DIRECTORS REPORT Dear shareholders Your directors have pleasure in presenting the 35th annual report along with the audit financial statement of the company for the company for the financial year ended 31 march 2015. A summary of the consolidated and standalone results is given below BUSINESS_ Indian Economy during 2014-15 The Growth in GDP during 2014-15 is estimated to be at 7.4%, as compared to a growth rate of 6.9% in 2013-14, on improved performances in both industry and services. Even though the new government remained committed in its endeavours, a steadier resolution of the politically difficult structural issues that have stalled investment and limited economic performance, was needed. Higher infrastructure spending, continued reforms to the financial and monetary policy, demand improvement and lower oil prices should have a positive effect on the economy going forward. The Company's Performance vis-a-vis Industry The sale of new Passenger Cars and Multi Utility Vehicles (MUVs) recorded a growth of 3.9% during 2014-15 against 6.1% de-growth in 2013-14, mainly on account of a growth in Passenger cars and Utility Vehicles. Within the Passenger Vehicles segment, Passenger Cars and Utility Vehicles grew by 5.0% and 5.3% respectively whereas, Vans dropped by 10.2% during 2014-15, compared to the corresponding previous year. All India sales of new Commercial Vehicles recorded a de-growth of 2.8% during 2014-15, against a de-growth of 20.2% in 2013-14. The improved performance was due to a better performance of M&HCVs (Medium & Heavy Commercial Vehicles). However, the growth continued to be negative due to a sharper drop in LCVs (Light Commercial Vehicles) and SCV (Small Commercial Vehicles) segments in 2014-15. M&HCVs witnessed a growth of 16.0% and LCVs & SCVs dropped by 11.6% and 13.2% respectively. The Construction Equipment segment witnessed a dip in sales for the second successive year at 13.5% in 2014-15 against drop of 18.7% in 2013-14. Sales of tractors witnessed a de-growth of 13.0% in 201415, against a growth of 20.1% in 2013-14. Tractor demand for 2014-15 was subdued due to a market slowdown. The Indian Housing Finance Market has crossed Rs. 10 trillion mark translating into a steady growth of 17% (annualised) for 9MFY15. Given that there is a large proportion of population which is still under-served by the traditional financial institution, there is still untapped potential for growth especially in certain segments like affordable housing. The Company made disbursements of Rs. 10,11,523.62 Lacs on consolidated basis during FY 2014-15 as against Rs. 9,08,081.60 Lacs in FY 2013-14, registering a YoY growth of 11%. The Company has witnessed strong disbursement growth in Mortgage, SME and Used Assets, while recording a stable growth in tractors. The mortgage business now constitutes about 15% of the overall loan book portfolio of the Company. The Company's total consolidated Income grew by 12.7% from Rs. 2,11,769.30 Lacs to Rs. 2,38,597.96 Lacs. The Company has discontinued the gold loan product as decided at the meeting of Board of Directors held on 6 November 2014. No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company except the preferential issue of equity shares aggregating to Rs. 50,000 Lacs. SUBSIDIARIES AND JOINT VENTURE COMPANIES Subsidiary Magma ITL Finance Limited (MITL), a subsidiary of the Company and Joint Venture with International Tractors Limited, manufacturers of Sonalika brand of tractors, is registered with the RBI as a Non-Deposit Taking NBFC. The subsidiary company made disbursements of Rs. 38,735.25 Lacs against Rs. 45,376.10 Lacs in previous year and earned a PBT of Rs. 2,865.59 Lacs for the year ended 31 March 2015 against Rs. 2,708.03 Lacs in previous year. The disbursement was slowed down due to credit stress in the tractor portfolio. Magma Advisory Services Limited is a 100% Equity owned subsidiary of the Company and which also holds Investment in Magma Housing Finance (A Public Company with Unlimited Liability) has earned a PBT of Rs. 8.02 Lacs for the year ended 31 March 2015 against Rs. 3.49 Lacs in previous year. Magma Housing Finance (A Public Company with Unlimited Liability), a step down subsidiary of the Company, made disbursements of Rs. 97,814.51 Lacs against Rs. 46,227.75 Lacs in previous year and has earned a PBT of Rs. 1,643.94 Lacs for the year ended 31 March 2015 against Rs. 445.89 Lacs in previous year. The Statement in Form AOC-1 containing the salient features of the financial statement of your Company's subsidiaries and joint ventures and associates pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 forms part of the Annual Report and hence not repeated here for the sake of brevity. During the year under review, your Company has formulated and put in place a Policy for determining Material Subsidiaries as per the revised clause 49(V)(D) of the Listing Agreement with the Stock Exchanges. The said policy has been posted on the Company's website www.magma <http://www.magma>. co.in at <https://magma.co.in/about-us/investor-relations/> secretarial-documents/download-secretarial-documents/. Joint Ventures The Company has a Joint Venture Agreement with HDI-Gerling Industrie Versicherung AG, for General Insurance Business in India in the name of Magma HDI General Insurance Company Limited (MHDI) (the "JV Company"). MHDI has reported Gross Written Premium (GWP) of Rs. 55,481.43 Lacs in FY 2014-15 against Rs. 42,985.27 Lacs in FY 2013-14 registering a growth of 29%. Jaguar Advisory Services Private Limited, a Joint Venture with HDI-Gerling Industrie Versicherung AG and the Company, is an Advisory Services Company domiciled in India. Presently, this Company provides manpower services. It has earned a PBT of Rs. 4.60 Lacs for the year ended 31 March 2015 against Rs. 4.01 Lacs in previous year. DIVIDEND_ Your Directors recommend the following dividend, subject to your approval at the ensuing Annual General Meeting as under: 1. On Equity Shares @ 40% i.e Re. 0.80 per Equity Share of the face value of Rs. 2/- each; 2. On Preference Shares: a) 9.7 % i.e. Rs. 9.70 pro-rata per share dividend on 21,09,199 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 20/- each for the period from 1 April 2014 to 16 February 2015 (both days inclusive), since the shares were redeemed on 17 February 2015; b) 3.61% i.e. Rs. 3.61 pro-rata per share dividend on 65,00,999 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 60/- each for a day i.e. 1 April 2014 and 3.61% i.e. Rs. 3.61 pro-rata per share dividend on 65,00,999 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 40/- each (reduced to Rs. 40/- upon redemption of 3rd instalment of Rs. 20/- each on 2 April 2014) for the period from 2 April 2014 to 31 March 2015 (both days inclusive); c) 12% i.e. Rs. 12/- per share dividend on 25,00,000 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100 each; d) 9.6% i.e. Rs. 9.60 per share dividend on 10,00,000 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100 each; e) 0.50% i.e. Re. 0.50 pro-rata per share dividend on 21,09,199 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 40/- each for the period from 1 April 2013 to 16 February 2014 (both days inclusive) and 0.50% i.e. Re. 0.50 pro-rata per share dividend on 21,09,199 Cumulative Non-Convertible Redeemable Preference Shares of Rs. 20/- each (reduced to Rs. 20/- upon redemption of 4th instalment of Rs. 20/- each per share on 17 February 2014) for the period from 17 February 2014 to 31 March 2014 (both days inclusive); and f) 11% i.e. Rs. 11/- per share dividend on 36,00,000 Cumulative Redeemable Non-Convertible Preference Shares of Rs. 100/- each. TRANSFER TO RESERVE_ The Company proposes to transfer a sum of Rs. 2,990.00 Lacs to Statutory Reserve. An amount of Rs. 37,285.78 Lacs is proposed to be retained in the Statement of Profit and Loss as at the end of financial year 2014-15. DEPOSITS_ During the year under review the Company has not invited deposit from the public falling within the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and Non- Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998. EMPLOYEE STOCK OPTION SCHEME_ Your Company had formulated and implemented Magma Employees Stock Option Plan 2007 (MESOP 2007) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. Pursuant to the Plan, a further 20,000 number of Stock Options were granted to the eligible employees under MESOP 2007 as per the details mentioned below:- Your Company had also formulated and implemented Magma Restricted Stock Option Plan 2014 (MRSOP 2014) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 including any amendments, new enactment thereof or thereto. The MRSOP 2014 was approved by the Board of Directors at its meeting held on 1 July 2014 and by the Members of the Company by a special resolution passed through Postal Ballot on 25 September 2014. Pursuant to the MRSOP 2014, 6,50,000 Options were granted to the eligible employees under Magma Restricted Stock Option Plan 2014 as per the details mentioned below:- The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the MESOP 2007 and MRSOP 2014 in accordance with the applicable SEBI Guidelines. The details of Options granted and outstanding as on 31 March 2015 along with other particulars as required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as set out in the Annexure I to the Report and the Auditors' Certificate would be placed at the forthcoming Annual General Meeting pursuant to Clause 14 of the said Guidelines for inspection by the members. SHARE CAPITAL_ Equity Shares During the year, the following changes were effected in the Share Capital of the Company: Issue of Equity Shares under the Magma Employees Stock Option Plan 2007: During the year 3,05,900 Equity Shares of the face value of Rs. 2/- each were allotted to the eligible employees at a price of Rs. 36/- and Rs. 60/- per Equity Share (including a premium of Rs. 34/- and Rs. 58/- per Equity Share), upon the exercise of stock options by the employees. After the close of the financial year, 30,000 Equity Shares of the face value of Rs. 2/- each were allotted to the eligible employee at a price of Rs. 60/- per Equity Share (including a premium of Rs. 58/- per Equity Share), upon the exercise of stock options by the employee. Preferential issue of Equity Shares The Company has as on 8 May 2015 (i.e. subsequent to the closure of FY 2014-15) raised a sum of Rs. 5,00,00,00,076/-(Rupees Five Hundred Crore and Seventy Six Only) by way of preferential issue of 4,62,96,297 (Four Crore Sixty Two Lacs Ninety Six Thousand Two Hundred and Ninety Seven Only) equity shares of face value of Rs. 2/- each at a price of Rs. 108/-each to augment long term working capital requirements of the Company in view of the growth in the business of the Company and to strengthen the financial position of the Company. Consequent to issue of the additional Equity Shares as above, the issued, subscribed and paid up Equity Share Capital of the Company stands increased to Rs. 4,735.04 Lacs divided into 23,67,52,172 (Twenty Three Crore Sixty Seven Lacs Fifty Two Thousand One Hundred Seventy Two Only) Equity Shares of Rs. 2/- each as on date. The new Equity Shares issued shall rank pari passu with the existing Equity Shares of the Company in all respects. Preference Shares a) Redemption of Preference Shares (i) As per the terms of issue of 9.7% Cumulative Non-Convertible Redeemable Preference Shares of face value of Rs. 100/- each, the fifth and the last instalment of 20% (Rs. 20/- each) on 21,09,199 Preference shares aggregating to Rs. 421.84 Lacs was redeemed on 17 February 2015. The said preference shares were fully redeemed out of the proceeds of the issue of equity shares in the earlier years which inter-alia includes redemption of preference shares. (ii) As per the terms of issue of 65,00,999 Nos. Cumulative Non-Convertible Redeemable Preference Shares of Rs. 100/- each (carrying dividend rate fixed at 6 months US Dollar Libor plus 3.25%), the fourth instalment aggregating to US Dollar 3 Million were redeemed after the close of the Financial Year on 2 April 2015 out of the proceeds of the issue of equity shares in the earlier years which inter-alia includes redemption of preference shares. Consequently, the issued, subscribed and paid up Preference Share Capital of your Company stands revised to Rs. 8,400.20 Lacs as on date. Debt Secured Debt During the year, the Company issued 4,000 Nos. Secured Redeemable Non-Convertible Debt Instruments of Rs. 10 Lacs each, aggregating to Rs. 40,000 Lacs. Such instruments are in the nature of Debentures. Subordinated Debt During the year, the Company issued 2150 Nos. Unsecured Redeemable Non-Convertible Subordinated Debt Instruments in the nature of Debentures of the face value of Rs. 10 Lacs each, aggregating to Rs. 21,500 Lacs. Perpetual Debt Instrument During the year, the Company has not issued any Unsecured Redeemable Non-Convertible Perpetual Debt Instruments in the nature of Debentures. CREDIT RATING_ During the Financial Year 2014-15, Credit Analysis & Research Limited ("CARE") revised its ratings on the Company's various debt instruments except for Short term instruments. Short-term debt instruments are re-affirmed at CARE A1+, which reflects CARE's expectations that the Company's short-term instruments have very strong degree of safety regarding timely payment of financial obligations and that these instruments carry lowest credit risk. The long term debt instruments of the Company are rated at AA, reflecting expectations that these instruments have very high degree of safety regarding timely payment of financial obligations and carry very low credit risk. Rating for subordinated debt instruments are at AA-, again reflecting that these instruments have very high degree of safety regarding timely payment of financial obligations and carry very low credit risk, and the rating of Perpetual Debt instruments is at A+. A status of ratings assigned by rating agencies and migration of ratings during the year is also provided in Note No. 35 (i) to the Financial Statements of the Company. CONSOLIDATED FINANCIAL STATEMENTS_ In accordance with the requirements under Clause 32 of the Listing Agreement, your Company prepared Consolidated Financial Statements in accordance with Accounting Standard-21-"Consolidated Financial Statements" and Accounting Standard-27- "Financial Reporting of Interests in Joint Ventures" issued by The Institute of Chartered Accountants of India. The Consolidated Financial Statements forms part of the Annual Report. CORPORATE GOVERNANCE_ Your Company complies with the provisions laid down in Corporate Governance laws. It believes in and practices good corporate governance. The Company maintains transparency and also enhances corporate accountability. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the following forms part of this Annual Report: (i) Declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel; (ii) Management Discussion and Analysis; (iii) Report on the Corporate Governance; and (iv) Auditors's Certificate regarding compliance of conditions of Corporate Governance DIRECTORS' RESPONSIBILITY STATEMENT_ To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual accounts for the year ended 31 March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. t hat the annual accounts have been prepared on a going concern basis; e. that proper internal financial controls are in place and that the financial controls are adequate and are operating effectively; and f. t hat proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Directors on the recommendation of the Nomination and Remuneration Committee had appointed Ms. Ritva Kaarina Laukkanen (DIN: 06882930) as an Additional Director in the category of Non-Executive, Non-Independent Director, with effect from 14 October 2014. By virtue of the provisions of Articles of Association of your Company and Section 161 of the Companies Act, 2013, Ms. Laukkanen will vacate office at the ensuing Annual General Meeting (AGM) of your Company. Your Directors at its meeting held on 8 May 2015, have recommended for the approval of the Members the appointment of Ms. Laukkanen as Non-Executive Director of the Company, liable to retire by rotation, with effect from the date of the ensuing AGM of your Company. Ms. Laukkanen is not disqualified from being appointed as a Director as specified in terms of Section 164 of the Companies Act, 2013. Notice under Section 160 of the Companies Act, 2013, have been received from a Member of the Company proposing candidature of Ms. Laukkanen. Appropriate resolution seeking your approval to the aforesaid appointment along with brief profile of Ms. Laukkanen is appearing in the Notice convening the 35th AGM of your Company. In accordance with the provisions of the Companies Act, 2013, Mr. Mayank Poddar (DIN: 00009409) retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment. Mr. Poddar is not disqualified from being appointed as a Director as specified in terms of Section 164 of the Companies Act, 2013. Brief profile of Mr. Poddar who is to be re-appointed, as stipulated under Clause 49 of the Listing Agreement is furnished in the Notice of the ensuing AGM. The Board of Directors of your Company recommends the re-appointment of Mr. Poddar at the ensuing AGM. Mr. Girish Bhatia, Company Secretary retired from the services of the Company with effect from 6 September 2014 and in his place Mr. Kailash Baheti has been appointed as the Company Secretary of the Company with effect from 7 September 2014. The Nomination and Remuneration Committee of the Board has recommended the said appointment to the Board of Directors. Mr. Atul Bansal has been appointed as the Chief Financial Officer (CFO) of the Company with effect from 13 March 2015 in place of Mr. V Lakshmi Narasimhan who has resigned as CFO of the Company. The Nomination and Remuneration Committee and the Audit Committee of the Board has recommended the said appointment to the Board of Directors. The Board has placed on record their deep appreciation for the valuable contribution made by Mr. Bhatia and Mr. Narasimhan during their unstinted tenure of services with the Company. The Company has received declarations pursuant to Section 149(7) from all the Independent Directors of the Company viz., Mr. Satya Brata Ganguly, Mr. Nabankur Gupta, Mr. Narayan K Seshadri and Mr. Neil Graeme Brown confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. MEETINGS_ Minimum four pre-scheduled Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company's specific needs. In case of business exigencies or urgency of matters, resolutions are passed by circulation. During the year nine Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement. AUDIT COMMITTEE_ The Audit Committee comprises of Mr. Narayan K Seshadri who serves as the Chairman of the Committee and Mr. Neil Graeme Brown, Mr. Satya Brata Ganguly, Mr. Sanjay Nayar and Mr. Mayank Poddar as other members. The terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. All the recommendations made by the Audit Committee during the year were accepted by the Board. NOMINATION AND REMUNERATION COMMITTEE The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. STAKEHOLDERS' RELATIONSHIP COMMITTEE_ The composition and terms of reference of the Stakeholders' Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. REMUNERATION POLICY_ The Board has, on the recommendation of the Nomination and Remuneration Committee adopted the Remuneration Policy, which inter-alia includes policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. FAMILIARISATION PROGRAMME FOR BOARD MEMBERS The Company is required to conduct the Familiarisation Programme for Independent Directors (IDs) in terms of Clause 49(II)(B)(7) of the Listing Agreement, to familiarise them about the Company and their roles, rights, responsibilities in the Company. The Familiarisation Programme is stated in the Corporate Governance Report forming part of this Annual Report. The details of such Familiarisation Programme for directors may be referred to, at the website of the Company www.magma.co.in <http://www.magma.co.in> at <https://> magma.co.in/about-us/investor-relations/secretarial-documents/download-secretarial-documents/. BOARD EVALUATION_ Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, your Company has adopted the Remuneration Policy with comprehensive procedure on performance evaluation. Chairman of the Nomination and Remuneration Committee, who is an independent Director of the Board conducted a one-to-one session with each Director to understand their points of view on the parameters for performance evaluation. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, ethics and compliances, financial reporting process and monitoring activities. Performance parameters for the Board as a collective body, included parameters like qualification and diversity of Board members, method and criteria for selection of independent directors to ensure independence, availability, appropriateness, clarity of understanding on risk scenarios faced by the Company, existence, sufficiency and appropriateness of policy on dealing with potential conflicts of interest, involvement of Board members in long -term strategic planning etc. Based on these criteria, the performance of the Board, various Board Committees, Chairman and Individual Directors (including Independent Directors) was found to be satisfactory. Independent Directors has conducted its meeting without the participation of other Non-Independent Directors and members of management and reviewed the performance of Board, its Committee, Chairman and individual Directors. On the basis of the review by the Independent Directors, they hold unanimous opinion that the Non-Independent Directors, including the Chairman to the Board have abundant knowledge in their respective fields and are experts in their areas. CORPORATE SOCIAL RESPONSIBILITY_ Pursuant to Section 135 of the Companies Act, 2013 read with rules made there under, your Directors have constituted the Corporate Social Responsibility (CSR) Committee. The CSR Committee comprises of Mr. Mayank Poddar who serves as the Chairman of the Committee and Mr. Sanjay Chamria and Mr. Satya Brata Ganguly as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The CSR Policy has been posted on the Company's website www.magma.co.in <http://www.magma.co.in> at <https://magma.co.in/about->us/investor-relations/secretarial-documents/download-secretarial-documents/. As part of its initiatives under CSR, the Company has undertaken projects or programs in the areas of Education, Health, Water and Sanitation and Environment Protection and Awareness. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith and marked as Annexure II. INTERNAL FINANCIAL CONTROLS_ Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorised, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors. The Audit Committee regularly reviews the audit findings and actions taken thereon, as well as the adequacy and effectiveness of the internal systems and controls. Your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. In this regard, your Board confirms the following: i. Systems have been laid to ensure that all transactions are executed in accordance with management's general and specific authorisation. There are well-laid manuals for such general or specific authorisations. ii. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with Generally Accepted Accounting Principles or any other criteria applicable to such statements, and to maintain accountability for aspects. iii. Access to assets is permitted only in accordance with management's general and specific authorisation. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any. STATUTORY AUDITORS_ M/s. B S R & Co. LLP, Chartered Accountants, Bangalore, bearing Registration No. 101248W/W-100022 have been appointed as the Statutory Auditors of the Company for a period of 2 years from the conclusion of the 34th AGM (for FY 2013-14) till the conclusion of the 36th AGM (for FY 201516). The Board now recommends the appointment of M/s. B S R & Co. LLP for ratification by the members at the Annual General Meeting for the Financial Year 2015-16. STATUTORY AUDITORS' OBSERVATIONS_ The notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDIT_ Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. MKB & Associates, Practicing Company Secretaries to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended 31 March 2015 is annexed herewith and marked as Annexure III. SECRETARIAL AUDITORS' OBSERVATIONS_ Reference point no. 5 of the Secretarial Auditor's Report your Company had reconstituted the Nomination and Remuneration Committee on 8 May 2015. VIGIL MECHANISM_ The Company has a vigil mechanism named 'Breach of Integrity and Whistle Blower Policy' in terms of Section 177 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement to deal with instance of fraud and mismanagement, if any, and to report concerns about unethical behaviour, wrongful conduct and violation of the Company's code of conduct or ethics policy. The details of the said Policy is explained in the Corporate Governance Report and also posted on the website of the Company www. magma.co.in at <https://magma.co.in/about-us/investor->relations/secretarial-documents/download-secretarial-documents/. RISK POLICY_ The Company understands that risk evaluation and risk mitigation is a function of the Board of the Company and the Board of Directors are fully committed to developing a sound system for identification and mitigation of applicable risks viz., systemic and non-systemic. The Board of Directors has approved a Risk Management Policy as per which the Company is in the process of identifying critical risks of various departments within the Company. Once identified, a sound mitigation system will be put in place. Further the Board is of the opinion that at present there are no material risks that may threaten the functioning of the Company. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis and are reviewed by the Audit Committee of the Board. During the year the Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. A Policy on related party transactions and dealing with related parties as approved by the Board has been posted on the Company's website www.magma.co.in <http://www.magma.co.in> at <https://> magma.co.in/about-us/investor-relations/secretarial-documents/download-secretarial-documents/. PARTICULARS OF LOANS/GUARANTEE/ADVANCES/ INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR Particulars of loans/guarantee/advances/investments outstanding during the financial year is furnished in Note Nos. 14, 19, 30 and 42 to the financial statement. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. The full Annual Report including the aforesaid information is being sent to all shareholders of the Company through the prescribed mode and is available on the Company's website. EXTRACT OF ANNUAL RETURN_ The details forming part of the extract of the Annual Return in form MGT 9 forms part of this Annual Report and is annexed herewith and marked as Annexure IV SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS There were no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. TRANSFERS OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund (IEPF). During the year under review your Company has transferred Rs. 4,38,927/- (Rupees Four Lacs Thirty Eight Thousand Nine Hundred Twenty Seven Only) to IEPF. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 31 July 2014 (date of last Annual General Meeting) on the Company's website (www.magma.co.in <http://www.magma.co.in>), as also on the Ministry of Corporate Affairs' website. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013_ The Company is committed to provide a safe & conducive work environment to its employees and has formulated 'Policy for Prevention of Sexual Harassment' to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment. During the year under review, no case of sexual harassment was reported. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO 1) Your Company does not have any activity relating to conservation of energy or technology absorption. 2) The foreign exchange earnings and the foreign exchange outgo of the Company is furnished in Note No 33 to the financial statement. APPRECIATION_ Your Directors would like to record their appreciation of the hard work and commitment of the Company's employees and warmly acknowledge the unstinting support extended by its bankers, alliance partners and other stakeholders in contributing to the results. For and on behalf of the Board Mayank Poddar Chairman DIN: 00009409 Place : Kolkata date : 8 May 2015 |