CHAPTER – 1

INTRODUCTION

INTRODUCTION

A project is a job preparation for while lapel and expert careers. Projects are a part of the
curriculum of Visvesvaraya technological university, Belagavi for MBA students which place
vital role to bridge the gap between the theories learnt and practical issues of management
aspects. it is also support the main purpose of training which is to know the practical
implications policies and programs of company.

A study is very important to know the functioning of various aspects of marketing. A detail
analysis of each elements to knowing there individuals functions and there part in the
development of a products channel distribution.

Generally a study relating to specific topic consists of our place of data and services involving
the students and association. Students be able to also use the projects to decide if they have an
interest in exacting career, to create a system of contacts, to acquire recommendation later to
include there curriculum vitae or to increase school credit. The finding rendered by the project
study would be a implication benefits to the employer has it would help in future improvements.

My project was carried out at Muthoot finance Limited, Chikkabalapur. The Six weeks of
interaction with the company gave me insight into the organization and functioning of the
company.
INDUSTRY PROFILE
India has a different financial sector undergoing rapid expansion, both in terms of strong
growth of existing financial services firms and new entities entering the market. The sector
comprises commercial banks, insurance companies, non-banking financial companies, co-
operatives, pension funds, mutual funds and other smaller financial entities. The banking regulator
has allowed new entities such as payments banks to be created recently thereby adding to the types
of entities operating in the sector. However, the financial sector in India is predominantly a banking
sector with commercial banks accounting for more than 64 per cent of the total assets held by the
financial system.
He Mutual Fund (MF) industry in India has seen rapid growth in Assets Under
Management (AUM). Total AUM of the industry stood at Rs 25.03 trillion (US$ 356.01 billion)
between April-November 2019. At the same time the number of Mutual fund (MF) equity
portfolios reached a high of 78.6 million as of June 2019.
Another crucial component of India’s financial industry is the insurance industry. The insurance
industry has been expanding at a fast pace. The total first year premium of life insurance
companies reached Rs 197,587.23 crore (US$ 34.10 billion) during Financial Year 2019.
Along with the secondary market, the market for Initial Public Offers (IPOs) has also witnessed
rapid expansion. The total amount of Initial Public Offerings (IPO) increased to US$ 1.9 billion
raised from 37 between April – June 2019.
Over the past few years India has witnessed a huge increase in Mergers and Acquisition
(M&A) activity. In H12019, 74 deals of acquisition took place in financial sector. The total value
of such transactions was US$ 4.177 billion.
Furthermore, India’s leading bourse Bombay Stock Exchange (BSE) will set up a joint
venture with Ebix Inc to build a robust insurance distribution network in the country through a
new distribution exchange platform.

 Initiative (BII) along with JP Morgan, Michael and Susan Dell Foundation, and the Bill
and Melinda Gates Foundation.
 The private equity and venture capital (PE/VC) investments reached US$ 25.20 billion
between January to October 2019.*
GOVERNMENT INITIATIVES
 In December, 2019, Securities and Exchange Board of India (SEBI) proposed direct
overseas listing of Indian companies and other regulatory changes.
 Bombay Stock Exchange (BSE) introduced weekly futures and options contracts on
Sensex 50 index from October 26, 2019.
 In September 2018, SEBI asked for recommendations to strengthen rules which will
enhance the overall governance standards for issuers, intermediaries or infrastructure
providers in the financial market.
 The Government of India launched India Post Payments Bank (IPPB), to provide every
district with one branch which will help increase rural penetration. As of August 2018,
two branches out of 650 branches are already operational.

Gold has always been a valued commodity. Particularly in India, it is considered as

auspicious, and used in the form of jewelry, coins and other assets. Due to their high value,
people have been taking loans against gold ornaments for centuries. Till about a decade ago,
most of such lending activities used to take place in the unorganized sector through pawnbrokers
and money lenders. However, the scenario has changed with the entry of organized players.
According to our latest report, in the past few years, banks and non-banking finance companies
(NBFCs) have made a significant presence in the gold loan market. It is anticipated that the
organized gold loan market will grow at a compound annual rate of 25.5% during FY 2012 to FY
2015-16.
Our comprehensive research report, “Gold Loan Market in India”, finds that the
organized gold loan market has grown tremendously over a period of time, thanks to the
changing consumer perception about gold loan, and rising loan requirements. A new trend of
gold financing for purchasing has also been observed in the industry. For providing our clients a
deep insight into the Indian gold loan market, we also conducted a primary research that studied
the consumer behavior in the market. We found that the consumer outlook is changing as people
are increasingly taking gold loans to meet their various short-term needs.

Non-Banking Financial Institute

A non-banking financial institution (NBFI) or non-bank financial company (NBFC) is a

foundation that does not have a full financial permit or isn't managed by a national or universal
Based on their liability structure, the NBFCs are classified into two broad categories: (a) Deposit
taking NBFCs, and (b) Non-deposit taking NBFCs. As on March 31, 2015-16, there were 11,842
NBFCs registered with the Reserve Bank; out of which 220 were deposit-taking (NBFCs-D) and
11,622 were no deposit taking (NBFCs-ND) entities. The two existing residual Non-Banking
Finance Companies (RNBCs)2 are in the process of winding up their businesses.

The role of NBFC sector in the Indian financial system has become critical in terms of its size,
spread and niche areas of operations. Many of the larger NBFCs have grown bigger and become
more connected with other financial entities, necessitating periodical review of the regulatory
framework for this sector. During the year, the Reserve Bank, with a view to addressing the
regulatory gaps, arbitrage and risks associated with NBFCs, initiated a host of measures to
strengthen regulation and supervision of NBFCs and harmonise their regulations with those of
the banks in a phased manner as also to foster financial stability

Non-deposit taking systemically important NBFCs

 Non-deposit taking NBFCs with an asset size of `1 billion or more were being classified
as systemically important NBFCs (NBFCs-ND-SI) till November 2014-15. Since then, an
upward revision in the asset size criterion for classifying NBFCs-ND-SI4 has been
effected, which now stands at `5 billion. During 2014-15-15, the balance sheet of
NBFCs-ND-SI expanded signifi cantly on the back of marked growth in disbursement of
loans and advances on the asset side and sharp rise in borrowings on the liability side.

 Loans and advances extended by NBFCs-NDSI posted signifi cant growth at 15.5 per
cent during 2014-15-15, in contrast to the slowdown in commercial bank’s non-food
credit during the same period (Chart 4.6). Strong growth in credit extended by the NBFC
- Infrastructure fi nance companies (IFCs), microfi nance companies and loan companies
contributed to sturdy growth in the loan portfolio of NBFCs-ND-SI. Among the sectors,
infrastructure, medium and large-scale industries, and the transport sectors contributed to
strong growth in credit off-take of the NBFCs-ND-SI.

 During 2014-15-15, NBFCs-ND-SI raised funds mainly through debentures and

commercial papers. Borrowings from banks, which earlier constituted the main source of
funding, has been progressively reduced. A notable feature is the rising exposure of
 mutual funds to the financial instruments floated mainly by the NBFC-IFCs, LCs and
NBFC-Micro Finance Institutions (NBFC-MFIs).

Growth of NBFCs

RBI's cash related security report says NBFC advances broadened 16.6% in the year, twice as
snappy as the 8.8% credit improvement over the keeping cash portion.

The general non-performing advances of non-dealing with a record cash related association
(NBFC) fragment is presumably going to addition to 7.8% in the budgetary year 2016-17-17
from a normal 6.7% in the current money related, says a report.

"The general gross non-performing assets(NPA) extent of non-sparing cash budgetary

companies(NBFCs) transversely finished asset classes is most likely going to rise to 7.8% by
walk 2017-18, from 6% at end-September 2015-16 and a normal 6.7% in FY16", India
examinations and research said in a report.

The rating office said NBFCs will continue picking up credit markets offer to the impediment of
banks, as banks fight to raise capital for a productive move to the Basel-III organization, which is
driving them to diminish credit improvement. The retail-connected with NBFCs will well
ordered decrease their single thing center by expanding into other asset classes, mainly secured
in nature.

Charges associated with Gold Loan:

 Loan processing charge: While some of the service providers may waiver these charges,
some banks do charge a processing fee.
 Valuation Charge: These are the charges to be paid to the valuator. These charges are also
specific to the service provider and those having in-house valuators do not charge any extra
amount for valuation.
 Late payment penalty: Most of the service providers charge late payment penalty and this too
can vary from one institution to the other.
 Pre-payment penalty: Most of the service providers do not charge a penalty for repayment
before the loan tenure is over. But some may still have this charge in place.
 It is advisable to check with the loan provider before taking the loan. These charges could
change the amount that you may finally receive.
Advise On Gold Loans
 Go for gold loan if you are confident of returning the money in time otherwise, you will be
penalized and all your pledged gold will come under the control of bank or finance company.
 While opting for gold loan check the interest rates in various banks and private finances. If
you go for private lenders then better to go with one who has been in this business for many
years.

As far as you are not emotionally linked to your gold ornaments this is the best option. However
nothing like this can help you during your difficulties and with the fall of dollars and euro many
think gold is the only safe thing left.

COMPANY PROFILE:

ORIGIN OF THE MUTHOOT FINANCE

Muthoot Finance Ltd.

Type Public
Traded as BSE: 533398
BSE SENSEX Constituent
Industry Finance
Hotels & Resorts
Information technology
 Broadcast Media
Healthcare
Education
Energy & Power Generation
Infrastructure
Founded 1887 by Muthoot Ninan Mathai
Headquarters Kochi, India
Key people M G George Muthoot (Chairman)
George Alexander Muthoot (MD)
George Jacob Muthoot (Whole-Time Director Director)
George Thomas Muthoot (Whole-Time Director)
Employees 24224

History of Muthoot finance:

Muthoot Finance Ltd is the largest gold company in India. The company provides personal and
business loans secured by gold jewellery, or Gold Loans, primarily to individuals who possess
gold jewellery but could not access formal credit within a reasonable time, or to whom credit
may not be available at all, to meet unanticipated or other short-term liquidity requirements. The
company is headquartered in Kerala. In addition to their Gold Loans 1business, the company
provides money transfer services through their branches as sub- agents of various registered
money transfer agencies.

They have commenced providing collection agency services. They also operate three
windmills of 1.25 MW each in the state of Tamil Nadu. Muthoot Finance Ltd was incorporated
on March 14, 1997 as a private company with the name The Muthoot Finance Pvt Ltd. The
company is promoted by M G George Muthoot, George Thomas Muthoot, George Jacob
Muthoot and George Alexander Muthoot. The company's operating history evolved over a period
of 70 years since M George Muthoot (the father of the promoters) founded a gold loan business
in 1939 under the heritage of a trading business established by his father, Ninan Mathai Muthoot,
in 1887. In the year 2001, the company obtained the license from RBI to function as an NBFC.
In the year 2005, as per the scheme of amalgamation.
 Muthoot Enterprises Private Ltd was amalgamated with the company with effect from
March 22, 2005. In May 16, 2007, the name of the company was changed from The Muthoot
Finance Pvt Ltd to Muthoot Finance Pvt Ltd. During the year 2008-09, the company opened 278
new branches across various states. Also, they opened regional offices in Sales and
Visakhapatnam. In November 18, 2008, the company was converted into public limited company
and the name was changed to Muthoot Finance Ltd. They obtained fresh RBI license to function
as an NBFC without accepting public deposits, consequent to change in name. During the
year2009-10, the company added 620 new branches. As per the scheme of de-merger, the radio
business of the company was de-merged and transferred to Muthoot Broadcasting Pvt Ltd with
effect from January 01, 2010. The company opened 316 new branched between April 2010 to
August 2010. As of August 31, 2010, they had 1,921 branches located in 20 states and two union
territories in India. The Company intends to continue to grow their loan portfolio by expanding
their network through the addition of new branches. The company in the year 2018 totally have
in 29 states, 4303 branches, 22000 team members.

BUSINESS DIVISIONS

Muthoot Finance promotes “GOLD POWER”, a concept which emphasizes mobilizing

household Gold possessions (ornaments), estimated to be more than 20000 tones, in times of
financial crunch. The services can be used by anyone from any economic section of society, with
minimal paperwork and hindrances. Muthoot Finance privately placed 4% of its paid up capital
to Private Equity players - Barings India and Matrix Partners India for Rs.1.57 billion, hence
valuing the earlier privately held company at over $1 billion. In terms of market capitalization,
Muthoot Finance Ltd is the second largest company in Kerala, first being Federal Financial
institutes.

Muthoot Finance Chickaballapur

Muthoot Finance restricted may be a gold finance company. the corporate may be a non-banking
monetary company (NBFC), that is engaged in providing loan (financing) against collateral of
gold jewelers. The corporate operates through 2 segments: finance and Power Generation. it's
came upon its branch in Chikkaballapur district that was started on 2011 and settled at pillappa
advanced, Chickaballapur city. it's with success in operation from past six years by providing
totally different services like finance gold transactions, the corporate offers interchange services,
cash transfers, wealth management services, travel and touristry services, and sells gold coins at
Muthoot Finance Branches .loans against collateral of gold jewelry primarily to people having no
access to formal credit from the bank among cheap amount to satisfy their short term capital
necessities. the target market of Muthoot Finance incorporates non-public firms, merchants,
agriculturists, dealers, SME entrepreneurs, and salaried individuals.

Established 05-06-2011
Number of accounts
3356 accounts
Opened

Profit -750000

Number of employees 8 members

PROMOTERS

Name Holding Dec 2018 No of holders

% shares

Individuals/Hindu undivided 73.51 294,463,872 13

Family

M G George Muthoot 11.62 46,551,632 1

George Alexander Muthoot 10.89 43,630,900 1

George Jacob Muthoot 10.89 43,630,900 1

George Thomas Muthoot 10.89 43,630,900 1

Susan Thomas 7.49 29,985,068 1

George M Jacob 3.76 15,050,000 1

Anna Alexander 3.73 14,935,068 1

Elizabeth Jacob 3.73 14,935,068 1

Sara George 3.37 13,519,336 1

Eapen Alexander 1.88 7,525,000 1

George M Alexander 1.88 7,525,000 1

George M George 1.69 6,772,500 1

Alexander M George 1.69 6,772,500 1

VISION, MISSION AND QUALITY POLICY

Vision
Touching the lives of millions with customer-centric approach nourished in a milieu that enables
creation and innovation

Mission
The concentrate of the organization is on making liquidity with a benefit class, to be specific
gold, which has the biggest customer advertise in India. They consider it to be one of the
superior methods for making riches in the economy.
QUALITY POLICY

Muthoot Finance Ltd,our quality policy will carry out it's activities in the economic
development, society progress and environmental hazards with the and core objective of
improving quality of life. It has been a constant endeavour of the company to rightfully follow
our vision and values up keeping it with good corporate governance to meet the expectations of
our customers, employees, shareholders and society at large.

 We will do a transparent and a honest business and maintain privacy in handling our
stakeholders
 We will continue to improvise our quality of service for our customers and ensure
customer satisfaction at all levels
 We will work towards in maintaining a employees, customer, and society friendly
environment in our day to day activities.

PRODUCTS/ SERVICE PROFILE

Information Technology

Muthoot Systems and Technologies Pvt Ltd: Operating under the brand Emsyneis the
Information technology arm of the Muthoot Group, is headquartered in Cochin. The company
has been operating for over the past 15 years in the IT sector. Their client list includes US
companies such as ARC group, PA, Court Port LLC, SVM, and JAL International.

 Precious Metals
Muthoot Precious Metals Corporation: Established in May 2006, the company sells coins
& bars of 999 Pure 24 Carat gold and silver throughout India. They carry out the sales of these
bars and coins through more than 4000 branches of Muthoot Finance Ltd. MPMC imports gold
bullion from Switzerland and converts them into gold coins of smaller denominations so as to
suit the investment requirements of people from different income groups. MPMC is one of the
leading sellers of Gold Coins in retail market. Gold Coins/Bars are sold in different
denominations up to 50gms and silver coins in 20, 50 & 100gms denominations.

Company offers the unique and one of its kind schemes to book gold on today's rate and
pay later in flexible installments. Most of the gold & silver coins are imprinted with the images
of deities and monuments such as Goddess Lakshmi, LordGanesha, Lord Ayyappan,
Venkateswara Swami (Bajaj), Our lady of Velankanni, St.Alphonsa, St.Gregarious, Lord Sri
Padmanabha, GoldenTemple, Chatrapathi Shivaji, Mary Matha, St.George, etc. MPMC also
launched a special Collector’s Edition 8gms Gold Coin for the Muthoot Group's partnership with
the Delhi Daredevils, Delhi's IPL team.

 Money transfer
Muthoot Finance Ltd: Money transfer is a service provided by Muthoot Finance since
2002. As of December 2012, there are 7 inward remittances that Muthoot Finance offers Union,
express Instant Cash, Transfect, Money gram Global Money.
 Foreign exchange
Muthoot Exchange Company Pvt. Ltd: The Foreign exchange division of the Muthoot
Group is head quartered in Kerala. Customers can avail this service at select Muthoot Finance
Ltd. Outlets across India.

 Securities

Muthoot Securities Ltd: Established on 28 May 2008, Muthoot Securities Ltd. is a

member of various stock exchanges namely NSE, BSE and MCX-SX. MSTL. It operates over
200 business centers in Kerala, Tamil Nadu, Andhra Pradesh and Karnataka. Its product
offerings comprise financial products and services namely equity, commodity & currency
trading, internet based trading, Portfolio Management Services, depository services, mutual
funds, PAN services, market research etc. Company recently tied up with UTI Infrastructure
Technology and Service Ltd to issue PAN card through its network of branches all over India,
which will now act as Muthoot PAN processing centre.

Travel & Tourism Muthoot Travel Smart: Headquartered in Kochi, Muthoot Travel
Smart is the travel division of Muthoot Group. The services offered by this division include
international and domestic ticketing, railway ticketing, tour, passport, emigration & visa, travel
desk, travel insurance, bus ticketing and foreign exchange.

 Healthcare
 Medical Centre: Established in 1988, the Group operates a medical centre and specialty
clinics. It also provides a number of health services round the clock. Health check-up schemes,
cashless treatments and community health programs also fall under the healthcare spectrum of
Muthoot Group. The Group also operates several Diagnostic & Scan centers throughout Kerala
and 2 multi-specialty hospitals in Kozhencherry and Pathanamthitta.

 Hotels and hospitality

Muthoot Leisure & Hospitality Services (P) Limited: Established in 1978, The Group
runs 2 luxury resorts viz. Pampa Villa and Cardamom County, as well as 12 houseboats in
Kerala, which operate under the brand 'Muthoot River Escapes'. Muthoot Hotels runs a chain of
South Indian coffee outlets as well. Muthoot River Escapes has been given a five star rating by
Trip Advisor. All of these combined are referred to as Raxa Collective.

 High lights of the products

 The scheme provides finance for any personal need or requirement. The
total amount being determined on the basis of repaying capacity of the applicant.
 Lowest interest rates in the industry.
 Interest charged on daily reducing balance (which in essence lowers the
effective rate of interest).
 Low processing charges.
 No margin.
 No security required-which minimal documentation.
 Long repayment period up to 48 months.
 No repayment penalties. Interest burden can be reduced by optimally
utilizing surplus funds for repaying the loan.
 Total transparency with regard to rate of interest and fees charged-no
hidden costs.
 The scheme is liberal, broad based, customer oriented and competitive.
 The products help the customer to confidently face the challenge of
meeting any kind of personal expenses.
 With the withdrawal of big buy scheme loans can be granted for purchase
of consumer durables under personal loan scheme.
  With the withdrawal of the scheme of loans to individuals for purpose of
home computers, loans for purchase of computers can be given under this scheme.
 GOLD LOAN

The Muthoot Gold loan portfolio is the largest in India as well as all around the globe. It
is humbling to know that more than 78000 people avail our trusted services on a daily basis.

For the past 125 years, the company has been serving the interests of customers as its top
most priority. Our journey through centuries coupled with the fact that we are still a rapidly
growing company highlights the trust and commitment that our customers worldwide have
shown in us. With Muthoot Finance Ltd. gold loan services, it takes no more than a few minutes
for your gold to generate cash.

The simple procedure that we follow allows:

 0% processing fees
 Quick Loan disbursal
 Loan limit stretches from Rs. 1500 to Rs. 1 crore
 Pre-payment option-without any penalty
 Minimal documentation
 In-house gold evaluation
 Improves customer service in a shorter response time
 Strong rooms for providing safe custody for gold ornaments
Being India’s largest gold loan service provider, safeguarding the deposits of gold
ornaments is our primary concern. A flexible interest rate policy is what helps us cope with
volatile markets. Our gold loan range starts from Rs. 1500 and stretches up to Rs. 1
crore. Serving over 78,000 customers daily, we assist almost every section of the society in
obtaining quick cash for leveraging their dreams.

OBJECTIVES OF MUTHOOT FINANCE GOLD LOAN:

 Among the largest gold loan provides in India.
 More than 14 years in Finance business.
 Over 70,000 satisfied customers
  Customized Muthoot finance gold loan scheme loans for different customers. This
includes small loans for poor customers as well as high amount for high profile
customers.
Factors of Muthoot Finance Gold Loan

 Fastest gold loans. The loans are delivered within 5 minutes.

 The loan denomination varies from 1 Crore to 1 thousand.

 Muthoot finance gold loan are granted after minimal credit assessment and
documentation.

 High quality customer service provided to customers.

 Gold ornaments are evaluated at customer’s home for their convenience and
safety.

 Over 3000 branches of Muthoot Finance extending gold loans to customers.

 Muthoot finance gold loan interest rates are very competitive.

 Other than Muthoot finance gold loan interest rate, no processing fee is charged
from customers.

SERVICE CHARGES RELATING TO GOLD LOANS

SL CATEGORY SERVICE CHARGE

NO
1 Service charge for gold loans under Rs.10/- for loans upto Rs.10,000/- and
normal schemes (except loans under Rs.20/- for loans above Rs.10,000/- every
MHL and MLS schemes) Applicable time a loan is sanctioned/renewed and a
only in South India Branches) pledge form is printed.
2 Processing charges for loans under South Branches - 0.5% of the loan amount
 MHL (Muthoot High value Loan) North Branches - Loan amount below Rs.5
scheme. lakhs-1% of the loan amount, Loans of
Rs.5 lakhs and above and less than Rs.10
lakhs-1% of the loan amount, Loans of
Rs.10 lakhs and above and less than Rs.25
lakhs-0.5% of the loan amount, Loans of
Rs.25 lakhs and above-0.25% of the loan
amount
3 Documentation charges for limits Rs.1500/- per account (For renewals within
sanctioned under MOS (Muthoot 12 months Rs.750/- per account)
Overdraft scheme)
4 Processing charges for loans under Rs.50/- per loan account
MSS (Muthoot Samsung Scheme)
5 Processing charges for loans under ZIL Rs.50/- per loan account
(Zero Interest Loan) scheme
6 Charges for lost tokens (Applicable for Rs.25/- (in addition to the cost of stamp
loans under all schemes) paper applicable)
7 Notice charges South Branches:- Ordinary Notice -
(Applicable for loans under all Rs.10/-
schemes) Registered Notice - Rs.40/-
Auction Notice - Rs.70/-
North branches:-
Ordinary Notice(3 times) - Rs.10/-
*3=Rs.30/-
Registered Notice - Rs.40/-
Auction Notice - Rs.100/-
(whenever a loan is marked for auction, the
charges will be recovered)
8 Administrative charges 0.15% of loan amount(Minimum Rs.40/-
(applicable only in North branches) ,maximum Rs.600/-) for all schemes in
North branches
9 Stamp duty levied by State Actuals wherever applicable
Governments
10 SMS Charges Rs.2/- per account at the time of closure /
renewal

MUTHOOT FINANCE PERSONAL LOAN

Muthoot finance is biggest gold financing structure in India in regards with loan portfolio
as per 2010 report by IMACS industry. Business as well as personal loans is provided by
Muthoot against gold jewelry; Muthoot finance personal loan are offered to those who have gold.
For those people, who can’t get any type of loan, Muthoot finance personal loan is just the right
choice. Good thing about Muthoot finance is that least documents for Muthoot finance personal
loan are required as well as Muthoot finance personal loan interest rate is quite reasonable. Some
points of Strength in Muthoot Finance Personal Loan Are:
 Muthoot Finance personal loan is the only loan that asks for minimum documents
for Muthoot finance personal loan.
 Muthoot finance is leading NBFC with nominal Muthoot finance personal loan
interest rate in India.
 Outstanding of gold as on 30th November 2018 was Rs 128978
 Currently there are more than 4.1 million account of loan with Muthoot finance
 Flexibilities like minimum documents for Muthoot finance personal loan as well
as nominal Muthoot finance personal loan interest rate has enabled Muthoot to lead the
market with huge network of branches.
 Muthoot finance personal loan has its feet deep dug in under estimated semi urban
and rural areas of south India. Big percentage of population from under developed
region have least access to credit facilities.
 Branch of network include 4303 branches in south region, 297 branches in west
region, 465 branches in north region and 96 branches in east region.

PERSONAL LOAN SCHEME

Benefits
 It Transacts with more than 70000 clients per day
 It continues to act with same profile for past 124 years
 It is a huge unit to provide gold loan facilities to let people convert their dreams in
to reality like initiating own business or purchasing own home Muthoot Finance net
grows 7% Muthoot's total income rose 11 per cent to Rs 1,365 crore, while capital
adequacy ratio was at 19.5%.

AREA OF OPERATIONS

In India
The company's headquarters are located in Kerala, India, and it operates over 4,303 branches
throughout the India.

Outside India

Muthoot Finance is established in the UK, the US, and the United Arab Emirates.

INFRASTRUCTURE FACILITY

In muthoot, we trust consistent up-degree of advanced instruments and innovations is essential to

improve business esteem against the finance ground of India's computerized insurgency.
Digitization, driven by savvy advances, encourages us achieve a more extensive client base,
convey better client encounter and enhance profitability. Amid the year, we concentrated on
honing the IT biological system to upgrade the accommodation of clients in more courses than
one.

 Web pay; in the digital era, people find online medium more convenient to make
transactions and payments. In line with the growing social trend, we offered such a
facility, ‘muthoot web pay’, for our gold loan customers.
 Missed call service; in august 2015-16, we launched the ‘missed call service’ for our
customers. As soon as any customer gives a missed call on 08040751515, that person
receives a text message showing the gold loan outstanding and interest due as on date.
 Online gold loan (OGL); OGL is yet another online product that meets urgent loan
requirement of customers at any place and any time. The loan amount directly gets
credited to bank accounts of customers and has the facility to repay online.
 Unique customer ID; customer are required to submit their ID or address proof each
time they transact with a different branch.
 E-mail and SMS alerts; real- time cyber receipts are generated and sent to customers
through text messages and emails, instead of print receipts. Transaction details and
repayment reminders through these platforms ensure customer comfort and security.
 Auto debit for EMI product; we have launched NPCI’s automated debit system for our
customers of ‘gold loan installment scheme’ to provide flexibility and convenience to
customers.
  Comprehensive asset recovery module; we have developed a comprehensive asset
recovery module, integrated with the core banking system. This enables timely follow-up
by our branch and field staff, and ensures on-time repayment of loans, leading to a
substantial reduction in NPA.

COMPETITORS INFORMATION
 Muthoot fincorp.
 Manapuarm
 IIFL
 Fed fina
 Mini Muthoot

SWOT ANALYSIS
Strength
1. Leading position in gold loan business.
2. High quality customer’s services and short response time.
3. Strong capital raising capability.
4. Geographic diversification which aids business scalability.
5. Low average loan tenure shields against gold price volatility.

Weakness

1. Any major in gold price in future can adversely impact the company’s revenue.
2. Deterioration in asset quality is a key risk to investment call.

Opportunity

1. The gold market is under net rated and is predictable to carry on rising at the
speed of 35 to 40% in prospect.
2. To venture into banking sectors.
3. Now customer segments.

Threat

1. Rising interest scenario.

 2. Increased competition from NBFC’s and banking in gold financing business.
3. Major part of business concerted in south India. any disturbance in the financial
system of the area can unfavorably affect the company’s operation

FUTURE GROWTH AND PROSPECTUS

Leading gold loan provider muthoot finance ltd, wants a sector shot at getting a bank license
once the draft guidelines for on-top blank licenses are finalized by the RBI. Muthoot said that it
is in a stronger position that before and stands a better chance of getting a license this time, once
RBI finalize the framework for license. Muthoot expects a business growth of 10-15% over the
next two years. The company has gone through some rough patches in previous years.

FINANCIAL STATEMENT

BALANCE SHEET OF MUTHOOT FINANCE LIMITED - 2018-19

Equity and liabilities Amount Assets Amount

Shareholders Fund Non-current assets

a) Share Capital 39904755490 a. Fixed assets

b) Reserves and surplus 61385640575 i . Tangible assets 2262400317

Non –current liabilities ii. Intangible assets 99918994

a) Long-term borrowings 48451337451 iii. Capital work in progress 99783210

b) Other-long term 6719692255 iv. Intangible assets under 211495018

liabilities development

c) Long-term provisions 97051810 b. Non-current 159073494

investment
Current liabilities c. Deferred tax 635146885
 assets(net)
a) Short – term 127658658528 d. Long-term loans and 8365977780

borrowings advances

b) Trade payables amd 65047407170 Current assets 806252984

Current investments
other current liabilities

c) Short-term provisions 6792030215 a. Trade receivable 12769313382

d) Total outstanding dues 975466934 b. Cash and bank balance 16448756373

of creditors
c. Short-term loans and 279923226507
advances
d. Other current assets 60075257

Total 321841420204 Total 321840420204

STATEMENT OF PROFIT AND LOSS ACCOUNT - 2018-19

Particulars Amount
Revenue from operations 59,108,007,360
Other income 275,902,209
Total revenue 59,383,909,569
Expenses
Employee benefit expenses 7,642,315,188
Finance cost 23,688,649,487
Other expenses 4,623,649,487
Directors remunerations 358,000,000
Depreciations and amortization 519,208,989
expenses
Provisions and write offs 2,966,497,773
Total expenses 39,798,071,402
Profit before tax 19,585,838,167
Tax expenses
Current tax 7,569,922,592
Deferred tax (54,947,717.87)
Taxes relating to previous years (1,740,48434
Profit for the year 12,072,603,777

CHAPTER -2
CONCEPTUAL BACKGROUND AND LITERATURE REVIEW

“A STUDY ON PERFORMANANCE ANALYSIS OF GOLD LOAN COMPANIES: A

CASE STUDY OF MUTHOOT FINANCE LTD AT CHICKBALLAPUR”

INTRODUCTION
Finance is concerned with broad sense as an economic activity of mobilization savings and
directing them in investment .Finance is life blood and nerve centre of business. Irrespective of
size and nature it requires adequate amount of finance. Finance is required to establish business
acquire fixed assets, to produce product, to keep men and machines at work and to encourage
management to maximize earnings of the firm. Even existing firm needs additional finance for
expansion.

Due to globalization, survival of business in the modern world is the driving to do better than
others and entry of private sector has caused for intense competition. That’s why among business
community is doing something better than others to capture the business. Therefore monitoring
the financial health of a company by checking its sales and profits is not sufficient today. So in
the changing scenario, every business strives hard for survival in the present day’s era of core
competence. Survival of the business is possible only who is having the strength to face
challenges, but it will happen through checking current position and fulfill the requirements.

The financial requirements of a business must be sufficient to meet its long term and short term
commitments. To meet long term commitment, it needs permanent capital and for short term
commitments, it needs working capital. But finance managed in a systematic manner for smooth
running of a business. Both the excessive and inadequate will cause for business failures.

A business without finance is a wingless bird. Therefore, the financial analyst is responsible to
monitor the financial position of a bank regularly, because whether the bank’s finance is using
correctly or not. Then they can be change easily, if any improper financial practices that is in
regarding rate of return, proportion of fixed capital and working capital.
MEANING OF FINANCE

Financial is the area of business management devoted to judicious use of capital and a careful
selection of sources of capital in order to enable a business firm to move in the direction of
reaching its goals.

Finance may be defined as the provision of money at the time when it is required. Finance refers
to management of flows of money through an organization it concerns with the application of
skills in the manipulation use and control of money.

DEFINITION OF FINANCE

According to Guttmann and Douglas business finance can be broadly defined as activity
concerned with the planning, raising, controlling and administering the funds use in the business.

According to Joseph and massy, financial management is the operational activity of a business
that is responsible for obtaining and effectively utilizing the funds necessary for effectively
utilizing the funds necessary.

FINANCIAL PERFORMANCE
Financial performance is an accounting summary that details a businessman organizations
revenues expenses and net income. A statement of financial performance is also required to as
statement of profit and loss or statement of financial performance on a monthly, quarterly or
annual basis.

A statement of financial performance provides important details about corporation’s revenues.

Revenues represent income that a company earns during a period. They include sales, interest
income and gains on short term investments.

A statement of financial performance provides important details about corporation’s expenses. It

represents costs that a company includes during a period. They may include cost of sales, interest
expenses and loses on short term investment.

INTRODUCTION TO LOAN

A loan is a type of debt. Loan entails the redistribution of financial assets over time, between the
lender and the borrower. The borrowers initially receive an amount of money from the lender,
which he has to pay back, usually but not always in regular installments, to the lender. This
service is generally provided at a cost, referred to as interest on the debt. A loan is of the annuity
type if the amount paid periodically (for paying off and interest together) is fixed.

A borrower may be subject to certain restrictions known as loan covenants under the terms of the
loan. Acting as a provider of loans is one of the principal tasks for financial institutions. For
other institutions, issuing of debt contracts such as bonds is a typical source of funding.

Legally, a loan is a contractual promise between two parties where one party, the creditor, agrees
to provide a sum of money to a debtor, who promises to return the money to the creditor either in
one lump sum or in parts over a fixed period in time. This agreement may include providing
additional payments of rental charges on the funds advanced to the debtor for the time the funds
are in the hands of the debtor (interest).

MEANING OF LOANS
 A loan is a financial arrangement, under which an advances is granted by the bank to
borrower on a separate account called the loan account. When a loan is sanctioned to a borrower
and it is paid borrower at once in lump sum either in cash or by transfer to the credit of his
current account.

Gold-Loan, Muthoot Gold Loan Encourage Customers To Use Digital Payment Modes Or
Repayments.

Gold-loan Muthoot Gold Loan which have registered a 40-50% decline in biz are now
encouraging their customers to use net banking, debit cards and e-wallets for repayments.

VP Nandakumar, managing director, Muthoot Gold Loan , said: "There is no denying that
demonetization has caused a shortage of cash in the market. Some customers faced problems in
making repayments because we stopped accepting old notes. We are encouraging them to pay
using online tools.

We started accepting repayments by cheque."

However, Nandakumar said he is hopeful that demonetisation will eventually benefit gold-loan
NBFCs the most because the cash crunch will lead to a shift in business from unorganised
players to the organised ones.

The 10-Step Advances Service

The modern digital consumer has increased power and expectations around how they want
customer service delivered. The Digital Banking Report entitled, 'Customer Service in the Digital Age',
provides strategies and tactics for organizations wanting to differentiate their customer experience in the
digital age.

By Jim Marous, Co-Publisher of The Financial Brand and Publisher of the Digital Banking
Report.
A customer service revolution is occurring in financial services. It’s dynamic, overarching, and
being driven by consumers who are embracing digital and mobile channels as never before. The
digital age is changing the way consumers research, shop and buy products and services and how
they share their experiences after purchase.

As a result of this transformation, there has never been a time when customer service and the
overarching customer experience has been as important as it is today. The rise of digital
channels, digital communication, social media, social networks and word-of-mouth across a
connected universe gives us a glimpse into the power and potential to solve problems, address
complaints proactively, and potentially predict outcomes before they occur.

In financial services, we have seen the power of these new channels allow the masses to attack
the largest organizations in our industry and make them change policies or adjust procedures. On
a singular level, consumers have more ways than ever to voice their displeasure.

The key is to create an organization that can leverage digital technology to be responsive (or
maybe proactive), empathetic, accessible, connected and human in the hearts, minds, and wallets
of your most prized assets – your customers and your employees. But, customer service is just
one component of a much broader customer experience imperative that you can leverage to
create a superior advances relationship.

The 57-page Digital Banking Report, ‘Customer Service in the Digital Age‘ provides a guide to
providing the best level of customer care in today’s world of online banking, mobile devices and
social media. Written in conjunction with Jeanne Capachin, this report includes more than
25 charts, tables and case study illustrations that support tactical advice provided to help move
organizations to a new level of customer service.

The topics covered in the Customer Service in the Digital Age report include:
 10 Steps to Improved Advances Service
 Customer Service by the Numbers
 Customer Journey Mapping
 Building the Digital Support Center
 Ways Firms Fail at Advances Care
 Digital Support Technologies
  The Future of Customer Service in Banking

TYPES OF LOANS

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as
collateral for the loan.

A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The financial
institution, however, is given security — a lien on the title to the house — until the mortgage is
paid off in full. If the borrower defaults on the loan, the financial institutes would have the legal
right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car; in
much the same way as a mortgage is secured by housing. The duration of the loan period is
considerably shorter — often corresponding to the useful life of the car. There are two types of
auto loans, direct and indirect. A direct auto loan is where a financial institute gives the loan
directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary
between the financial institutes or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

A stock hedge loan is a special type of securities lending whereby the stock of a borrower is
hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.

A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the
merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for
a pre-settlement loan. This is considered a secured non-recourse debt due to the fact if the case
reaches a verdict in favor of the defendant the loan is forgiven.

Unsecured

Unsecured loans are monetary loans that are not secured against the borrower's assets. These
may be available from financial institutions under many different guises or marketing packages:

 credit card debt

  personal loans

 financial institutes overdrafts

 credit facilities or lines of credit

 corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the
borrower. These may or may not be regulated by law. In the United Kingdom, when applied to
individuals, these may come under the Consumer Credit Act 1974.

PURPOSE OF LOAN

Advances will be granted to enable the professional to render professional service (not
charitable services) for purchasing the necessary equipment or for a repairing or renovating the
existing equipment or acquiring or repairing the business premises or for purchasing tools or for
working capital requirement.

Amount of Loan:

1) Rs.5 lacks of which not more than Rs.l lack should be working Capital.

2) In case of professionally qualified medical practitioner, setting up practice in semi-urban and

rural areas the higher credit limit ceiling of Rs. 10 lacks unit a sub ceiling of Rs. 2 lacs for
working capital.

Equity Fund Scheme for Professionals and Self-Employed Persons

The Equity Fund Scheme has been extended to the category of Professionals and Self-employed.
Amount of assistance will be 25% of the project cost (aggregate of cost of equipment's and
working capital requirements) subject to an upper ceiling of Rs. 25,000/- no collateral security /
third party guarantee for loans up to and includes of Rs. 25,000/-. For loans in excess of Rs.
25,000/- collate rated security by way of immovable properties or third party guarantee may be
asked for any in cases where primary security is inadequate, or for other valid reasons, and not as
a matter of routine.

Key features of gold loan:

1. Secured: Advance is no heritable against the gold spared by the applicant.

2. Multi-reason:the advance might be utilized for any reason; its length not for any unlawful
activity or theory inside the securities showcase. NBFCs put even less impediments on the work
of advance.

3.Low disbursal times: NBFCs in like manner in light of the fact that the sloppy space apportion
advances at an essentially speedier pace (as small as 3 minutes to maybe a couple of hours) as
differentiated and banks which can take maybe a couple times.

4.High advance to-regard extents: though banks would regularly not offer more than seventy
fifth of the gold esteems as advance, NBFCs loaning may go as high as ninety fifth if there
should emerge an episode of high-flawlessness gold.

5. Shorter credit residencies: there's no base sum for the advance and, if require be, one will
discount the advance include the exact after day. The regular residency of the advance is around
ninety to a hundred days.

6. Varied finance costs: the credit cost relies upon the residency and live of advance. It vacillates
from twelve-tone framework to eighteen because of banks, though for NBFCs, it might achieve
unadulterated gold. The fund costs charged by the messy piece are fundamentally higher and
might stretch out from half-hour shrewd rates of interest are essentially associated if the credit to
regard doesn't outperform 50-60%.

Types of gold testing in India

 Acid test
Acid test is prescribed for all types of ornaments. Nitric acid and Non-iodized crystal salt
solutions are used for performing the test. Acid has to be handled with utmost care to avoid
direct contact with human body.
Rub the ornaments over the rubbing stone.
Add 2 or 3 drops of acid to the rubbed grains on the stone and watch for any reaction.
If fumes emerge and the grains disappear or colour of the grains changes, the ornaments
is spurious.
In case of no visible reaction, add 2 or 3 drops of crystal slat solution also.
 Flexibility test

Flexibility test is prescribed normally for solid plains types of ornaments such as bangles and
rings without stones, designs etc.

 Press the ornaments mildly with hand holding in the palm and applying uniform pressure
from the outer surface with fingers.
 Gold is ductile and bends fast and returns to its original form on release.
 Ornaments made out of other metals with gold plated on any metal, will be of different color.
 Color test
a) The ornaments made of pure gold will be of a dim yellow colour.
b) Ornaments made of other metals or ornaments with gold plated on any metal, will be of
different colour.
 Sound test
a) Drop the ornaments on the rubbing stone/glass sheet and listen to the sound.
b) Gold ornaments will give a clear bell sound.
 Weight test
Gold ornaments will be of bigger size compared to the ornaments made of other metals of the
same weight.
 Pointed scratching
a) Ornaments with designs. Joints, soldering etc. shall be subjected to this test.
b) Strongly rub a particular point of the ornaments over the stone and perform the acid test.
c) Repeat the process at various points such as joints, soldering, etc. to assess the purity
and gold content.
 Smell test
a) Rub the ornaments firmly on the palm.
b) Smell the rubbed portion of the plan. Ornaments made of pure gold will leave not leave
any smell.
c) Ornaments made of or containing high percentage of copper will leave a pungent smell
of copper sulphate.
 Use ability test
Branded new gold are very difficult to check the originality of gold but already used gold are
easily to check the gold originality.
 Magnifying glass Magnifying glass shall be used as a tool for
a) Closely viewing the size and nature of grains over the rubbing stone, reaction in
change of colour, etc. while carrying out the acid test.
b) Identifying joints, soldering, colour etc. on the ornament.
c) Examining the purity engraved if any on the ornament, markings such as hall marking
etc. on the ornaments.
 Finishing
Ornaments will made up of gold will have a very good finishing.

Charges related to gold loan

Loan handling charge: whereas a little of the specialist organizations could wavier these
charges, a couple of banks do charge a making ready expense.

Valuation charge: These square measure the fees to be paid to the appraiser. These charges
square measure in addition specific to the specialist co-op and people having in-house valuators
do not charge any further add for valuation.

Late installment penalization: Most of the specialist co-ops charge late installment punishment
and this can also shift from one foundation to ensuing.

Pre-installment penalization: the overwhelming majority of the specialist co-ops do not charge a
punishment for compensation before the loan residency is over. Be that because it could, some
could at the present have this charge established.

It is prudent to visualize with the loan provider before taking the loan. These charges might
amendment they add that you just could at long last get.

Risk associated with gold loan

•Price variance of gold credit:-

The variance of gold cost make stressed to the moneylender and the measure of advance which
given against the gold esteem won't be satisfactory when the cost tumble down this will expand
the credit default.

•The development of gold credit is packed in south India:

The business is excessively amassed in the south. Around 75 percent of gold advance business is
in the south. Gold advances business isn't so awful, yet fixation in the south is still too substantial
for comfort.

•Saturation of business openings:-

Development rates have begun financing off logically as the business guts. Rates of 100-200
percent are pretty much finished.

•Growing rivalry:-

Rivalry is developing as we have seen above numerous banks and NBFCs are coming in this part
and propelling their gold credit item with a few offices.

•Change in approach and standards:-

With time certainly administrative body come in real life to control the acts of these
organizations. The RBI has proclaimed it as non need area loaning. This pushed up financing
costs by 1-2 percent promptly.

•Margin of advance against gold:-

Privately owned businesses loan against bring down edges. Not at all like banks, which loan 55-
65 percent of the gold sold, privately owned businesses give out higher extents of 70-80 percent?
This implies the security edges are more slender for them.

LITERATURE REVIEW

Churiwal and Shreni 2012 have given the overview of growing gold demands. They
highlighted various aspects of Gold Loan from traditional pawn broker to shifting of Gold Loan
to NBFC. They also explained the emerging importance of the Gold Loan to the borrowers as
well as lender due to its movement from traditional lenders to Organised lenders. They also
explain the important factors like the rise in borrowing costs due to removal of agricultural sector
status on Loans. NBFCs are growing through Gold Loan compare to organize banks. It has
become the effective means of meeting the demand for Micro-finance in India.

Dnyanesh N. 2012 discussed that the Organised Gold Loan market has grown tremendously
over a period of time, owing to the changing consumer Perception about Gold Loan and rising
Loan requirements. The Perception of consumers towards Gold Loan has changed drastically.
The author has discussed the Changing consumer Perception and rising Loan requirement of
consumers. He has pointed out the growing demand of rising Loan requirement.

In Indian Institute of Banking and Finance 2010 has been stated that the Banks and NBFCs
have started attracting the borrowers by providing Loans against the pledge of gold jewelry. The
jewelry is weighed and its purity is certified by Organised Financial Institution gold smith. The
value of gold is decided as per the extant market price. The interest rate will be same as applied
to Personal Loan, but some institutions are giving attractive interest rate on gold pledged. The
provision of the gold Control Act is also taken into consideration.

Nandakumar P 2010 stated that the Organised Gold Loan segment is potentially a vehicle for
social transformation. Gold Loan must be made a part of this process. In rural areas, lack of
access to bank, poor invest in gold. The distress faced by Indianž s Farmers needs to move on
multiple fronts in extending timely credit to the rural masses. The author has presented and
analysed the distress and lack of access to banks in rural areas.

Verma 2012 explained that how the Reserve Bank of India RBI has raised the Loan-to-value
LTV ratio of the Non-Banking, Finance Companies lending money against gold to 75 per cent
from 60 per cent earlier, so as to facilitate the monetization of idle gold, according to a
notification by RBI. The norms are expected to bolster the Loan books growth of the Gold Loan
companies.

Nair Vinay and Verma Geeta et.al (2010) stated that in India, the savings habits of the poor
and lower classes differ significantly from the richer sections. While the rich invest their Savings
across many different kinds of assets, the poor continue to invest their savings mainly in goldIn
fact, in rural areas, this is often a necessity because of lack of access to banks Also, there are
strong cultural factors at work in India, which make gold not only a desirable but also a
necessary asset to hold. Gold is traditionally a store of value, protecting our savings from
inflationary devaluation. It also serves important ceremonial purposes, such as in a wedding
celebration where gold is always the preferred gift. The author highlighted the savings habits of
our poor and lower classes in gold, which can be added advantages in the Loan market that is
considered as Loan asset too.
George M G Muthoot,2018 chairman of Indias largest gold company Muthoot Finance, gave
his view on the change in regulation and said, ŸThis move by the apex regulatory body will help
the cause of financial inclusion and is an acknowledgment of the growing significance of
goldfinancing NBFCs in fuelling micro-economies in the country. This will help the un-banked
rural and semi-urban customers get more value against their assets and prevent them from going
back the Unorganised sector.

Davy et .al 2010 has stated that in the market survey; the Gold Loan is a simple modification of
the Age-old practice of money lenders and has been institutionalized by the banks nowIn this
Loan, one has to deposit the household gold in the form of jewelry with the bank or financing
Agency and get a Loan up to 60 per cent of the gold deposited.

Mitra Ajay, Managing Director of India, Middle East & Turkey, and World Gold Council said
that Acceptance of gold for Loans by Banks and Financial Institutions is an important
development that will infuse greater confidence in gold as an asset class. While jewelry was
being accepted as collateral through informal channels and Non-Banking, Financial Companies
NBFCs for long, it was primarily not widely offered by banks since only a few banks had the
requisite infrastructure for the procedures to deal with the valuation and storage of gold.
However, with banks entering gold bar business, infrastructure for storage became available and
with medallions too being accepted for securitization purposes, the role of gold is surely bound
to change from commodity to a monetized asset that would encourage consumers to invest more
in gold, a time-tested secure and now a monetized asset class.

Venkateswaran (2012) analyzed that organized gold loan market grew at CAGR of 40 per cent
during FY 2002-10. The study pointed out that gold loan market was underpenetrated which
accounted just 1.2 per cent of the value of total Gold stock in India. The study concluded that
negligible penetration, aggressive network expansion and increasing adoption of gold loans
attracted more financial institutions to enter into business to give competition to existing NBFCs.

Mary (2013-14) found out that the demand for gold as an investment avenue was gaining
momentum among consumers of Cochin and Delhi. The research resulted that gold was price
sensitive at low prices but insensitive to price increase. The study concluded that the gold
customers in Cochin and Delhi were price insensitive in nature.
Roy (2013-14) analyzed with the help of CAMEL model that the gold loan NBFCs
(Manappuram Finance, Muthoot Finance and Muthoot Fincorp) used heavier debt in their capital
structure, aggressive lending policies and their lower liquidity put them on the edge of high risk.
Gupta (2014-15) compared the Economic value added (EVA) with the traditional performance
measures (CAMEL indicators) as a predictor of financial health of all public sector banks and 20
top private sector banks during 2003 to 2008. The results revealed that Earning Per Share (EPS)
and Return on Net Worth (RONW) were better predictor of financial health of banks followed by
EVA over the other indicators.

Malhotra and Aspal (2014-15) analyzed the financial performance of the new private sector
banks in India by using the CAMELS model during 2008-2012. The study indicated no
significant difference in CAMELS ratios among the new private sector banks.

Rao (1993) discussed in his research about ‘Financial appraisal of Indian Automotive Tyre
Industry’. Main objective of study was intended to probe into the financial condition-financial
strength and weakness-of the Indian tyre industry. He has been measured and evaluates the
financial performance through inter-company and inter-sector analysis for the period of 1981-
1988. He has found that the fixed assets utilisation in many of the tyre undertakings was not as
productive as expected and inventory was managed fairly well. He has considered that the tyre
industry's overall profit performance was subjected to inconsistency and ineffective. He has
suggested some recommendations to improve financial performance.

Pai, Vadivel & Kamala (1995) have studied about the diversified companies and financial
performance. Main purpose of research was found out the relationship between diversified firms
and their financial performance. For the purpose of research, they have selected seven large firms
and analysed those firm which having different products-both related and otherwise-in their
portfolio and operating in diverse industries. In this study, a set of performance measures / ratios
was employed to determine the level of financial performance and variation in performance from
one firm to another has been observed and statistically established. They revealed that the
diversified firms studied have been healthy financial performance.

Vijayakumar A. (1996) has studied about ‘Assessment of Corporate Liquidity - a discriminate

analysis approach’ in this research he has revealed that the growth rate of sales, leverage, current
ratio, operating expenses to sales and vertical integration was the important variables which
determine the profitability of companies in the sugar industry. Also he has studied the short term
liquidity position in twenty-eight selected sugar factories in co-operative and private sectors.

Dhankar (1998) has studied about the criteria of performance measurement for business
enterprises in India study of public sector undertakings. The author gives a new model for
measuring the performance of a business enterprise in India, wherein, the basis is to compare its
actual rate of return with its expected risk adjusted rate of return. Realizing the importance and
controversy of public sector in India, an attempt was made to measure the performance of all
public sector undertakings, which were started up to 1964 and were in operation until 1983. It is
shocking to know that half of them on an average want to talk of making excess returns, have not
been able to earn equal to their cost of capital.

Sengupta (1998) studied concerning the performance of the fertilizers industry in India. By
Analysing of cost functions and cobb-douglas production function have been made to check the
performance of the industry. Analysis of shifting cost functions further highlight that the firms
belonging to this industry expand capacities, even before fully exploiting the existing capacity
conforming to the oligopolistic behavioural tendency of the firms belonging to the fertilizers
industry. The results showed that the industry was subject to the law of increasing costs. He
founded that, to get further support from the examination of the production function, which
revealed that the average productivity of labour exceeds its marginal productivity.

CHAPTER – 3

RESEARCH DESIGN

STATEMENT OF THE PROBLEM

The Title of the undertaking is 'Scientific investigation of gold credits'. There is wide vacillation
between various segments. While issuing gold advances by various plans on various areas,
investigate the outside factor which is influencing to the specific segment. Muthoot back should
consider increment the net salary and diminish the NPA level of the fund, while issuing gold
credits, significant part of the pay is gotten from the gold advances of the fund.
NEED OF THE STUDY

Present study need of annual statement and the financial statement of the gold pledged by
company and the interest gain by company. The complete portfolio of gold loan statement.

OBJECTIVES OF THE STUDY

The main aim of the present study is to accomplish the following objectives:

 To study the procedure of issuing of gold loans to the public.

 To study the position of Muthoot finance with regard to gold loan.
 To explore the reason for choosing gold loan instead of the conventional loans.
 To study the general terms & conditions for repayment of gold loans.
 To know the mode of payments & repayment periods of gold loan borrowed from muthoot
financial Institutions.

SCOPE OF THE STUDY

The study is based on gold loan in Muthoot finance. Many institutions and banks were providing
gold loan facility. But mainly Muthoot finance provides the convenience to customers in the
form of affordable installment payable monthly, low rate of interest and the facility to liquidity
ones gold any time and availing different alternative choice to his customers. With Muthoot
finance Ltd. Gold loan benefit, it takes close to a couple of minutes for your gold to create
money.

RESEARCH METHODOLOGY

A research is considered as the framework or plan for a study that guides as well as helps the
data collection and analysis of data. Present study is an analytical and descriptive in nature and
based on empirical study. The data was collected through annual report & some information
through the books & also from the website.

a) PRIMARY DATA
They are collected by interview with the branch manager for the first time, about the statistical
investigation and used by them in statistical analysis of formed as primary.

b) SECONDARY DATA

The data collected from the company record published of books, newspapers, websites & some
other officials of the finance company. The study is basically confined to secondary data
obtained from the annual reports of the company, books of accounts, periodical, statistics given
by officials, websites etc. the source of data used for the study was Balance sheet and Profit and
loss account of company. The secondary data was collected from annual reports of the company
from 2016-17 to 2017-18.

Tools and techniques

The collected data has been analyzed and interpretation is drawn and same is shown by way of
graphs, diagrams.

Analysis and interpretation of data has been prescribed with the help of percentage tables and
statistical tools such as chi-square test were used to test the hypothesis

LIMITATIONS OF THE STUDY

 The Study is part to only 10 weeks

 The time duration for conducting the study is limited.
 Inability of the finance personnel to provide adequate information due to their
preoccupation with their work
 Limited sample size which cause to variation in the analysis and interpretations.
 Some of the details are not provided by the finance officials because of their
confidentiality.
CHAPTER SCHEME

CHAPTER 1: Introduction

Introduction, Industry profile of non government financial companies, NGFCs history,

Muthoot finance Limited profile, Muthoot finance promoter, Vision, Mission and quality
policy, products and varies services, different schemes of Muthoot finance limited and,
competitors, SWOT analysis, future growth and prospectus. Financial statements –
Balance sheet and Profit and loss account of Muthoot finance Ltd.

CHAPTER 2: Conceptual background and literature review

Theoretical background of the study, about finance, finance performance, and about
loans, types of loans, information about gold loans and gold loan schemes, interest rates
of Muthoot finance, and their policies, rules and regulations. Gold testing measures.

CHAPTER 3: Research design

In this Chapter includes Statement of the problem, Need of the study, objective of the
study, scope of the study, Methodology, tools of data collection, limitations of the study,
and chapter scheme of the project.

CHAPTER 4: Data Analysis and Interpretation

In this chapter we can saw tables and graphs and analysis and interpretation.

CHAPTER 5: Summary of Finding and Suggestions

Bibliography

Annexure
 CHAPTER 4

DATAANALYSIS AND INTERPRETATIOr = 12 a𝑡 2 + vo𝑡 + r0

N
INTRODUCTION:

Analysis of data is a procedure of reviewing, cleaning, changing, and demonstrating information

with objective of featuring valuable data proposing conclusions and supporting basic leadership.
Information examination various realities and methodologies, enveloping assorted systems under
an assortment of names, in various business, science and sociology domains.

Present Year−Past Year

FORMULA of Trend analysis= × 100
Past Year

ANALYSIS:

It is a procedure of setting up the significant connection between the things of two financial
statements with the targets of identified the monetary and operational quality and weakness

INTERPRETATION:
It refers to the examination of different segments and definite conclusion might be drawn about
acquiring limit effectiveness benefit liquidity dissolvability trend etc.

YEAR AMOUNT (CRS) GROWTH

ANALYSIS AND INTERPRETATION: It is process of establishing the meaningful

relationship between the items of financial statements with the objectives of identifying the
financial strength and weaknesses. This process includes both analysis and interpretation.

4.1 Table showing Gold loan assets

 2014-15 26,387 ---

2015-16 21,862 -17.148

2016-17 23,408 7.071

2017-18 24,379 4.148

2018-19 27,278 11.891

ANALYSIS

The above table shows that gold loan assets under management is in 2015-16 16.923, 2016-17
7.071, 2017-18 -4.148, 2018-19 -11.891.

4.1 Graph showing Gold loan Assets

 30,000
27,278
26,387
24,379
25,000 23,408
21,862

20,000

15,000

10,000

5,000

0
201 2015-2016 2016-2017 2017-2018 2018-2019

INCRS

INTERPRETATION

From the above table we watch that the aggregate gold credit resources of Muthoot fund has
been expanded and diminished there development from year to year when contrast with their
earlier years. 2014-15 take as base year in 2015-16 decreased- 17.148%, 2016-17 increased -
7.071%, 2017-18 - 4.148% and in 2018-19 - 11.891%.

4.2 Table showing Gold jewelers kept as security

 YEAR AMOUNT ( in tons) GROWTH

2014-15 134 ----

2015-16 118 -11.940

2016-17 131 11.016

2017-18 142 8.396

2018-19 149 4.929

ANALYSIS

The above table shows that gold jewelers kept as security is in 2015-16 -118 tons, 2016-17 - 131
tons, 2017-18 - 142 tons, and in 2018-19 - 149 tons.
4.2 Graph showing Gold jewelers kept as security

Gold jewelers kept as security

Series 3

142 149
134 131
118

2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

INTERPRETATION

From the above table indicates that the customers who are prefer gold loan increases year by year
in muthoot In 2015-16 decreased- 11.940%, 2016-17 increased- 11.016%, 2017-18- 8.396% and
in 2018-19 increased to 4.929%.
4.3 Table showing Average gold loan per branch

YEAR AMOUNT (%) GROWTH

2014-15 63.2 ----

2015-16 56.93 -9.920

2016-17 55.01 -3.372

2016-17 50.63 -7.962

2018-19 63.39 25.20

ANALYSIS

The above table shows that Average gold loan per branch is 2014-15 taken as base year 2015-16-
56.93, 2016-17-55.01, 2017-18-50.63, and 2018-19 -63.39.
4.3 Graph showing Average gold loan per branch

Average gold loan per branch

70 63.39 63.2
60 55.01 56.93
50.63
50

40

30 Series 1

20

10

0 Series 1
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- 9.920%, 2016-17 decreased- 3.372%, 2017-18 -7.962% and in 2018-
19increased up to 25.20%.

4.4 Table showing interest income on average loan assets

 YEAR AMOUNT (%) GROWTH (%)

2014-15 21.43 ----

19.72 -7.979
2015-16
2016-17 19.31 -1.774

2017-18 20.27 4.971

2018-19 21.66 6.857

ANALYSIS

The above table shows that interest income n average loan assets 2014--15- 21.43, 2015-16 -
19.72, 2016-17 - 19.31, 2017-18 - 20.27, and 2018-19 - 21.66.

4.4 Table showing interest income on average loan assets

 interest income on average loan assets
In %

21.66
21.43

20.27

19.72

19.31

13-Mar 14-Mar 15-Mar 16-Mar 17-Mar

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years
due to increase in activates of business in 2015-16 decreased-7.979%, 2016-17 decreased- -
1.77%4, 2017-18 increased- 4.971%and in 2018-19- 6.85%7.

4.5 Table showing interest expense on average loan assets

 YEAR AMOUNT (%) GROWTH

2014-15 8.69 -----

2015-16 9.25 6.444

2016-17 9.52 2.918

2017-18 10.84 13.865

2018-19 11.38 4.981

ANALYSIS

The above table shows interest income on average loan assets 2014-15 - 8.69, 2015-16- 9.25,
2016-17 -9.52, 2017-18 - 10.84, and 2018-19 - 11.38.
4.5 GRAPH SHOWING INTREST EXPENSE ON AVERAGE LOAN ASSECTS

12 11.38
10.84

10 9.52 9.25
8.69

0 in %
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased- 6.44%4, 2016-17 increased- 2.918%, 2017-18- 13.865%and in 2018-19-
4.981%.
4.6 Table showing net interest margin

YEAR AMOUNT (%) GROWTH

2014-15 12.74 -----

2015-16 10.47 -17.582

2016-17 9.70 -7.354

2017-18 9.42 -2.886

2018-19 10.27 9.023

ANALYSIS

The above table shows net interest margin 2014-15 -12.74, 2015-16 -10.47, 2016-17 -9.70, 2017-
18 -9.42, and 2018-19-10.27.
4.6 Graph showing NET INTEREST MARGIN

14 12.74
12
10.27 10.47
9.42 9.79
10

0 NET INTEREST MARGIN

2013-14 2014-15 2015-16 2016-17 2017-18

NET INTEREST MARGIN

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- -17.582% , 2016-17 decreased-7.354%, 2017-18-2.886% and in 2018-19
increased - 9.023%.
4.7 Table showing return on average loan assets

YEAR AMOUNT (%) GROWTH (%)

2014-15 4.05 ----

2015-16 3.22 -20.493

2016-17 3.03 -5.900

2017-18 3.32 9.570

2018-19 4.47 34.638

ANALYSIS

The above table shows return on average loan assets 2014-15 -4.05, 2015-16 -3.22, 2016-17 -
3.03, 2017-18 -3.32, and 2018-19 -4.47.
4.7 Graph showing RETURN ON AVERAGE LOAN ASSETS

4.47
4.5
4.05
4

3.5 3.22 3.32

3.03
3

2.5

1.5

0.5

0
2013-14 2014-15 2015-16 2016-17 2017-18

(%)

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- 20.493%, 2016-17 decreased- 5.900%, 2017-18 increased - 9.570% and in
2018-19 - 34.638%.
4.8 Table showing operating expenses to average loan assets

YEAR AMOUNT (%) GROWTH

2014-15 4.08 ----

2015-16 4.46 9.313

2016-17 5.01 12.331

2017-18 5.1 1.796

2018-19 5.63 10.392

ANALYSIS

The above table shows that operating expenses to average loan assets 2014-15 - 4.08, 2015-16 -
4.46, 2016-17 -5.01, 2017-18 - 5.1, and 2018-19 - 5.63.
4.8 Table showing operating expenses to average loan assets

5.63
5
5.01 5.1

4.46
4
4.08

0
2013-14 2014-15 2015-16 2016-17 2017-18

(%)

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased- 9.313%, 2016-17 increased- 12.331%, 2017-18 - 1.796% and in 2018-19 -
10.392%.
4.9 Table showing profit before tax

YEAR AMOUNT (crs) GROWTH (%)

2014-15 1,511 ---

2015-16 1,193 -21.045

2016-17 1,028 -13.830

2017-18 1,317 28.112

2018-19 1,921 45.861

ANALYSIS

The above table shows that profit before tax 2014-15 - 1,511, 2015-16 - 1,193, 2016-17 - 1,028,
2017-18 - 1,317, and 2018-19 - 1,921.
4.9 Graph showing Profit before tax

20,000 19,210

18,000

16,000 15,114

14,000 13,168
11,936
12,000
10,279
10,000

8,000

6,000

4,000

2,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

PBT

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- 21.045%, 2016-17 decreased - 13.830%, 2017-18 increased- 28.112% and in
2018-19 also increased 45.861%.
4.10 Table showing provision for taxation

YEAR AMOUNT (IN CRS) GROWTH

2014-15 507 ---

2015-16 413 -18.540

2016-17 357 -13.559

2017-18 507 42.016

2018-19 741 46.153

ANALYSIS

The above table shows that provision for taxation 2014-15 - 507, 2015-16 - 413, 2016-17 - 357,
2017-18 -507, and 2018-19 - 741.
4.10 Graph showing PROVISION FOR TAXACTION

IN CRS

741

507 507

413
357

2013 2014 2015 2016 2017

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- 18.540%, 2016-17 decreased- 13.559%, 2017-18 - 42.016%and in 2018-19
- 46.153%.
4.11 Table showing profit after tax

YEAR AMOUNT (IN CRS) GROWTH

2014-15 1,004 ---

2015-16 780 -22.310

2016-17 671 -13.974

2017-18 810 20.715

2018-19 1,180 45.679

ANALYSIS

The above table shows that profit after tax 2014-15 -1,004, 2015-16 - 780, 2016-17 - 671, 2017-
18 - 810, and 2018-19 - 1,180.
4.11 Graph showing PROFIT AFTER TAX

IN CRS

IN CRS

1,180

1,004

780 810
671

2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 decreased- 22.310%, 2016-17 decreased- -13.974%, 2017-18increased -20.715%and in
2018-19 increased - 45.679%.
4.12 Table showing number of branches increase

YEAR AMOUNT GROWTH (%)

2014-15 4,082 ----

2015-16 4,270 4.605

2016-17 4,245 -0.585

2017-18 4,275 0.706

2018-19 4,307 0.748

ANALYSIS

The above table shows that number of brances increase 2014-15 - 4,082, 2015-16 - 4,270, 2016-
17 -4,245, 2017-18 - 4,275, and 2018-19 - 4,307.
4.12 Graph showing number of branches increase

NO OF BRANCHES

4350
4300 4307
4270 4275
4250 4245
4200
4150
4100
4082
4050
4000
3950
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased- 4.605%, 2016-17 decreased-0.585%, 2017-18 - 0.706%and in 2018-19 -
0.748%.
4.13 Table showing number of employees

YEAR N0 of peoples GROWTH (%)

2014-15 24,881 ----

2015-16 25,012 0.526

2016-17 22,882 -8.515

2017-18 22,781 -0.441

2018-19 24,205 6.250

ANALYSIS

The above table shows that number of employees 2014-15 -24,881, 2015-16 -25,012, 2016-17 -
22,882, 2017-18 -22,781, and 2018-19 -24,205.

.
4.13 Graph showing NUMBER OF EMPLOYEES

2013-14, 24.881

2017-18, 24,205 2014-15, 25,012

2016-17, 22,781 2015-16, 22,882

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased- 0.526%, 2016-17 decreased- 8.515%, 2017-18 decreased- 0.441%and in
2018-19 increased- 6.250%.
4.14 Table showing reserves and surplus

YEAR AMOUNT (crs) GROWTH (%)

2014-15 3,364 ----

2015-16 3,893 14.833

2016-17 4,686 20.369

2017-18 5,220 11.395

2018-19 6,117 17.183

ANALYSIS

The above table shows that reserve and surplus 2014-15 -3,364, 2015-16 -3,893, 2016-17 -4,686,
2017-18 -5,220, and 2018-19 -6,117.
4.14 Graph showing Reserves and surplus

7,000
6,117
6,000
5,220
5,000 4,686

3,893
4,000
3,364

3,000

2,000

1,000

0 IN CRS
2013-14 2014-15 2015-16 2016-17 2017-18

Column2

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased 14.833%, 2016-17 increased20.369%, 2017-18 11.395%and in 2018-19
17.183%.
4.15 Table showing net worth

YEAR AMOUNT( crs) GROWTH

2014-15 3,736 ----

2015-16 4,265 14.159

2016-17 5,084 19.202

2017-18 5,619 10.523

2018-19 6,516 15.963

ANALYSIS

The above table shows that net worth 2014-15 -3,736, 2015-16 -4,265, 2016-17 -5,084, 2017-18
-5,619, and 2018-19 -6,516.
4.15 Graph showing net worth

in crs

6,516

5,619
5,084

4,265
3,736

2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

From the above table we observe that the total gold loan assets of Muthoot finance has been
increased and decreased there growth from year to year when compare to their previous years. In
2015-16 increased14.159%, 2016-17 increased 19.202%, 2017-18 decreased 10.523 %and in
2018-19 increased 15.963%.
 CHAPTER-5

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

All through this study I have found numerous things and in light of those findings, given a few
proposals to enhance the activities of the Muthoot company ltd and finally the entire
investigation's decision is given, which given the opposition for their task. The findings,
suggestions r and conclusion are as per the following.

Findings
 It is founded that most of the respondents who prefer gold loan because of easily quick
getting money.
 That the gold loan assets is increased compare to previous year by increase of good opinion
about the company to the customers.
 Compare to previous year the tons of gold kept as security is increased due to increase in
number of customers.
 The normal gold credit per branch is fluctuating from year to year.
 From the collected data it was found that interest income on average loan assets is increased
compare to two previous year due to rate of gold is fluctuating.
 The interest expenses cost on average loan assets are expanded year by year.
 The net interest margin on gold loans of Muthoot finance fluctuating compared to past
years.
 The return on average loan assets is fluctuating year by year in previous year was increased.
 Theoperating expenses on average loan assets gold loans of Muthoot finance fluctuating
compared to past years.
 The profit before tax on gold loans of Muthoot finance fluctuating compared to past years
but increased in previous year.
 The provision for tax on gold loans of Muthoot finance fluctuating compared to past years
but increased in previous year.
 The profit after tax on gold loans of Muthoot finance fluctuating compared to past years but
high rate of increased in previous year.
 From the collected data it was found that the number of branches of muthoot finance is
increased year by year due to increase in business operations of company in country.
 The number of employees is increased of Muthoot finance due to increase in branches.
 The reserves and surplus are increased compare to previous years.
 The net worth of company is increased year by year due to increase in assets and profit of
the company.

SUGGESTIONS

 The manager are required to give detailed information about the muthoot services. Provided
in the institution for the public to meet the requirements .
 It is suggested that the one-time settlement plan ought to present again for the convenience
of existing clients and for pulling in new client.
 The detail information about financing policies to the customers.
 The duration of repayment principal amount along with the interest should be extended as
the customers feel difficulty in repaying within a specified period.
 Most of the clients are expecting that not should bring about the service charges towards the
endorsing of gold credit.
 Informing to the customers about the different gold loan schemes in the muthoot finance.
 The interest rates on gold loans are important, so the financers have to give detail
information about the interest rates.
 Giving the terms and conditions of gold loans to the muthoot finance to the customers.
 The muthoot finance should increase its loans to maximum extent to increase its
profitability.
 The organization should utilize advanced technologies to check the purity of gold credit as
opposed to utilizing outdated strategy. By utilizing such old systems the gold ornaments
weightage may diminish.
 The muthoot finance should extend the repayment period for the some gold loan schemes.
 The muthoot should extend lending maximum amount on some gold loan schemes.
CONCLUSION

The main function of financing is itself lending loans and providing other services. As other
financing companies are providing various services under different schemes it very helpful for
the public for providing to fulfill their financial requirements. The main aim of lending loans is
to mobilize savings from the public.

The finance reinvests the same deposits for the development of the country through lending
loans & other services. This analysis portrays the eligibility, terms & conditions to use the fund
tenure of repayment and come across with how the finance manages its capacity to meet the
loans and earn profits even though maintaining the bad debts, which are not recovered from the
public. So this project is very helpful to the Muthoot finance manager regarding their operations
in maintaining loan accounts of the public.

Moreover we had find certain problems faced by Muthoot in lending gold loans & other loans,
given certain recommendations to overcome these problems and also to make several changes in
the schemes adopted by the muthoot in order to attract more customers for making use of these
loans.
 ANNEXURE

BALANCE SHEET OF MUTHOOT FINANCE LIMITED - 2018-19

Equity and liabilities Amount Assets Amount

Shareholders Fund Non-current assets

a) Share Capital 39904755490 e. Fixed assets

b) Reserves and surplus 61385640575 i . Tangible assets 2262400317

Non –current liabilities ii. Intangible assets 99918994

d) Long-term borrowings 48451337451 iii. Capital work in progress 99783210

e) Other-long term 6719692255 iv. Intangible assets under 211495018

liabilities development

f) Long-term provisions 97051810 f. Non-current 159073494

investment
Current liabilities g. Deferred tax 635146885
assets(net)
e) Short – term 127658658528 h. Long-term loans and 8365977780

borrowings advances

f) Trade payables amd 65047407170 Current assets 806252984

Current investments
other current liabilities

g) Short-term provisions 6792030215 e. Trade receivable 12769313382

h) Total outstanding dues 975466934 f. Cash and bank balance 16448756373

of creditors
g. Short-term loans and 279923226507
advances
 h. Other current assets 60075257

Total 321841420204 Total 321840420204

STATEMENT OF PROFIT AND LOSS ACCOUNT - 2018-19

Particulars Amount
Revenue from operations 59,108,007,360
Other income 275,902,209
Total revenue 59,383,909,569
Expenses
Employee benefit expenses 7,642,315,188
Finance cost 23,688,649,487
Other expenses 4,623,649,487
Directors remunerations 358,000,000
Depreciations and amortization 519,208,989
expenses
Provisions and write offs 2,966,497,773
Total expenses 39,798,071,402
Profit before tax 19,585,838,167
Tax expenses
Current tax 7,569,922,592
Deferred tax (54,947,717.87)
Taxes relating to previous years (1,740,48434
Profit for the year 12,072,603,777