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Magma Fincorp Ltd.

BSE: 524000 Sector: Financials
NSE: MAGMA ISIN Code: INE511C01022
BSE 00:00 | 23 Apr 125.10 3.15
(2.58%)
OPEN

127.50

HIGH

129.85

LOW

122.00

NSE 00:00 | 23 Apr 125.30 1.45
(1.17%)
OPEN

124.90

HIGH

127.25

LOW

123.50

OPEN 127.50
PREVIOUS CLOSE 121.95
VOLUME 31087
52-Week high 193.50
52-Week low 81.00
P/E 12.80
Mkt Cap.(Rs cr) 3,369
Buy Price 125.10
Buy Qty 25.00
Sell Price 126.00
Sell Qty 35.00
OPEN 127.50
CLOSE 121.95
VOLUME 31087
52-Week high 193.50
52-Week low 81.00
P/E 12.80
Mkt Cap.(Rs cr) 3,369
Buy Price 125.10
Buy Qty 25.00
Sell Price 126.00
Sell Qty 35.00

Magma Fincorp Ltd. (MAGMA) - Auditors Report

Company auditors report

To the Members of

Magma Fincorp Limited

Report on the Audit of 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 March2018 the Statement of Profit and Loss and the Statement of Cash Flows for the year thenended and 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 state ofaffairs profit and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards prescribed under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Auditor's 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 of the standalone financial statements in accordance with theStandards on Auditing specified under

Section 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

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 2018 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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 prescribed 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 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

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 contracts - Refer Note 30(c) to the standalone financial statements.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they do not pertain to the financial year ended 31 March 2018. Howeveramounts as appearing in the audited standalone financial statements for the period ended31 March 2017 have been disclosed Refer Note 45 to the standalone financial statements.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-10022

Manoj Kumar Vijai

Partner

Membership No. 046882

London 9 May 2018

Annexure A to the Independent Auditor's 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 2018 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 areverified in a phased manner over a period of three years. In accordance with thisprogramme certain fixed assets were verified during discrepancies were noticed on suchverification. opinion the periodicity of the physical verification is reasonable havingregards to the size of the Company and the 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 asdisclosed in Note 11 to the annual standalone financial statements are held in the name ofthe Company except for the following:

(Rs. in Lacs)

Particulars Buildings
Total number of cases 3
Gross block as at 31 March 2018 1818.00
Net block as at 31 March 2018 1226.80

(ii) The Company is a Non-Banking Finance Company ("NBFC") primarily engagedin the business of financing. Accordingly it does not hold any physical inventories.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 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 byassetsbywhichfixed the Company. The remaining provisions related to Sectionassets186 of the Act do not apply to the Company as it is an NBFC.

(v)yearandnomaterial The Company has not accepted any deposits from the public inaccordance with the provisions of Section 73 to 76 of theInour Companies Act 2013 and therules framed thereunder.

(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 employees' stateinsurance income tax value added tax service tax goods and service tax cess and anyother material statutory dues have generally been regularly deposited during the year bythe Company with the appropriate authorities except for delays ranging from 1 day to 52days with respect to deposit of professional tax with appropriate authorities. Asexplained to us the Company did not have any dues on account of sales tax customs dutyand excise duty.

According to the information and explanations given to us there are no undisputedamounts payable in respect of provident fund employees' state insurance income taxvalue added tax service tax goods and service tax cess and other material statutorydues were in arrears as at 31 March 2018 for a period of more than six months from thedate they became payable. As explained to us the Company did not have any dues on accountof sales tax customs duty and 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:

Name of the Statute Nature of Dues Amount (Rs. Lacs) Paid under Protest Amount (Rs. Lacs) Period to which amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 723.56 108.54 2013-2014 CIT(A) Kolkata
Income Tax Act 1961 Income Tax 88.47 - 2014-2015 CIT(A) Kolkata
Finance Act 1994 Service Tax 208.00 93.00 2002-2003 to 2006-2007 CESTAT EZB Kolkata
Finance Act 1994 Service Tax 184.52 - 2010-2011 to 2013-2014 Service Tax Commissionerate 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
West Bengal Value Added Tax Act 2003 VAT 7.20 - 2013-2014 West Bengal Commercial Taxes Appellate and Revisional Board
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 2013-2014 Sales Tax Tribunal Delhi
Delhi Value Added Tax VAT 78.38 - 2013-2014 Sales Tax Tribunal Delhi
Income Tax Act 1961 Income Tax 2.25 0.34 2012-2013 CIT(A) Kolkata
Income Tax Act 1961 Income Tax 157.94 21.97 2011-2012 to 2013-2014 CIT(A) Kolkata
Finance Act 1994 Service Tax 107.99 8.09 2008-2009 to 2011-2012 CESTAT 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 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'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 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 by the applicable accounting standards.

(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 preferentialallotment of shares or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Companies (Auditor'sReport) Order 2016 is not applicable.

(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's Registration No: 101248W/W-10022

Manoj Kumar Vijai

Partner

Membership No. 046882

London 9 May 2018

Annexure B to the Independent Auditor's 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 2018:

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 2018 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 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 safeguarding ofits 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").

Auditor's 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 deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal FinancialControlsand 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 financialreporting 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 2018 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's Registration No: 101248W/W-10022

Manoj Kumar Vijai

Partner

Membership No. 046882

London 9 May 2018