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Magma Fincorp Ltd.

BSE: 524000 Sector: Financials
NSE: MAGMA ISIN Code: INE511C01022
BSE LIVE 15:41 | 18 Aug 178.65 -0.15
(-0.08%)
OPEN

177.45

HIGH

183.80

LOW

177.45

NSE 15:55 | 18 Aug 180.00 0.95
(0.53%)
OPEN

178.30

HIGH

183.80

LOW

176.45

OPEN 177.45
PREVIOUS CLOSE 178.80
VOLUME 14872
52-Week high 185.00
52-Week low 86.50
P/E 850.71
Mkt Cap.(Rs cr) 4,233
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 177.45
CLOSE 178.80
VOLUME 14872
52-Week high 185.00
52-Week low 86.50
P/E 850.71
Mkt Cap.(Rs cr) 4,233
Buy Price 0.00
Buy Qty 0.00
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 March2016 the statement of profit and loss and the cash flow statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyairs of theand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement 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 the auditor’s judgment including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company’s preparation of the financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the financialstatements.

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 as at 31 March 2016 andits 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 ("theOrder") issued by the Central Government of India in terms of section 143 (11) of theAct we give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 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 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone financial statement Refer note 30(a) to the standalone financial 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 contracts

Refer note 30(c) to the standalone financial statements; and

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

For B S R & Co. LLP

Chartered Accountants Firm

Registration No: 101248W/ W-100022

Akeel Master

Partner Membership Number: 046768

Mumbai 12 May 2016

Annexure A to the Independent Auditors’ Report

The Annexure referred to in the Independent Auditor’s Report to the members ofMagma Fincorp Limited ("the Company") on the standalone financialstatements for the year ended 31 March 2016:

(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 are verified in a phased manner over a period of three years. In accordancewith this programme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion the periodicity of thephysical verification is reasonable having regards to the size of the Company and thenature 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 2016 of those immovable properties whose title deeds are not in the name ofthe Company are Rs 1818.00 lacs and Rs 1291.12 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 physical inventories. Thus paragraph 3(ii) of theOrder 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 189of the Act was not prima facie prejudicial to the interest of the Company.

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 transactionin respect of loans guarantees and securities covered under Section 185 of the Act. TheCompany has complied with Section 186(1) of the Act in relation to investments made by theCompany. The remaining provisions related to Section 186 of the Act do not apply to theCompany 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 under Section 73 to Section 76 of Companies Act 2013 the rules framed thereunder and the directives issued by the Reserve Bank of India with regard to depositsaccepted from the public. Accordingly there has been no proceedings before the CompanyLaw Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or anyCourt or any other Tribunal in this matter and no order has been passed by any of theaforesaid authorities.

(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 underSection 148(1) of the Companies Act 2013 in respect of sale of power generated fromwindmills and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. However we have not made a detailed examination of therecords. The Central Government has not prescribed the maintenance of cost records underSection 148 (1) of the Companies Act 2013 for any of the other services rendered by theCompany.

(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 1 day to 91 days with respectto deposit of professional tax with appropriate authorities due to pending registrations.This was subsequently regularized during the year ended 31 March 2016 except for onebranch. As explained to us the Company did not have any dues on account sales taxcustoms duty excise 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 arrearsas at 31 March 2016 for a period of more than six months from the date they becamepayable. As explained to us the Company did not have any dues on account of sales taxcustoms 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 Amount Amount Paid under Protest Period to which amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 3327.45 - 2013-14 Commissioner of Income Tax (Appeals) Kolkata
Finance Act 1994 Service Tax 207.00 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 42.60 18.46 2006-2007 to 2012-2013 (till July 2012) Tax Board Rajasthan
Rajasthan Value Added Tax Act 2003 VAT 2.85 1.05 2013-14 to 2014-15 (till December 2014) Deputy Commissioner Appeal 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 Sales Tax Tribunal Delhi
Delhi Value Added Tax VAT 33.11 - 2013-14 Sales Tax Tribunal Delhi
Uttar Pradesh Value Added Tax VAT 2176.00 - 2013-14 Deputy Commissioner Appeal Uttar Pradesh

(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 managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 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’s Report) 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 incompliance with Section 177 and 188 of Companies Act 2013 where applicable. The detailsof such related party transactions have been disclosed in the financial statements asrequired under Accounting Standard (AS) 18 Related Party Disclosures specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

(xiv) The Company has made preferential allotment of shares during the year as perSection 42 of the Act. According to the information and explanations given to us and basedon our examination of the records of the Company the amounts raised have been used forthe purpose for which the funds were raised. The Company has not made any privateplacement of 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-cashtransactions with the director or persons connected with him. Accordingly paragraph 3(xv)of the Companies (Auditor’s Report) 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

Akeel Master

Partner Membership Number: 046768

Mumbai 12 May 2016

Annexure B to the Independent Auditors’ Report

The Annexure referred to in the Independent Auditor’s Report to the members ofMagma Fincorp Limited ("the Company") on the standalone financial statements forthe year ended 31 March 2016:

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 2016 in conjunction withour audit 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 statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 controlssystem over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 2016 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

Akeel Master

Partner Membership Number: 046768

Mumbai 12 May 2016