social Responsibility Policy) Rules, 2014.The composition and other details of the CSR Committee and its meetings are detailed in the Report on Corporate Governance, forming part of this Report.
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The Company has re-appointed M/s. PKF Sridhar & Santhanam LLP, Chartered Accountants, 91/92, VII Floor, Dr. Radhakrishnan Road, Mylapore, Chennai - 600 004, Tamil Nadu, India as the Statutory Auditors of the Company at the 28th AGM held on 27th September 2022 to hold of?ce from conclusion of the 28th AGM till conclusion of the 30th AGM of the Company to conduct audit of accounts of the Company. M/s PKF Sridhar & Santhanam LLP is a registered Limited Liability Partnership with LLPIN AAB-6552 (Registration No. with ICAI is 003990S/S200018). The Statutory Auditor holds a valid peer review certi?cate as prescribed under the Listing Regulations. The same is in compliance with the RBI Guidelines on appointment of statutory auditor(s) by NBFC.
The Auditors had also prepared a separate report, pursuant to Non - Banking Financial Companies Auditors Report (Reserve Bank) Directions, 2008 in addition to the report made under Section 143 of the Companies Act, 2013 which was duly examined by the Board and submitted to RBI.
The present Statutory Auditors of the Company are retiring at the conclusion of the ensuing 30th AGM after completion of their term for three years.
Based on the recommendation of the Audit Committee in its meeting held on 06.08.2024, the Board of Directors of the Company in its meeting held on 07.08.2024, have recommended the appointment of M/s. Sundaram & Srinivasan, Chartered Accountants (Registration No. 004207S), 23, CP Ramaswamy Iyer Rd, Sriram Colony, Abiramapuram, Chennai, Tamil Nadu 600018, for a period of 3 years as Statutory Auditors of the Company from the conclusion of 30th AGM till the conclusion of 33rd AGM, for the approval of shareholders of the Company.
As per the requirement of the Act, M/s. Sundaram & Srinivasan, Chartered Accountants has con?rmed that their appointment if made would be within the limits speci?ed under Section 141(3) (g) of the Act and they are not disquali?ed to be appointed as statutory auditor/s in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.
Accordingly, approval of the members is requested for appointment of M/s. Sundaram & Srinivasan, Chartered Accountants for a period of three (3) years as Statutory Auditors of the Company from the conclusion of 30th AGM till the conclusion of 33rd AGM and on such terms and conditions, including remuneration, as may be approved by the Board or Audit Committee of the Board of the Company. The Board or Audit Committee of the Board will negotiate and ?nalise the remuneration of the Statutory Auditors depending on their roles and responsibilities / scope of work. The remuneration paid to the Statutory Auditors will be disclosed in the Corporate Governance Report as well as the Annual Financial Statements of the Company on an annual basis.
M/s. Sundaram & Srinivasan, Chartered Accountants have 80 years Bank Audit experience as Central Statutory Auditors/Branch Auditors of various Nationalized and Private Banks and 20 years of Experience as Statutory Auditors of NBFCs and Housing Finance Companies.
As required under the Listing Regulations, M/s. Sundaram & Srinivasan, Chartered Accountants has con?rmed that they hold a valid certi?cate issued by the Peer Review Board of ICAI.
Recommendations of the Audit Committee
There was no instance during the year where the Board has not accepted the recommendations of the Audit Committee requiring disclosure pursuant to Section 177(8) of the Companies Act, 2013
Audit quali?cations, reservation or adverse remarks or disclaimer
The Board has duly examined the Statutory Auditors Report to the accounts, which is self- explanatory. Clari?cations, wherever necessary, have been included in the Notes to the Accounts
STATUTORY REPORT :
Report of the Board of Directors Transcending Boundariessection of the Annual Report. Further, your directors con?rm that there are no quali?cation, reservation or adverse remark or disclaimer in the Independent Auditors Report provided by Statutory Auditors for the Financial Year 2023-2024. There is no incident of fraud requiring reporting by the Auditors under Section 143(12) of the Act.
The Board, at its meeting held on August 08, 2023, re-appointed M/s. SEP & Associates, Company Secretaries, Building No. CC 56/172, K C Abraham Master Road, Panampilly Nagar, Kochi - 682036 to conduct the Secretarial Audit for the year ended March 31, 2024 in compliance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Secretarial Audit Report in form MR-3, submitted by the Secretarial Auditors for the FY 2023-24 is enclosed to this report as
Annexure 3. The Directors of your Company con?rms that there is no quali?cation, reservation or adverse remark or disclaimer in Secretarial Audit Report for the period under review. No offence of fraud was reported by the Secretarial Auditor of the Company.The Company has an independent internal audit department headed by Chief Internal Auditor Mr. Vijayakumar V appointed w.e.f 22.02.2024. The internal audit department broadly assess and
contribute the overall improvement of the organisations governance, risk management and control processes using a systematic and disciplined approach. The internal audit team follows Risk Based Internal Audit which helps the organisation to identify the risks and address them accordingly based on the risk priority and direction provided by the Board of Directors.
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
Considering the nature of activities, the provisions of Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings & out go does not apply to the Company. The Company is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.
The Company has in place, a comprehensive Whistle Blower Policy in compliance with Section 177 (9) & 177 (10) of the Companies Act, 2013 and as per Regulation 4 (2) (d) (iv) & 34 (3) read with Para 10 of Part C of Schedule V of the Listing Regulations.
A brief note on the highlights of the Whistle Blower Policy and compliance with the same is also provided in the Report on Corporate Governance, which forms part of this Report.
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 NBFC registered with RBI are exempt from the applicability of provisions of Section 186 of the Act.
The details of the investments of the Company are given in the notes to the ?nancial statements.
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Your directors con?rm that all contracts/arrangements/transactions entered into by the Company during the Financial Year 2023-24 with related parties were in compliance with the provisions of the Act and Listing Regulations. The Company had obtained prior approval of the Audit Committee for all the related party transactions during the Financial Year 2023-24 as envisaged in Regulation 23 (2) of the Listing Regulations. Further, the Audit Committee had given prior omnibus approval under Regulation 23 (3) of the Listing Regulations for related party transactions that are foreseen and of repetitive in nature during the period under review and the required disclosures are made to the Committee on quarterly basis against the approval of the Committee.
In addition to the above, the Company had obtained the approval of the shareholders for related party transactions with Muthoot Micro?n Limited, Muthoot Bankers and Muthoot Fincorp Limited at the AGMs held on June 06, 2017, June 14, 2018, September 28, 2020 and June 15, 2024 respectively for a period of ?ve years even though the said transactions were not material in nature.
All related party transactions that were entered into during the ?nancial year ended March 31, 2024 were on an arms length basis and were in the ordinary course of business except the transaction Muthoot Bankers on windmill business and the transaction with Muthoot Fincorp Limited on Cash Remittance, Space Sharing and Rent Deposit and payment towards airline and train tickecting, for which the Company had obtained the approval of shareholders.
Therefore, the provisions of Section 188 of the Companies Act, 2013 were not attracted for the transactions. Thus, disclosures as per Form AOC-2 under Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is attached herewith as
Annexure 4.The disclosure of transactions with related party for the year, as per IND-AS 24 Related Party Disclosures is given in Notes to the Accounts section of the Annual Report. Also, there are no materially signi?cant related party transactions during the year under review made by the Company with Promoters, Directors or other designated persons which may have a potential con?ict with the interest of the Company at large.
The policy on dealing with related party transactions as approved by the Board is uploaded on the Companys website at the web link:
https://www.muthootcap.com/wp-content/uploads/2022/06/Related- party-transaction-policy.pdf.Disclosures required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter-alia, the ratio of remuneration of each Director to median remuneration of employees, percentage increase in the median remuneration etc., are annexed to this Report as
Annexure 5.Statement containing the particulars of top ten employees and the details as prescribed under Section 197(12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this Report as
Annexure 6.In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the shareholders. Any shareholder interested in obtaining such particulars may write to Company Secretary at the Registered Of?ce of the Company.
As the Company does not have any Holding Company or Subsidiary Company no disclosure as required under Section 197(14) of the Act has been made.
The equity shares of your Company were listed on BSE Limited since April 24, 1995 and on National Stock
STATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesExchange of India Limited since August 24, 2015 and debt instruments are also listed on the BSE Limited. Your Company has paid the required listing fees to both the Stock Exchanges for the Financial Year 2023- 24.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016, requires the top one thousand listed entities based on market capitalization as on 31st March of every ?nancial year, to have, a “Business Responsibility and Sustainability Report” as part of their Annual Report, containing the environmental, social and governance disclosures, in the format as may be speci?ed by the Board from time to time. Your Company is not one amongst the top one thousand listed companies based on the market capitalisation as on 31st March 2024, this Report has not been prepared and attached in Annual Report.
Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 27 read with Part E of Schedule II and Schedule V of the Listing Regulations on Corporate Governance. The detailed Report on Corporate Governance along with certi?cate on Corporate Governance from the Statutory Auditors forms part of this Report.
The Management Discussion and Analysis Report for the year under review is included as a separate section of this Report. The same covers the state of the Companys affairs and provides insightful information on the performance of the Organization in view of the various macro-economic barriers under which it operates.
The Company has in place, a Fair Practice Code approved by the Board on April 02, 2012, in compliance with the guidelines issued by the RBI, to ensure better service and provide necessary information to customers to take informed decisions. The FPC is available on the website of the Company at:
https:// www.muthootcap.com/wp-content/uploads/2024/06/Fair-Practice-Code.pdf. The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and appropriateness.The Company has a dedicated Customer Grievance Cell for receiving and handling customer complaints/grievances and ensuring that the customers are treated fairly and without bias at all times. All issues raised by the customers are dealt with courtesy and redressed expeditiously.
In accordance with the provisions of Section 92(3) and Section 134(3) (a) of Companies Act, 2013 read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7 of the Company is hosted on website of the Company at
https://www.muthootcap.com/ investors/?data_tab=tab-24/#tab4.
In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Directors state that:
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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 ?nancial year and of the pro?t of the Company for that period;
The Credit Rating enjoyed by the Company as on March 31, 2024, is as given below:
Credit Rating Agency |
Instrument |
Rating as on March 31, 2024 |
Date on which the credit rating was obtained |
Migration during the March 31, 2024 |
CRISIL |
2500 crore Bank loan facilities | CRISIL A+ / Stable |
March 02, 2023 |
CRISIL A+/ Stable (Reaf?rmed) |
CRISIL |
Fixed deposits | CRISIL A+ / Stable |
March 02, 2023 |
CRISIL A+/ Stable (Reaf?rmed) |
CRISIL |
200 crore non-convertible debentures | CRISIL A+ / Stable |
March 01, 2023 |
CRISIL A+/ Stable (Reaf?rmed) |
CRISIL |
75 crore non-convertible debentures (reduced from 150 Crores) |
CRISIL A+ / Stable |
March 02, 2023 |
CRISIL A+/ Stable (Reaf?rmed) |
CRISIL |
100 crore Long Term Principal Market Linked Debentures | CRISIL PPMLD A+/Stable |
March 02, 2023 |
CRISIL PPMLD A+ / Stable (Reaf?rmed) |
CRISIL |
100 crore Long Term Principal Market Linked Debentures | CRISIL PPMLD A+/Stable |
March 02, 2023 |
CRISIL PPMLD A+ / Stable (Reaf?rmed) |
CRISIL |
250 Crore Commercial Paper | CRISIL A1+ |
March 02, 2023 |
CRISIL A1+ (Reaf?rmed) |
CRISIL |
Non-Convertible
Debentures of 110 Crores |
CRISIL A+ / Stable |
March 12, 2024 |
Your Company is committed to create an environment in which all individuals are treated with respect and dignity and promote a gender sensitive and safe work environment. Accordingly, the Board of Directors adopted a policy for prevention of Sexual Harassment of Women at Workplace. An Internal Complaints Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (‘POSH). During the year under review, there were no cases ?led under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
STATUTORY REPORT :
Report of the Board of Directors Transcending BoundariesDetails of cases reported to Internal Complaints Committee during the ?nancial year 2023-24 are as under:
| Number of complaints pending at the beginning of the ?nancial year 2023-24 |
NIL |
| Number of complaints ?led during the ?nancial year 2023-24 |
NIL |
| Number of complaints disposed of during the ?nancial year 2023-24 |
NIL |
| Number of complaints pending as on end of the ?nancial year 2023-24 |
NIL |
The Company is registered with the Reserve Bank of India (“the RBI”) as a NBFC-D. As per the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated October 19, 2023, the Non-Banking Finance Companies are categorised into four layers, NBFC - Base Layer (NBFC - BL), NBFC - Middle Layer (NBFC - ML), NBFC - Upper Layer (NBFC - UL) and NBFC - Top Layer (NBFC - TL) based on Size, activity and risk perceived. According to the said regulation, the Company has been categorised as NBFC - ML. The Company has listed its equity shares in the BSE Limited and the National Stock Exchange of India Limited and has also listed various Non-Convertible Debt Instruments in BSE Limited.
The Company has complied with and continues to comply with all applicable Laws, Rules, Circulars, Regulations, etc. including Directions of RBI for NBFC - Ds and various SEBI Listing Regulations, and does not carry on any activities other than those speci?cally permitted by RBI for NBFC - D.
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ACKNOWLEDGEMENTS
Your directors wish to place on record their appreciation and sincerely acknowledge the contribution and support from shareholders, customers, depositors, debenture holders, Central and State Governments, Bankers, Reserve Bank of India, Registrar of Companies, Kerala and Lakshadweep, Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Registrar & Share Transfer Agents, Credit Rating Agencies and other Statutory and Regulatory Authorities for the kind co-operation and assistance provided to the Company.
Your directors also extend their special appreciation to each Muthootians for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance along with every well- wisher for their continued commitment, dedication and co-operation.
Place: Kochi
Date: August 07, 2024
For and on behalf of the Board of Directors
Sd/- Thomas John Muthoot
Chairman DIN: 00011618
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