VOL XVII / ISSUE #1 / march 13 for private circulation only

RECOGNITION, CELEBRATION AND MOTIVATION.

The year couldn’t have started any substantially increased the employment opportunities in better than this. Our pioneering Tier II, III & IV cities and towns. vision to make the common man, That’s not all. We have registered an encouraging growth irrespective of caste, colour and of `1969 crores in assets under management, as against creed, perfectly bankable has a reduction of Rs.1337 crores in the first quarter and a garnered global recognition. On growth of ` 405 crores in the second quarter. This signifies the occasion of the Financial that the holistic strategy we have adopted to address the Inclusion Day, Muthoot Finance regulatory restrictions imposed on Gold Loan NBFCs has was bestowed with the coveted worked wonders for us, giving us the necessary confidence Skoch Financial Inclusion Award and momentum to sustain growth in the coming year. In 2013 by Dr. C. Rangarajan, the turn, it improves our profitability metrics. Hon’ble Chairman, Economic We are also glad that the KUB Rao Committee Report is Advisory Council to the Prime now in public domain and the facts and recommendations Minister and former Governor of mentioned in the report dispel any negative perceptions the Reserve Bank of India. about our industry and business. The report underscores The prestigious award is indeed special because it recognizes that there are no systemic implications to domestic financial Muthoot Finance’s pioneering role and mission in building a stability because of the inter-connectedness between the sustainable economic model of financial inclusion specially gold loan NBFCs and the banking system. In fact, in the in the rural and semi-rural heartland of India. We are one final report of the working group that studied the issues of the first Indian companies to consider thousands of related to Gold and Gold Loans by NBFCs, it has been rural Indians as perfectly bankable, even before the term clearly stated that ‘Gold Loan NBFCs are doing a socially ‘financial inclusion’ became common parlance. useful function.’ With a growing customer base of over 6 million and serving Indeed, this is a perfect birthday gift to our Founder around 80,000 customers every day, we have not only (Banking), Late Shri. M. George Muthoot, and Founder been successful in changing the concept of gold loan from (Muthoot Group), Shri. Ninan Mathai Muthoot, whose birth a ‘desperate loan option’ to a ‘lifestyle banking product’, anniversaries were grandly celebrated across all branches and offices on February 4th and 5th respectively. Their but also in making the unorganized Non-Banking Financial vision inspires us. Their words are our guiding principles. Company (NFBC) sector into an organized space. We have Let’s march ahead and make them proud. Let the golden made gold jewellery, which was considered to be a static run continue. asset so far, into an economically productive asset and an Chairman economy driver. Our aggressive branch expansion has also M.G. George Muthoot

Skoch Financial Inclusion Award Congratulations Muthoot Finance Ltd. M r . E a p e n received the Skoch Financial Alexander S/o. Inclusion Award 2013 for Mr. George ‘Access to Banking and A l e x a n d e r Financial Services’ at a Muthoot, glittering function held at Managing Hotel Shangri-La, Ashoka D i r e c t o r , Road, New Delhi. Mr. has joined M. G George Muthoot, the Muthoot Chairman, The Muthoot Group as Vice Group received the award President, on behalf of the company. Western India The award was conferred Region. He by Dr. C Rangarajan, Hon’ble Chairman, completed his bachelor’s degree from St. Economic Advisory Council Xavier’s College, . He completed to the Prime Minister along his MSc. in International Political Economy with Mr. Sameer Kochhar, from London School of Economics. We wish Chairman, Skoch Group. him all success in his new assignment. The Edit Page ECONOMIC TIMES | MUMBAI | THURSDAY | 28 FEBRUARY 2013 A Halo for Gold Loan NBFCs on advances against gold Considering its massive transparency, internal jewellery to asking gold growth potential, gold controls, documentation, Guest Column loan companies and banks loans have been attracting grievance redressal to expand their gold loan a lot of companies, system and transparent GEORGE ALEXANDER MUTHOOT portfolio for monetising irrespective of their auctions will further idle gold to indicating no abilities. cement the customer’s he release immediate systemic risk, trust in existing players, The measures followed of Reserve we can safely assume gold helping the organised by the AGLOC, along with Bank of India’s loans aren’t influencers of sector grow further and the ones suggested by (RBI) KUB Rao gold imports, while playing bring in more uniformity. the committee, will act c o m m i t t e e a very important role of as a high entry barrier for That apart, higher loan- report on gold monetisation the idle gold those thinking of a foray tovalue consideration is has brought lying with the masses. a breath of fresh air. The into the lucrative business an indicator from the RBI awareness of gold loans And, with an estimated of gold loans. This high that it wants the sector had grown well beyond 20,000 tonnes of gold entry barrier would also to grow to monetise idle the south and gold loan holding in the country, 65% protect the interests of the gold through the organised players, especially the of which is thought to be existing players and ensure sector. Besides, higher biggies, have been growing held by the rural population, healthy competition loan-to-value should also at a brisk pace. The RBI the sector and other players and relationships. provide a muchneed are just scraping the surface impetus to growth, though had some concerns, which Second, banks would of the massive growth we also believe we should it laid down with a slew now be more comfortable potential. As regards still be given the same level of measures it deemed fit. in lending to the sector as certain measures that the playing field as banks. The While these were more these NBFCs are neither committee has redrawn, they report would also have of hygiene factors, what a systemic risk to the are aimed at better capital calmed investors’ nerves, followed was a dialogue financial system, nor, with adequacy, more operational as they were waiting between the gold loan their minimal exposure, transparency, achieving eagerly for this report. players and the regulator to could create a threat to better know your customer Now, valuations too would explain the business model, the banking sector. This (KYC) and protecting the reflect the fundamentals risk management measures, will now ensure a smooth customer’s interest. The of the company rather the role the sector played in flow of funds to the gold loan sector has already than regulatory overhangs financial inclusion and the sector. Third, existing or implemented this and, in the investors have been sector’s efforts to address potential customers would fact, has also formed a pondering over for the customers, who even have more clarity and a self-regulatory organisation last nine months. today are being exploited clearer perception of the under the Association by moneylenders and business. Besides, with Last but not the least, of Gold Loan Companies pawnbrokers. the hike in loan-to-value to the report has recognised (AGLOC) to address these that gold loan NBFCs have The Rao committee’s 75% under consideration, issues and ensure best a socially useful function. recommendations reiterate customers may not have practices for the sector. The RBI has been stressing this and articulate a perfect second thoughts on going the need for inclusive mix of what it feels about One important back to moneylenders growth, and gold loan the sector and what it implication of the report is or pawnbrokers to get an NBFCs, considering our is expected to do, going that the recommendation extra loan amount for their reach to the rural hinterland, forward. While the report will create a high entry jewellery. have been catering to the reiterates moderating barrier for the sector. Extra stress on better needs of the unbanked or the demand for gold underserved population imports considering its for decades now. Rather The Rao committee report is obvious impact on the than recognising us just current account deficit, it a perfect mix of assessing the sector and what its future is as a business or a sector, clearly mentions that gold it would be commendable loans have a casual impact It protects exististing player in the sector and allows banks if the regulator sees us as on gold imports. to be comfortable in lending a facilitator of financial By making a case of Rather than just a business, inclusion. Thus, future reviewing the loan-to-value the sector should be seen as regulation would ensure the ratio to 75% from 60% to aiding financial inclusion role of NBFCs is protected having no curbs or limits to support this cause. Article Published in the Economic Times (All Edition) CSR Initiatives Muthoot M George Memorial Altus Disputatio Research Award

Muthoot Finance in association with National University of Advance Legal Studies, organized Altus Disputatio, a national level Debate Competition. Mr. George M Jacob, Director, The Muthoot Group has instituted an award of ` 2 lakhs in Muthoot Group distributed the prizes to the winners. Justice cash and a citation in memory of our founder Chairman Late P. N. Ravindran, Judge, High Court of Kerala; Prof. M.C. Mr. M. George Muthoot to be presented every year to the Valsan, former Secretary, Kerala Legislative Assembly and Mr. best young researcher in Nephrology. This year the Muthoot P Sahasranamam, M George Memorial Research Award for the best young Senior Advocate, Educational Assistance researcher in Nephrology was presented to Ms.Shruti Dave High Court of by Australian Consul General Mr.David Holly in a glittering Kerala were ceremony held in on 25th January, 2013. Muthoot present on this Finance Asst. General Manager Mr. Babu John Malayil was occasion. present on this occasion. Saree Distribution Archery Equipment

Muthoot M George Foundation handed over the Educational Assistance cheque to Mr. T Vamsi through Perala Mr. V.J. Baby handed over the Archery Branch under Vijawada Region. Equipment to Mr. Kishore A., who Bhoopalarayerpuram Branch Under is handicapped, at a function held at Tirunelveli Region distributed Sarees to Irinjalakuda,. Mr. Kishore is the widows. Mr. S.R. Jeyadurai, MP Delhi Police Heart & Eye expected to train in archery for participating was present on this occasion. Checkup Camp in the Para Olympics in 2016.

Mirchi Auto No.1

The Muthoot Group in association with Delhi Police Force conducted ‘Delhi Police Heart & Eye Checkup Camp’, a nineteen-day camp at NDMC Hall, Lodhi Road, New Delhi. The camp was supported by Foundation for Social Awakening (FSA) and Paysuni Charitable Trust and Fortis Escorts Health Institute. In Association with Radio Mirchi Muthoot Finance Ltd. organized Hon’ble Union Water Resource Minister Mr. Harish Rawat Auto No.1, a 45 days campaign for identifying the responsible inaugurated the camp. Mr. Neeraj Kumar (Commissioner of Auto Driver of Coimbatore. Coimbatore city Traffic Police & Police, Delhi); PadmaShree and Arjuna Awardee Ace Shooter The Auto Association – Coimbatore supported the campaign. Mr. Jaspal Rana; Mr. Avinav Chaubey (AGM-Marketing, Muthoot Finance Chief Marketing Officer Mr. Cherian Peter The Muthoot Group) were present on this occasion. flagging off the campaign. BBC India Business Week Mega Gold Loan Festival Monthly Bumper Prize Winner

Mr. George Alexander Muthoot, Managing Director, The Muthoot Group was interviewed by Mr. Sameer Hashmi of BBC for their India Business Week Programme. Muthoot Finance Mega Gold Loan Festival monthly bumper prize for the month of December was won by Mr. Saravana Balan from Kanyakumari. Muthoot Group Mega Bumper Prize Winner Jt. Managing Director Mr. George Jacob Muthoot handed over the key to the winner. Muthoot Finance Trivandrum North Regional Manager Mr. Udayanandan Nair M; Trivandrum South Regional Manager Mr. Vaidyanathan were present on this occasion.

Foreign Currency Exports As part of the expansion and diversification of their business, Muthoot Exchange Company has started export of foreign currency notes to Bahrain. The first shipment of currency notes The bumper prize for Muthoot Finance Mega Gold Loan Festival were exported on 15.02.2013 to National was drawn by Mr. K Babu, Honorable Minister for Fisheries, Port Finance and Exchange, Manama, Bahrain. By and Excise at Muthoot Finance Head office Cochin. Nissan sunny doing so the foreign exchange division has joined car was won by Mrs. Mary V. J., customer of Ponnarimangalam a group of very few foreign exchange operators branch in Ernakulam District. Around 50 lacs of gold loan in India who are capable of doing this specialized customers participated in this contest. (L-R) Mr.K.N.C. Nair( GM operation. By the beginning of the next financial IT), Mr. Mohan Chandran K. (GM – Risk Management & Credit) year, shipments will also be sent to Raeiffezen Mr. K.R. Bijimon (Chief General Manager) Mr. Babu John Malayil Bank International, Vienna which is one of the (Agm Corporate Communications) Mr.C.V. John (GM HRD) Mr. leading Banks in Austria. K. Babu (Honorable Minister For Fisheries Ports And Excise) Mr. The export activity will enable us to offer better C.V. Balasankar (GM - Credit & Operations) Mr. George Alexander rates for all currencies and help us achieve our Muthoot (Managing Director) Mr. George M Jacob (Director) goal of becoming one of the top three foreign Mr. Cherian Peter (Chief Marketing Officer). exchange service provider in India.

Achievers Trip to Dubai US Students Visit

Managers who have achieved their targets were sent on a trip A team of 19 first & second year MBA students along with to Dubai Shopping Festival. The group travel arrangements were faculty leads Mr. Jayasankar M Swaminathan and Ms. Patricia made by Muthoot Travelsmart. Collins University of North Carolina’s Kenan Flager Business School visited The Muthoot Group Corporate office, as “People who don’t take risks generally part of their Global Immersion Elective. Seen in the picture are Jayasankar M Swaminathan, lead faculty make about two big mistakes a year. Flagler Business School, University of North Carolina; Ms. People who do take risks generally make Patricia Collins staff member, Mr. George Alexander Muthoot, about two big mistakes a year.” Managing Director; Mr. George M Jacob, Director; Mr. George M Alexander, Vice President, The Muthoot Group & Mr. K. P. - Peter F. Drucker - Padmakumar, Executive Director, Muthoot Finance Ltd. along with the students. Paul M George Memorial Cup Investothon 2012-13

Muthoot Finance conducted an interdepartmental cricket tournament for its employees. Muthoot Audit team “Audit Tiger” won the game. Muthoot Marketing Team “Marko Blasters” were the runner up.

Muthoot Green Park Muthoot Builders, a division of Muthoot Group started its new project “Muthoot Green Park” (the 14th residential project of Muthoot builders) Muthoot Securities Ltd. participated in the at Peroorkada, Trivandrum. INVESTOTHON 2012-13, held at Marine The foundation stone laying Drive, Kochi on 20 Jan 2013. Muthoot team ceremony was done by were selected as the “Most Enthusiastic Mr. George Jacob Muthoot, Team” in the event and was given the Jt. Managing Director, The certificate of Honor. Muthoot Group.

Branch Opening Inauguration of our MPMC launches the Mecca Medina with Kaipuzha Branch under holy number 786 imprint gold coin Kottayam Region. Mr. George Thomas Muthoot, Jt. Managing Director, The Muthoot Group addressing the gathering.

Corporate Fun Fest

Muthoot Precious metals Corporation, one of the group companies of Muthoot Group has introduced one more variety of Gold coin to its collections. This Gold coin Mr.M.K.George Mr.Sreejith S. Mr.Jinson Chacko has the impression of ‘Mecca Medina with holy number Shenoy 786 imprint’. The coin exemplifies the holiest city and Muthoot Group participated in the Corporate Funfest, a the auspicious number in the Islamic religion. 24 carat competition between the Corporates in Kerala, organized gold coin with 999 purity comes in 2gms, 4gms and by Rotary Club of Cochin East. Mr. M.K. George, 8gms denomination in a tamper proof blister packing. Sr. Regional Manager, Ernakulam secured 1st prize for (L-R) Mr. George M Jacob, Director; Mr. Alexander M Solo Music Competition. Mr. Sreejith S. Senoy, Accounts George, Director; Mr. M.G. George Muthoot, Chairman; Executive in Muthoot Precious Metals Corporation won Mr. George Alexander Muthoot, Managing Director; Mr. 2nd Prize in Badminton Singles & in doubles along with Eapen Alexander, Vice President. Mr. Jinson Chacko, Manager, Central Office. Awards Rotary Binani Zinc CSR Award Institute of Public Enterprise & Subir Raha Centre for Corporate Governance Awards

Muthoot Finance Ltd, has been honoured with twin Corporate Social Responsibility (CSR) Awards at a function held at Taj Deccan in Hyderabad. The company won CSR Awards in the category of “Return to Consumer” and “Community Development”. Mr. George Jacob Muthoot, Jt. Muthoot Finance Ltd. received Rotary Binani Zinc Award for Managing Director, The Muthoot Group received the award on its CSR programs at a function held at Bolgatty Palace, Kochi. behalf of the company. (L-R) - Ms. Anita Ramachandran, CEO, The award was presented by Mr. Shyam Srinivasan, Managing Cerebrus Consultants Pvt. Ltd, Prof. R.K. Mishra, Director, Director & CEO of Federal Bank to Mr. K.R. Bijimon, Chief IPE &. Mr. George Jacob Muthoot, Jt. Managing Director, The General Manager, Muthoot Finance Ltd. Muthoot Group.

Q3 Result 2012-2013 interest rates of gold bonds Fixed Income Gold Bond (w.e.f: 08.03.2013) Monthly Interest Scheme Period General Special Category* 12 months & 1 day 10.50% 11.00% 400 days 11.00% 11.50 % 18 months 11.50% 12.00 % 24 months 11.50% 12.00% Muthoot Finance Directors announcing the Q3 result for the 30 months 11.50% 12.00% year 2012-13 (L-R) Justice. K. John Mathew, Director, 36 months 11.50% 12.00% Mr. George Joseph, Director, Mr. K.P. Padmakumar – 60 months 11.50% 12.00% Executive Director, Mr. M.G. George Muthoot, Chairman, 120 months 10.50% 11.00% Mr. George Alexander Muthoot, Managing Director, Mr. Annual Interest Scheme George Thomas Muthoot, Jt. Managing Director, Mr. George Jacob Muthoot, Jt. Managing Director, George Period General Special Category* 12 months & Varghese, Director. 1 day 11.00% 11.50% 400 days 11.50% 12.00% ` a) Retail Loan Assets under Management 25712 18 months 12.00% 12.50% crores (YoY increase of 12%) 24 months 12.00% 12.50% b) Profit after tax ` 270 crores (YoY increase of 8%) 30 months 12.00% 12.50% c) Earnings per share ` 21.10 (YoY increase of 7%) 36 months 12.00% 12.50% d) Income from Operations ` 1365 crores (YoY 60 months 12.00% 12.50% increase of 11%) 120 months 11.00% 11.50% Multiplier Bond General Special Category* • Financial Services • Hospitality • Real Estate Period Maturity Effective Maturity Effective value Yield (p.a.) value Yield (p.a.) • Education • Healthcare • IT • Media • Forex 36 months 1405 13.50 1426 14.20 • Money Transfer • Wealth Management 60 months 1763 15.26 1806 16.12 • Precious Metals • Power Generation 120 months 2557 15.57 2685 16.85 * Interest rate for Special Category is applicable to (a) Senior Citizens, (b) State / Central Government • • Pensioners, (c) Ex- Servicemen and their widows, (d) Central / State Award Winners and (e) Single Travel Services Securities Trading investment of ` 10 lakhs and above. • Commodities & Currency Trading Muthoot Doubling Bond* • Plantations • Vehicle & Assets Finance Ltd. Maturity value of Effective Yield Period ` 1000 (p.a.) 66 months 2000 18.18% *Minimum investment ` 25,000/-

Call free from BSNL Landline: 1800 425 1887. Customer Care Cell: 98470 91119. Tel: 0484 2396478, 2394712. Compiled & Published by The Muthoot Group Fax: 0484 2396506. (A Muthoot M George Enterprise), for private e-mail: [email protected] circulation. Corporate Office: Muthoot Chambers, www.muthootgroup.com Opp. Saritha Theatre Complex, Banerji Road, Kochi - 682 018, Kerala, India. English