Directors Report of Muthoot Capital Services Ltd.

Mar 31, 2025

Your Directors take pleasure in presenting the 31st Annual Report on your Company''s Business and
Operations together with Audited Financial Statements of the Company for the Financial Year ended March
31, 2025.

1. PERFORMANCE HIGHLIGHTS

A snapshot on key performance highlights of your Company showcasing the progress across Business
and Operational parameters and Financial performance is detailed below. The consistent growth in
income and operational resilience highlight the Company''s strengthened fundamentals and continued
progress.

a. Financial Results

The summarized financial results of your Company for FY 2024-25 are given below:

Particulars	2024-2025	2023-2024
Total Income	47,649.53	40,140.78
Total Expenses	41,609.76	33,291.55
Profit Before Exceptional Items and Tax	6,039.77	6,849.23
Exceptional Items	-	(9,584.65)
Profit Before Tax (PBT)	6,039.77	16,433.88
Tax Expenses	1,465.17	4,168.09
Profit After Tax (PAT) (including OCI)	4,631.47	12,249.46
Basic Earnings Per Share (EPS)	27.81	74.58

b. Business Growth

Your Company has demonstrated substantial performance enhancement through strategic
investments in technology, expansion into new markets and diversification of its product portfolio.
Throughout this growth phase, the Company has remained steadfast in its commitment to
delivering exceptional customer service. These initiatives culminated in a successful conclusion to
the fiscal year March 31, 2025, marked by an impressive additional disbursement of '' 1,20,367 lakhs
and sustained asset quality. Notably, the Company achieved a commendable growth rate of 83.68%
during the reporting year.

c. Profitability

During the Financial Year 2024-25, your Company achieved a net profit of '' 4,631 lakhs as compared
to '' 12,249 lakhs for the previous Financial Year. Profit Before Tax was at '' 6,040 lakhs for the year
ended March 31, 2025 as compared to '' 16,434 lakhs for the year ended March 31, 2024. Total Income
has increased from '' 40,141 lakhs for the year ended March 31, 2024 to '' 47,650 lakhs for the year
ended March 31, 2025. The Net Interest Margin (NIM) is reported at 53% for the Financial Year 2024-25
as against 58% in Financial Year 2023-24.

d. Asset Quality

As on March 31, 2025, the gross NPA and net NPA in the books of your Company stood at '' 14,920
lakhs and '' 6,835 lakhs respectively. The Provision Coverage on the entire on-book loan stood at 3.5%

as on March 31, 2025 against 8.1% as on March 31, 2024. The Asset quality was the parameter which
was given the top-most significance throughout the past few financial years. A considerable
reduction can be seen in the year-on-year numbers. The Company''s Non-performing asset as of
March 31, 2025 stood at '' 14,920 lakhs while the same were '' 20,504 lakhs as of March 31, 2024. The
overall collection efficiencies have significantly improved in all the buckets. Despite overall
improvement, the Company is carrying management overlay of '' 3,738 lakhs where in NNPA is
2.30%.

e. Net Worth and Capital Adequacy Ratio

The Net Worth of your Company stood at '' 65,806 lakhs as against '' 61,175 lakhs in the previous year.

It increased on account of profit earned during the year amounting to '' 4,631 lakhs. Your Company''s
total Capital Adequacy Ratio (CRAR) as on March 31, 2025 stood at 22.25% of the aggregate risk
weighted assets on the Balance Sheet and risk adjusted value of the Balance Sheet items, which is
significantly above the statutory minimum of 15%. Out of the above, Tier I CRAR stood at 22.06% and
Tier II CRAR stood at 0.19%. The CRAR as on March 31, 2024 was at 31.30%.

f. Earnings Per Share

Earnings Per Share of your Company during the year under review is reported at '' 27.81 against
earning of '' 74.58 as on March 31, 2024. Return on Equity was at 7.29% for the Financial Year 2024-25.

2. DIVIDEND

To ensure availability of capital for the future growth of the Company, your Board of Directors are of the
view that ploughing back of profit after tax into the business is a necessity of time. Hence, the Board
does not recommend any dividend for the Financial Year 2024-25.

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (“SEBI Listing Regulations”) is available on the website of the Company at

https://www.muthootcap. com/wD-content/uDloads/2021/12/Policv- on-Distribution-of-Dividends.pdf.

The details relating to the unclaimed dividends is available on the Company''s website at
httDs://www.muthootcaD.com/investors/#tabn Shareholders may note that both the unclaimed
dividend and corresponding shares transferred to IEPF, including all benefits accruing on such shares, if
any, can be claimed from IEPF following the procedure prescribed in the IEPF Rules.

Investor Education and Protection Fund

During the Financial Year 2024-25, there was neither any dividend nor any shares due to be transferred
to Investor Education and Protection Fund (IEPF) Authority. As per the provisions of IEPF Authority
(Accounting, Audit, 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.

3. RESERVES

Your Company has transferred an amount of '' 930 lakhs to the Statutory Reserves 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 Financial Year ended March 31, 2025. Post transfer of profits to reserves, your
Board has decided to retain '' 3,605.41 Lakhs as surplus in the profit & loss account.

4. RESOURCE MOBILISATION

a. Share Capital

The authorized share capital of the Company is '' 2,500 lakhs and the paid-up share capital of the
Company is '' 1,645 lakhs. Your Company had not issued any equity shares either with or without

differential rights during the Financial Year 2024-25. Hence, the disclosure requirements under
Section 43 of the Companies Act, 2013 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. Hence,
disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based
Employee Benefits 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.

b. Debentures

During the year under review, your Company issued Non-Convertible Debentures (NCDs) amounting
to '' 79,100 lakhs and redeemed NCDs aggregating to an amount of '' 21,325 lakhs (including the
repayment of Market Linked Debentures). The NCDs are listed on the debt market segment of the
BSE Limited. As specified in the respective offer documents, the funds raised from NCDs are being
utilized for various financing 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. Your
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, 2025, the residual portion of Secured
Redeemable Non-Convertible Principal Protected Market Linked NCDs under private placement
including those issued during earlier years along with interest accrued is '' 1,00,002 lakhs. The
debentures issued are secured by way of pari-passu charge on the current assets of the Company.
The NCDs of your Company are rated as A / Stable by CRISIL and A (Stable) by ICRA.

Trustees for Debenture Holders for ensuring and protecting the interests of debenture holders are as
follows:

1. Mr. A. Gopalakrishnan, Chartered Accountant, M/s. K. Venkatachalam Aiyer & Co., Chartered
Accountants, Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682
018, Kerala;

2. Vardhman Trusteeship Private Limited, The Capital, A Wing, 412A, Bandra Kurla Complex, Bandra
(East), Mumbai - 400 051, Maharashtra.

c. Fixed Deposits

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 fixed deposits during FY
2013-14. The fixed deposits of your Company are rated as A / Stable by CRISIL.

The outstanding number of fixed deposits as on March 31, 2025, received by the Company including
interest accrued at that date is '' 4,364 lakhs.

As on March 31, 2025, there are 30 accounts of fixed deposits amounting to '' 45 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, fourteen days 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 fixed deposit certificate 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.

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 Direction - Non-Banking Financial Companies Acceptance of Public
Deposits (Reserve Bank) Directions, 2016 dated August 25, 2016, your Company has created a floating
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.

d. Subordinated Debts

Your Company in the current year has not raised money through issue of subordinated debts. As of
March 31, 2025, the total amount of outstanding subordinated debts including accrued interest was
'' 214 lakhs as against '' 1,138 lakhs in the previous year.

The subordinated debts and public deposits contribute to 1.6% of our total funding.

e. Commercial Paper

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 Papers as on March 31, 2025 was '' 21,832 lakhs.

f. Bank Finance

Your Company raises funds for its working capital requirements mainly from banks and financial
institutions. As on March 31, 2025, the total outstanding amount of credit facilities from Banks and
Financial Institutions were '' 1,22,041 lakhs as against '' 86,094 lakhs as on March 31, 2024, excluding
accrued interest.

Apart from the above, your Company has been sourcing funds through Securitization. During the
year under review, your Company has sourced '' 37,086 lakhs (previous year '' 14,449 lakhs). The same
has been invested into by various kinds of entities and the value remaining outstanding as on March
31, 2025 was '' 38,952 lakhs (previous year '' 24,429 lakhs).

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors:

As on March 31, 2025, the Board of your Company consisted of the following 7 (Seven) Directors:

DIN	Name of Director	Designation	Date of Appointment
09775050	Mrs. Tina Suzanne George	Whole-Time Director	23.12.2024
10766726	Mrs. Ritu Elizabeth George	Non-Executive Director	23.12.2024
10763021	Ms. Susan John	Non-Executive Director	23.12.2024
01277149	Mr. Thomas Mathew	Independent Director	01.04.2019
08586100	Mrs. Shirley Thomas	Independent Director	25.11.2021
08709050	Mrs. Divya Abhishek	Independent Director	08.08.2023
10896999	Mr. Robin Tommy	Independent Director	04.02.2025

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 fields and the Company has
benefited immensely by their presence on the Board. The key Board qualifications, expertise, attributes
are given in detail in the Report on Corporate Governance which forms part of the Annual Report.

Key Managerial Personnel:

Mrs. Tina Suzanne George, Whole-Time Director; Mr. Mathews Markose, Chief Executive Officer; Mr.
Ramandeep Singh, Chief Financial Officer and Ms. Deepa G, Company Secretary and Compliance Officer
are the Key Managerial Personnel of your Company, as on March 31, 2025.

a) Changes in Directors and Key Managerial Personnel (KMP) during the Financial Year 2024-25
Appointments

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 ''fit and proper'' status of the individual who is proposed to be appointed on the
Board of Directors of the Company, and if deemed fit, recommends their candidature to the Board of
Directors for consideration.

During the year under review, Mr. Thomas Mathew (DIN: 01277149), Independent Director, was re¬
appointed as an Independent Director of the Company for a second term of 5 (Five) consecutive
years w.e.f. April 01, 2024 till March 31, 2029 vide Special Resolution passed via Postal Ballot dated
June 15, 2024.

Further, in line with succession planning for the Company and considering the knowledge, relevant
expertise and experience and based on the recommendation of the Nomination and Remuneration
Committee (NRC), the Board of Directors of the Company at its Meeting held on December 23, 2024,
approved the appointment of Mrs. Tina Suzanne George (DIN: 09775050) as the Whole-Time Director
and of Mrs. Ritu Elizabeth George (DIN: 10766726) and Ms. Susan John (DIN: 10763021) as the Non¬
Executive Non-Independent Directors, respectively, with effect from December 23, 2024. The
appointments were approved by the Shareholders via Postal Ballot on February 12, 2025.

Also, the Board of Directors of your Company, on the recommendation of the NRC, appointed Mr.
Robin Tommy (DIN: 10896999) as an Additional Non-Executive Independent Director on the Board on
February 04, 2025, for a period of 5 years and his appointment as the Non - Executive Independent
Director was approved by the Shareholders via Postal Ballot on March 29, 2025.

During the year under review, Ms. Deepa G was appointed as Company Secretary and Compliance
Officer of your Company with effect from March 01, 2025.

Cessation

During the year under review, Mr. A. P. Kurian (DIN: 00008022), Independent Director, ceased to hold
office as an Independent Director of the Company w.e.f. September 02, 2024. Further, Mr. Thomas
George Muthoot (DIN: 00011552), Managing Director; Mr. Thomas John Muthoot (DIN: 00011618), Non¬
Executive Non-Independent Director; and Mr. Thomas Muthoot (DIN: 00082099), Non-Executive Non¬
Independent Director, ceased to hold their office as Directors of the Company w.e.f. December 23,
2024, respectively.

Mr. Srikanth G Menon, resigned as Company Secretary & Compliance Officer and Chief Compliance
Officer of the Company with effect from February 28, 2025.

Director Retiring by Rotation

In terms of Section 152(6) of the Companies Act, 2013 read with relevant Rules made thereunder and
the Articles of Association of the Company, Mrs. Ritu Elizabeth George (DIN: 10766726), Director of the

Company, shall retire by rotation and being eligible, has offered herself for re-appointment at the
ensuing Annual General Meeting (“AGM”) of the Company. The detailed profile of Mrs. Ritu Elizabeth
George (DIN: 10766726) has been included in the Notice convening the ensuing 31st Annual General
Meeting of the Company.

b) Declaration by Independent Directors and Statement on Compliance with the Code of Conduct

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 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. The Independent Directors
have confirmed 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 and Qualification 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 Whole-Time Director confirming the receipt of such declaration from Independent
Directors is enclosed to this report as Annexure I.

Non-Disqualification of Directors

A Certificate duly certified by Mr. Puzhankara Sivakumar, Managing Partner, M/s. SEP & Associates,
Company Secretaries (C.P. No. 2210), confirming that none of the Directors on the Board of your
Company as on March 31, 2025 have been debarred or disqualified 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 Report on
Corporate Governance.

c) Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company contains the following:

i. Diversity is ensured through consideration of a number of factors, including but not limited to
skills, regional and industry experience, background and other qualities.

ii. The Company shall also take into account factors based on its own business model and specific
needs from time to time.

iii. The NRC shall lead the process of identifying and nominating candidates for appointment as
Directors in the Board.

iv. The benefits of diversity continue to influence succession planning and continue to be the key
criteria for the search and nomination of Directors to the Board.

v. Board appointments are based on merit and candidates will be considered against objective
criteria, having due regard for the benefits of diversity on the Board, including gender.

d) Policy on Nomination & Remuneration

The management of your Company has immensely benefitted 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 Policy on Nomination and Remuneration is framed in terms of

Section 178(3) of the Companies Act, 2013 which contains the criteria for determining qualifications,
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 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 Company''s website at the weblink:
httDs://www.muthootcaD.com/wD-content/uDloads/2025/08/Policv-on-Nomination-and-
Remuneration.pdf. Your Company has formulated policy on Succession Planning for Directors and
Key Managerial Personnel for continuity and smooth functioning of the Company.

e) Formal Annual Evaluation of Board and its Committees

Based 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. It may be noted that Mrs. Tina Suzanne George, Mrs. Ritu Elizabeth George,
Ms. Susan John and Mr. Robin Tommy have not been subject to the evaluation in accordance with
the Nomination and Remuneration Policy adopted by the Company, which states that performance
evaluation of / by the Directors / Members of the Board / Committee of Board shall be carried out
only after completion of six months from the date of appointment on the Board / Committee of
Board of the Company.

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.

f) Meetings of the Board

During the Financial Year 2024-25, your Board of Directors met 11 (Eleven) times. Further details about
the Meetings of the Board are given in the Report on Corporate Governance.

g) Committees of the Board

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.

6. SUBSIDIARIES / JOINT VENTURE / ASSOCIATE COMPANY

Your 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.

7. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there is no change in business of the Company. Your Company was
primarily engaged in the business of financing for purchase of automobiles, mainly two wheelers, used
four wheelers and commercial vehicles against hypothecation of the vehicles and granting of personal /
business loans etc. The Company has also obtained the licence of corporate agent at the later part of the
year from the Insurance Regulatory and Development Authority of India (IRDAI). During the year under
review, your Company has disbursed retail loans to the extent of '' 2,62,108 lakhs and as on March 31,

2025, the total outstanding amount was '' 3,00,692 lakhs. The Company had disbursed business /
corporate loans to the extent of '' 2,100 lakhs and as on March 31, 2025, the outstanding amount was
'' 5,351 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.

8. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE
COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of your Company
between the end of the financial year and the date of this Report.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS

Your Directors confirm that there were no significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and Company''s operations in future.

10. RISK MANAGEMENT

The Board oversees the risk management functions of your Company and a separate Risk Management
Committee of the Board supervises the risk management functions. Apart from this, your 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 identified 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.

In order to ensure that your Company maintains high standards of risk management practices, the
Chief Risk Officer (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, your Company
has a well-defined 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 identification, 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
identified, 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 identified, 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 sufficiency of its capital funds to cover the risks specified under Pillar II of Basel guidelines.
The adequacy of Company''s 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.

Fraud Monitoring and Reporting

Pursuant to revised Master Directions - Reserve Bank of India (Fraud Risk Management in NBFCs)
Directions, 2024 on Fraud Risk Management in Non-Banking Financial Companies (NBFCs) (including
Housing Finance Companies) dated July 15, 2024 issued by Reserve Bank of India (“Master Directions”),
your Company has constituted a Fraud Risk Monitoring Committee (FRMC) to monitor and review the
cases of frauds to oversee the effectiveness of fraud risk management including root cause analysis and
mitigating measures and strengthen the internal controls, risk management framework to prevent /
minimize the incidence of frauds.

Your Company has prepared the Framework for Early Warning Signals (EWS) on Fraud that aims to
establish a robust system for the early detection and prevention of fraud. The framework outlines the
governance structure, key indicators, and reporting mechanisms to ensure timely identification and
mitigation of fraudulent activities. The Company also has in place a Fraud Risk Management Policy.

The Risk Management Committee reviews incidents of fraud quarterly. Annual review of the frauds is
also conducted and reported by the management to Board as per the Master Directions. Among other
things, details reported includes modus operandi, amount involved, identity of the perpetrators of fraud,
action taken against them and remedial actions taken to mitigate the risk. Further, the same is also
reported to RBI and Auditors. The Auditors, in turn, have also brought these cases to the attention of the
Audit Committee pursuant to Circular issued by National Financial Reporting Authority (‘NFRA'') dated
June 26, 2023.

Cyber Security

Your Company adopted ISO 27001:2022 standards, practices its processes and upgrade its
implementation on regular basis to maintain the information security as per the market trend. MCSL is
an ISO 27001:2022 certified Company. On regular basis, different types of system audits are conducted
by the external and internal auditors. Board constituted IT Strategy Committee governs the security
policies and its implementation as per the Company''s Corporate Governance process. To improve cyber
security system, the Company continuously invests towards upgrading the technology, IT security
related implementation, training and awareness programme.

During the year, new initiatives were taken in areas of Digital Platforms, API Security, Email Security and
Attack Surface Management. The Company has also adopted a continuous Vulnerability Assessment
and Penetration Testing (VAPT) to protect all our digital assets.

11. ADEQUACY OF INTERNAL AUDIT AND FINANCIAL CONTROLS

Your 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 financial 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 is in compliance with Section 138 of
the Companies Act, 2013. The Board of Directors at its Meeting held on March 26, 2024 appointed
Mr. Vijayakumar Vuyyuru as the Chief Internal Auditor w.e.f. February 22, 2024, for a period of three years.
The scope and authority of the Internal Audit function is defined 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 your Company
has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its

business, including adherence to the Company''s policies, safeguarding of its assets, prevention and
detection of frauds and errors, accuracy and completeness of accounting records and timely preparation
of reliable financial information. The Internal Audit function provides independent assurance to the
Board of Directors and Senior Management on the quality and effectiveness of the Company''s internal
control, risk management and governance systems and processes, thereby helping the Board and Senior
Management to 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
identified timelines for its completion. Accordingly, your Board is of the opinion that the Company''s
internal financial controls were adequate and effective during Financial Year 2024-25.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility activities at Company encompasses much more than social outreach
programmes. Your 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 your 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 fulfillment 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 Company''s 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
httDs://www.muthootcaD. com/wD-content/uDloads/2025/08/CSR-Policv.Ddf.

During the year, the Company spent an amount of '' 88.38 lakhs identified as CSR activities. 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 II 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 the Annual Report of the Company.

13. AUDIT & AUDITORS

a. Statutory Auditors

During the year under review, the tenure of M/s. PKF Sridhar & Santhanam LLP, Chartered
Accountants, as Statutory Auditors of the Company expired at the 30th Annual General Meeting
(AGM) of the Company held on September 25, 2024.

M/s. Sundaram & Srinivasan, Chartered Accountants (Firm Registration No.: 004207S), was thereafter
appointed as the Statutory Auditors of the Company at the 30th AGM held on September 25, 2024 to
hold office from conclusion of the 30th AGM till conclusion of the 33rd AGM of the Company to
conduct audit of accounts of the Company during the said period. M/s. Sundaram & Srinivasan holds a
valid peer review certificate as prescribed under the Listing Regulations. The same is in compliance
with the RBI Guidelines on appointment of statutory auditor(s) by NBFC.

M/s. Sundaram & Srinivasan, the Statutory Auditors of the Company, had also prepared a separate
report pursuant to Non - Banking Financial Companies Auditor''s Report (Reserve Bank) Directions,
2016, 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.

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 qualifications, reservation or adverse remarks or disclaimer

The Board has duly examined the Statutory Auditors'' Report to the accounts, which is self¬
explanatory. Clarifications, wherever necessary, have been included in the Notes to the Accounts to
the Financial Statements. Further, your Directors confirm that there is no qualification, reservation or
adverse remark or disclaimer in the Independent Auditor''s Report provided by M/s. Sundaram &
Srinivasan, the Statutory Auditors of the Company, for the Financial Year 2024-25. There is no incident
of fraud reported by the Auditors under Section 143(12) of the Act.

b. Secretarial Auditors

The Board, at its Meeting held on May 23, 2024, re-appointed M/s. SEP & Associates, Company
Secretaries, having Peer Review Certificate no. 3693/2023, as the Secretarial Auditors of the Company
for FY 2024-25, to conduct the Secretarial Audit of the Company for the year ended March 31, 2025 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 2024-25,
is enclosed to this report as Annexure III. The Directors of your Company confirms that there is no
qualification, 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.

Further, the Board at its Meeting held on August 05, 2025, based on the recommendation of the
Audit Committee, has appointed M/s. S. Sandeep & Associates, Company Secretaries, having Peer
Review Certificate No. 6526/2025, as Secretarial Auditors of the Company for a period of 5 (Five)
financial years from FY 2025-26 till FY 2029-30, subject to Shareholder''s approval at the ensuing
Annual General Meeting of the Company.

c. Internal Auditor

Your Company has an independent internal audit department headed by Chief Internal Auditor, Mr.
Vijayakumar Vuyyuru appointed w.e.f. February 22, 2024. The internal audit department broadly
assesses and contribute towards the overall improvement of the organisation''s 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.

14. COMPLIANCE WITH THE SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

Your Company has duly complied with Secretarial Standards on Board Meetings and General Meetings
issued by the Institute of Company Secretaries of India.

15. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO

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, foreign exchange earnings and outgo is not applicable to the Company. Your Company is,
however, constantly pursuing its goal of technological upgradation in a cost-effective manner for
delivering quality customer service.

16. WHISTLE BLOWER POLICY OR VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your Company has in place, a comprehensive Whistle Blower Policy in compliance with Section 177(9)
and 177(10) of the Companies Act, 2013 and 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 the Annual Report.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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 your Company are given in the Notes to the Financial Statements.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Directors confirm that all contracts / arrangements / transactions entered into by the Company
during the Financial Year 2024-25 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 2024-25 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 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, your Company had obtained the approval of the shareholders for related party
transactions with Muthoot Fincorp Limited and Muthoot Bankers at the AGMs / vide Postal Ballot held
on September 28, 2020 and June 15, 2024, respectively, for a period of five years even though the said
transactions were not material in nature.

All related party transactions that were entered into during the financial year ended March 31, 2025 were
on an arm''s length basis and were in the ordinary course of business except the transaction with
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 ticketing, for which
the Company had obtained the approval of shareholders.

Therefore, the 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 detailed in Annexure IV.

The disclosure of transactions with related parties during the year under review, as per IND-AS 24:
Related Party Disclosures, is given in Notes to the Accounts to the Financial Statements. Also, there are
no materially significant related party transactions during the year under review made by the Company
with Promoters, Directors or other designated persons which may have a potential conflict with the
interest of the Company at large.

Further, your Company has generally complied with the provisions of Section 177 and 188 of the
Companies Act, 2013 with respect to the related party transaction except in one instance where the
transaction carried out by the Company is in line with the approved rates as per the prior specific
approval taken by the Company in accordance with the provision of Section 177 and 188 of the
Companies Act, 2013 but due to the surge in the business volume the transaction exceeded the
omnibus limits approved by the Audit Committee and the monetary threshold prescribed under the
proviso to Section 177(4) of the Act by '' 2.10 Crores. However, the terms and conditions of the said
transaction was in accordance with the approval of the Audit Committee.

The Policy on dealing with Related Party Transactions as approved by the Board is uploaded on the
Company''s website at the web link: httDs://www.muthootcaD. com/wD-content/uDloads/2025/08/
Related-Partv-Transaction-Policv.Ddf

19. DISCLOSURE OF REMUNERATION & PARTICULARS OF EMPLOYEES

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., forms part of this Report as Annexure V.

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 Office 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.

20. LISTING

The Equity shares of your Company were listed on BSE Limited since April 24, 1995 and on National
Stock Exchange of India Limited since August 24, 2015 and debt instruments are also listed on BSE
Limited. Your Company has paid the required listing fees to both the Stock Exchanges for the Financial
Year 2024-25.

21. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, requires the top one thousand listed entities based on market capitalization as on 31st
March of every financial 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 specified by the Board from time to time. As your Company is not one amongst the top one
thousand listed companies based on the market capitalisation as on March 31, 2025, this Report is not
applicable to the Company.

22. FAIR PRACTICE CODE (FPC)

Your Company has in place, a Fair Practice Code approved by the Board on April 02, 2012, last being
reviewed on May 23, 2024, 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: httDs://www.muthootcaD.com/wD-content/uDloads/2024/06/Fair-Practice-
Code.Ddf. The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and
appropriateness.

23. CUSTOMER GRIEVANCE

Your 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.

24. ANNUAL RETURN

In accordance with the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read
with Rule 12(1) of Companies (Management and Administration) Rules, 2014, the Annual Return of the
Company in Form MGT-7 is hosted on website of the Company at
httDs://www.muthootcaD.com/investors/?data_tab=tab-26/#tab6

25. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, your

Directors state that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed
along with proper explanation relating to material departures;

b) They 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) They 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) They had prepared the annual accounts on a going concern basis;

e) They had laid down internal financial controls to be followed by the Company and that such internal
financial controls are adequate and were operating effectively; and

f) They had devised proper systems to ensure compliance with the provisions of all applicable laws and
that such systems were adequate and operating effectively.

26. CREDIT RATING

The Credit Ratings enjoyed by the Company as on March 31, 2025 is as given below:

Credit Rating Agency	Instrument	Rating as on March 31, 2025	Date on which the credit rating was obtained	Revision during the year ended March 31, 2025
CRISIL	'' 2500 crores Bank loan facilities	CRISIL A / Stable	December 23, 2024	No Revision
CRISIL	Fixed Deposits	CRISIL A / Stable	December 23, 2024	No Revision
CRISIL	'' 1000 crores Non-Convertible Debentures	CRISIL A / Stable	December 23, 2024	No Revision
CRISIL	'' 80 crores Long Term Principal Protected Market Linked Debentures	CRISIL PPMLD A / Stable	December 23, 2024	No Revision
CRISIL	'' 400 crores Commercial Paper	CRISIL A1	December 23, 2024	No Revision
ICRA	'' 200 crores Non-Convertible Debentures	[ICRA] A (Stable)	February 17, 2025	Assigned

27. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013

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 filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.

Details of cases reported to Internal Complaints Committee during the financial year 2024-25 are as
under:

Number of Sexual Harassment Complaints received during the financial year 2024-25	NIL
Number of Sexual Harassment Complaints disposed off during the financial year 2024-25	NIL
Number of Sexual Harassment Complaints pending beyond 90 days during the financial year 2024-25	NIL

28. COMPLIANCE WITH MATERNITY BENEFIT ACT, 1961

Your Company upholds its ongoing commitment in maintaining a supportive and legally compliant
work environment for all employees. During the financial year 2024-25, your Company has complied
with all the applicable provisions of the Maternity Benefit Act, 1961. Eligible women employees were
extended with all the statutory benefits under the Act including paid maternity leave, nursing breaks,
and creche facilities.

During the year under review, a total of 14 women employees availed maternity benefits. Your Company
ensured timely facilitation and disbursement of these benefits in accordance with the provisions of the
Maternity Benefit Act, 1961. Additionally, no complaints or grievances were received in connection with
the provisions of the Maternity Benefit Act, 1961.

29. COMPLIANCE

Your Company is registered with the Reserve Bank of India (“RBI”) as an 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, your Company has been categorised as NBFC - ML. The Company has listed its equity shares
on BSE Limited and National Stock Exchange of India Limited and has also listed various Non¬
Convertible Debt Instruments on BSE Limited.

Your 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 specifically permitted by RBI for NBFC-D.

30. OTHER DISCLOSURES

• Your Company, in the capacity of Financial Creditor, has not filed any applications with National
Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 during the Financial Year
2024-25 for recovery of outstanding loans against any customer.

• 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.

• The provisions of Section 148 of the Act relating to maintenance of cost records and cost audit are not
applicable to your Company.

• Your Company has not defaulted in repayment of loans from banks and financial institutions. There
were no delays or defaults in payment of interest / principal of any of its debt securities and deposits
accepted.

• The equity shares of your Company were not suspended from trading during the year.

• Disclosures pursuant to RBI Master Directions, unless provided in the Directors'' Report and Corporate
Governance Report, form part of the notes to the standalone financial statements.

• Disclosure regarding details relating to deposits covered under Chapter V of the Companies Act, 2013
is not applicable since your Company is an NBFC regulated by RBI. The Company accepts deposits as
per the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve
Bank) Directions, 2016.

• Your Company continues to comply with the Master Direction - Reserve Bank of India (Non-Banking
Financial Company - Scale Based Regulation) Directions, 2023 and all the applicable laws, regulations,
guidelines, etc. prescribed by RBI from time to time. The Board of Directors have framed various
policies as applicable to the Company and periodically reviews the policies and approves
amendments as and when necessary.

• A Compliance Certificate from M/s. SEP & Associates, Practicing Company Secretaries, regarding
compliance of conditions of Corporate Governance forms part of this Report as Annexure VI.

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.

For and on behalf of the Board of Directors

Sd/- Sd/-

Tina Suzanne George Ritu Elizabeth George

Place: Kochi Whole-Time Director Director

Date: August 05, 2025 DIN: 09775050 DIN: 10766726

---

Mar 31, 2024

Your directors have pleasure in presenting the 30th Annual Report on your Company’s business and operations together with audited financial statements of the Company for the financial year ended March 31, 2024.

1. PERFORMANCE HIGHLIGHTS

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.

a) Financial Results

The summarized financial results of your Company for the FY 2023-2024 are given below:

( '' in lakhs, except earnings per share)

Particulars	2023-2024	2022-2023
Total Income	40,140.77	44,310.31
Total Expenses	33,291.54	33,430.36
Profit Before Exceptional items and Tax	6,849.23	10,879.95
Exceptional items	(9,584.65)	-
Profit Before Tax (PBT)	16,433.89	10,879.95
Tax Expense	4,168.09	3,011.84
Profit After Tax (PAT) (including OCI)	12,249.46	7,792.58
Basic Earnings Per Share (EPS)	74.58	47.84

b. Business Growth

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 '' 1,43,842 lakhs during the year with robust asset quality. Though the growth can be seen as neutral the additional business during the year has redefined the policy, SOPs and the way forward. The business growth for the reporting year was 9%.

c. Profitability

During the Financial Year 2023-24, your Company achieved a net profit 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%. Profit 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 financial year as against 67% in Financial Year 2023- 2024.

d. Asset Quality

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 topmost significance throughout the past few Financial Years. A considerable reduction can be seen in the year-on-year numbers. The Company’s Non-performing asset as of March 31st 2024 stood at '' 20,504 lakhs while the same were '' 46,349 lakhs as of March 31st 2023. The Overall collection

efficiencies have significantly 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%.

e. Net Worth and Capital Adequacy Ratio

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 profit earned during the year amounting to '' 12,249 lakhs. The Company’s 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 significantly 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%.

f. Earnings Per Share

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 financial year.

2. DIVIDEND

To ensure availability of capital for the future growth of the Company, your Board of Directors, are of the view that ploughing back of profit 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

httDs://www.muthootcaD. com/wD-content/uDloads/2021/12/Policv-on-Distribution-of-Dividends.Ddf. The list of unclaimed dividends is available on the Company’s 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 financial 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 financial year 2015-16. Since the amount has been transferred to IEPF Authority, no claim for unclaimed and unpaid dividends for the financial 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.

3. RESERVES

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 financial year ended March 31, 2024. Post transfer of profits to reserves, your Board has decided to retain '' 9,799 Lakhs as surplus in the profit & loss account.

4. RESOURCE MOBILISATION

a. Share Capital

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 under

Section 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 Benefits 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.

b. Debentures

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 specified in the respective offer documents, the funds raised from NCDs are being utilized for various financing 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:

1. Mr. A Gopalakrishnan, Chartered Accountant, M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682 018; and

2. Vardhman Trusteeship Private Limited, The Capital, A Wing, 412A, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 are the Debenture Trustees.

c. Fixed Deposits

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 fixed deposits during FY 2013 -2014. The fixed deposits of the Company are rated as “A /Stable” by CRISIL.

The outstanding number of fixed 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 fixed 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 fixed deposit certificate 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.

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 floating 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.

d. Subordinated Debts

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.

e. Bank Finance

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).

f. Commercial Paper

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.

5. DIRECTORS

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 fields and the Company has benefited immensely by their presence on the Board. The key Board qualifications, expertise, attributes are given in detail in the Report on Corporate Governance which forms part of this Report.

Key Managerial Personnel:

Mr. Thomas George Muthoot, Managing Director, Mr. Ramandeep Singh, Chief Finance Officer, Mr. Mathews Markose, Chief Executive Officer and Mr. Srikanth G Menon, Company Secretary and Compliance Officer are the Key Managerial Personnels of the Company, as recorded by the Board as on March 31, 2024.

a) Changes in Directors and Key Managerial Personnel (KMP) during the Financial Year 2023-2024 Appointments

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 ‘fit and proper’ person status of the person who is proposed to be appointed on the Board of Directors of the Company, and if deemed fit, 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 Officer 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 Officer 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 officer 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 profile of Mr. Thomas Muthoot has been included in the notice convening the ensuing 30th AGM.

b) Declaration by Independent Directors and Statement on compliance with the code of conduct.

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 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. The Independent Directors have confirmed 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 & Qualification 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 confirming the receipt of this declaration from Independent Directors is enclosed to this report as Annexure I.

Non-Disqualification of Directors

A certificate bearing Unique Document Identification Number (UDIN): F003050F000900201 from Puzhankara Sivakumar, Managing Partner, M/s. SEP & Associates, Company Secretaries (C.P No. 2210), confirming that none of the Directors on the Board of the Company as on March 31, 2024 have been debarred or disqualified 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.

c) Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company contains the followings:

i. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities.

ii. The Company shall also take into account factors based on its own business model and specific needs from time to time.

iii. The NRC shall lead the process of identifying and nominating candidates for appointment as Directors in the Board.

iv. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board.

v. Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender.

d) Policy on Nomination & Remuneration

The management of the Company has immensely benefitted 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 qualifications, 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 Company’s website at the weblink: https://www. muthootcap.com/wp-content/uDloads/2023/05/Policv-on-Nomination-and-Remuneration.Ddf. The Company has formulated policy on Succession Planning for Directors and Key Managerial Personnel for continuity and smooth functioning of the Company.

e) Formal Annual Evaluation of Board and its Committees

Based 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.

f) Meetings of the Board

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.

g) Committees of the Board

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.

6. SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY

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.

7. CHANGE IN THE NATURE OF BUSINESS, IF ANY

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.

8. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of financial 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 fields of insurance such as life, pension & employee benefit, health, fire, 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.”

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS

Your directors confirm that there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

10. RISK MANAGEMENT

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 identified 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 Officer ("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-defined 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 identification, 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 identified, 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 identified, 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 sufficiency of its capital funds to cover the risks specified under Pillar II of Basel guidelines. The adequacy of Company’s 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.

11. ADEQUACY OF INTERNAL AUDIT AND FINANCIAL CONTROLS

The 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 financial 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 defined 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 efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the Company’s 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 identified timelines for its completion. Accordingly, your Board is of the opinion that the Company’s internal financial controls were adequate and effective during Financial Year 2023-2024.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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 fulfillment 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 Company’s 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. muthootcaD.com/wD-content/uDloads/2024/02/CSRPolicv.Ddf.

During the year, the Company spent an amount of '' 144.62 lakhs identified as CSR activities including for ongoing projects from financial 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.

13. AUDIT & AUDITORS

a. Statutory Auditors

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 office 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 certificate 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 Auditor’s 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 confirmed that their appointment if made would be within the limits specified under Section 141(3) (g) of the Act and they are not disqualified 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 finalise 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 confirmed that they hold a valid certificate 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 qualifications, reservation or adverse remarks or disclaimer

The Board has duly examined the Statutory Auditors’ Report to the accounts, which is selfexplanatory. Clarifications, wherever necessary, have been included in the Notes to the Accounts

section of the Annual Report. Further, your directors confirm that there are no qualification, reservation or adverse remark or disclaimer in the Independent Auditor’s 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.

b. Secretarial Auditors

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 confirms that there is no qualification, 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.

c. Internal Auditor

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 organisation’s 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.

14. COMPLIANCE WITH THE SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

15. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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.

16. WHISTLE BLOWER POLICY OR VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

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.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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 financial statements.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your directors confirm 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 Microfin 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 five years even though the said transactions were not material in nature.

All related party transactions that were entered into during the financial year ended March 31, 2024 were on an arm’s 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 significant related party transactions during the year under review made by the Company with Promoters, Directors or other designated persons which may have a potential conflict 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 Company’s website at the web link: https://www. muthootcaD.com/wD-content/uDloads/2022/06/Related-Dartv-transaction-Dolicv.Ddf.

19. DISCLOSURE OF REMUNERATION & PARTICULARS OF EMPLOYEES

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 Office 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.

20. LISTING

The equity shares of your Company were listed on BSE Limited since April 24, 1995 and on National Stock

Exchange 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 202324.

21. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

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 financial 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 specified 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.

22. CORPORATE GOVERNANCE 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 certificate on Corporate Governance from the Statutory Auditors forms part of this Report.

23. MANAGEMENT DISCUSSION AND ANALYSIS 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 Company’s affairs and provides insightful information on the performance of the Organization in view of the various macro-economic barriers under which it operates.

24. FAIR PRACTICE CODE (FPC)

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.muthootcaD.com/wD-content/uploads/2024/06/Fair-Practice-Code.Ddf. The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and appropriateness.

25. CUSTOMER GRIEVANCE

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.

26. ANNUAL RETURN

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 httDs://www.muthootcaD.com/investors/?data tab=tab-24/#tab4.

27. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Directors state that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) We 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) We 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) We had prepared the annual accounts on a going concern basis;

e) We had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) We had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. CREDIT RATING

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 (Reaffirmed)
CRISIL	Fixed deposits	CRISIL A / Stable	March 02, 2023	CRISIL A / Stable (Reaffirmed)
CRISIL	'' 200 crore non-convertible debentures	CRISIL A / Stable	March 01, 2023	CRISIL A / Stable (Reaffirmed)
CRISIL	'' 75 crore non-convertible debentures (reduced from '' 150 Crores)	CRISIL A / Stable	March 02, 2023	CRISIL A / Stable (Reaffirmed)
CRISIL	'' 100 crore Long Term Principal Market Linked Debentures	CRISIL PPMLD A /Stable	March 02, 2023	CRISIL PPMLD A / Stable (Reaffirmed)
CRISIL	'' 100 crore Long Term Principal Market Linked Debentures	CRISIL PPMLD A /Stable	March 02, 2023	CRISIL PPMLD A / Stable (Reaffirmed)
CRISIL	'' 250 Crore Commercial Paper	CRISIL A1	March 02, 2023	CRISIL A1 (Reaffirmed)
CRISIL	Non-Convertible Debentures of '' 110 Crores	CRISIL A / Stable	March 12, 2024

29. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

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 filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Details of cases reported to Internal Complaints Committee during the financial year 2023-24 are as under:

Number of complaints pending at the beginning of the financial year 2023-24	NIL
Number of complaints filed during the financial year 2023-24	NIL
Number of complaints disposed of during the financial year 2023-24	NIL
Number of complaints pending as on end of the financial year 2023-24	NIL

30. Compliance

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 specifically permitted by RBI for NBFC - D.

31. OTHER DISCLOSURES

• The Company, in the capacity of Financial Creditor, has not filed any applications with National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 during the Financial Year 2023-24 for recovery of outstanding loans against any customer.

• 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.

• The provision of Section 148 of the Act relating to maintenance of cost records and cost audit are not applicable to the Company.

• The Company has not defaulted in repayment of loans from banks and financial institutions. There were no delays or defaults in payment of interest/principal of any of its debt securities and deposits accepted.

• The equity shares of the Company were not suspended from trading during the year.

• Disclosures pursuant to RBI Master Directions, unless provided in the Directors’ Report and Corporate Governance Report, form part of the notes to the standalone financial statements.

• Disclosure regarding details relating to deposits covered under Chapter V of the Act is not applicable since our Company is a NBFC regulated by RBI. The Company accepts deposits as per the Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016.

• The Company continues to comply with the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and all the applicable laws, regulations, guidelines, etc. prescribed by RBI from time to time. The Board of Directors have framed various policies as applicable to the Company and periodically reviews the policies and approves amendments as and when necessary.

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.

For and on behalf of the Board of Directors

Sd/-

Thomas John Muthoot Chairman DIN: 00011618

Place: Kochi

Date: August 07, 2024

---

Mar 31, 2019

Dear Members,

The Directors are pleased to present the 25^th Board’s Report on your Company’s business and operations, together with audited financial statements of the Company for the financial year ended March 31, 2019.

1. PERFORMANCE HIGHLIGHTS

a) Financial Results

The summarized financial results of your Company for the FY 2018 - 2019 are given below:

(Rs. in lakhs, except earnings per share)

Particulars	2018 - 2019	2017 - 2018
Total Income	535 27.42	398 08.56
Total Expenses	408 02.88	315 62.54
Profit Before Tax (PBT)	127 24.54	82 46.02
Tax Expense	44 82.07	28 78.30
Profit After Tax (PAT)	82 42.47	53 67.72
Basic Earnings Per Share (EPS)	50.11	36.39

b) Business Growth

During the Financial Year (FY) ended March 31, 2019, your Company was able to achieve an impressive growth. The total Asset Under Management (AUM) (including sold portfolio) of your Company increased by 22.48%. The AUM (including sold portfolio) of the Company as on March 31, 2019 stood at Rs.2741 04.67 lakhs, whereas the same as on March 31, 2018 was Rs.2238 02.63 lakhs.

c) Profitability

The total income of the Company increased to Rs.535 27.42 lakhs during the FY 2018 - 2019 as against t 398 08.56 lakhs during the FY 2017 - 2018. The total expenditure for the FY 2018 - 2019 was at Rs.408 02.88 lakhs. The Company achieved an all-time high profit of Rs.82 42.47 lakhs while the same was Rs.53 67.72 lakhs in FY 2017 - 2018. The Net Interest Margin (NIM) improved to 69.83% as against 69.15% in FY 2017 - 2018.

d) Asset Quality

As on March 31, 2019, the gross NPA and net NPA in the books of your Company stood at Rs.113 13.80 lakhs and Rs. 61 90.43 lakhs respectively. The Provision Coverage Ratio stood at 45.28%. Your Company has adopted new and aggressive methods to control delinquencies and the NPA figures and hence have been able to achieve this in spite of the aftermath of the Kerala floods, which temporarily increased the delinquency substantially.

e) Net worth & Capital Adequacy Ratio

Based on the higher profitability of Rs. 82 42.47 lakhs, the net worth of your Company increased by 20.92% to Rs.476 35.45 lakhs as against t 393 92.98 lakhs in the previous year. The Company’s total Capital Adequacy Ratio (CAR) as on March 31, 2019 stood at 21.88% of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the off - Balance Sheet items, which is above the statutory minimum of 15%. Out of the above, Tier I CAR stood at 21.17% and Tier II CAR stood at 0.71%. The CAR as on March 31, 2018, stood at 22.04%.

f) Earnings Per Share

Earnings Per Share of your Company has improved from t 36.39 to t 50.11 during the year under review. Return on Equity reached 19.37% during the year.

2. DIVIDEND

In view of the business growth plans of the Company, the launch of new products and proposed investment in IT/infrastructure in the forthcoming years, the Board of Directors of your Company decided to plough back the profit after tax into the business and hence have not recommended any dividend for the FY 2018- 2019.

3. RESERVES

Your Board of Directors has transferred an amount of Rs. 16 50.00 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 FY ended March 31, 2019. Post transfer of profits to reserves, your Board decided to retain Rs.185 04.84 lakhs as surplus in the Profit and Loss Account.

4. RESOURCE MOBILISATION

a) Share Capital

The authorized share capital of the Company is Rs.25 00.00 lakhs and the paid-up share capital of the Company is Rs.16 44.75 lakhs. The Company had not issued any equity shares either with or without differential rights during the FY 2018 - 2019 and hence, the disclosure requirements under Section 43 of the Companies Act, 2013 and Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

b) Debentures

The Company has not issued any debentures during the FY 2018 - 2019. As on March 31, 2019, the residual portion of secured redeemable non-convertible debentures under private placement during earlier years along with interest accrued is Rs.6.21 lakhs. The debentures issued are secured by way of floating charge on the current assets of the Company. The non-convertible debentures of your Company is rated as “A/Stable” by CRISIL.

Trustees for Debenture Holders: Mr. A Gopalakrishnan, Chartered Accountant, M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682 018, is the Debenture Trustee for ensuring and protecting the interests of debenture holders.

c) Commercial Papers

During the year under review, your Company has raised funds for its working capital requirements by way of issue of Commercial Papers and duly repaid the same on the maturity date(s). The Commercial Papers of your Company are rated “A1” by CRISIL.

d) Fixed Deposits

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 fixed deposits during FY 2013 -2014. The fixed deposits of the Company are rated “FA /Stable” by CRISIL.

The outstanding amount of fixed deposits as on March 31, 2019, received by the Company including interest accrued at that date is Rs.66 07.17 lakhs. As on March 31, 2019, there are 92 accounts of fixed deposits amounting to Rs.1 77.34 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 Companies Act, 2013, 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 are not responding to the communication, Company contacts the depositors in person instructing them to surrender the fixed deposit certificate and claim the amount. In case, where 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.

Trustees for Deposit Holders: Subject to 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 floating 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.

e) Subordinated Debts

The Company has, in the current year, raised money through issue of subordinated debts. As of March 31, 2019, the total amount of outstanding subordinated debts, including accrued interest was Rs.63 72.38 lakhs as against Rs.65 05.99 lakhs in the previous year.

The subordinated debts and public deposits consists of 8.26% of our total funding.

f) Bank Finance

The Company raised funds for its working capital resources mainly from banks. As on March 31, 2019, the total outstanding amount of credit facilities from Banks were Rs.1349 04.18 lakhs as against t 1149 10.26 lakhs as on March 31, 2018 excluding interest accrued.

Apart from the above, the Company has been sourcing funds through Securitization and Direct Assignment transactions. During the year under review the Company has sourced Rs.837 34.51 lakhs (net of MRR) (previous year Rs.439 76.23 lakhs). The same has been invested into by Banks / NBFCs / Mutual Funds and the value remaining outstanding as on March 31, 2019 was Rs.656 84.87 lakhs (previous year Rs.322 02.37 lakhs).

5. DIRECTORS

The Board of your Company consists of the following seven Directors:

Category	Name of Directors
Executive Director	Mr. Thomas George Muthoot, Managing Director
Non - Executive - Non - Independent Directors	Mr. Thomas John Muthoot, Chairman
	Mr. Thomas Muthoot
Non - Executive Independent Directors	Mr. A.P. Kurian
	Mr. R.K. Nair1
	Mrs. Radha Unni
	Mr. K M Abraham2
	Mr. Thomas Mathew3

¹ Resigned with effect from March 28, 2019

² Appointed as Additional Independent Director with effect from January 18, 2019

³ Appointed as Additional Independent Director with effect from April 01, 2019

The composition of the Board is in line with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015. All the Directors are having vast knowledge and experience in their relevant fields and the Company had benefitted immensely by their presence in the Board. The key Board qualifications, expertise, attributes are given in details in the Report on Corporate Governance forming part of this Report.

Mr. Thomas John Muthoot, Director (DIN: 00011618) retires at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Thomas John Muthoot as Director of the Company. The detailed profile of Mr. Thomas John Muthoot recommended for re-appointment is enclosed with the Notice for the 25^th AGM of the Company.

Mr. A.P. Kurian (DIN: 00008022) and Mrs. Radha Unni (DIN: 03242769) were appointed as the Independent Directors of the Company by the shareholders at the 20^th Annual General Meeting held on September 03, 2014 for a period of five consecutive years, i.e., for a term upto September 02, 2019. Hence, Mr. A P Kurian and Mrs. Radha Unni will complete their initial term as per Companies Act, 2013 as an Independent Director of the Company on September 02, 2019. Since they are eligible, your Board recommends the re-appointment of Mr. A.P. Kurian and Mrs. Radha Unni for one more term subject to the approval of shareholders by way of special resolution. The detailed profile of Mr. A.P. Kurian and Mrs. Radha Unni, recommended for re-appointment in the ensuing AGM is enclosed with the Notice for the 25^th AGM of the Company.

a) Changes in Directors and Key Managerial Personnel (KMP) during the FY 2018 - 2019

During the FY 2018 - 2019, Mr. K.M. Abraham (DIN: 05178826) has been appointed as the Additional Independent Director on the Board with effect from January 18, 2019. The Board of your Company recommends the regularization of appointment of Mr. K.M. Abraham in the ensuing AGM for a period of five years.

The Board also appointed Mr. Thomas Mathew (DIN: 01277149) as the Additional Independent Director of the Company at the Board meeting held on March 28, 2019. The appointment of Mr. Thomas Mathew is effective from April 01, 2019. The Board of your Company recommends the regularization of appointment of Mr. Thomas Mathew in the ensuing AGM for a period of five years.

The detailed profile of Mr. K.M. Abraham and Mr. Thomas Mathew recommended for re-appointment in the ensuing AGM is enclosed with the Notice for the 25^th AGM of the Company.

During the FY 2018 - 2019, Mr. R.K. Nair, Independent Director (DIN: 00631889), has resigned from the Board with effect from March 28, 2019 due to compelling personal reasons and pre-occupation with other professional commitments. The Board places on record their appreciation for the commendable contribution made by Mr. R.K. Nair as Independent Director during his tenure in the Company. The Board took on record the confirmation from Mr. R.K. Nair that there are no material reasons for resignation other than those provided.

Mr. Ravi Oruganti, who was appointed as the Company Secretary & Compliance Officer at the Board meeting held on April 17, 2018, has resigned with effect from the closing hours of March 28, 2019, due to personal reasons.

Mr. Thomas George Muthoot, Managing Director and Mr. Vinodkumar M. Panicker, Chief Finance Officer are the KMPs of the Company, as recorded by the Board, as on March 31, 2019.

b) Declaration by Independent Directors

On April 01, 2019, the Company has received declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as laid down in Section 149 (6) of the Companies Act, 2013 and subsequently the same was placed at the Board Meeting held on April 24, 2019.

A declaration by Managing Director confirming the receipt of this declaration from Independent Directors is enclosed to this Report as Annexure 1.

c) Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company are as follows:

(i) Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities.

(ii) The Company shall also take into account factors based on its own business model and specific needs from time to time.

(iii) The Nomination & Remuneration Committee shall lead the process for Board appointment and for identifying and nominating, for approval of the Board, candidates for appointment to the Board.

(iv) The benefits of experience/knowledge in the areas relevant to the Company and diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board.

(v) Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender.

d) Policy on Nomination & Remuneration

The Company’s policy on Director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) of the Companies Act, 2013 is provided on the website of the Company and can be accessed on: https:// muthootcap.com/admin/uploads/Policy_on_Nomination_and_Remuneration.pdf

The Policy on Nomination and Remuneration sets out the criteria for determining qualifications, positive attributes and independence of Director and the norms for evaluation of the Board, its Committees and individual Directors.

e) Formal Annual Evaluation of Board and its Committees

Based 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 Companies Act, 2013 and SEBI (LODR) Regulations, 2015, is given in the Report on Corporate Governance, which forms part of this Report.

f) Meetings of the Board

During the FY 2018 - 2019, your Board of Directors met seven times. More details about the meetings of the Board is given the Report on Corporate Governance, forming part of this Report.

g) Committees of the Board

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.

6. SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY

The Company has no subsidiary/joint venture/associate company and hence consolidation and the provisions relating to the same under the Companies Act, 2013 and Rules made thereunder are not applicable to the Company.

7. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no change in the nature of business of the Company. The Company is mainly into the business of providing two-wheeler loans, for which, during the year under review the Company has disbursed loans to the extent of t 1851 00.78 lakhs and as on March 31, 2019, the total outstanding amount (including sold portfolio) was Rs.2339 39.44 lakhs. The Company had disbursed business/corporate loans to the extent of Rs.225 43.50 lakhs and as on March 31, 2019, the outstanding amount is Rs.315 88.81 lakhs. Apart from the above, the Company has ventured into the disbursement of used car loans and disbursed an amount of Rs.4 12.22 lakhs during the year under review. As on March 31, 2019, the total outstanding amount was Rs.3 45.85 lakhs.

The Company had entered into pool buyout arrangement of loan receivables amounting to Rs.54 45.73 lakhs (after deducting 5% / 10% for MRR requirement) during the year under review. The aggregate amount outstanding under loan buyout, as on March 31, 2019, was Rs.52 06.46 lakhs.

The sourcing of two-wheeler and used car business of the Company takes place mainly at the dealer points for two wheelers and through branches of its group company, Muthoot Fincorp Limited. During the FY 2018 - 2019, the Company has also started sourcing through its mobile app which is in the nascent stage.

8. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this Report.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS

Your Directors confirm that there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

10. RISK MANAGEMENT

The Board oversees the enterprise wide risk management functions of the Company and a separate Risk Management Committee of the Board supervises the risk management functions. Apart from these, the Company has a separate Risk Management Department that co-ordinates and administers the risk management functions to have a ‘top to down’ focus on the risk management.

The Company believes that risk resilience is key to achieving higher growth. To this effect, the Company have a well-defined Risk Management Policy in place, to create and protect shareholder value, by minimizing threats or losses and identifying and maximizing opportunities 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 identification, assessment, and prioritization of risks affecting the Company in the short and foreseeable future. The Policy suggests framing an appropriate response for the key risks identified, 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 identified, assessed and monitored on a regular basis.

Detailed discussion on Risk Management forms part of Management Discussion & Analysis under the section ‘Risks and Concerns’, which forms part of this Annual Report. At present, in the opinion of your Board of Directors, there are no material risks which may threaten the existence of the Company.

11. ADEQUACY OF INTERNAL AUDIT AND FINANCIAL CONTROLS

The 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 financial controls of the Company are evaluated by the Audit Committee as per Schedule II Part C of the SEBI (LODR) Regulations, 2015.

Apart from Statutory Audit and Concurrent Audit, your Company, in compliance with Section 138 of the Companies Act, 2013, had engaged PKF Sridhar & Santhanam LLP as the Internal Auditors of the Company for the FY 2018 - 2019. The scope and authority of the Internal Audit function is defined in the Audit Policy of the Company, duly 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 efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The Internal Audit function provides independent assurance to the Board of Directors and Senior Management on the quality and effectiveness of the Company’s internal control, risk management and governance systems and processes, thereby helping the Board and Senior Management to 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 operations were observed. Accordingly, your Board, is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2018 - 2019.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility activities at Muthoot Capital Services Limited encompasses much more than social outreach programmes. 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 fulfillment of its role as a responsible corporate citizen. The Company has undertaken a number of enriching and enlivening activities in the areas of Health, Education, Environment and Livelihood.

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 Company’s 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://muthootcap.com/admin/uploads/CSR_Policy-MCSL.pdf

During the year, the Company spent an amount of t 131.21 lakhs towards its CSR activities. 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.

13. AUDIT & AUDITORS

a) Statutory Auditors

M/s. Varma & Varma, Chartered Accountants (FRN: 004532S), Sreeraghavam, Kerala Varma Tower, Bldg. No. 53/2600 B, C, D & E, Off. Kunjanbava Road, Vyttila, P.O., Kochi - 682 019 were appointed as the Statutory Auditors of the Company during the 23^rd AGM held on June 06, 2017, for a period of five years.

The Board has duly examined the Statutory Auditors’ Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to the Accounts section of the Annual Report. Further, your Directors confirm that there are no qualifications, reservations or adverse remarks or disclaimers in the Independent Auditor’s Report provided by Statutory Auditors for the FY 2018 - 2019.

b) Secretarial Auditors

The Board, at its meeting held on April 17, 2018, appointed M/s. SVJS & Associates, Company Secretaries, 65/2364A, Ponoth Road, Kaloor, Kochi, Ernakulam - 682 017 to conduct the Secretarial Audit for the year ended March 31, 2019 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 2018 -2019 is enclosed to this report as Annexure 3. The Directors of your Company confirms that there are no qualifications, reservations or adverse remarks or disclaimers in Secretarial Audit Report for the period under review.

14. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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 and technology absorption does not apply to your Company. The Company is, however, constantly pursuing its goal of technological upgradation in a cost-effective manner for delivering quality customer service.

15. WHISTLE BLOWER POLICY OR VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your 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 SEBI (LODR) Regulations, 2015.

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.

16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or provided any guarantee or made any investments pursuant to Section 186 of the Companies Act, 2013, during the period under review.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Directors confirm that all contracts/arrangements/transactions entered into by the Company during the FY 2018 - 2019 with related parties were in compliance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The Company had obtained prior approval of the Audit Committee for all the related party transactions during the FY 2018 - 2019 as envisaged in Regulation 23 (2) of the SEBI (LODR) Regulations, 2015. Further, the Audit Committee had given prior omnibus approval under Regulation 23 (3) of the SEBI (LODR) Regulations, 2015, for related party transactions that are foreseen and of repetitive 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 Microfin Limited, Muthoot Fincorp Limited and Muthoot Bankers at the AGMs held on August 21, 2015, June 06, 2017 and June 14, 2018 respectively for a period of five years even though the said transactions were not material in nature.

All related party transactions that were entered into during the financial year ended March 31, 2019 were on an arm’s length basis and were in the ordinary course of business. Therefore, the provisions of Section 188 of the Companies Act, 2013 were not attracted.

Also, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, or other designated persons which may have a potential conflict with the interest of the Company at large. 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 not required. However, the disclosure of transactions with related party for the year, as per Accounting Standard-18 Related Party Disclosures is given in Notes to the Accounts section of the Annual Report.

The Company has in place, a Board approved Related Party Transaction Policy, which is available on the website of the Company at https://muthootcap.com/admin/uploads/RPT-Policy-MCSL.pdf

18. PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration of Directors under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this Report as Annexure 4.

The information, as required to be provided in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this Report as Annexure 5.

19. LISTING

Equity shares of your Company is listed on BSE Limited since April 24, 1995 and on National Stock Exchange of India Limited since August 24, 2015. Your Company has paid the required listing fees to both the Stock Exchanges for the FY 2019 - 2020.

20. CORPORATE GOVERNANCE 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 SEBI (LODR) Regulations, 2015 on Corporate Governance. The detailed Report on Corporate Governance along with certificate on Corporate Governance from the Statutory Auditors forms part of this Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review is included as a separate section and forms part of this Report.

22. FAIR PRACTICE CODE (FPC)

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:// muthootcap.com/admin/uploads/Fair_Practice_Code-MCSL.pdf

The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and appropriateness.

23. CUSTOMER GRIEVANCE

The Company has a dedicated Customer Grievance Redressal 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.

24. EXTRACT OF ANNUAL RETURN

The extract of the annual return in form MGT-9 is placed on the website of the Company and can be accessed at: https://muthootcap.com/admin/uploads/MGT-9_31.03.2019.pdf

25. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) we 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) we 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) we had prepared the annual accounts on a going concern basis;

e) we had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

26. ACKNOWLEDGEMENTS

Your Directors wishes 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 cooperation and assistance provided to us.

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 and every well-wisher for their continued commitment, dedication and co-operation.

For and on behalf of the Board of Directors

Sd/-

THOMAS JOHN MUTHOOT

Kochi Chairman

April 24, 2019 DIN: 00011618

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Mar 31, 2018

BOARD''S REPORT

Dear Members,

The Directors are pleased to present the 24^th Board’s Report on the Company’s business and operations, together with audited financial statements of the Company for the financial year ended March 31, 2018.

1. PERFORMANCE HIGHLIGHTS

a) Financial Results

The summarized financial results of your Company for the FY 2017 - 2018 are given below:

(Rs, in lakhs, except earnings per share)

Particulars	2017 - 2018	2016 - 2017
Total Income	398 08.56	284 19.99
Total Expenses	315 62.54	238 01.32
Profit Before Tax	82 46.02	46 18.67
Tax Expense	28 78.30	16 09.50
Profit After Tax	53 67.72	30 09.17
Basic Earnings Per Share (EPS)	36.39	21.93

Note: Previous year figures have been reworked, re-grouped, re-arranged and re-classified to conform to the current year presentation. EPS for FY 2016 - 2017 has been restated based on the bonus issue made in June, 2017 (Previous year reported at t 24.13).

b) Business Growth

During the Financial Year (FY) ended March 31, 2018, your Company was able to achieve an impressive growth. The total Asset Under Management (AUM) of your Company increased by 55.45%. The AUM of the Company as on March 31, 2018 stood at Rs, 22 38 02.63 lakhs whereas for the same for the FY 2016 - 2017 was Rs, 14 39 68.04 lakhs.

c) Profitability

The total income of the Company increased to Rs, 398 08.56 lakhs during the FY 2017 - 2018 as against Rs, 284 19.99 lakhs during the FY 2016 - 2017. The total expenditure for the FY 2017 - 2018 was at Rs, 315 62.54 lakhs. The Company achieved an all-time high profit of Rs, 53 67.72 lakhs while the same was Rs, 30 09.17 lakhs in FY 2016 - 2017. The Net Interest Margin (NIM) improved to 69.15% as against 63.43% in FY 2016 - 2017.

d) Asset Quality

As on March 31, 2018, the gross NPA and net NPA in the books of your Company stood at Rs, 87 91.27 lakhs and Rs, 56 92.98 lakhs respectively. The Provision Coverage Ratio stood at 35.33%. Your Company has also adopted new methods to control NPA figures and improve asset quality at lower costs.

e) Net worth & Capital Adequacy Ratio

Based on the higher profitability and the Qualified Institutional Placement (QIP) of Rs, 165 02.59 lakhs undertaken by the Company, the net worth of your Company increased by 121.33% to Rs, 393 92.99 lakhs as against Rs, 177 98.50 lakhs in the previous year. The Company’s total Capital Adequacy Ratio (CAR) as on March 31, 2018 stood at 22.04% of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the off - Balance Sheet items, which is above the statutory minimum of 15%. Out of the above, Tier I CAR stood at 19.69% and Tier II CAR stood at 2.35%. The CAR as on March 31, 2017, stood at 16.98%.

f) Earnings Per Share

Earnings Per Share of your Company has improved from Rs, 21.93 (restated from Rs, 24.13 as reported last year, based on bonus issue made in June, 2017) to Rs, 36.39 during the year under review. Return on Equity reached 21.17% during the year.

2. DIVIDEND

In view of the business growth plans of the Company and investment planned in digitization and technology, the Board of

Directors of your Company decided to plough back the profit after tax into the business and hence have not recommended any dividend for the FY 2017 - 2018.

3. RESERVES

Your Board of Directors has transferred an amount of Rs, 10 80.00 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 FY ended March 31, 2018. Post transfer of profits to reserves, your Board decided to retain Rs, 119 12.37 lakhs as surplus in the Profit and Loss Account.

4. RESOURCE MOBILISATION

a) Share Capital

The authorised share capital of the Company was increased from Rs, 15 00.00 lakhs to Rs, 25 00.00 lakhs during the FY 2017 - 2018. The change in paid up share capital of the Company during the year is given below:

Reason for Change	No. of Shares	Face Value ('')	Premium, if any (Rs,)	Issue Size (Rs, in lakhs)
Issue of Bonus Shares	12 47 258	10.00	Nil	124.73
Issue of shares under Qualified Institutions Placement (QIP)	27 27 700	10.00	595.00	165 02.59

The paid up capital of your Company as on March 31, 2018 is Rs, 16 44.75 lakhs. The Company had not issued any equity shares with differential rights during the FY 2017 - 2018 and hence, the disclosure requirements under Section 43 and Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

b) Debentures

The Company has not issued any debentures during the FY 2017 - 2018. As on March 31, 2018, the residual portion of secured redeemable non-convertible debentures under private placement during earlier years along with interest accrued is Rs, 18.13 lakhs. The debentures issued are secured by way of floating charge on the current assets of the Company. The non-convertible debentures of your Company is rated as “A-/Stable” by CRISIL.

Trustees for Debenture Holders: Mr. A Gopalakrishnan, Chartered Accountant, M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682 018, is the Debenture Trustee for ensuring and protecting the interests of debenture holders.

c) Commercial Papers

During the year under review, your Company has raised funds for its working capital requirements by way of issue of Commercial Papers. The Commercial Papers of your Company are rated as “A1” by CRISIL.

The outstanding amount of Commercial Papers as on March 31, 2018 is Rs, 145 23.09 lakhs.

d) Fixed Deposits

Your Company is a Non - Banking Financial Company (NBFC), registered with Reserve Bank of India (RBI) having a Category A (Deposit Taking) License. The Company started accepting fixed from the FY 2013 - 2014. The fixed deposits of the Company are rated as “FA-/Stable” by CRISIL.

The outstanding amount of fixed deposits as on March 31, 2018, received by the Company including interest accrued at that date is Rs, 88 00.20 lakhs. As on March 31, 2018, there are 124 accounts of fixed deposits amounting to Rs, 1 99.82 lakhs which have become due for payment, but have not been claimed by the depositors.

Chapter V of the Companies Act, 2013, relating to acceptance of deposits by Companies, is not applicable to the Company since it is an NBFC registered with RBI.

Communication to Deposit Holders: The Company has the practice of sending communication by registered post, two months in advance to the deposit holders whose accounts are about to mature. If the deposit holders are not responding to the communication, Company will contact the depositors in person instructing them to surrender the fixed deposit certificate and claim the amount. In case, where 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.

Trustees for Deposit Holders: Subject to the provisions of 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 floating 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.

e) Subordinated Debts

The Company had in the current year raised money through issue of subordinated debts. As of March 31, 2018, the total amount of outstanding subordinated debts, including accrued interest was Rs, 65 05.99 lakhs as against Rs, 52 37.71 lakhs in the previous year.

The subordinated debts and public deposits consists of 10.49 % of our total funding.

f) Bank Finance

The Company raised funds for its working capital resources mainly from banks. As on March 31, 2018, the total outstanding amount of credit facilities from Banks were Rs, 1149 10.25 lakhs as against Rs, 814 81.62 lakhs as on March 31, 2017 (Amounts are given without interest accrued).

Apart from the above, the Company has been sourcing funds through Securitization and Direct Assignment transactions. During the year under review the Company has sourced Rs, 439 76 .23 lakhs (net of MRR) (previous year Rs, 349 55.74 lakhs). The same has been invested by Banks/ NBFCs and the value remaining outstanding as on March 31, 2018 was Rs, 322 02 .37 lakhs (previous year Rs, 236 00.89 lakhs).

5. DIRECTORS

As on March 31, 2018, the Board of your Company consists of six Directors as follows:

Category	Name of Directors
Executive Director	Mr. Thomas George Muthoot, Managing Director
Non - Executive - Non Independent Directors	Mr. Thomas John Muthoot, Chairman Mr. Thomas Muthoot, Director
	Mr. A.P. Kurian
Non - Executive Independent Directors	Mr. R.K. Nair Ms. Radha Unni

The composition of the Board is in line with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015. All the Directors are having vast knowledge and experience in their relevant fields and the Company had benefitted immensely by their presence in the Board.

Mr. Thomas Muthoot, Director (DIN: 00082099) retires at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Thomas Muthoot as Director of the Company. The detailed profile of Mr. Thomas Muthoot, recommended for re-appointment is enclosed with the Notice for the 24^th AGM of the Company.

a) Changes in Directors and Key Managerial Personnel (KMP) during the FY 2017 - 2018

During the year under review, there were no changes in the composition of the Board of Directors of your Company.

Mr. Syam Kumar R., Company Secretary & Head - Governance one of the KMPs of the Company has resigned with effect from the closing hours of January 15, 2018, due to personal reasons.

Mr. Thomas George Muthoot, Managing Director and Mr. Vinodkumar M. Panicker, Chief Finance Officer are the KMPs of the Company, as recorded by the Board as on March 31, 2018.

b) Declaration by Independent Directors

On April 01, 2018, the Company has received declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as laid down in Section 149 (6) of the Companies Act, 2013 and subsequently the same was placed at the Board Meeting held on April 17, 2018.

A declaration by Managing Director confirming the receipt of this declaration from Independent Directors is enclosed to this Report as Annexure 1.

c) Policy on Board Diversity

The Policy on Board Diversity approved and adopted by the Company are as follows:

(i) Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities.

(ii) The Company shall also take into account factors based on its own business model and specific needs from time to time.

(iii) The Nomination & Remuneration Committee shall lead the process for Board appointment and for identifying and nominating, for approval of the Board, candidates for appointment to the Board.

(iv) The benefits of experience/knowledge in the areas relevant to the Company and diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board.

(v) Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender.

d) Policy on Nomination & Remuneration

The Company’s policy on Director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) of the Companies Act, 2013 is enclosed to this Report as Annexure 2.

The Policy on Nomination and Remuneration sets out the criteria for determining qualifications, positive attributes and independence of Director and the norms for evaluation of the Board, its Committees and individual Directors.

e) Formal Annual Evaluation of Board and its Committees

Based 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 Companies Act, 2013 and SEBI (LODR) Regulations, 2015 is given in the Report on Corporate Governance, which forms part of this Report.

f) Meetings of the Board

During the FY 2017 - 2018, your Board of Directors met eight times. More details about the meetings of the Board is given the Report on Corporate Governance, forming part of this Report.

g) Committees of the Board

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.

6. SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY

The Company has no subsidiary/joint venture/associate company and hence consolidation and the provisions relating to the same under the Companies Act, 2013 and Rules made thereunder are not applicable to the Company.

7. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of the Company. The Company is mainly into the business of providing two wheeler loans for which during the year under review the Company has disbursed loans to the extent of Rs, 1758 38.00 lakhs and as on March 31, 2018, the total outstanding amount was Rs, 1939 76.65 lakhs. The Company had disbursed business/corporate loans to the extent of Rs, 211 31.11 lakhs and as on March 31, 2018, the outstanding amount is Rs, 267 54.03 lakhs.

The Company had entered into pool buyout arrangement of loan receivables amounting to Rs, 34.53 lakhs (after deducting 5% or 10% for MRR requirement). The aggregate amount outstanding under loan buyout as on March 31, 2018 was Rs, 57.89 lakhs.

The sourcing of two wheeler business for the Company takes place mainly at the dealer points for two wheelers. The Company has already activated 2,869 dealers.

8. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this Report.

9. CREDIT RATING

The Credit Rating enjoyed by the Company as on March 31, 2018, is as given below:

Credit Rating Agency	Instrument	Rating as on March 31, 2018	Migration during the FY 2017 - 2018
CRISIL	Bank Facilities	CRISIL A-/ Stable	No change
CRISIL	Public Deposits	FA-/Stable	No change
CRISIL	Commercial Paper	CRISIL A1	No change
CRISIL	Non-Convertible Debentures	CRISIL A-/ Stable	No change

10. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

Your Directors confirm that there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

11. RISK MANAGEMENT

Risk Management is embedded in the operating framework of the Company. The Company believes that risk resilience is key to achieving higher growth. To this effect, the Company has a well-defined 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 identification, 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 identified, so as to make sure that risks are adequately addressed or mitigated.

The risk management framework in the Company is periodically reviewed by the Risk Management Committee of Board of Directors. The Internal Auditors are also having a complete review of risk assessments and associated management action plans.

Detailed discussion on Risk Management forms part of Management Discussion & Analysis under the section ‘Risks and Concerns’, which forms part of this Annual Report. At present, in the opinion of your Board of Directors, there are no risks which may threaten the existence of the Company.

12. ADEQUACY OF INTERNAL AUDIT AND FINANCIAL CONTROLS

The Company has in place robust Internal Audit and Financial Controls with reference to the financial statements, which is evaluated by the Audit Committee as per Schedule II Part C of the SEBI (LODR) Regulations, 2015.

Apart from Statutory Audit and Concurrent Audit, your Company, in compliance with Section 138 of the Companies Act, 2013, had engaged PKF Sridhar & Santhanam LLP as the Internal Auditors of the Company for the FY 2017 - 2018. The Internal Audit function essentially validates and ensures that the Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

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. Accordingly, your Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2017 - 2018.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility activities at Muthoot Capital Services Limited encompasses much more than social outreach programmes. 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 fulfillment of its role as a responsible corporate citizen. The Company had undertaken a number of enriching and enlivening activities in the areas of health, education, environment and livelihood.

The Company’s CSR Policy is committed towards CSR activities as envisaged in Schedule VII of the Companies Act, 2013. 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 3 to this Report in the format prescribed as per the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The CSR Policy is available on the website of the Company at http://muthootcap.com/wp-content/uploads/CSR-Policy.pdf.

The composition and other details of the CSR Committee is detailed in the Report on Corporate Governance, forming part of this Report.

14. AUDIT & AUDITORS

a) Statutory Auditors

M/s. Varma & Varma, Chartered Accountants (FRN: 004532S), Sreeraghavam, Kerala Varma Tower, Bldg. No. 53/2600 B, C, D & E, Off. Kunjanbava Road, Vyttila, P.O., Kochi - 682 019 were appointed as the Statutory Auditors of the Company during the 23^rd AGM held on June 06, 2017, for a period of five years.

The Board has duly examined the Statutory Auditors’ Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to the Accounts section of the Annual Report. Further, your Directors confirm that there are no qualification, reservation or adverse remark or disclaimer in the Independent Auditor’s Report provided by Statutory Auditors for the FY 2017 - 2018.

b) Secretarial Auditors

The Board, at its meeting held on April 18, 2017, appointed M/s. SVJS & Associates, Company Secretaries, 39/3525, Kausthubham, Manikkath Road, Ravipuram, Kochi - 680 016 to conduct the Secretarial Audit for the year ended March 31, 2018 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 2017 - 2018 is enclosed to this report as Annexure 4. The Directors of your Company confirms that there are no qualification, reservation or adverse remark or disclaimer in Secretarial Audit Report for the period under review.

15. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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 and technology absorption does not apply to your Company. The Company is, however, constantly pursuing its goal of technological up gradation in a cost-effective manner for delivering quality customer service.

16. WHISTLE BLOWER POLICY OR VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your 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 SEBI (LODR) Regulations, 2015.

A brief note on the highlights of the Whistle Blower Policy and compliance with Code of Conduct is also provided in the Report on Corporate Governance, which forms part of this Report.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or provided any guarantee or made any investments pursuant to Section 186 of the Companies Act, 2013, during the period under review.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Directors confirm that all contracts/arrangements/transactions entered into by the Company during the FY 2017 - 2018 with related parties were in compliance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The Company had obtained prior approval of the Audit Committee for all the related party transactions during the FY 2017 -2018 as envisaged in Regulation 23 (2) of the SEBI (LODR) Regulations, 2015. Further, the Audit Committee had given prior omnibus approval under Regulation 23 (3) of the SEBI (LODR) Regulations, 2015 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 Members for related party transactions with Muthoot Fincorp Limited, Muthoot Bankers and Muthoot Microfin Limited at the AGMs held on September 03, 2014, August 21, 2015 and June 06, 2017 respectively for a period of five years even though the said transactions were not material in nature.

The 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 enclosed to this Report as Annexure 5. All the related party transactions entered into by the Company were in the ordinary course of business, on an arm’s length basis and there were no material contracts or arrangement or transactions at arm’s length basis during the period.

The Company has in place a Board approved Related Party Transaction Policy which is enclosed to this Report as Annexure 6 and is also available on the website of the Company at http://muthootcap.com/wp-content/uploads/RPT Policy.pdf.

19. PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration of Directors under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this Report as Annexure 7.

The information, as required to be provided in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this Report as Annexure 8.

20. LISTING

Equity shares of your Company was listed on BSE Limited since April 24, 1995 and on National Stock Exchange of India Limited since August 24, 2015. Your Company has paid the required listing fees to both the Stock Exchanges for the FY 2018 - 2019.

21. CORPORATE GOVERNANCE 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 SEBI (LODR) Regulations, 2015 on Corporate Governance. The detailed Report on Corporate Governance along with certificate on Corporate Governance from the Statutory Auditors forms part of this Report.

22. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review is included as a separate section forms part of this Report.

23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has been employing 407 women employees in various cadres as on March 31, 2018. The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace and an Internal Complaint Committee in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and

Redressal) Act, 2013 and Rules made there under for reporting and conducting inquiry into the complaints made by the victim on the harassments at the work place. The functioning of the Committees were carried out as per letter and spirit contained in the provisions of the Act. During the FY 2017 - 2018, the Company has not received any complaint of sexual harassment and hence, there were no complaints pending for redressal as on March 31, 2018. The Company had conducted 8 workshops/awareness programs regarding women empowerment during the period under review.

24. FAIR PRACTICE CODE (FPC)

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: http://muthootcap.com/fair-practice-code/.

The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and appropriateness.

25. CUSTOMER GRIEVANCE

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.

26. EXTRACT OF ANNUAL RETURN

The extract of the annual return in form MGT-9 is annexed to this report as Annexure 9.

27. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) we 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) we 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) we had prepared the annual accounts on a going concern basis;

e) we had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. ACKNOWLEDGEMENTS

Your Directors wishes 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 us.

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 and every well-wisher for their continued commitment, dedication and co-operation.

For and on behalf of the Board of Directors

Sd/-

Kochi Thomas John Muthoot

April 17, 2018 Chairman

DIN: 00011618

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Mar 31, 2017

To

The Members of

Muthoot Capital Services Limited

The Directors are pleased to present their 23^rd Board''s Report on the Company''s business and operations, together with audited financial statements of your Company for the financial year ended 31^st March, 2017.

I 1. FINANCIAL SUMMARY

The summarised financial results of your Company for the FY 2016 - 2017 are given below:

(Rs. in lakhs, except earnings per share)

Particulars	2016 - 2017	2015 - 2016
Total Income	284 19.99	228 49.43
Total Expenses	238 01.32	193 04.45
Profit Before Tax	46 18.67	35 44.98
Tax Expense	16 09.50	12 59.64
Profit After Tax	30 09.17	22 85.34
Basic earnings per share	24.13	18.32

Note: Previous year figures have been reworked, re-grouped, re-arranged and re-classified to conform to the current year presentation.

I Highlights of Performance Growth:

During the year ended 31^st March, 2017, the Company was able to achieve an impressive growth when compared to the previous year. The total income of the Company clocked at Rs. 284 19.99 lakhs during the FY 2016 - 2017 as against Rs. 228 49.43 lakhs during the FY 2015 - 2016. The total expenditure for the FY 2016 - 2017 witnessed an increase of 23.29% which reached Rs. 238 01.32 lakhs. The Company achieved an all-time high profit of Rs. 30 09.17 lakhs while the same for the previous year was Rs. 22 85.34 lakhs. The Asset Under Management (AUM) of the Company as on 31^st March, 2017 was stood at Rs. 14 39 70.00 lakhs. The Net Interest Margin (NIM) improved to 63.43% as against 61.93% in the FY 2015 - 2016.

2. DIVIDEND

Based on the aggressive growth plans for the coming years, Directors of your Company decided to plough back the profit after tax for business activities and hence have not recommended any dividend for the FY 2016 - 2017.

3. RESERVES

Out of the profits generated by the Company, your Board has transferred an amount of Rs. 6 10.00 lakhs to the Statutory Reserves maintained under Section 45-ICof the Reserve Bank of India Act, 1934. The Company has not transferred any amount to the General Reserve for the FY ended 31^st March, 2017. Post transfer of profits to reserves, your Board decided to retain Rs. 76 24.65 lakhs as surplus in the Profit and Loss Account.

4. BONUS ISSUE

Your Directors have recommended to issue bonus shares in the ratio of 1:10 (i.e., one share for every ten shares held) having face value of Rs. 10.00 by way of capitalization of reserves to the Members of the Company as a reward for your loyalty towards the Company and Management. This will be subject to the approval of Members in the ensuing Annual General Meeting and Stock Exchanges where the shares of the Company are listed. The said issue of bonus shares, if approved, would result in capitalization of reserves amounting to Rs. 1 24.73 lakhs.

5. RESOURCE MOBILISATION

a) Share Capital

The authorized share capital of the Company is Rs. 15 00.00 lakhs and the paid up share capital of the Company is Rs. 12 47.25 lakhs. The Company had not issued any equity shares either with or without differential rights during the FY

2016 - 2017 and hence, the disclosure requirements under Section 43 and Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

Your Directors have decided to increase the authorized share capital of the Company from the existing Rs. 15 00.00 lakhs to Rs. 25 00.00 lakhs, subject to the approval of Members in the ensuing Annual General Meeting.

b) Debentures

The Company had not issued any debentures during the FY 2016 - 2017. The residual portion of secured redeemable non-convertible debentures under private placement during earlier years along with interest accrued is Rs. 232.79 lakhs as on 31^st March, 2017. The debentures issued are secured by way of floating charge on the current assets of the Company.

Trustees for Debenture Holders

Mr. A Gopalakrishnan, Chartered Accountant, Partner, M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682 018, is the Debenture Trustee for ensuring and protecting the interests of debenture holders.

c) Public Deposits

Your Company is a Non - Banking Financial Company (NBFC), registered with Reserve Bank of India (RBI) having a Category A (Deposit Taking) License. The Company started accepting public deposits during FY 2013 - 2014. The public deposits of the Company are rated as "FA-/Stable" by CRISIL.

The outstanding amount of public deposits as on 31^st March, 2017, received by the Company including interest accrued at that date is Rs. 115 17.98 lakhs. As on 31^st March, 2017, there are 124 accounts of public deposits amounting to Rs. 1 61.54 lakhs which have become due for payment, but have not been claimed by the depositors.

Chapter V of the Companies Act, 2013, relating to acceptance of deposits by Companies, is not applicable to the Company since it is an NBFC registered with RBI.

Communication to Deposit Holders

The Company has the practice of sending communication by registered post, two months in advance to the deposit holders whose accounts are about to mature. If the deposit holders are not responding to the communication, Company will contact the depositors in person instructing them to surrender the fixed deposit certificate and claim the amount. In case, where 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.

Trustees for Deposit Holders

Subject to the provisions of 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.

As per the Master Circular - Miscellaneous Instruction to all NBFCs dated 01^st July, 2014, NBFCs accepting/holding public deposits were directed to create a floating charge on the Statutory Liquid Assets invested in terms of Section 45 - 1B of the RBI Act, 1934, in favour of the depositors.

Your Company has created a floating 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.

d) Subordinated Debts

The Company had in the current year raised money through issue of subordinated debts. As of 31^st March, 2017, the total amount of outstanding subordinated debts, including interest accrued was Rs. 52 37.71 lakhs as against Rs. 17 75.22 lakhs in the previous year.

e) Bank Finance

The Company raised funds for its working capital resources mainly from banks. As on 31^st March, 2017, the total outstanding amount of credit facilities from Banks were Rs. 814 81.62 lakhs as against Rs. 738 24.75 lakhs as on 31^st March, 2016.

6. DIRECTORS

As on 31^st March, 2017, the Board of your Company consists of six Directors as follows:

Category	Name of Directors
Executive Director	Mr. Thomas George Muthoot, Managing Director
Non - Executive - Non Independent Directors	Mr. Thomas John Muthoot, Chairman
	Mr. Thomas Muthoot, Director
Non - Executive Independent Directors	Mr. A.P. Kurian
	Mr. R.K. Nair
	Ms. Radha Unni

The composition of the Board is as per the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015. All the Directors are having vast knowledge and experience in their relevant fields and the Company had benefitted immensely by their presence in the Board.

Mr. Thomas John Muthoot, Director (DIN: 00011618) retires at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Thomas John Muthoot as Director of the Company. The detailed profile of Mr. Thomas John Muthoot, recommended for re-appointment is enclosed with the Notice for the 23^rd AGM of the Company.

I a) Changes in Directors and Key Managerial Personnel (KMP) during the FY 2016 - 2017

During the year under review, there were no changes in the composition of the Board of Directors of your Company.

Mr. R. Manomohanan, Chief Executive Officer, one of the KMPs of the Company has resigned with effect from 28^th February, 2017, due to personal reasons.

The following persons are the KMPs of the Company, as recorded by the Board as on 31^st March, 2017:

Mr. Thomas George Muthoot : Managing Director

Mr. Vinodkumar M. Panicker : Chief Finance Officer

Mr. Syam Kumar R. : Company Secretary & Head - Governance

b) Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013, and Regulation 17 (1) (a) of the SEBI (LODR) Regulations, 2015, the Company shall have at least one Woman Director on the Board. Your Company has Ms. Radha Unni, as Woman Director on the Board of the Company.

c) Declaration by Independent Director(s) and re-appointment, if any

The Company has three Independent Directors on the Board. On 01^st April, 2017, the Company has received declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as laid down in Section 149 (6) of the Companies Act, 2013, and subsequently the same was placed at the Board Meeting held on 18^th April, 2017.

A declaration by Managing Director confirming the receipt of this declaration from Independent Directors is annexed to this report as Annexure 1.

During the FY 2016 - 2017, the Company has conducted a development programme for its Independent Directors on the topic "An Awareness on Board Evaluation".

The presentation made in this regard is posted on the website of the Company and the web link is: http://muthootcap.com/wp-content/uploads/Details-of-Familiarisation-Refresher-Programme-1.pdf

d) Policy on Board Diversity

The Policy on Board Diversity adopted by the Company includes the following:

(i) Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities.

(ii) The Company shall also take into account factors based on its own business model and specific needs from time to time.

(iii) The Nomination & Remuneration Committee shall lead the process for Board appointment and for identifying and nominating, for approval of the Board, candidates for appointment to the Board.

(iv) The benefits of experience/knowledge in the areas relevant to the Company and diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board.

(v) Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender.

e) Formal Annual Evaluation of Board and its Committees

Pursuant to Section 178 (3) of the Companies Act, 2013, the Nomination & Remuneration Committee of the Company has formulated the criteria for determining qualifications, positive attributes and independence of Director and recommended to the Board a policy on remuneration of the Directors, Key Managerial Personnel and other employees. The Policy also includes the norms for evaluation of the Board, its Committees and individual Directors. Based on the recommendation of the Committee, the said Policy on Nomination & Remuneration was approved and adopted by the Board.

The Board has carried out an annual evaluation of its own performance, its Committees and Independent Directors, excluding the Director being evaluated. Structured evaluation forms were prepared on the basis of the criteria laid down by the Policy on Nomination & Remuneration.

The Nomination & Remuneration Committee reviewed the performance of the individual Directors on the basis of the duly filled evaluation forms submitted by the Directors. Each evaluation form prescribes various norms for evaluation such as understanding and knowledge of the market in which the Company is operating, ability to appreciate the working of the Company and the challenges it faces, composition of the Board and its Committees, attendance of meetings of the Board and its Committees, extend of participation and involvement in the meetings, ability to convey his/her views and flexibility to work with others, etc.

Separate meeting of Independent Directors was conducted during the FY 2016 - 2017, to review:

a) The performance of the Non-Independent Directors and the Board as a whole;

b) The performance of the Chairman of the Company; and

c) The quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All Directors participated in the evaluation survey and reviews was carried out. The outcomes of each evaluation forms were collated by the Nomination & Remuneration Committee and placed before the Board on 18^th April, 2017. The Board reviewed the same and arrived at a conclusion that the performance of the Board, its Committees and individual Directors were exemplary.

The Board also noted the comments/suggestions of Independent Directors and Chairmen of respective Committees and discussed various initiatives to further strengthen Board effectiveness.

f) Policy on Nomination and Remuneration

The Company’s policy on Director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) of the Companies Act, 2013, annexed herewith as Annexure 2.

g) Meetings of the Board

During the FY 2016 - 2017, your Board of Directors met five times on the following dates: -

19.04.2016 06.06.2016 14.07.2016 24.10.2016 18.01.2017

h) Audit Committee

As on 31^st March, 2017, the Audit Committee consists of four Non - Executive Directors, of which three are Non - Executive Independent Directors. All the members of the Committee possess accounting or related financial management expertise. Composition of the Audit Committee is as follows:

Name of the Member	Designation in the Committee	Nature of Directorship
Mr. A.P Kurian	Chairman	Independent Director
Mr. Thomas Muthoot	Member	Non - Executive, Non - Independent Director
Mr. R.K. Nair	Member	Independent Director
Ms. Radha Unni	Member	Independent Director

The constitution and terms of reference of the Committee are in accordance with the SEBI (LODR) Regulations, 2015, Companies Act, 2013 and RBI Regulations, which are elaborated in the Corporate Governance Report forming part of this Report.

i) Other Committees of the Board

The details of the other Committees of the Board, their composition, terms of reference and the activities during the year are elaborated in the Corporate Governance Report forming part of this Report.

7. SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY

The Company has no subsidiary/joint venture/associate company and hence consolidation and applicable provision under the Companies Act, 2013, and Rules made there under are not applicable to the Company.

8. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no change in the nature of business of the Company. The Company is mainly into the business of providing two wheeler loans. The Company had disbursed business/corporate loans to the extent of Rs. 162 78.00 lakhs and as on 31^st March, 2017, the outstanding amount is Rs. 181 79.21 lakhs.

The Company had entered into pool buyout arrangement of loan receivables amounting to Rs. 4 47.53 lakhs (after deducting 5% or 10% for MRR requirement). The aggregate amount outstanding under loan buyout as on 31^st March, 2017 was Rs. 6 72.09 lakhs.

The sourcing of two wheeler business for the Company takes place mainly at the dealer points for two wheelers. The Company has already activated 1800 dealers. It plans to activate 400 - 500 dealerships/sub dealerships additionally in the FY 2016 - 2017.

The Company proposes to look at other means of funding like NCDs, apart from the existing means of financing by way of bank loans, public deposits, subordinated debts etc.

9. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes or events have occurred since the date of the Balance Sheet that could have any effect on the financial position of the Company.

10. CAPITAL ADEQUACY RATIO

Right from the inception, your Company has been strong on capital adequacy. The Company''s total Capital Adequacy Ratio (CAR) as on 31^st March, 2017 stood at 16.98% of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the off - Balance Sheet items, which is above the statutory minimum of 15%. Out of the above, Tier I CAR stood at 13.61% and Tier II CAR stood at 3.37%. The CAR as on 31^st March, 2016, stood at 15.40%.

11. CREDIT RATING

The Credit Rating enjoyed by the Company as on 31^st March, 2017, is as given below:

Credit Rating Agency	Instrument	Rating as on 31st March, 2017	Migration during the FY 2016 - 2017
CRISIL	Bank Facilities	CRISIL A-/ Stable	Downgraded from CRISIL A/Stable
CRISIL	Public Deposits	FA-/Stable	Downgraded from FA/Stable
CRISIL	Short Term Debt	CRISIL A1	No change
CRISIL	Non-Convertible Debentures	CRISIL A-/ Stable	Downgraded from CRISIL A/Stable

12. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

Your Directors confirm that there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

13. ADEQUACY OF INTERNAL AUDIT AND FINANCIAL CONTROLS

The Company has in place adequate Internal Audit and Financial Controls with reference to the financial statements, which is evaluated by the Audit Committee as per Schedule II Part C of the SEBI (LODR) Regulations, 2015.

Apart from Statutory Audit and Concurrent Audit, your Company, in compliance with Section 138 of the Companies Act, 2013, had engaged M/s. Varma & Varma, Chartered Accountants, Kochi - 682 019 as the Internal Auditors of the Company for the FY 2016 - 2017. Their scope of work includes review of operational efficiency, effectiveness of systems & processes, compliances and assessing the strengths and weaknesses of internal controls in all areas. Findings and observations of the Internal Auditors are discussed and suitable corrective actions are taken as per the directions of Audit Committee on an on-going basis to improve efficiency in operations. Thus the Internal Audit function essentially validates the compliance of your Company''s processes and operations with regulatory guidelines, accounting procedures and Company''s own internal rules and instructions.

The Company''s internal control systems are well established and commensurate with the nature of its business and the size and complexity of its operations. The stabilized and effective internal control system calibrates the risk appetite of your Company and ensures that all its assets are safeguarded and protected to prevent any revenue leakage and losses to the Company. Such controls enable reliable financial reporting also.

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. The present system of reporting ensures independence of the internal audit function and symbolizes best corporate governance practices. Your Directors confirm that during the year under review, there were no reportable material weaknesses in the present systems or operations of internal controls.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Aligning with its vision, your Company has been continuing to increase value creation in the community in which it operates, through its services and CSR initiatives, so as to stimulate well-being for the community, in fulfillment of its role as a responsible corporate citizen. The Company had undertaken a number of enriching and enlivening activities in the areas of health, education, environment and livelihood. The Company''s CSR Policy is committed towards CSR activities as envisaged in Schedule VII of the Companies Act, 2013. 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 3 to this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The CSR Policy is also available on the website of the Company by accessing the following link: http://muthootcap.com/wp-content/uploads/CSR-Policy-2016.pdf

The composition and other details of the CSR Committee is detailed in the Corporate Governance Report.

15. AUDIT & AUDITORS

a) Statutory Auditors

M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, (FRN: 004610S) Building No. 41/3647 B, First Floor, Blue Bird Towers, Providence Road, Kochi - 682 018 were appointed as the Statutory Auditors of the Company during the 20^th AGM held on 03^rd September, 2014, for a period of three years. As per the provisions of Section 139 of the Companies Act, 2013, an audit firm shall not be appointed as the Statutory Auditors for more than two terms of five consecutive years and after completing such term, the audit firm shall not be eligible for re-appointment as auditor in the same Company for five years from the completion of such term^.

In this background, yours Directors have recommended the appointment of M/s. Varma & Varma, Chartered Accountants (FRN: 004532S), Sreeraghavam, Kerala Varma Tower, Bldg. No. 53/2600 B, C, D & E, Off. Kunjanbava Road, Vyttila P.O., Kochi - 682 019, Kerala, India as the Statutory Auditors of the Company subject to the approval of Members for a period of five years from the conclusion of 23^rd AGM. The Company had obtained a certificate from them that the appointment, if made, shall be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Further, your Directors confirm that there is no qualification, reservation or adverse remark or disclaimer in the Independent Auditor''s Report provided by Statutory Auditors for the FY 2016 - 2017. The notes to accounts forming part of financial statements are self-explanatory and need no further clarification.

b) Secretarial Auditors

The Board had, at its meeting held on 19^th April, 2016, appointed M/s. SVJS & Associates, Company Secretaries, 39/3519 B, First Floor, Padmam Apartments, Manikkath Road, Ravipuram, Kochi - 680 016 to conduct the Secretarial Audit for the year ended 31^st March, 2017 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 2016 - 2017 is annexed to this Report as Annexure 4. The Directors of your Company confirms that there is no qualification, reservation or adverse remark or disclaimer in Secretarial Audit Report for the period under review.

ANNUAL KBrUK I ZU1D-1/

16. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

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 and technology absorption does not apply to your Company. The Company is, however, constantly pursuing its goal of technological up gradation in a cost-effective manner for delivering quality customer service.

17. WHISTLE BLOWER POLICY OR VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your 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 SEBI (LODR) Regulations, 2015 which are reviewed and updated from time to time. Directors, employees, customers and other stakeholders of the Company can lodge complaints/disclosures regarding unethical behavior, actual or suspected frauds or violation of the Company''s Code of Conduct through the mechanism provided under Whistle Blower Policy. The mechanism also provide for adequate safeguards against victimization of Director(s)/ employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. No personnel have been denied access to the Chairman of the Audit Committee, for giving any information on any integrity issue as envisaged in the Whistle Blower Policy.

The said policy is available on the website of the Company which can be accessed by following link: http://muthootcap.com/wp-content/uploads/Whistle-Blower-Policy.pdf

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or provided any guarantee except the investments made in the PMS account with Hedge Equities Limited pursuant to Section 186 of the Companies Act, 2013, during the period under review.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Directors confirm that all contracts/arrangements/transactions entered into by the Company during the FY 2016 - 2017 in compliance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The Company had obtained prior approval of the Audit Committee for all the related party transactions during the FY 2016 - 2017 as envisaged in Regulation 23 (2) of the SEBI (LODR) Regulations, 2015. Further, the Audit Committee had given prior omnibus approval under Regulation 23 (3) of the SEBI (LODR) Regulations, 2015 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 Members for related party transactions with Muthoot Fincorp Limited and Muthoot Bankers at the AGMs held on 03^rd September, 2014 and 21^st August, 2015 for a period of five years even though the said transactions were not material in nature.

The 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 annexed to this Report as Annexure 5. All the related party transactions entered into by the Company were in the ordinary course of business, on an arm''s length basis and there were no material contracts or arrangement or transactions at arm''s length basis during the period.

The Company has in place a Board approved Related Party Transaction Policy which can be accessed at http://muthootcap.com/wp-content/uploads/RPT Policy.pdf

The Company proposes to do business of sourcing of two-wheeler loans and its collection through Muthoot Microfin Limited (MML), a related party. All terms of the said transaction are subject to the conditions that the prescribed price/charges payable under the contracts shall be competitive, based on the prevailing market price, not prejudicial to the interest of either parties.

Your Directors have decided to enter into the above transaction with MML for a period of five years subject to the approval of Members at the ensuing AGM.

20. HUMAN RESOURCES

Your Company is well aware of the importance of its human capital and thus provides positive work environment which is conducive, flexible and enriched. The Company continuously strive to build a best-in class organizational culture to attract, build and retain talent at all levels. The Company have taken an integrated talent management approach that spans the complete employee lifecycle.

Your Company offers various benefits to employees including various statutory and non-statutory staff welfare measures. All eligible employees are covered under statutory provisions namely Employees Provident Fund, Employee State Insurance, Maternity Benefits, Gratuity etc.

The disclosures required under the provisions of Section 197 (12) of the Companies Act, 2013, read with Rule 5 (1) and 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended up to date, is annexed to this Report as Annexure 6.

21. LISTING

Equity shares of your Company were listed on BSE Limited since 24^th April, 1995 and on National Stock Exchange of India Limited since 24^th August, 2015. Your Company has paid the required listing fees to both the Stock Exchanges for the FY 2017 - 2018.

22. CORPORATE GOVERNANCE 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 SEBI (LODR) Regulations, 2015 on Corporate Governance. The detailed report on Corporate Governance along with certificate on Corporate Governance from the Statutory Auditors is forming part of this Report.

23. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review is included as a separate section forming part of this Report.

24. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance towards sexual harassment of women at the workplace. The Company has been employing 363 women employees in various cadres as on 31^st March, 2017. The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace and an Internal Complaint Committee in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under for reporting and conducting inquiry into the complaints made by the victim on the harassments at the work place. The functioning of the Committees were carried out as per letter and spirit contained in the provisions of the Act. During the FY 2016 - 2017, the Company has not received any complaint of sexual harassment and hence there were no complaints pending for redressal as on 31^st March, 2017. The Company had conducted 11 workshops/awareness programs regarding women empowerment during the period under review.

25. FAIR PRACTICE CODE (FPC)

The Company has in place, a Fair Practice Code approved by the Board on 02^nd April, 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 posted on the website of the Company and can be accessed at the following link: http://muthootcap.com/fair-practice-code/

The FPC is also reviewed by the Board at frequent intervals to ensure its level of adequacy and appropriateness.

26. CUSTOMER GRIEVANCE

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.

27. EXTRACT OF ANNUAL RETURN

The extract of the annual return in form MGT-9 is annexed to this Report as Annexure 7.

28. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) we 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;

(iii) We 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;

(iv) We had prepared the annual accounts on a going concern basis;

(v) We had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) We had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

29. ACKNOWLEDGEMENTS

Your Directors sincerely acknowledge the contribution and support from shareholders, customers, depositors, debenture holders, Central and State governments, Bankers, SEBI, BSE Limited, National Stock Exchange of India Limited, Registrar & Share Transfer Agents, Credit Rating Agencies, Reserve Bank of India, Registrar of Companies, Kerala and Lakshadweep and other Statutory and Regulatory Authorities for the kind co-operation and assistance provided to us.

Your Directors also place on record their special appreciation to each Muthootians and every well-wisher for their continued commitment, dedication and co-operation.

For and on behalf of the Board of Directors Sd/-

^Kochi Thomas John Muthoot

^{18th April}, ²⁰¹⁷ Chairman

DIN: 00011618

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 21st Annual Report on the business and operations of the Company and the accounts for the financial year ended 31st March, 2015.

1. Financial summary and Performance of the Company

(RS. in 000RS. except per share)

Particulars 2014 - 2015 2013 - 2014

Total Income 191 28 64 158 75 78

Total Expenditure 152 14 25 121 69 58

Profit before Depreciation and other 39 14 39 37 06 20 Provisions

Depreciation 138 97 78 94

Provisions and Write offs 358 86 2 69 03

Exceptional Items - 4

Profit Before Tax 34 16 56 33 58 27

Provision for Taxation

Current Tax 13 23 00 11 78 00

Deferred Tax (1 36 02) (32 56)

Income Tax adjustment for earlier years 43 (7 73)

Proft After Tax 22 29 15 22 20 56

Basic Earnings Per Share 17.87 17.80

An analysis of the Company's performance for the current and previous fiscal years reveal that the Company was able to achieve an impressive growth during the year under review. The total income rose to RS. 191 28.64 lakhs during 2014 - 2015 as against RS. 158 75.78 lakhs during the previous year. The total expenditure were RS. 152 14.25 lakhs against RS. 121 69.58 lakhs during the previous year. The net profit of the Company stood at RS. 22 29.15 lakhs compared to RS. 22 20.56 lakhs in the previous year. An amount of RS. 15 00.59 lakhs has been proposed to be transferred to Reserves and Surplus during the year under review.

The Company raised funds for its working capital resources mainly from banks, the total amount of working capital loans outstanding being RS. 580 61.96 lakhs as at 31st March, 2015. Further, the Company had in the current year raised money by way of subordinated debts and public deposits. As on 31st March, 2015 the total amount outstanding on subordinated debts and public deposits (including interest accrued) was RS. 4 46.70 lakhs and RS. 113 57.53 lakhs respectively. With emphasis on other sources of funding, the Company expects to reduce its dependence on bank funds. Another source of funds for the Company in the earlier years was issue of secured redeemable non-convertible debentures under private placement, a residual portion of which is still outstanding as on 31st March, 2015. The debentures issued are secured by way of floating charge on current assets of the Company. The Company has appointed trustees for ensuring that the interests of debenture holders are protected. The debentures outstanding together with interest accrued amounts to RS. 7 59.91 lakhs as at 31st March, 2015.

The Company had, during the year 2012 - 2013, entered into sellout arrangement of loan receivables amounting to RS. 37 25.84 lakhs (after deducting 10% for Minimum Retention Requirement). The aggregate amount outstanding under loan sellout as on 31st March, 2015 was RS. 71.05 lakhs.

The sourcing of the business for the Company viz. two wheeler financing takes place at the dealer points for two wheelers. The Company has already activated 1800 dealers. It plans to activate 400-500 dealerships/sub dealerships additionally in the financial year 2015 - 2016. The Company is the preferred financier for Hero and Honda. It also has initiated steps to focus on other manufacturers like Suzuki, Yamaha, Royal Enfield, TVS, and Bajaj etc. during the financial year 2015 - 2016.

2. Change in the nature of business, if any

The Company is into the business of providing two wheeler loans only. There is no structural change in the business carried out by the Company during the year under review. Apart from the two traditional methods of growth through branches and dealer points, the Company is currently working at expanding the business by providing loans through the Micro Finance Division of Muthoot Fincorp Limited (MFL) to the micro finance customers. Under the arrangement, the Micro Finance Division will take care of the collection of loan repayment also. It is also looking at additional growth through loan portfolio buyout of good quality assets.

As mentioned above, the Company proposes to look at other means of funding like Non-Convertible Debentures/ Commercial Papers, apart from the existing means of financing by way of bank loans, public deposits, subordinated debts etc.

3. Directors

The Board of your Company consists of six Directors as on the date of this report as follows:

Category Name of Directors

Executive Director Mr. Thomas George Muthoot, Managing Director

Non - Executive - Mr. Thomas John Muthoot, Chairman Non - Independent Mr. Thomas Muthoot Directors

Mr. A.P Kurian Non - Executive Mr. R.K. Nair Independent Directors Ms. Radha Unni

All the Directors have rich experience and specialized knowledge in various areas of relevance to the Company. The Company is immensely benefited by the range of experience and skills that the Directors bring to the Board. The composition of the Board is as per the Companies Act, 2013 and the Listing Agreement.

Mr. Thomas John Muthoot, Director (DIN: 00011618) retires at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment. The Board of Directors recommends the re-appointment of Mr. Thomas John Muthoot as a Director of the Company. The detailed profile of Mr. Thomas John Muthoot, recommended for re-appointment is mentioned in the Notice for the AGM.

A) Changes in Directors and Key Managerial Personnel during the year 2014 - 2015

During the year under review, Mr. Philip Thomas, Director (DIN: 00051384) ceased to be a member from the Board on 28th June, 2014. Ms. Radha Unni (DIN: 03242769) was appointed as Additional Director on the Board on 28th June, 2014. Further at the 20th AGM held on 03rd September, 2014, Mr. A P Kurian (DIN: 00008022), Mr. R. K. Nair (DIN: 00631889) and Ms. Radha Unni were appointed as Independent Directors on the Board pursuant to Section 149,150,152 and other applicable provisions of the Companies Act, 2013, for a period of 5 years from 03rd September, 2014.

Ms. Malathy N., Company Secretary (ACS: 20399), resigned with effect from 21st April, 2014. Mr. Syam Kumar R. (FCS: 6086), was appointed as Company Secretary & Head-Governance with effect from 02nd June, 2014.

The following persons are the Key Managerial Persons of the Company as recorded by the Board:

1. Mr. Thomas George Muthoot - Managing Director

2. Mr. R. Manomohanan - Chief Executive Officer

3. Mr. Vinodkumar M. Panicker - Chief Finance Officer

4. Mr. Syam Kumar R. - Company Secretary & Head-Governance

B) Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company shall have at least one Woman Director on the Board. Your Company has Ms. Radha Unni, as Woman Director on the Board of the Company.

C) Declaration by Independent Director(s) and re-appointment, if any

The Company has three Independent Directors on the Board. The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013, that the Independent Directors of the Company meet the criteria for their independence laid down in Section 149 (6) of the Companies Act, 2013.

The Company has formulated a familiarization programme for its Directors which gives an insight into the history of the Company, its promoters, performance of the Company over the previous year's etc.The familiarization programme is posted on the website of the Company and the web link is:

http://www.muthootcap.com/pdf/Familirisation_Programme.pdf

D) Policy on Board Diversity

The Policy on Board Diversity adopted by the Company includes the following:

a. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities;

b. The Company shall also take into account factors based on its own business model and specific needs from time to time;

c. The Nomination & Remuneration Committee shall lead the process for Board appointment and for identifying and nominating, for approval of the Board, candidates for appointment to the Board;

d. The benefits of experience/knowledge in the areas relevant to the Company and diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board; and

e. Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender.

E) Formal Annual Evaluation of Board

As per Section 134 (3) (e) of the Companies Act, 2013, and Rule 8 (4) of the Companies (Accounts) Rules, 2014, the Nomination and Remuneration Committee formulated the criteria for determining qualifications, positive attributes and independence of Director and recommended to the Board a Policy on remuneration of the Directors, Key Managerial Personnel and other Employees. The Policy also included norms for evaluation of Directors, Chairman, MD, Board as a whole and various Committees of the Board. Based on the recommendation of the Committee, the said Policy on Nomination & Remuneration and Evaluation of Directors was adopted by the Board.

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and individual Directors pursuant to the provisions of Section 178 (3) of the Companies Act, 2013, and the Corporate Governance requirements as prescribed under Clause 49 (IV) of the Listing Agreement. A structured questionnaire was prepared after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, Board processes and procedures, Board effectiveness etc.

The Board and Nomination & Remuneration Committee reviewed the performance of the individual Directors inter alia, on the basis of understanding and knowledge of the market in which the Company is operating, ability to appreciate the working of the Company and the challenges it faces, attendance of meeting, extend of participation and involvement in the meetings, ability to convey his views and flexibility to work with others. The performance of the Committees was evaluated by the Board based on composition of the Committees, effectiveness of the Committee meetings with respect to the terms of reference and conduct of meetings and procedures followed.

Separate meeting of Independent Directors was conducted during the year, to review the performance of the Board as a whole, performance of Non-Independent Directors, performance of the Chairman and assess the quality, quantity, timelines of flow of information from the Management to the Board of Directors.

F) Managerial Remuneration

The Company's Policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Sub Section (3) of Section 178 of the Companies Act, 2013, is detailed in Corporate Governance Report forming part of the Directors Report.

4. Number of meetings of the Board of Directors

The Board of Directors met 7 times during the financial year 2014 - 2015 on the following dates: 20.05.2014, 28.06.2014, 04.08.2014, 02.09.2014, 05.11.2014, 10.12.2014 and 30.01.2015.

5. Audit Committee

As on 31st March, 2015, the Audit Committee consists of four Non-Executive Directors of which three are Non- Executive Independent Directors. All the Members of the Committee possess accounting or related financial management expertise. Composition of the Audit Committee is as follows:

Name of the Members

Mr. Philip Thomas Chairman*

Mr. A.P. Kurian Chairman**

Mr. Thomas Muthoot Member

Mr. R.K. Nair Member

Ms. Radha Unni*** Member

* Relinquished his Chairmanship effective 28th June, 2014

** Appointed as Chairman of the Committee on 04th August, 2014

*** Appointed as a Member on 04th August, 2014

The constitution and terms of reference of the Committee are in accordance with the Listing Agreement, Companies Act, 2013 and Reserve Bank of India (RBI), Regulations which are elaborated in the Corporate Governance Report forming part of the Directors Report.

6. Other Committees of the Board

The details of the other Committees of the Board, their composition, terms of reference and the activities during the year are elaborated in the Corporate Governance Report forming part of the Directors Report.

7. Subsidiaries/Joint Venture/Associate Company

The Company has no subsidiary/joint venture/associate company and hence consolidation and applicable provision under the Companies Act, 2013, and Rules made thereunder are not applicable to the Company.

8. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report

No material changes or events have occurred since the date of the Balance Sheet that could have any effect on the financial position of the Company.

9. Deposits

As you are aware, your Company is a Non-Banking Financial Company (NBFC) registered with RBI having a category A (Deposit Taking) License. The Company started accepting public deposits during the previous year. The outstanding amount of public deposits as on 31st March, 2015, received by the Company including interest accrued that date is RS. 1 13 57.53 lakhs. As on 31st March, 2015, there are 245 numbers of accounts of public deposits amounting to RS. 3 46.56 lakhs which have become due for payment but have not been claimed by the depositors. The public deposits of the Company are rated as "FA Stable" by CRISIL.

The Company has the practice of sending communication by registered post two months in advance to the deposit holders whose accounts are about to mature. If the deposit holders are not responding to the communication, Company will contact the depositor in person instructing them to surrender the fixed deposit certificate and claim the amount. In case where the depositors are not traceable due to change in address/phone numbers, another regular communication is sent to the deposit holders and other modes to contact the deposit holders are also initiated till the deposits are repaid.

Chapter V of the Companies Act, 2013 relating to acceptance of deposits by Companies, is not applicable to the Company since it is an NBFC registered with RBI.

10. Trustees for deposit holders

Subject to the provisions of RBI Guidelines for Trustees of deposit holders of the Non-Banking Financial Companies (NBFC), the Board appointed IDBI Trusteeship Services Limited as trustees for deposit holders.

As per the Master Circular-Miscellaneous Instruction to all NBFCs dated 1st July, 2014, NBFCs accepting/holding public deposits were directed to create a floating charge on the Statutory Liquid Assets invested in terms of Section 45-1B of the RBI Act, 1934, in favour of the depositors.

The Company created a floating charge on the Statutory Liquid Assets in favour of IDBI Trusteeship Services Limited as Trustee on behalf of the depositors as required under Section 45-1B of the RBI Act, 1934.

11. Capital Adequacy Ratio

Your Company's total Capital Adequacy Ratio (CAR) as on 31st March, 2015 stood at 15.97 % of the aggregate risk weighted assets on the Balance Sheet and risk adjusted value of the off-Balance Sheet items, which is above the regulatory minimum of 15%. The CAR as on 31st March, 2014 (previous year) stood at 17.32%.

12. Credit Rating

The Credit Rating enjoyed by the Company as on 31st March, 2015 and migration of rating during the year is as given below:

Credit Rating Agency Instrument Rating as on 31st March, 2015

CRISIL Bank Loan Facilities CRISIL A/Stable

CRISIL Public Deposits FA Stable

CRISIL Short-Term Debts CRISIL A1

Credit Rating Agency Migration during the financial year 2014 - 2015

CRISIL CRISIL A (Negative) was converted to CRISIL A/Stable on 26.08.2014

CRISIL Revised the outlook to FA Stable from FA (Negative) on 26.08.2014

CRISIL No change

13. Significant & Material Orders passed by the Regulators

Your Directors confirm that there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

14. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.

The Company has in place adequate internal financial controls with reference to the financial statements. During the year under review there were no reportable material weaknesses in the systems or operations.

15. Corporate Social Responsibility (CSR)

Your Company has always responded in a reasonable manner to the growing needs of the society. A number of enriching and enlivening activities that contribute to the community in the areas of health, education, environment and preservation of the country's rich culture and heritage have been taken up.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 1 to this report in the format prescribed in the Companies (Accounts) Rules, 2014. The policy is available on the website of the Company.

The composition and other details of the CSR Committee is detailed in the Corporate Governance Report.

16. Dividend

Your Directors have recommended a dividend of RS. 5/- per equity share (i.e. 50 % on the face value of RS. 10) aggregating to RS. 6 23.63 lakhs for the financial year ended 31st March, 2015. This would result in an additional cash outflow of RS. 1 26.96 lakhs on account of corporate dividend tax. Once approved by the ensuing AGM, the dividend will be paid to Members whose names appear in the Register of Members as on 14th August, 2015.

17. Reserves

Out of the profits generated by the Company, the Board proposes to make the following allocations to the various Reserves: (RS. in '000)

Particulars Amount

Transfer to Statutory Reserves 5 00 00

Transfer to General Reserves 2 50 00

Proposed dividend 6 23 63

Tax on proposed dividend 1 26 96

Total 15 00 59

18. Share Capital

The Company had not issued any equity shares either with or without differential rights during the financial year under review and hence, the disclosure requirements under Rule 4 (4) and Rule 16 (4) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

19. Statutory Auditors

M/s K. Venkatachalam Aiyer & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company during the 20th AGM held on 3rd September, 2014 for a period of three years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment need to be ratified at each AGM during their tenure and your Directors recommend ratification of the appointment of Statutory Auditors for the financial year 2015 - 2016 in the ensuing AGM.

20. Auditors Report

There are no qualifications or adverse remarks mentioned in the Auditors' Report for the financial year 2014 - 2015. The notes to accounts forming part of financial statements are self explanatory and need no further clarification.

21. Secretarial Auditors Report

Secretarial Auditors Report for the financial year 2014 - 2015 as provided by M/s SVJS & Associates, Company Secretaries, 39/3519 B, 1st Floor, Padmam Apartments, Manikkath Road, Ravipuram, Kochi-16 is annexed to this report as Annexure 2.

There are no qualifications or adverse remarks in the Secretarial Auditors' Report.

22. Conservation of energy and technology absorption, foreign exchange earnings and outgo

Considering its nature of activities, the following disclosures are made as per the provisions of Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014:

a. The Company has no activities relating to conservation of energy and technology absorption.

b. There are no foreign exchange earnings or outgo during the period under review.

23. Whistle Blower Policy / Vigil mechanism for Directors and employees

The Company promotes ethical behavior in all its business activities and has a mechanism for reporting unethical behavior, actual or suspected frauds or violation of the Company's Code of Conduct or ethics policy. Pursuant to Section 177 (9) & 177 (10) of the Companies Act, 2013 and as per Clause 49 (II) (F) of the Listing Agreement, the Company has a Whistle Blower Policy/Vigil Mechanism in place. The mechanism should also provide for adequate safeguards against victimization of Director(s)/Employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy is available in the website of the Company which can be accessed by following the below link.

http://www.muthootcap.com/pdf/MCSL_Whistle_Blowing_GuidelinesV1.pdf

24. Particulars of loans, guarantees or investments under Section 186

The Company has not given any loans or provided any guarantee or made any investments pursuant to Section 186 of the Companies Act, 2013 during the period under review.

25. Particulars of contracts or arrangements with Related Parties

All the Related Party Transactions have been approved by the Audit Committee and also by the Board. The transactions with Muthoot Fincorp Limited (MFL) and Muthoot Bankers were approved by the shareholders at the last AGM of the Company held on 03rd September, 2014, and the approval is valid for a period of 5 years.

Transactions with related parties during the financial year under review are at arms length and in the ordinary course of business and confirming to the requirements of Companies Act, 2013. Omnibus approvals from Audit Committee were taken on a quarterly basis for the transactions that are foreseen and of repetitive in nature. Form AOC-2 as required under Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure 3.

The Company has in place a Related Party Transaction Policy which was approved by the Board and has been placed in the website of the Company.

The web link to the said policy is http://www.muthootcap.com/pdf/c_Policy.pdf

26. Corporate Governance Report

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement on Corporate Governance. A detailed report on Corporate Governance together with a certificate from the Statutory Auditors is included as a part of this report.

27. Management Discussion and Analysis Report

The Management Discussion and Analysis Report of the year under review is presented in a separate section forming part of this report.

28. Particulars of Employees

As required by the provision of Section 197 of the Companies Act, 2013, read with Rule 5 (1) and 5 (2) (i) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the Employees who were in receipt of remuneration in excess of RS. 60 lakhs per annum during the year is attached to this report.

29. Listing with Stock Exchanges

The Company confirms that it has paid the annual listing fees upto the financial year 2015 - 2016 to BSE where the Company's shares are listed. The Company has also initiated steps to get the shares listed on National Stock Exchange (NSE).

30. Internal Control Systems and their adequacy

The details in respect of internal control systems and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this report.

31. Directors' Responsibility Statement

Pursuant to Sub Clause (c) of Sub Section (3) of Section 134 of the Companies Act, 2013, your Directors state that-

(a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) we 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) we 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) we had prepared the annual accounts on a going concern basis;

(e) we had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

32. Extract of Annual Return

The extract of the annual return in form No. MGT-9 is attached to this report as Annexure 4.

33. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has been employing 417 women employees in various cadres as on 31st March, 2015. The Company has in place an Internal Complaint Committee in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no compliant received from any women employee during the period and hence no complaint is outstanding as on 31st March, 2015 for redressal.

34. Acknowledgements

The Directors sincerely acknowledge the contribution and support from customers, shareholders, depositors, debenture holders, Central and State governments, Bankers, SEBI, Bombay Stock Exchange Limited, Share Transfer Agents, Rating Agencies, Reserve Bank of India, Registrar of Companies, Kerala and Lakshadweep and Other government authorities for the kind co-operation and assistance provided to us. The Directors also place on record their gratitude to the employees and well-wishers for their continued commitment, dedication and co-operation.

For and on behalf of the Board of Directors

Kochi Thomas John Muthoot 25th May, 2015 Chairman

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Mar 31, 2014

The Directors are pleased to present to you the 20th Annual Report together with the Audited Statements of Accounts and the Auditor''s report for the financial year ended March 31, 2014.

Financial Results

(Rs.in 000''s, except per share)

Particulars 2013-14 2012-13

Total Income 158 75 78 107 21 71

Total Expenditure 121 69 58 73 08 01

Profit before Depreciation and other Provisions 37 06 20 34 13 70

Depreciation 78 94 53 35

Provisions and Write offs 2 69 03 1 33 27

Exceptional Items 4 7

Profit before Tax 33 58 27 32 27 15

Provision for Taxation Current Tax 11 78 00 10 80 83

Deferred Tax (32 56) (29 00)

Income Tax adjustment for earlier years (7 73) (61)

Proft after Tax 22 20 56 21 75 93

Basic Earnings Per Share 17.80 17.45

An analysis of the Company''s performance for the current and previous fiscal years reveal that the Company was able to achieve an impressive growth during the year under review. The total loan disbursements during the year under consideration was Rs. 581 62.73 Lakhs as compared to Rs. 431 17 Lakhs for the year ended March 31, 2013. The total income rose to Rs. 1 58 76 Lakhs during 2013 - 2014 as against Rs. 107 22 Lakhs during 2012 - 2013. The total expenditure including depreciation and amortization expenses were Rs. 125 17.50 Lakhs as against Rs. 74 94.64 Lakhs during the previous financial year. The net profits of the Company was Rs. 2220.56 Lakhs as compared to Rs. 2175.93 Lakhs in the previous year. An amount ofRs. 1563.90 Lakhs has been proposed to be transferred to reserves and surplus during the year under review.

The Company raised funds for its working capital resources mainly from banks, the total amount of working capital loans outstanding beingRs. 488 63 Lakhs as at March 31, 2014. Another source of funds for the Company was issue of secured redeemable non convertible debentures under private placement. The debentures issued are secured by way of floating charge on current assets of the Company. The Company has appointed trustees for ensuring that the interests of debenture holders are protected. The debentures outstanding together with interest accrued amounts to Rs. 15 83.68 Lakhs as at March 31, 2014. Further the Company had in the current year raised money by way of Subordinated Debt and Public Deposits. As on March 31, 2014 the total amount due on Subordinated Debt and Public Deposit (including accrued interest) was Rs. 283.85 Lakhs and Rs. 5986.19 Lakhs respectively.

The Company had, in the previous year, also entered into pool buyout arrangement of auto loan (Three wheeler) receivables with Dhanlaxmi Bank Limited. for an outstanding amount of Rs. 3725.84 Lakhs (after deducting 10% for MRR requirement). The aggregate amount outstanding under loan buyout as on March 31, 2014 wasRs. 1092.21 Lakhs.

Dividend

Your Directors have recommended a dividend of 4.50 per share (i.e. 45%) aggregating to Rs. 561.27 Lakhs for the financial year ended March 31, 2014. This would result in an additional cash outflow of Rs. 95.39 Lakhs on account of dividend distribution tax. The Company had during the year 2013 - 2014 transferred an amount of Rs. 2,02,254 to Investor Education and Protection Fund, being unclaimed dividend for the year 2005 - 2006. Members are requested to make claim to the Company for any unclaimed dividend declared since 2006 - 2007.

Share Capital

There were no changes in the share capital of the Company during the year under review.

Directors

As per the erstwhile provisions of the Companies Act, 1956, Mr. Thomas Muthoot and Mr. R K Nair, Directors are to retire by rotation at the ensuing Annual General Meeting. In terms of Section 149 and other applicable provisions of the Companies Act, 2013, an Independent Director should be appointed for a fixed term and is not liable to retire by rotation. Hence Mr. R K Nair and Mr. A P Kurian being Independent Directors on the Board are proposed to be re appointed as Independent Directors for a period of 5 years from the date of AGM (03.09.2014). Mr. Thomas Muthoot, being a non independent director and being eligible for re appointment has offered himself for re appointment, liable to retire by rotation. The Board recommends his appointment as Director.

Mr. Philip Thomas has resigned from the Board citing personal reasons and the same was accepted by the Board at its meeting held on 28.06.2014. The Directors place on record the valuable contributions made by Mr. Philip Thomas during his tenure in office of the Director of the Company and sub committees of the Board.

The Board has appointed Ms. Radha Unni as Additional Director on the Board with effect from 28.06.2014. The details of the qualification and experience of the said Director are given separately in the Annual Report. The Board recommends the appointment of Ms. Radha Unni in the ensuing Annual General meeting as an Independent Woman Director for a period of five years from the date of AGM (03.09.2014).

None of the Directors is disqualified under Section 274(1) (g) of the Companies Act, 1956.

Personnel

The particulars of employees as required under provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011, are attached to this report.

Auditors

M/s K. Venkatachalam Aiyer & Co., Chartered Accountants, retires at the ensuing Annual General Meeting and is eligible for re appointment. Pursuant to Section 139 of the Companies Act, 2013 and the rules made thereunder, the Statutory Auditors are eligible to be appointed for a term of three year from the conclusion of this Annual General Meeting subject to ratification by shareholders at every Annual General Meeting during the term.

The Auditors have confirmed that if re appointed, it would be within the limits and conditions specified under section 141 of the Companies Act, 2013.

Reply to Auditor''s Report

There are no qualifications or adverse remarks mentioned in the Auditors'' Report. The notes to accounts forming part of financial statements are self explanatory and need no further clarification.

Conservation of energy and technology absorption, foreign exchange earnings and outgo

Considering its nature of activities, the following disclosures are made as per the provisions of Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988:

a. The Company has no activities relating to Conservation of energy and technology absorption.

b. There are no foreign exchange earnings or outgo during the period under review.

Directors'' Responsibility Statement

As per the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a. In the preparation of the Annual Accounts for the year ended March 31, 2014, the applicable accounting standards read with the requirements of Schedule VI to the Companies Act, 1956, have been followed with proper explanation relating to material departures, if any;

b. The directors have selected such accounting policies and applied them consistently and made judgements 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 2013 - 2014 and of the profit of the Company for that period.

c. The Directors 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 fraud and other irregularities; and

d. The Directors have prepared the Annual Accounts on a going concern basis.

RBI guidelines

Your Company has complied with the guidelines issued by the Reserve Bank of India on prudential norms covering all areas like income recognition, investment accounting, provisioning for non performing assets and Know Your Customer (KYC) norms.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report annexed hereto forming part of this Report, states performance of the Company and future outlook also.

Corporate Governance

A report on corporate governance together with Auditor''s Certificate on compliance with the conditions of the said clauses, as per the Listing Agreement, forms part of this report. The details of Committees of Board of Directors are contained in the Corporate Governance Report.

Green Initiative

As part of green initiative practice, the Company proposes to effect electronic delivery of its Annual Report in lieu of the paper form to Members. A physical copy of the Annual Report will be sent free of cost to those Members who have not provided their email addresses for receiving the same electronically or specifically requested for physical copy. The copy of the Annual Report is also uploaded in the website of the Company www.muthootcap.com.

Acknowledgements

The Directors sincerely acknowledge the contribution and support from customers, debenture holders, deposit holders, central and state governments, bankers, SEBI, Bombay Stock Exchange Limited, Share Transfer Agents, Reserve Bank of India, Registrar of Companies, Kerala and other government authorities for the kind co operation and assistance provided to us. The Directors also place on record their appreciation to the employees for their continued commitment, dedication and co operation. The Directors also acknowledge the continued support and co operation of the shareholders for the activities and performance of the Company and record their gratitude for the same.

For Muthoot Capital Services Limited

Sd/-

Kochi - 35 Thomas John Muthoot June 28, 2014 Chairman

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Mar 31, 2013

To the Members,

The Directors are pleased to present to you the 19th Annual Report together with the Audited Statements of Accounts and the Auditor''s report forthe financial year ended March 3 1,2013.

Financial Results

(Rs.in 000''s, except per share)

Particulars 2012-2013 2011-2012

Total Income 107,21,71 67,35,22

Total Expenditure 72,76,87 42,91,31

Profit before Depreciation and other Provisions 34,44,84 24,43,91

Depreciation 53,35 31,03

Provisions and Write offs 1,64,41 1,12,35

Exceptional Items 7

Profit before Tax 32,27,15 23,00,53

Provision fortaxation

Current Tax 10,80,83 7,87,60

Deferred Tax (29,00) (36,92)

Income Taxadjustment forearlieryears (61) (1,14)

Profit after Tax 21,75,93 15,50,99

Basic earnings per share 17.45 13.12

An analysis ofthe Company''s performance for the current and previous fiscal years reveal that the Company was able to achieve an impressive growth during the year under review. The total loan disbursements during the year under consideration was Rs. 431 16 lakhs compared to Rs. 28845 lakhs forthe year ended March 31, 2012. The total income rose to Rs. 10721.71 lakhs during 2012 - 2013 as againstRs. 6735.22 lakhs during 201 I - 2012. The total expenditure including depreciation and provisions was Rs. 7494.63 lakhs as against Rs. 4434.69 lakhs during the previous financial year. The net profits ofthe Company stood at Rs. 2175.93 lakhs as compared to Rs. 1550.99 lakhs in the previous year marking an increase of40.30%. An amount ofRs. 1592.23 lakhs has been proposed to be transferred to reserves and surplus duringthe year under review.

The Company raised funds for its working capital resources mainly from banks, the total amount of working capital demand loan outstanding beingRs. 32430 lakhs as at March 31, 2013. Another source of funds forthe Company was issue of secured redeemable non convertible debentures under private placement. The debentures issued are secured by way of floating charge on current assets of the Company. The Company has appointed trustees for ensuring that the interests of debenture holders are protected. The debentures outstanding together with interest accrued amounts to Rs. 2285.51 lakhs as at March 3 1,2013.

The Company had also entered into pool buyout arrangement of auto loan (3 wheeler) receivables with Dhanlaxmi Bank Ltd for an outstanding amount of Rs. 3725.84 lakhs (after deducting 10% for M RR requirement) as on September

24,2012. The aggregate amount outstanding under loan buyout as on March 3 1,2013 is Rs.2781.28 lakhs.

Dividend

Your Directors have recommended a dividend of Rs. 4 per share (i.e. 40 %) aggregating to Rs. 498.91 lakhs for the financial year ended March 3 1, 2013. This would result in an additional cash outflow ofRs. 84.79 lakhs on account of dividend distribution tax. The Company had during the year 2012 - 2013 transferred an amount of Rs. 1,34,984 to Investor Education and Protection Fund, being unclaimed dividend forthe year 2004-2005. Members are requested to make claim to the Company for any unclaimed dividend declared since 2005 - 2006.

Share Capital

There were no changes in the share capital duringthe year under review.

Directors

Mr. A. R Kurian and Mr. Philip Thomas, retire by rotation atthe ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.

None ofthe Director is disqualified underSection 274( I )(g) ofthe Companies Act, 1956.

Personnel

The particulars of employees as required under provisions of Section 217 (2A) ofthe Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 201 I, are attached to this report.

Auditors

M/s K. Venkatachalam Aiyer & Co., Chartered Accountants, retire atthe ensuing Annual General Meeting and are eligible for re - appointment. They have confirmed that if re-appointed, it would be within the limits specified under section 224 (IB) ofthe Companies Act, 1956.

Reply to Auditor''s report

There are no qualifications or adverse remarks mentioned in the Auditors'' report. The notes to accounts forming part of financial statements are self-explanatory and need no further clarification.

Conservation of energy and technology absorption, foreign exchange earnings and outgo

Considering its nature of activities, the following disclosures are made as perthe provisions of Section 217( I )(e) ofthe Companies Act, 1956, read with the Companies (disclosure of particulars in the report of Board of Directors) Rules, 1988:

a. The Company has no activities relatingto conservation of energy and technology absorption.

b. There are no foreign exchange earnings oroutgo duringthe period under review.

Directors'' Responsibility Statement

As perthe provisions of Section 217(2AA) ofthe Companies Act, 1956, the Directors hereby confirm that:

a. In the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards read with the requirements of Schedule VI to the Companies Act 1956, have been followed with proper explanation relatingto material departures, if any;

b. The directors 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 ofthe financial year 2012 - 2013 and ofthe profit ofthe Company for that period;

c. The Directors have taken proper and sufficient care forthe 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 fraud and other irregularities; and

d. The Directors have prepared the annual accounts on agoing concern basis.

RBI guidelines

Your Company has complied with the guidelines issued by the Reserve Bank of India on prudential norms covering all areas like income recognition, investment accounting, provisioning for non performing assets and Know Your Customer (KYC) norms.

Management Discussion and Analysis Report

The management discussion and analysis report annexed hereto forming part of this Report, states performance ofthe Company and future outlook also.

Corporate Governance

A report on corporate governance together with Auditor''s certificate on compliance with the conditions ofthe said clauses, as perthe Listing Agreement, forms part of this report. The details of Committees of Board of Directors are contained in the Corporate Governance Report.

Green Initiative

As part of green initiative practice, the Company proposes to effect electronic delivery of its Annual Report in lieu ofthe paperformto Members. A physical copy ofthe Annual Report will be sent free of cost to those Members who have not provided their email addresses for receiving the same electronically or specifically requested for physical copy. The copy of Annual Report is also uploaded in the website ofthe Companywww.muthootcap.com.

Acknowledgements

The Directors sincerely acknowledge the contribution and support from customers, shareholders, debenture holders, central and state governments, bankers, SEBI, Bombay Stock Exchange Ltd, Share Transfer Agents, Reserve Bank of India, Registrar of Companies, Kerala and other government authorities for the kind co - operation and assistance provided to us. The Directors also place on record their gratitude to the employees for their continued commitment, dedication and co-operation.

For and on behalf of Board of Directors

sd/-

Kochi-35 Thomas John Muthoot

May5,20l3 Chairman

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Mar 31, 2012

The Directors present to you the 18th Annual Report together with the Audited Statements of Accounts for the year ended March 31, 2012.

Financial Results

PARTICULARS (Rs. in 000's, except per share)

2011 - 2012 2010 - 2011

TOTAL INCOME 67 35 22 37 17 61

TOTAL EXPENDITURE 42 91 31 21 94 16

PROFIT BEFORE DEPRECIATION AND OTHER PROVISIONS 24 43 91 15 23 45

Depreciation 31 03 14 33

Provisions and Write offs 1 12 35 58 50

PROFIT BEFORE TAX 23 00 53 14 50 62

Provision for taxation:

Current Tax 7 87 60 5 07 00

Deferred Tax (36 92) (23 17)

Income Tax adjustment for earlier years (114) 25

PROFT AFTER TAX 15 50 99 9 66 54

Basic earnings per share 13.12 12.09

Your Company has been constantly focused on improving its revenue and maintaining a sustainable growth. This is evident from the financial performance of the Company during the year under review. As on 31st March, 2012, the total revenue was Rs. 6735.22 lakhs as against Rs. 3717.61 lakhs in the previous year registering a growth of 81.17%. The total expenses rose to Rs. 4291.31lakhs from Rs. 2194.16 lakhs resulting in an increase of 95.58%. The net profits of your Company stood at Rs. 1550.99 lakhs as compared to Rs. 966.54 lakhs in the previous year reporting an increase of 60.47%.

Based on the requirement under section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

1) In the preparation of the Annual Accounts for the year ended March 31, 2012, the applicable accounting standards read with the requirements of Schedule VI to the Companies Act 1956, have been followed with proper explanation relating to material departures, if any;

2) The Directors have selected such accounting policies and applied them consistently, except for the change in accounting policy explained below, 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 as at March 31, 2012, and of the profit of the Company for that period :

a. Presentation and disclosure of financial statements

During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

b. Interest on hypothecation loans was recognized on accrual basis up to the current reporting date as against for the completed months up to the previous year. This resulted in an increase of operating revenue by Rs. 412.39 Lakhs for the year ended March 31, 2012.

3) The Directors 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 fraud and other irregularities; and

4) The Directors have prepared the Annual Accounts on a going concern basis.

The Management Discussion and Analysis Report annexed hereto, forming part of this Report, provides interalia, the performance of the Company and the future outlook also.

As per the Listing Agreement, a report on Corporate Governance together with Auditors' Certificate on compliance with the conditions of the said clause is also provided as an annexure to this Report.

Your Company has complied with the guidelines issued by the Reserve Bank of India on prudential norms covering all areas like income recognition, investment accounting, provisioning for non performing assets and Know Your Customer (KYC) norms.

Changes to Share Capital

During the year under review, the Company had made a Rights Issue of 65,00,000 Equity Shares at an issue price of Rs. 10 each for cash at a price of Rs. 80 (including a share premium of Rs. 70) per equity share aggregating Rs. 52,00,00,000. The Rights Issue raised Rs. 47,78,06,000. The issue was made for the following purposes namely:

a. Repayment of unsecured loans taken from one of the promoters

b. For general corporate purposes of the Company

c. To meet the expenses of the issue.

Out of the Rs.47,78,06,000 raised, Rs. 5,97,25,750 was credited to Share Capital and Rs. 41,80,80,250 was credited to Securities Premium account. Out of the proceeds of the issue Rs. 42,72,78,494 was utilized for repayment of loan from one of the promoters, Rs.36,82,608 utilized for meeting the rights issue expenses and the remaining amount of Rs.4,68,44,898 utilised for general corporate purposes. The Rights Issue opened for subscription on Monday, 11th July, 2011 and closed on Monday, 25th July, 2011. The Basis of Allotment was finalized on Wednesday, 3rd August, 2011 in consultation with the Bombay Stock Exchange Limited ("BSE"). The eligible shareholders were allotted equity shares on Thursday, August 04, 2011. Subsequent to the Rights Issue the Subscribed capital of the Company has increased from Rs. 6,50,00,000 to Rs. 12,47,25,750.

The Board of Directors of the Company wishes to thank all the investors for their response to the Issue. The proceeds from the Issue has helped the Company to reduce its debts and cost of funds and to increase its profitability.

Dividend

Your Directors have recommended a dividend of Rs.3.50 per Equity Share of Rs.10/- for the financial year ended 31.03.2012. The dividend, if approved at the forthcoming AGM, will be paid to members whose name appear in the Register of Members as on 24.07.2012. in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners.

An unclaimed dividend of Rs. 120936/- pertaining to the year 2003 - 04 was transferred to Investor Education and Protection Fund during the year 2011 - 2012.

Directors

Directors, Mr. Thomas John Muthoot and Mr. R.K.Nair, retire by rotation at the forthcoming AGM, and being eligible offer themselves for re-appointment.

Auditors

The auditors of the Company, M/s K. Venkitachalam Aiyer & Co., Chartered Accountants, are eligible for re-appointment.

Reply to Auditor's Report

The Auditor's Report to the members does not contain any qualification or adverse remarks on the financial reporting and disclosure of the Company. The Notes to Accounts forming part of the financial statements are self-explanatory and need no further explanation.

Personnel

The particulars of employees as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011, are attached to this report.

Conservation of energy and technology absorption

The Company being in the business of financial service has not consumed energy of any significant level and thus considering its nature of activities no comments are necessary in respect of energy conservation, reduction of energy consumption and technology absorption as required to be provided under Section 217(1)(e) of the Companies Act 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988.

Foreign Exchange earnings and outgo

There were no foreign exchange earnings or outgo during the period under review.

Acknowledgements

The Directors take this opportunity to thank the customers, shareholders, debenture holders, Central and State Governments, bankers, SEBI, Bombay Stock Exchange Limited, share transfer agents, Reserve Bank of India, Registrar of Companies, Kerala, and other Government authorities for the sincere co-operation and assistance provided to us. The Directors also thank the employees for their commitment, dedication and co-operation.

For and on behalf of Board of Directors

Kochi – 35 Thomas John Muthoot

11.06.2012 Chairman

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Mar 31, 2011

The Directors are pleased to present the 17th Annual Report along with the Balance Sheet as on 31-03-2011 and the Profit and Loss Account for the year ended on that date.

Financial Results

The financial performance of the Company for the year ended 31st March, 2011, is summarized below:

PARTICULARS Year Ended 31.03.2011 Year Ended 31.03.2010 Amount (Rs.) Amount (Rs.)

TOTAL INCOME 377292259 224755727

TOTAL EXPENDITURE 224949020 114854613

PROFIT BEFORE DEPRECIATION

AND OTHER PROVISIONS 152343239 109901114

Depreciation 1433299 918821

Provision & Write offs 5848652 240302

PROFIT BEFORE TAX 145061288 108741991

Provision for taxation

Current tax 50700000 37220000

Deferred Tax (2317200) (174000)

Income Tax adjustment for earlier years 24593 (32628)

PROFIT AFTER TAX 96653895 71728619

Add:Balance brought forward from previous year 100432855 62115936

AMOUNT AVAILABLE FOR

APPROPRIATIONS 197086750 133844555

Less:Appropriations

Transfer to Statutory Reserve 19400000 14400000

Proposed Dividend 19500000 16250000

Dividend Tax 3163400 2761700

Surplus carried to Balance Sheet 155023350 100432855 Results Of Operations

During the financial year the income from operation amounted to Rs.3772.92 lakhs as against Rs.2247.56 lakhs during the previous year, recording a growth of 67.87%. The profit after tax increased from Rs.717.29 lakhs to Rs.966.54 lakhs recording an impressive growth of 34.75 %, compared to last year figures. The Management is continuing their efforts for the future performance also by adopting proactive strategies.

Dividend

Your Directors have recommended a dividend of Rs.3.00 Per Equity Share of Rs.10/- for the financial year ended 31.03.2011. The dividend will be paid to members whose name appear in the Register of Members as on 11th July, 2011, in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners.

During the year 2010 - 2011, unclaimed dividend of Rs.1,15,713/- pertaining to the year 2002 - 03 was transferred to Investor Education and Protection Fund. The unclaimed dividend for the year 2003 - 04 shall be transferred to the Fund on 21st September, 2011. Shareholders who have not received their dividends are requested to write to the Company for revalidating their dividend warrants or issuing duplicate warrants.

Share Capital

The Company has not issued any shares or any other security including ADR/GDR/FCCB/Warrants/Bonds during the year.

RBI Guidelines

Your Company has complied with the guidelines issued by the Reserve Bank of India on prudential norms covering all areas like income recognition, investment accounting, provisioning for non performing assets and Know Your Customer (KYC) norms.

Corporate Governance

The Company has implemented all the stipulations prescribed under Clause 49 of the Listing Agreement. A report on Corporate Governance together with Auditors Certificate on compliance with the conditions of the said clause is provided as an annexure to this report.

Rights Issue

The Company had obtained the consent of shareholders during the Annual General Meeting held on 24th September, 2009, for making a rights issue of equity shares ( 65 00 000 equity shares of Rs.10 each) in the ratio of 1:1. The Company had filed the draft letter of offer with SEBI and is awaiting the final approval. The Board has fixed the rights issue price at Rs.80/- per share and the record date for the same was 25.05.2011. M/s Karvy Investor Services Limited have been appointed as the Merchant Banker for the rights issue.

Directors

Mr. Philip Thomas, Director, and Mr. Thomas Muthoot, Director, are liable to retire by rotation and being eligible offers themselves for re-appointment at the ensuing Annual General Meeting. Your Board recommends their re-election.

Directors Responsibility Statement

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that :

1) In the preparation of the Annual Accounts for the year ended March 31, 2011, the applicable accounting standards read with the requirements of Schedule VI to the Companies Act, 1956, have been followed with proper explanation relating to material departures, if any;

2) The Directors 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 as at March 31, 2011, and of the Profit of the Company for that period.

3) The Directors 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 fraud and other irregularities; and

4) The Directors have prepared the Annual Accounts on a going concern basis.

Auditors

M/s K. Venkatachalam Aiyer & Co., Chartered Accountants, Building No. 41/3647 B, Providence Road, M.G.Road North End, Ernakulam, Kochi - 682 018, Statutory Auditors of the Company will hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company had received a letter from them that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956, and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act. The Board recommends their re-appointment.

Reply to Auditors Report

The Auditors Report to the members does not contain any qualification or adverse remarks on the financial reporting and disclosure of the Company. The Notes to Accounts, forming part of the financial statements, are self-explanatory and need no further explanation.

Personnel

None of the employees are in receipt of remuneration in excess of the limits as laid down under provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975, as amended.

Conservation of energy and technology absorption

The Company being in the business of financial service has not consumed energy of any significant level and thus considering its nature of activities no comments are necessary in respect of energy conservation, reduction of energy consumption and technology absorption as required to be provided under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988.

Foreign Exchange earnings and outgo

There was no foreign exchange earnings or outgo during the period under review.

Acknowledgments

Your Directors take this opportunity to thank the customers, shareholders, debenture holders, Central and State Governments, Bankers, Bombay Stock Exchange Limited, Merchant Banker, Share Transfer Agents, Reserve Bank of India, Registrar of Companies, Kerala, SEBI and other Government Authorities for the sincere co-operation and assistance provided to us. Let us together thank our executives, staff and other employees of the Company for their committed services which has helped us in attaining this growth.

For and on behalf of the Board

Thomas John Muthoot Chairman

Kochi – 35 Date : 01.06.2011

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Mar 31, 2010

The Directors are pleased to present their 16th Annual Report with audited accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(All amounts in lakhs except EPS)

Rs.

Operating Results 31.03.2010 31.03.2009 31.03.2008

Total Income 2,247.56 1,738.62 1,225.40

Profit before tax 1,087.42 835.15 611.53

Tax 370.13 293.40 211.38

Profit after tax 717.29 541.75 400.15

Net worth 2,136.92 1,609.75 1,220.09

Capital employed 10,087.34 6,937.07 4,686.54

Return on net worth (%) 33.57% 33.65% 32.80%

Earning per share 11.04 8.33 6.16

REVIEW OF PERFORMANCE

The total Income of the Company registered a growth of 29.27 % from Rs. 1,738.62 lakhs during the previous year to Rs. 2,24756 lakhs in the current year. This year the Company succeeded in restricting the interest expenses to Rs. 691.60 lakhs compared to Rs. 615.29 lakhs in the last year, which is an increase of only 12.40%. Due to the cost control measures adopted by the Company, the profit before tax recorded a jump of 30.21% from Rs. 835.15 lakhs during the last year to Rs. 1,087.42 lakhs this year. The net profit increased from Rs. 541.75 lakhs last year to Rs. 717.29 lakhs in the year ended 31.03.2010, recording an increase of 32.40%. The management is taking the maximum efforts for the future performance also by adopting proactive strategies.

APPROPRIATIONS

The net profit of Rs. 717.29 lakhs along with a sum of Rs. 621.16 lakhs brought forward from the previous year aggregated to Rs. 1,338.45 lakhs which is appropriated as under:

Appropriations Rs. in lakhs

Transfer to Statutory Reserves 144.00

Proposed Dividends 162.50

Dividend Tax 27.62

Balance Carried to Balance Sheet 1,004.33

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.50 per share for the year-ended 31.03.2010 subject to the approval of Members at the ensuing Annual General Meeting. Dividend will be paid to (i) all members whose name appear in the Register of Members as on 31st July, 2010 and (ii) all members whose name appear as beneficial owners, as furnished by National Securities Depository Limited and Central Depository Services (India) Limited for the purpose as on that date.

DIRECTORS

Mr. A.P. Kurian and Mr. R.K. Nair retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received confirmation that their appointment is within the limits prescribed under section 224(1B) of the Companies Act, 1956.

RBI GUIDELINES

The company has complied with the guidelines issued by the Reserve Bank of India on prudential norms covering all areas like income recognition, investment accounting, provisioning for non performing assets and know your customer (KYC) norms.

CORPORATE GOVERNANCE

Your company has adopted the best practices of corporate governance. A separate report on corporate governance together with certificate from auditors of the Company M/s. K. Venkatachalam Aiyer & Co., Chartered Accountants, confirming compliance with Clause 49 of Listing Agreement is enclosed and forms part of this Report.

The Management Discussion and Analysis is given as a separate statement forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

i) Applicable Accounting Standards have been followed in preparation of the annual accounts with proper explanation relating to material departures, if any.

ii) They have selected such accounting policies in consultation with the Statutory Auditors and applied them consistently and made judgments and estimates that were 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 or Loss of the Company for the period under review.

iii) 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 fraud and other irregularities.

iv) They have prepared the annual accounts on a going concern basis.

PERSONNEL

None of the Employees is in receipt of remuneration in excess of the limit as laid down under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The Company being in the business of financial service has not consumed energy of any significant level and thus considering its nature of activities no comments are necessary in respect of energy conservation, reduction of energy consumption and technology absorption.

FOREIGN EXCHANGE EARNINGS AND OUTGO

There was no foreign exchange earnings and outgo during the period under review.

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the trust reposed in your Company and the assistance and co-operation received from Reserve Bank of India, Registrar of Companies, Kerala, Bombay Stock Exchange Limited, Bankers, Share Transfer Agents, other Government Authorities, Shareholders, Debenture holders and clients and look forward to their continued support and co-operation.

Your Directors also wish to express their appreciation to all the employees of the Company for their dedication, commitment and wholehearted support and co-operation extended. To them goes the credit for the Companys achievements.

And to you our Shareholders, your Directors are deeply grateful for the confidence and faith that you have always reposed in us.

On behalf of the Board of Directors

Kochi-35 Thomas John Muthoot

12.05.2010 Chairman