avinash muthoot finance project

7/25/2019 Avinash Muthoot Finance Project...

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CHAPTER 1

INTRODUCTION


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EANIN% OF FINANCE

#inance is considered to be the foundation of basic

activities of any business.

*articularly in production and marketing activities. The

nance functions in the same way as oil functions in the

operation of machine or

blood functions in the human body.

In the absence of nance, nobody can image either of

setting up a business or its operations and development. +ot

only this, nance is needed in those areas where economic

activities of any type are performed.

'enerally speaking, business nance means the

arrangement of nance for all business activities. Since the

objective of the business is to earn prot and for the operations

of business activities, organi$ation of any type sale

proprietorship, rm or company is very much needed, it can

easily be deduced that the business nance is related to the

nancial arrangement of the organi$ations set up and operated

for the objective of earning prot.

#inance often signied the money and it studies as how

do an individual, businessman, investor, nancial institutions

and also government manage and operate the nance, i.e.


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!oney. -perts have never held common opinion with regard to

nance.


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DEFINITIONS OF FINANCE

Accordin& to Hus'and and Duc(#ny)

/Something must be there for directing the 0ow of

economic activities and their conduct without any bottleneck.

#inance is the only means which can perform their function.

Accordin& to Os'orn$ R*C

The nance function is the process of ac&uiring and

utili$ing funds by a business1.

Accordin& to +onn#,ill# and D#-#y

/#inancing consists in raring, providing, managing, of all

money, capital or funds of any kind to be used in connection

with the business1.


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CHAPTER.II

FINANCIA/ SERVICES


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CHAPTER.0

FINANCIA/ SERVICES

The nancial services can also be called nancial

intermediation is a process by which funds are mobili$ed from a

large number of savers and make them available to all those

who are in need of it and particularly to corporate customers.

Thus, nancial services sector is a key area and it is very vital

for industrial developments. " well developed nancial

services industry is absolutely necessary to mobili$e the

savings and to allocate them to various investable channels

and thereby to promote industrial development in a country.

FEATURES OF FINANCIA/ SERVICES

Some of the characteristic features of nancial services

are as follows.

2ustomer oriented

Intangibility

Simultaneous performance

3ominance of human element

*erish ability

Inseparability

4ack of special identity.

IPORTANCES OF FINANCIA/ SERVICES


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#ollowing are the some of the points which shows the

importance of the nancial services.

#inance is /lifeblood1 of an organi$ation.

#inancial services need for every organi$ation to run the

business.

"gricultural sector need nancial services.

It is important in development of the economy of the

country.

Increases the savings and mobili$ation of funds.

It is useful in the new innovation in service sector.

it helps to increase the productivity of the agriculture.

REASONS FOR %RO2TH OF FINANCIA/ SERVICES

#inancial services stimulating growth of the system of a

country. 5easons for growth of nancial services are as follows,

DEO%RAPH3

*opulation growth stimulating the re&uirement of basic

needs, such as food, shelter, education, health care facility.

These needs are fullled we re&uired nancial systems.

ECONOIC

#inancial services growth directly related with the growth

of the economy of the nation.

PO/ITICA/ AND /E%A/


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6hen the country improves nancially growth,

automatically the political and legal condition of the country

also improves.

SOCIA/ AND CU/TURA/

6hen the country stands nancially t then the living

standard of the peoples also increases automatically and also

the culture of the nation is saved.

T3PES OF FINANCIA/ SERVICES

78 4ong9Term #inance Sources:8 !edium9Term #inance Sources

;8 Short9Term #inance Sources

I*/on&.T#r4 Financ# Sourc#s)

+ormally, this source is resorted to nance that

part


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of the business therefore normally e&uity shares should be

issued for raising funds for nancing permanent working capital

'5 R#tain#d #arnin&s)

That part of earned prots. In a business which is not

distributed as divided is called or retained earnings and it is

considered as regular and costless source of nancing working

capital.

6orking capital re&uirements to increase wit the growth

of business concern and which can be met by reinvesting the

prots in business itself.

c8 R#s#r,#s)

4ike retained earnings, various types of reserve also do

not involve any ed charge on business earnings and

therefore the use of such reserves in nancing working capital

is also considered as proper and protable.

d5 Sal# of "6#d ass#ts)

Some ed assets owned by the business concern may

become obsolete and some of there are available as

scrap


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" business concern may avail some discount while

making payments against current liabilities i.e. discharging the

current obligations. Similarly, provisions for taes and other

known epenses are created and it is just possible that actual

payment on these score may be less than their book values

should be considered as non9recurring source for nancing

working capital.

II +orro-#d Sourc#s7E6t#rnal Sourc#s)

>nder this component of long9term sources, the followingare included.

a5 D#'#ntur#s)

?usiness concern may also raise funds for nancing the

working capital by issue of debentures in the same way as the

issue of shares. It is, however, noticeable that issue of

debenture created ed burden in the rm of interest8 on the

business used after considering the progress of the business,

stability of business earnings, risk factor etc.

b8 /on&.t#r4 /oans7d#'ts)

In addition to the issue of debenture, a business concern

may also obtain funds for working capital as loans from

nancial corporations, trusts and investment companies.

II. #diu4 T#r4 "nanc#)


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@n the basis of terms of duration. The business nance is

classied into ; types of !edium Term of nance is that,

!edium Term nanceA

To nance a business for a period of more than a year but

less than 7B years is called intermediate nancing. Such type

of nance is obtained for epansion and moderni$ation of

eisting plant. It is also needed for the purchase of assets.

2ostly raw9material. It may be used to met the cost of

maintenance, repair, improvement and betterment of plant.

4astly it can be used to repay the short term loans.


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Sourc#s of #diu4 t#r4 "nanc#)

15 Co44#rcial 'an(s)

2ommercial banks provide medium term nance to

traders and manufacturers against security.

05 Insuranc# co48ani#s)

The insurance companies also provide loan to

manufacturers against the security of assets.

95 Industrial d#,#lo84#nt 'an( of Pa(istan)

I3?* was established in7CD7 to provide medium and long

term nance to establish and epand industries.

:5Pa(istan industrial cr#dit and in,#st4#nt cor8oration

CPICIC5

This corporation was set up in 7CEF and is one of the

major sources of providing nance for medium and long term

projects. It also provides nance in technical and managerial

elds. It also provider loans for working capital.

III* SHORT TER FINANCE

"s mentioned in the preceding chapter, variable working

capital is normally nanced through short9term sources

including spontaneous ones. #ollowing may be included in this

category.


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78 Trade 2redit

:8 ?ank 2redit

;8 *ublic 3eposits

G8 Inter9corporate 3eposits

E8 "dvances from customers

D8 Internal sources

F8 Some new and innovative sources +on9?ank8 such as

a8 2ommercial *aper

b8 2onvertible 3ebentures

c8 #actoring

15 Trad#Cr#dit)

Sellers


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remembered, i.e. trade credit is etended in connection with

goods or raw materials bought for resale or processing and

resale and it is dierent from consumer credit which is oered

to individual for buying goods for ultimate are


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2ommercial bank provides cash credit facilities to its

customers


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?ank provides short9term credit in the above forms to its

customer. =owever, bank credit system is subjected to a

number of regulations as discussed at the end of this chapter.

95 Pu'lic D#8osits)

5egulations imposed on the availability of bank credit

induced many concerns to eplore alternative sources of

nancing the working capital and the mobili$ation of savings

from the general public was rated to be a very importantalternative source. #unds thus mobili$ed form general public

deposits by non nancial and non9banking companies is a very

old system. " number of tetile mills of "hmadabad, Surat and

!umbai started to avail this source of nance which became

very popular later on.

In or country the evolution of inter corporation deposits

took place in the seventh decade of the twentieth century.

?oth demand and supply were e&ually responsible for this.

There is no control on the short9term market of inter9corporate

deposits

=owever, long9term deposits are made covered under

sec E "8 of the Indian 2o, "2 and accepted freely among the

corporate bodies.


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remains with them till the supply of goods. +ormally, no

interest is paid on this amount. Therefore, it is the cheaper

source of short9term nancing but resort to their method can

be made only by some reputed and well9settled concerns. In

case of industries, where tough competition is noticed, no

advance can be received rather goods are to be sold to

customers on credit terms.

=5 Int#rnal Sourc#s)

6hen a business concern establishes a depreciation

fundC*P* C ?)

2ommercial paper is a short9term money market

instrument which is considered as most ideal both for investors

as well as for corporate sector borrowing from banks for

working capital re&uirements. 6hile high9rate companies may


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take advantage of this source the investors too can earn prot

by using their short9term funds.

"s a source of short9term fund, commercial paper is mostpopular in Japan and western countries. In the >S", it is in

vogue. #or over 7BB years, while in -uropean countries and

Japan its origin is of recent one. In our country, 5eserve ?ank

of India permitted the issue of commercial papers in the year

7CC

;8 2ommercial paper is a promissory note which is negotiable

by endorsement and t for delivery with a ed maturity

between one month to one year and it is issued on discount

basis

It helps to raise short9term debt at attractive rates. It is

an unsecured instrument and is not tied up to any specicbusiness transaction. It does not carry any collateral security.

Thus, commercial paper becomes a substitute source and not

an additional source.

b8 Con,#rti'l# d#'#ntur#s)

#or augmenting funds for working capital along with long9

term purposes, there is one more source, i.e. the issue of

convertible debentures. It has been gaining popularity since

last two decade or so. Since banks generally grant

loans


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The issue of bearer debentures in normally not permitted.

Similarly, the issue of debentures is not permitted just to

prevent an enterprise from closing down due to recurring

losses.

-ven the permissible rater of interest on convertible and

non9convertible debenture is notied by the government form

time to time.

c5Factorin&)

@ne most recent source for nancing working capital in

factoring. In fact, factoring is also a business activity in which

a nancial intermediary called factor8 takes the responsibility of

collecting the debtors or receivables of a manufacturing trading

concern called /Seller or 2lint1.

In other words chief nancial eecutive instead of

discounting the bills from bankers seller the debtors and

receivables to a special nancial institution. #actor, i.e.

nancial institution assumes total responsibility of sales ledger

administration and collections from debtors. Thus, /#actoring is

a continuing arrangement between a nancial intermediary

called factory /and seller of goods and services called client8.#actors are generally subsidiary of either ?ank or private

#inance companies.

It is also important to note that factoring should not be

considered as related only to a specic transaction rather it

should be considered as a continuous arrangement. In fact, it

takes care of all receivables emanating from the credit sales of


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its client. In this sense, factoring is a nancial service designed

to help companies in managing the receivables in a better

way.

CHAPTER .9

COPAN3 PROFI/E


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CHAPTER .9

COPAN3 PROFI/E

COPAN3 +AC@%ROUND)

The !uthoot 'roup is a 7:; years old business based in

India and interested in nancial services, Information

technology, !edia and -ntertainment, =ealth care, -ducation,

*ower generation, Infrastructure, *lantations, *recious metals

and =ospitality. The 'roup takes its name from the !uthoot

#amily based in Kerala. The 2ompany was set up by !uthoot

+inan !athai in 7F at Ko$hencherry , a small town in the

erstwhile Kingdom of Travancore Kerala8. It was then later

taken over by his son ! John !uthoot who incorporated the

#inance division of the group which was till then primarilyinvolved in wholesale of grains. The company is now managed

by the third and fourth generation of its family members.

!uthoot #incorp 4imited !#48 the 0agship 2ompany of

the :B,BBB 2rore !uthoot *appachan 'roup . " market leader

in the gold loan business !uthoot #incorp has over 7:B

branches spread across the cities, towns and villages of India,

the 2ompany serves an average of GE,BBB customers a day.

!uthoot #incorp)s long9standing eperience, epertise and

stronghold in the semi urban and rural areas have enabled the

2ompany to provide &uick, customi$ed nance options and

investment products, maimi$ing returns to the population. The

loan products of !uthoot #incorp are uni&uely structured to

serve people who do not have


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easy access to mainstream commercial banks.

!#4 counts the satisfaction and long9service of its people

as a cornerstone of its success. #ostering teamwork, nurturing

creativity and rewarding dedication to commitment are

systematically and professionally managed. -cellence and

innovation are encouraged and rewarded. -nsuring !#4)s

people remain at the competitive edge, best practice in the

area and uni&ue motivational programs are regularly carried

out by the Training and =5 departments.

The company recently announced plans for an I*@ Initial

*ublic @ering8 before the year :B7G. In addition there are

plans to implement an -S@* -mployee Stock @wnership *lan8

before :B7:

!uthoot #incorp is a subsidiary of !uthoot 'roups was

established in 7C;C and primarily involved in nancial sector of

the country. !uthoot #incorp falls under the category of +on

?anking #inancial 2ompany +?#2s8 of the 5?I guidelines.

!uthoot #incorp limited is a nance companycatering to the

nancial needs of retail and institutional customers. It is

registered with the 5eserve ?ank of India as a systemically

important non9deposit taking non9banking nance company

+?#28 with a paid up capital of 5s. DB crores and a +et @wned

#und of 5s. GB; cores. !uthoot #inance is also the highest

credit rated 'old 4oan company in India, with a credit rating of

""925ISI"48 for its long term debt and *7L 25ISI"48 and "7L

25ISI"48 for its short term debt Instrument. It has a diverse
http://www.muthootfincorp.com/http://www.muthootfincorp.com/http://www.muthootfincorp.com/http://www.muthootfincorp.com/


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mi of retail oerings in the areas of 2onsumer loan products

and investment advisory services. These include 'old loans,

=ome loans, "uto loans, ?usiness loans, 4oans against

*roperty, Investment products and "dvisory Services, Secured

3ebentures etc.

!uthoot #inance a subsidiary of !uthoot 'roupwas

established in 7C;C, and is primarily involved in the nancial

sector of the country. 6e are the largest gold nancing

company in India in terms of loan portfolio. 6e providepersonal and business loans secured by gold jewellery, or 'old

4oans, 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 short9term li&uidity re&uirements. @ur 'old 4oan

portfolio as of !arch ;7, :B7B comprised approimately :.

million loan accounts in India that we serviced through 7,DBE

branches across :B states and two union territories in India.

"ccording to the I!a2S Industry 5eport :BBC, as of !arch ;7,

:B7B our branch network was the largest among gold loan

+?#2s in India. 6e have since increased our branch network to

7,C:7 branches as of "ugust ;7, :B7B, and used our branch

network to serve an average of E;,CC customers per day in

the month of "ugust :B7B. "s of "ugust ;7, :B7B, we

employed 7:,::B persons in our operations. !uthoot also

provides various nancial services such as Insurance

distribution, 6ealth !anagement, #oreign -change, !oney

Transfer and Mehicle "sset #inance. !uthoot #inance was

selected as one of the Top 7B #inance companies to work for in
http://en.wikipedia.org/wiki/Muthoot_Grouphttp://en.wikipedia.org/wiki/Muthoot_Group


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India by +aukri.com. !uthoot #inance privately placed GN of its

paid up capital to *rivate -&uity players 9 ?arings India

and !atri *artnersIndia for 5s.7.EF billion, hence valuing the

earlier privately held company at over O7 billion.

6e are a Systemically Important +on9deposit taking +?#2

head &uartered in the southern Indian state of Kerala. @ur

operating history has evolved over a period of FB years since !

'eorge !uthoot the father of our *romoters8 founded a gold

loan business in 7C;C under the heritage of a trading businessestablished by his father, +inan !athai !uthoot, in 7F. Since

our formation, we have broadened the scale and geographic

scope of our retail lending operations so that, as of !arch ;7,

:B7B, we were India)s largest provider of 'old 4oans. In the

years ended !arch ;7, :BB, :BBC and :B7B, revenues from

our 'old 4oan business constituted CE.CFN, CD.F7N and

C.BN, respectively, of our total income. In addition to our

'old 4oans business, we provide money transfer services

through our branches as sub9agents of various registered

money transfer agencies, and recently have commenced

providing collection agency services. 6e also operate three

windmills in the state of Tamil +adu.

6e issue secured non9convertible debentures called

/!uthoot 'old ?onds1 on a private placement basis. *roceeds

from our issuance of !uthoot 'old ?onds form a signicant

source of funds for our 'old 4oan business. 6e also rely on

bank loans and subordinated debt instruments as our sources

of funds. "s of !arch ;7, :B7B, we had 5s.:F,7C:.E million in
http://en.wikipedia.org/wiki/Baringshttp://en.wikipedia.org/wiki/Matrix_Partnershttp://en.wikipedia.org/wiki/Baringshttp://en.wikipedia.org/wiki/Matrix_Partners


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outstanding !uthoot 'old ?onds and 5s.:E,D7:.F million in

other borrowings. 6e also raise capital by selling a portion of

our loan receivables under bilateral assignment agreements

with various banks that purchase our portfolio primarily for

meeting their priority sector lending commitments.

@ur customers are typically small businessmen, vendors,

traders, farmers and salaried individuals, who for reasons of

convenience, accessibility or necessity, avail of our credit

facilities by pledging their gold jewellery with us rather than bytaking loans from banks and other nancial institutions. 6e

provide retail loan products, primarily comprising 'old 4oans.

6e also disburse other loans, including those secured by

!uthoot 'old ?onds. @ur 'old 4oans have a maimum 7:

month term. @ur average disbursed 'old 4oan amount

outstanding was 5s.:D,7;.B per loan account as of !arch ;7,

:B7B. In the year ended !arch ;7, :B7B, our retail loan

portfolio earned, on average, 7.DFN per month, or 7C.CGN per

annum.

"s of !arch ;7, :BB, :BBC and :B7B, our portfolio of

outstanding gross 'old 4oans under management

was5s.:7,FCB.7 million, 5s.;;,BBB.F million and 5s.F;,G7F.;

million, respectively, and approimately ;B.7 tons,;.C tons

and DE.E tons, respectively, of gold jewellery was held by us as

security for our 'old 4oans . 'ross non9performing assets

P+*"sP8 were at B.G:N, B.GN and B.GDN of our gross retail

loan portfolio under management as of !arch ;7, :BB, :BBC

and :B7B, respectively.


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In the years ended !arch ;7, :BB, :BBC and :B7B, our

total income was 5s.;,DD.G million 5s.D,:BG.B million and

5s.7B,C;.F million, respectively, demonstrating an annual

growth rate of EF.EDN, D.:CN and FE.ECN, respectively. @ur

prot after ta in the years ended !arch ;7, :BB, :BBC and

:B7B was 5s.D;D.B million, 5s.CFF.: million and 5s.:,:FE.F

million, respectively, demonstrating an annual growth rate of

GG.D7N, E;.DEN and 7;:.N, respectively. @ur net worth as

of !arch ;7, :BB, :BBC and :B7B was 5s.:,7;7.7 million,

5s.;,D7G.E million and 5s.E,G7.C million, respectively. 6ebelieve that the following competitive strengths position us

well for continued growthA

PROFI/E OF FOUNDER OF UTHOOT %ROUP

In 7F, in Ko$hencherry a &uiet hamlet surrounded by

plantations in the Southern state of Kerala, India, !r. +inan

!athai started a retail business along with his plantation

ventures.In time, his sons took over the reins and re9

established the business. 6ith their youthful vision and

combined strength it soon 0ourished. In 7C;C, the brothers

established the !uthoot 2hit #und -nterprises, providing small

and medium loans to farmers and merchants. In a short span of

7B years it became the largest business house of its kind in

Kerala.

They soon moved into full 0edged banking operations.

They specialised in gold loans and advances to small

enterprises and individuals on &uick and easy terms. This

ensured rapid growth. The brothers then decided it was time to


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bifurcate and thus was born the !uthoot *appachan 'roup,

founded by his youngest son !athew !. Thomas or !uthoot

*appachan as he is fondly known. >nder his watchful eye the

group has since diversied into nancial services, hospitality,

0ight catering, travel services, IT infrastructure, property

development, the automotive sector and alternate energy. "

simple and devout man !uthoot *appachan espoused a nine

point formula that stood by him in realising his goals. They are

love, peace, happiness, kindness, helpfulness, patience,

pleasantness, faithfulness, and self control.

These ethics have been a guiding light to the path of his

successors and have permeated every strata of the !uthoot

*appachan 'roup. The same values still govern every decision

in the 'roup. 6hen asked for his formula to success he

&uipped, /un0inching faith in the "lmighty and unshakeable

determination to face and overcome challenges.1 In dire

circumstances and sometimes in the face of loss he was heard

to &uote that a debit on earth will be a credit in heaven. " man,

known to adhere to his word, he instilled these values

throughout the organisation he nurtured. The !uthoot

*appachan 'roup carries !uthoot *appachan)s legacy on with

his words in our hearts /I am because 'od is with me.1

A+OUT THE +OARD OF DIRECTORS)

T!o4as o!n ut!oot

The !uthoot *appachan 'roup is headed by 2hairman

and !anaging 3irector, Thomas John !uthoot. 6ith a vision for

the future and rooted in the values imparted by his father, he


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has eectively spearheaded the group over the past twenty

ve years into one of Kerala)s leading nancial powerhouses.

=e also paved the way for the diversication of the group into

other major industries like power, hospitality, automotive and

more. =e is also a member of the 2hamber @f 2ommerce,

Trivandrum, and Treasurer of the Trivandrum "genda Task

#orce.

T!o4as %#or ut!oot

Thomas 'eorge !uthoot is the &uiet strength behind thevisionary growth of the group. The twin of John !uthoot,

!anaging 3irector of !uthoot 2apital Services and 3irector of

all other units of the !uthoot *appachan 'roup, his penchant

for technology and e%cient administrative skills ensures the

group stays on the cutting edge of development. =e is also the

2hairman of Kerala +on9?anking #inance 2ompanies 6elfare

"ssociation, Kochi and on the managing committees of Indo9

"merican 2hamber of 2ommerce9Kerala ?ranch, Kochi and

-&uipment 4easing "ssociation of India -4"I8, 2hennai.

T!o4as ut!oot

Thomas !uthoot is 3irector9 Strategic Initiatives and

3irector of other units of the group. "n epert in !icro credit

and !icro saving business with a great desire to serve the

masses, he is innovative with need based nancial products.

=is knowledge of emerging markets and their functions have

been harnessed in structuring the business interests of the

group. =e is also the Mice *resident of -rnakulam 3istrict


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2ricket "ssociation and !anaging 2ommittee member of Kerala

2ancer 2are Society.

THE COPAN3 PRODUCT /INE AND FEATURES OF THE

PRODUCT

"s far as services are concerned, !uthoot #incorp

provides various services according to the needs andre&uirements of its customers. ?asically its core services are

gold loan and swarnavarsham. !uthoot ncorp has strategic

alliances with leading companies which grant its customers

access to premium services at aordable costs. #or money

transfer Q6estern >nion money transfer ,!otilal @swal Q#or

investment advisory services and share broking, #or !utual

#und 9#ranklin Templeton. !uthoot #incorp also provides S3

secured debenture8 and #3 ed deposits8. In gold loan it

provides various types of schemes for customer like ; minutes

epress gold loan, smart plus gold loan. In ; minutes epress

gold loan one can get loan up to CB per cent of gold

depending upon the purity level of gold within three minutes on

an monthly interest of : per cent. ?ut in Smart plus gold loan

the benet of paying back in -&uated !onthly Instalments, The

-!I is apportioned such that the larger amount goes toward

repaying the principal, no foreclosure charges,*art release and

repledge is allowed, and 5ebates on prompt payment. "part

from -!I option it also provides dierent interest rate

depending upon time period and loan amount, here interest is


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also calculated on diminishing balance method. In smart plus

gold loan more 0eibility is there as compared to ; minute

epress gold loan.

In #3 ed deposits8 one get double its money in ve years

and the minimum amount in #3 is 5s 7B,BBB


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biggest competitors is !uthoot #inance and !annapuram gold

loan. Some of the new players like Karvy #inance, !ahindra

#inance gold loan, #uture 2apital comes into market which is a

threat for !uthoot #incorp. Though there are many competitors

in gold loan market but still !uthoot #incorp is successfully

running its business more than si decades and earned a prot

of more than :BB cores in the scal year :B7B977.

ACHIEVEENTS

!uthoot #inance is the highest credit rated 'old 4oancompany in India, with a credit rating of ""925ISI"48 for its

long term debt and *7L 25ISI"48 and "7L 25ISI"48 for its

short term debt Instrument. Its !ahila !itra loan portfolio

touches 7B,BBB women micro entrepreneurs. In last two

months it successfully opened :BB branches in northern part of

India.

FUTURE PROSPECTS

-arlier !uthoot #incorp was only in Kerala, and then it

slowly epands its business and now having more than FBB

branches in south India. Then in the early :BBB it epand its

business 'ujarat and in north India. "t the same time this +?#2

2ompany provides a wide choice of services to its customers.

+ow its net step will be to open another :BB branches in north

India and then to shift east India. So one can say that !thoot

#incorp is on epansion mode and in net 7B year it wii open

its branches in entire India.


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AR@ET /EADIN% POSITION IN THE %O/D /OAN

+USINESS 2ITH A STRON% PRESENCE IN UNDER.SERVED

RURA/ AND SEI UR+AN AR@ETS

'old loans are the core products in our asset portfolio. 6e

believe that our eperience, through our *romoters, has

enabled us to have a leading position in the 'old 4oan business

in India. =ighlights of our market leading position include the

followingA

6e are the largest gold nancing company in India in terms of

loan portfolio. @ur loan portfolio as of !arch ;7, :B7B

comprised approimately :. million loan accounts in India with

'old 4oans outstanding of 5s.F;,G7F.; million.

6e have the largest branch network among gold loan

+?#2s. "s of !arch ;7, :B7B, we operated 7,DBE branches

across :B states and two union territories in India, and in the

month of "ugust :B7B, we served an average of E;,CC

customers daily. @ur branch network has epanded

signicantly in recent years from ;F; branches as of !arch ;7,

:BBE to 7,C:7 branches as of "ugust ;7, :B7B, comprising ;;E

branches in northern India, 7,;:: branches in southern India,

7CF branches in western India and DF branches in eastern

India.

6e believe that due to our early entry we have built a

recogni$able brand in the rural and semi9urban markets of

India, particularly in the southern Indian states of Tamil +adu,


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Kerala, "ndhra *radesh and Karnataka. "s of !arch ;7, :B7B,

the southern Indian states of Tamil +adu, Kerala, "ndhra

*radesh and Karnataka constituted FE.;N of our total 'old

4oan portfolio.

6e have a strong presence in under9served rural and

semi9urban markets. " large portion of the rural population has

limited access to credit either because of their inability to meet

the eligibility re&uirements of banks and nancial institutions

because credit is not available in a timely manner, or at all. 6ehave positioned ourselves to provide loans targeted at this

market.

6e oer products with varying loan amounts, advance

rates per gram of gold8 and interest rates. The principal loan

amounts we disburse usually range from 5s.:,BBB.B to

5s.7BB,BBB.B while interest rates on our 'old 4oans range

between 7:.BBN to ;B.BBN per annum.

0*0*1*1 ut!oot Or&anisational Structur#

"&* 0*1


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CHAPTER .:

PRODUCT PROFI/E


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CHAPTER .:

PRODUCT PROFI/E

INTRODUCTION

The year 7C;C saw the emergence of the present day

corporate giant9 /The !uthoot 'roup1. It embarked on its

unending mission of providing ecellent services to its

customers by establishing its rst unit in Ko$hencherry.

The clear9cut vision and ideals of our founder patron late

Shri. +inan !athai !uthoot and #ounder chairman late Shri. !

'eorge !uthoot has made the !uthoot 'roup the 4argest

nancial 'roup of its kind in India.

>ndoubtedly the mission is to win the condence of the

customer through unmatched, prompt and personali$ed

service.

ADINISTRATIVE SET UP OF UTHOOT %ROUP

The 5egistered @%ce of the group is situated atko$henchenrry In kerala. The 2orporate @%ce South8 is in

Kochi, Kerala and the 2orporate @%ceA +orth8 is situated at

4ajpat +agar +ew 3elhi.


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THE %ROUP HAS FORT3 FOUR RE%IONA/ OFFICE

@#rala Ta4ilnadu @ARNATA@A ANDHRAPRADE

SHTrivendrum north South

tamilnadu

?angalore

+orth

=yderabad

Trivendrum south Sivagangai ?angalore

South

Secunderabad

Kollam Trichy =ubli vijayawadaKottarakkara !adurai !angalore Kurnool

Ko$henchery 2oimbatore !ysore Mishakapatanam-rnakulam 2hennai South 'oa Thirupathi

Trichur 2hennai north 5ajamundry"lleppey *ondichery

Idukki Salem2alicut Theni

ThirunelveliThanjavur

@O/@ATTA 2EST+E%A/

@ARNA/ HARI3ANAU+AI AHARASTR

AAHAADA+AD %URAT

DE/HI DE/HI2EST DE/HI DE/HI

AIPUR RAASTHAN


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VARIOUS DIVISIONS OF UTHOOT %ROUP

1. +AN@IN% B FINANCE DIVISION ;FIN5

Started in 7C;C

IS@ CBB79:BBB 2ompany

3eals in 'old ?ond 3eposits8 , 'old 4oan, ! *ower

2ard

0* UTHOOT P/ANTATION DIVISION

Since 7C;C

2ommitment of !uthoot 'roup to pollution free world

@ur -states are St. !athews -state, Koodal St. !athews

-state, at Kulasekharam +agercoilH

!uthoot *lantation boasts cloves, coconut and 5ubber.

9* EDUCATION DIVISION

Since 7CD:

St. 'eorge)s School, "lakananda, +ew 3elhi

St. 'eorge)s School, 3efence colony, +ew 3elhi

!'! !uthoot +ursing School, Ko$hencherry,

*athanamthitta

Sta Training 2olleges at -rnakulam +ew 3elhi

:* UTHOOT HOSPITA/IT3 B HOTE/ DIVISION

Carda4o4 County

Started in 7CF @ur 'roup purchased this project in

:BBB

ust 7 Km from famous *eriyar Tiger 5eserve


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/"ll Spice1 the multi9cuisine restaurant oers nest

international dishes

/"yura)9"yurvedic center helps you for natural therapy.

'reen 4eaf certicate from 3ept. of Tourism 'overnment

of Kerala

2ompany certied with G star classication and #irst IS@

CBB79:BBB 5esort in Kerala.

ut!oot Pa48a Villa

5iver side cottage at champakulam, "lleppey on the

banks of *ampa river.

ut!oot +ac( 2at#r Cruis#s

#leet of =ouse boats at "lleppey


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@ver 3rive 2ar 4oan #acility provides loans with lowest

rates with easy and 0eible repayment.

4oan also given to used Mehicles

* UTHOOT +UI/DERS

H#ad uart#rs at Tri,andru4*

Throughout its fteen years of operation, !uthoot

?uilders have

built several meticulously planned residential,

commercial, hospital and hospitality buildings which are known

for the &uality of construction, utility value and aesthetic

beauty

* UTHOOT S3STES AND TECHNO/O%IES *MT 4T3.

-!SR+-8

IT 3ivision of the !uthoot 'roup

Since 7CC;

Strong focus on custom application development

3eveloping custom application ranging from medium to

large9scale

* ONE3 TRANSFER DIVISION*

Started in:BBl

Faciliti#s includ# ;In-ard R#4ittanc#5

78 Trans 2ash

:8 press !oney


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;8#irst 5emit

G8 Instant 2ash

E8 !oney 'ram

Out-ard R#4ittanc#

78 6iremoney

1G. UTHOOT 2EA/TH ANA%EENT SERVICES PVT*

/TD*

4ife Insurance

!utual #unds

'eneral Insurance


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11* UTHOOT FOREI%NECHAN%E DIVISION

Since :BB7

"ll major currencies and travelers che&ues accepted for

encashment

2ommission free encashment

Sale of major currencies and travelers che&ues

*ossess "uthori$ed 3ealer 2ategory II license from 5?I

10* UTHOOT PRECIOUS ETA/S CORPORATION

Sale of CCC.CC *ure 'old coin imported from Swit$erland.

-asy to buy and store

19* PO2ER %ENERATION

The group has also ventured into power generation by

tapping into non conventional energy resources. The group in

association with Su$lon -nergy 2orporation has installed two

wind power units at Thirunelveli

to generate electricity from wind.

1:* EDIA

!uthoot 'roup has made a grant entry into the world of

media broad casting by setting up an #! radio station at

2hennai.


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1


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Su8#r +ull#t Points

6e provide instant cash loan in E minutes

loan for any amount available any time, any where for

any purpose.

Simple hassle free loan with least documentation.

unmatched safety of security of 'old pledged.

#leible payment option on easy installments.

1* USP 9 %O/D +OND

6e mobili$e resource, not through ed deposits as in

?anks, but through 3ebenture called 'old9?onds which are

fully U secure, redeemable and non9convertible instrument

7. The resources mobili$ed are given out as gold 4oans to

customers. This investors money is guaranteed by 7:BN of

gold kept in our strong rooms.

:. 6e oer the best rate of interest9 up to 7:N. In our 3oubling

?ond, 6e give 7FN interest and in F: months the bond amount

doubles.

;. The ?ond holder is free to close the deposit at anytime.

Investors in shares and insurance do not have this facility.

G. Since it is a 3ebenture, it cannot be converted in to other

instruments like shares etc.

E. Interest can be availed monthly or annually.


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D. =igher interest rate is oered to senior citi$ens, !uthoot

employees, -9service me state and central government

pensioners, freedom ghters and state and central award

winners.

F. 'old ?ond investments can be shifted to any branch of the

company.

. "lso you can avail interest from any branch

C. 2ustomer can avail a loan up to CBN the ?ond amount,

through any of our branches.

7B. Rou can suggest a nominee for your investment.

77. 2losing of the gold ?ond can be eected through any of our

branches.

Su8#r +ull#t Points

7. #or every 7BB crs. of investment in ?onds, we have 7GB

crores of gold with us.

:. >nmatched li&uidity. *remature closure of ?onds 4oans up

to CBN available at anytime

;. @ur rate of interest is :.EN to ;N higher than the interest

rates of nationali$ed


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G. 6e have an unblemished track record B77:G years. 6ide

network of over :EBB branches across the country facilities

customers to withdraw the amount of ?onds


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Imported from Swit$erland

#avorable for owners of jewellery shops and high value

customers.

p to 5s. EBBBB can be received as cash by the Indianreceiver.

" customer can accept money from any branches of

muthoot in India.

" foreigner can receive cash, in Indian currency up to an

e&uivalent of :EBB >S 3ollars from any !uthoot branch.


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Services of Si money transfer companies are made

available

through !uthoot ?ranches.

* USP. *Po-#r Card

This card will be accepted in all !uthoot #inance

branches.

=older gets an accidental insurance cover up to 5s.

7BBBBBnit linked and Investment oriented Insurance *lans

*rovides #leibility gives *rotection to savings of life


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4i&uidity, high returns, Ta benets, Insurance 2over,

option to switch among funds and continued advices to

maimi$e health.

-cellent after sales service and redemption advises.

ANA/3SIS OF FINANCIA/ STAEENT


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CHAPTER .

avinash muthoot finance project

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