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Magma Fincorp Ltd.

BSE: 524000 Sector: Financials
NSE: MAGMA ISIN Code: INE511C01022
BSE LIVE 15:50 | 19 Sep 182.90 -0.05
(-0.03%)
OPEN

186.75

HIGH

191.40

LOW

182.30

NSE 15:50 | 19 Sep 183.15 -0.70
(-0.38%)
OPEN

184.40

HIGH

192.00

LOW

181.10

OPEN 186.75
PREVIOUS CLOSE 182.95
VOLUME 24133
52-Week high 191.40
52-Week low 86.50
P/E 870.95
Mkt Cap.(Rs cr) 4,334
Buy Price 182.90
Buy Qty 1314.00
Sell Price 0.00
Sell Qty 0.00
OPEN 186.75
CLOSE 182.95
VOLUME 24133
52-Week high 191.40
52-Week low 86.50
P/E 870.95
Mkt Cap.(Rs cr) 4,334
Buy Price 182.90
Buy Qty 1314.00
Sell Price 0.00
Sell Qty 0.00

Magma Fincorp Ltd. (MAGMA) - Auditors Report

Company auditors report

To the Members of Magma Fincorp Limited

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Magma FincorpLimited ("the Company") which comprise the balance sheet as at 31 March 2017the statement of profit and loss and the cash flow statement for the year then ended anda summary of the significant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in

India including the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is and appropriate to provide abasis for our audit opinion on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2017 and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143 (11) of the Act we givein the "Annexure A" a statement on the matters specified in the paragraph 3 and4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) the balance sheet the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate Report in "Annexure B"; and

(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note 30(a) to the standalonefinancial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contract

Refer Note 30(c) to the standalone financial statements;

iii. there has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 and these are in accordance with books of account maintained bythe Company Refer Note 41 to the financial statements.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/ W-100022
Jayanta Mukhopadhyay
Partner
Membership Number: 055757
Place: Kolkata
Date: 11 May 2017

Annexure A to the Independent Auditors' Report

The Annexure referred to in the Independent Auditor's Report to the members of MagmaFincorp Limited ("the Company") on the standalone financial statements for theyear ended 31 March 2017 we report that:

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets during the year.

b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion the periodicityof the physical verification is reasonable having regards to the size of the Company andthe nature of its assets.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for three cases. The gross block and the net blockas at 31 March 2017 of those immovable properties whose title deeds are not in the name ofthe Company are Rs 1818.00 lacs and Rs 1258.96 lacs respectively.

(ii) The Company is a Non-Banking Finance Company ("NBFC") primarily engagedin the business of asset financing. Accordingly it does not hold any physicalinventories. Thus paragraph 3(ii) of the Order is not applicable.

(iii) The Company has granted loans to one company covered in the register maintainedunder Section 189 of the Companies Act 2013 ("the Act").

a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the company listed in the register maintained under

Section 189 of the Act was not prima facie prejudicial to the interest of theCompany.

b) In the case of the loans granted to the company listed in the register maintainedunder Section 189 of the Act the borrower has been regular in the payment of theprincipal and interest as stipulated.

c) There is no overdue amount of the loan granted to the company listed in the registermaintained under section 189 of the Act.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the

Company the Company has not undertaken any transaction in respect of loans guaranteesand securities covered under Section 185 of the Act. The Company has complied with Section186(1) of the Act in relation to investments made by the Company. The remaining provisionsrelated to Section 186 of the Act do not apply to the Company as it is an NBFC.

(v) The Company has not accepted any deposits from the public except for depositstaken over by way of merger in the year ended 31 March 2007. In our opinion and accordingto the information and explanations given to us the Company has complied with theprovisions of Section 73 to Section

76 or other relevant provisions of the Companies Act 2013 the rules framed there underand the directives issued by the Reserve Bank of India with regard to deposits acceptedfrom the public. Accordingly there has been no proceedings before the Company Law Boardor National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court orany other Tribunal in this matter and no order has been passed by any of the aforesaidauthorities.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the

Central Government for maintenance of cost records under Section 148(1) of theCompanies Act 2013 in respect of sale of power generated from windmills and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the records. The

Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act 2013 for any of the other services rendered by the

Company.

(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxservice tax value added tax employees' state insurance cess and any other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities except for delays ranging from 3 days to 32 days with respectto deposit of professional tax with appropriate authorities.

Further in two branches deposit was not made due to pending registrations. Asexplained to us the Company did not have any dues on account sales tax customs dutyexcise duty.

According to the information and explanations given to us there are no undisputedamounts payable in respect of provident fund income tax service tax value added taxemployees' state insurance cess and other material statutory dues were in arrears as at31 March 2017 for a period of more than six months from the date they became payableexcept for delay in deposit of professional tax incase of two branches from the date theybecame payable due to pending registration. As explained to us the Company did not haveany dues on account of sales tax customs duty excise duty.

b) According to the information and explanations given to us there are no material duesof cess and other material statutory dues which have not been deposited by the Companywith the appropriate authorities on account of any disputes. However according to theinformation and explanations given to us the following dues of income tax service taxand value added tax have not been deposited by the Company on account of disputes:

(Rs in Lacs)

Name of the Statute Nature of Dues Amount Paid under Protest Amount Period to which amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 3176.25 500.00 2012-13 ITAT Kolkata
Income Tax Act 1961 Income Tax 723.56 108.54 2013-14 CIT(A) Kolkata
Finance Act 1994 Service Tax 208.00 93.00 2002-2003 to 2006-2007 CESTAT EZB Kolkata
West Bengal Value Added Tax Act 2003 VAT 13.72 6.86 2008-2009 West Bengal Commercial Taxes Appellate and Revisional Board
West Bengal Value Added Tax Act 2003 VAT 14.53 7.21 2009-2010 West Bengal Commercial Taxes Appellate and Revisional Board
Rajasthan Value Added Tax Act 2003 VAT 2.10 1.10 2012-13 to 2013-14 Appellate Authority Rajasthan
Jharkhand Value Added Tax Act 2005 VAT 21.57 2.15 2006-2007 to 2009-2010 Sales Tax Tribunal Jharkhand Ranchi
Madhya Pradesh Value Added Tax Act 2002 VAT 133.75 - 2008-2009 to 2009-2010 Madhya Pradesh High Court Jabalpur
Orissa Value Added Tax 2004 VAT 68.89 11.48 2006- 2007 to 30 September 2012 Sales Tax Tribunal Orissa
Delhi Value Added Tax VAT 16.26 - 2012-13 Delhi Commissioner of Tax
Delhi Value Added Tax VAT 33.11 2.59 2013-14 Sales Tax Tribunal Delhi
West Bengal Value Added Tax VAT 29.29 12.93 2013-14 Joint Commissioner Kolkata

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to any financial institutions banks or to debentureholders during the year. The Company did not have any borrowings from the governmentduring the year.

(ix) In our opinion and according to the information and explanations given to us theterm loans and debentures were applied for the purpose for which the same were obtained.The Company has not raised any money by way of initial public offer during the year.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the

Company the Company has paid/provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with

Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Companies (Auditor'sReport) Order 2016 is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the

Company transactions with the related parties are in compliance with section 177 and188 of Companies Act

2013 where applicable. The details of such related party transactions have beendisclosed in the financial statements as required under Accounting Standard (AS) 18Related Party Disclosure specified under Section 133 of the Act read with Rule 7 of theCompany (Accounts) Rules 2014.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the

Company the Company has not made any preferential allotment of shares or privateplacement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the

Company the Company has not entered into any non-cash transactions with the directoror persons connected with him. Accordingly paragraph 3(xv) of the Companies (Auditor'sReport) Order 2016 is not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and such registration has been obtained by the Company on 23 September2008.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/ W-100022
Jayanta Mukhopadhyay
Partner
Membership Number: 055757
Place: Kolkata
Date: 11 May 2017

Annexure B to the Independent Auditors' Report

The Annexure referred to in the Independent Auditor's Report to the members of MagmaFincorp Limited ("the Company") on the standalone financial statements for theyear ended 31 March 2017:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013

We have audited the internal financial controls over financial reporting of MagmaFincorp Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the

Company considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial

Controls Over Financial Reporting issued by the Institute of

Chartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013 ("the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance

Note on Audit of Internal Financial Controls Over Financial

Reporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section

143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe ICAI. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial

Controls Over Financial Reporting issued by the ICAI.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/ W-100022
Jayanta Mukhopadhyay
Partner
Membership Number: 055757
Place: Kolkata
Date: 11 May 2017