Profit & Loss - Magma Fincorp Ltd.Mar'11 Mar'10 Mar'09 Mar'08 Mar'07 12 Months 12 Months 12 Months 12 Months 12 Months INCOME: Sales Turnover Excise Duty NET SALES Other Income TOTAL INCOME 800.32 0.00 800.32 0.00 847.53 648.79 0.00 648.79 0.00 702.98 579.30 0.00 579.30 0.00 625.63 443.01 0.00 443.01 0.00 471.77 265.31 0.00 265.31 0.00 278.38 EXPENDITURE: Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made TOTAL EXPENDITURE Operating Profit EBITDA Depreciation Other Write-offs EBIT Interest EBT Taxes 3.53 0.00 136.11 71.75 99.45 0.00 0.00 310.84 489.48 536.69 27.85 0.00 508.84 338.13 170.71 56.08 2.40 0.00 104.84 50.74 93.34 0.00 0.00 251.32 397.47 451.66 32.79 0.00 418.87 316.25 102.62 36.59 1.73 0.00 99.36 47.17 97.18 0.00 0.00 245.45 333.86 380.18 34.24 0.00 345.94 285.36 60.58 21.09 1.21 0.00 63.65 2.23 84.15 0.00 0.00 151.24 291.77 320.52 28.79 0.00 291.73 214.81 76.93 26.06 1.23 0.00 40.14 20.69 60.10 0.00 0.00 122.17 143.14 156.22 24.18 0.00 132.03 82.01 50.02 9.95 Profit and Loss for the Year Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT 114.63 -0.1 0.00 0.00 114.43 66.03 0.43 0.00 0.00 66.46 39.48 -0.4 0.00 0.00 39.04 50.87 -0.3 0.00 0.00 50.54 40.07 -8.67 0.00 0.00 31.40 KEY ITEMS Preference Dividend Equity Dividend Equity Dividend (%) Shares in Issue (Lakhs) EPS - Annualised (Rs) 9.62 7.79 29.99 1,297.74 8.82 5.99 5.17 23.75 217.77 30.52 6.02 2.18 9.99 217.77 17.93 10.13 4.36 19.99 217.77 23.21 4.79 4.22 24.92 169.30 18.55 The P&L A/C page of Magma Fincorp Ltd. presents the key P&L A/c Ratios, its comparison with the sector peers and 5 years of Profit & Loss Account Statement. The Cash Flow Statement of Magma Fincorp Ltd.presents the key Cash Flow ratios, its comparison with the sector peers and 5 years of Cash Flow Statement. Cash FlowPrint Particulars Profit Before Tax Net Cash Flows from Operating Activity Net Cash Used in Investing Activity Net Cash Used in Financing Activity Net Inc/Dec in Cash and Cash Equivalent Cash and Cash Equivalent - Beginning of the Year Cash and Equivalent - End of the Year Mar'11 170.50 Mar'10 103.04 Mar'09 60.13 -280.08 32.87 548.19 300.98 598.01 899.00 Mar'08 76.59 -766.66 -77.72 880.33 35.95 562.06 598.01 Mar'07 49.96 -198.45 -35.81 555.28 321.02 241.04 562.06 -926.43 -1,096.00 -6.89 969.14 35.82 968.46 1,004.28 60.42 1,105.04 69.46 899.00 968.46 The Balance Sheet Page of Magma Fincorp Ltd.presents the key ratios, its comparison with the sector peers and 5 years of Balance Sheet. Balancesheet - Magma Fincorp Ltd.Print Particulars Liabilities Share Capital Reserves & Surplus Net Worth Secured Loans Unsecured Loans TOTAL LIABILITIES Mar'11 12 Months 185.34 536.80 722.14 3,387.47 1,020.94 5,130.56 Mar'10 12 Months 137.88 326.71 464.59 2,863.99 703.10 4,031.68 Mar'09 12 Months 137.88 272.78 410.66 1,956.19 517.06 2,883.91 Mar'08 12 Months 137.88 242.77 380.65 1,422.21 488.54 2,291.39 Mar'07 12 Months 166.26 179.85 346.11 899.65 118.55 1,364.31 Assets Gross Block (-) Acc. Depreciation Net Block Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank Loans And Advances Total Current Assets Current Liabilities Provisions Total Current Liabilities NET CURRENT ASSETS Misc. Expenses 388.23 201.10 187.13 0.00 29.88 4,283.92 6.06 1,004.28 169.52 5,463.78 453.61 96.63 550.23 4,913.55 0.00 382.07 174.11 207.96 0.00 30.22 3,181.76 7.45 968.46 163.44 4,321.10 475.63 51.97 527.60 3,793.50 0.00 379.97 141.77 238.20 0.00 42.14 1,980.27 6.55 899.00 138.34 3,024.16 396.68 23.91 420.59 2,603.57 0.00 333.05 108.66 224.40 0.00 77.60 2,262.84 8.21 598.01 113.52 2,982.58 954.33 38.86 993.19 1,989.39 0.00 289.34 80.12 209.22 0.00 15.79 1,240.24 5.67 562.06 82.22 1,890.18 740.56 10.32 750.88 1,139.30 0.00 TOTAL ASSETS (A+B+C+D+E) 5,130.56 4,031.68 2,883.91 2,291.39 1,364.31 The Quarterly Results page of Magma Fincorp Ltd.presents the key result items, its comparison with the sector peers and its previous 5 Quarterly Results. Quaterly - Magma Fincorp Ltd.Print Dec'11 Sep'11 Jun'11 Mar'11 Dec'10 INCOME: Net Sales Turnover Other Income Total Income 267.05 -0.0 267.04 241.34 0.08 241.42 210.39 1.08 211.48 266.37 0.40 266.76 216.41 0.43 216.85 EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT 0.00 0.00 0.00 34.42 0.00 0.00 0.00 41.03 0.00 75.45 191.60 191.59 6.33 185.27 168.55 16.71 0.00 0.00 0.00 35.70 0.00 0.00 0.00 26.17 9.24 71.11 170.23 170.31 6.22 164.09 137.88 26.22 0.00 0.00 0.00 38.56 13.85 0.00 0.00 7.41 9.14 68.96 141.43 142.52 6.49 136.03 114.91 21.12 0.00 0.00 0.00 39.66 0.00 0.00 0.00 62.68 3.48 105.82 160.54 160.94 6.62 154.32 91.61 62.71 0.00 0.00 0.00 31.86 0.00 0.00 0.00 32.25 6.84 70.95 145.47 145.90 7.17 138.73 92.54 46.18 Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT 5.43 11.29 0.00 0.00 0.00 11.29 7.64 18.58 0.00 0.00 0.00 18.58 6.86 14.25 0.00 0.00 0.00 14.25 19.85 42.85 0.00 0.00 0.00 42.85 15.40 30.78 0.00 0.00 0.00 30.78 KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares(lacks) Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.) 0.00 37.95 0.00 0.00 1,258.00 66.30 0.00 0.00 0.59 0.00 35.93 0.00 0.00 1,257.32 69.98 0.00 0.00 1.03 0.00 35.93 0.00 0.00 1,269.41 70.67 0.00 0.00 0.79 0.00 25.96 0.00 0.00 757.46 58.37 0.00 0.00 3.30 0.00 25.95 0.00 0.00 757.46 58.37 0.00 0.00 2.37 The Half Yearly Results page of Magma Fincorp Ltd. presents the key Half Yearly result items, its comparison with the sector peers and its previous 5 Half Yearly Results. Half Yearly - Magma Fincorp Ltd.Print Sep'11 Mar'11 Sep'10 Mar'10 Sep'09 INCOME: Net Sales Turnover Other Income Total Income 451.74 1.16 452.90 482.78 0.83 483.61 362.86 0.86 363.72 386.11 1.67 387.78 313.20 2.03 315.23 EXPENSES Stock Adjustments Raw Material Consumed 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT 0.00 74.26 13.85 0.00 0.00 33.58 18.38 140.07 311.67 312.83 12.71 300.12 252.78 47.34 14.50 32.83 0.00 0.00 0.00 32.83 0.00 71.51 0.00 0.00 0.00 94.94 10.32 176.77 306.01 306.84 13.79 293.05 184.16 108.89 35.26 73.63 0.00 0.00 0.00 73.63 0.00 31.23 0.00 0.00 0.00 105.54 4.58 141.36 221.50 222.36 6.78 215.59 153.97 61.61 20.81 40.80 0.00 0.00 0.00 40.80 0.00 52.98 32.51 0.00 0.00 28.22 24.14 137.86 248.25 249.93 15.92 234.01 168.58 65.43 23.70 41.73 0.00 0.00 0.00 41.73 0.00 52.35 22.85 0.00 0.00 21.99 15.88 113.08 200.12 202.15 16.87 185.28 147.67 37.62 12.88 24.73 0.00 0.00 0.00 24.73 KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares Agg. Non-Promoter Holding (%) 0.00 35.93 0.00 0.00 1,257.32 69.98 0.00 25.95 0.00 0.00 757.46 58.37 0.00 25.87 0.00 0.00 753.21 58.23 0.00 21.78 0.00 0.00 109.61 50.33 0.00 21.78 0.00 0.00 109.91 50.47 Government Share Capital Adequacy Ratio EPS (Rs.) 0.00 0.00 1.83 0.00 0.00 5.67 0.00 0.00 3.15 0.00 0.00 19.16 0.00 0.00 11.36 The Nine Month Results page of Magma Fincorp Ltd. presents the key result items, its comparison with the sector peers and its previous 5 Nine Monthly Results. NinemonthlyPrint Dec'10 Dec'09 Dec'08 Dec'07 Dec'06 INCOME: Net Sales Turnover Other Income Total Income 579.27 1.30 580.57 488.89 2.90 491.79 446.54 1.37 447.91 283.33 26.32 309.65 150.50 5.26 155.76 EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT 0.00 0.00 0.00 94.99 0.00 0.00 0.00 88.88 21.15 205.02 374.25 375.54 21.23 354.31 0.00 0.00 0.00 79.16 0.00 0.00 0.00 68.40 26.46 174.01 314.88 317.78 25.01 292.77 0.00 0.00 0.00 70.80 40.55 0.00 0.00 36.17 22.35 169.86 276.68 278.05 24.36 253.69 0.00 0.00 0.00 46.30 78.68 0.00 0.00 0.00 0.00 124.99 158.34 184.66 21.05 163.61 0.00 0.00 0.00 23.94 43.00 0.00 0.00 0.00 0.00 66.94 83.56 88.82 17.05 71.78 Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT 246.52 107.80 36.21 71.58 0.00 0.00 0.00 71.58 230.21 62.56 21.43 41.13 0.00 0.00 0.00 41.13 204.75 48.94 16.70 32.24 0.00 0.00 0.00 32.24 112.05 51.56 0.00 51.56 0.00 0.00 0.00 51.56 42.26 29.51 0.00 29.51 0.00 0.00 0.00 29.51 KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares(lacks) Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.) 0.00 25.95 0.00 0.00 757.46 58.37 0.00 0.00 5.52 0.00 21.78 0.00 0.00 549.52 50.47 0.00 0.00 3.78 0.00 21.78 0.00 0.00 110.99 50.97 0.00 0.00 14.80 0.00 20.16 0.00 0.00 94.85 47.04 0.00 0.00 25.57 0.00 16.93 0.00 0.00 81.30 48.02 0.00 0.00 17.43 The Yearly Results page of Magma Fincorp Ltd. presents the key annual result items, its comparison with the sector peers and its Annual Results for the last five years. Yearly - Magma Fincorp Ltd.Print Mar'11 Mar'10 Mar'09 Mar'08 Mar'07 INCOME: Net Sales Turnover Other Income Total Income 845.64 1.69 847.33 699.31 3.70 703.01 623.41 2.08 625.48 437.12 34.31 471.43 264.15 14.18 278.33 EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT 0.00 0.00 0.00 134.65 0.00 0.00 0.00 151.56 24.63 310.85 534.79 536.48 27.85 508.63 338.13 170.50 56.07 114.43 0.00 0.00 0.00 114.43 0.00 0.00 0.00 105.34 55.36 0.00 0.00 50.22 40.02 250.93 448.38 452.08 32.79 419.29 316.25 103.04 36.58 66.46 0.00 0.00 0.00 66.46 0.00 0.00 0.00 99.92 0.00 0.00 0.00 104.32 41.51 245.76 377.65 379.73 34.24 345.49 285.36 60.13 21.08 39.04 0.00 0.00 0.00 39.04 0.00 0.00 0.00 64.05 0.00 0.00 0.00 131.24 0.00 195.28 241.84 276.15 28.79 247.36 170.77 76.59 10.94 65.65 0.00 -15.11 15.11 65.65 0.00 0.00 0.00 40.14 0.00 0.00 0.00 82.03 0.00 122.18 141.98 156.16 24.18 131.98 82.01 49.96 9.94 40.02 0.00 0.00 0.00 31.40 KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate 0.00 25.96 536.80 0.00 0.00 21.78 0.00 0.00 0.00 21.78 0.00 0.00 0.00 21.78 242.77 0.00 0.00 16.93 179.85 0.00 Agg. Non-Promoter Shares(lacks) Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.) 757.46 58.37 0.00 0.00 8.82 109.61 50.33 0.00 0.00 30.52 110.99 50.97 0.00 0.00 17.93 110.99 50.97 0.00 0.00 30.15 79.67 47.06 0.00 0.00 18.55 The Capital Structure page of Magma Fincorp Ltd. presents the Authorized Capital, Issued Capital, and Paid-Up Equity Capital of the company over the period. Capital Structure - Magma Fincorp Ltd. Period Instrument From 2010 2009 2008 2007 2006 2005 2004 2004 2004 2003 2002 2001 To 2011 2010 2009 2008 2007 2006 2005 2005 2005 2004 2003 2002 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Authorized Capital (Rs. cr) 35.0 35.0 35.0 35.0 25.0 25.0 15.0 15.0 15.0 15.0 15.0 15.0 Issued Capital (Rs. cr) 26.0 21.8 21.8 21.8 16.9 14.4 11.4 11.4 11.4 11.4 11.4 11.4 -PAIDUPShares (nos) 129773550 21777140 21777140 21777140 16929764 14391992 1000000 600000 11374992 11374992 11374992 11374992 Face Value 2.0 10.0 10.0 10.0 10.0 10.0 100.0 100.0 10.0 10.0 10.0 10.0 Capital (Rs. Cr) 26.0 21.8 21.8 21.8 16.9 14.4 10.0 6.0 11.4 11.4 11.4 11.4 1999 1998 1996 1994 1993 1992 1991 2001 1999 1999 1996 1994 1993 1992 Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share 15.0 25.0 25.0 25.0 10.0 10.0 5.0 11.2 11.2 11.2 8.8 6.3 6.3 4.2 11201018 11201018 11201018 8785560 6275400 6275400 4154500 10.0 10.0 10.0 10.0 10.0 10.0 10.0 11.2 11.2 11.2 8.8 6.3 6.3 4.2 The Shareholding Pattern page of Magma Fincorp Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc. Shareholding pattern - Magma Fincorp Ltd. Holder's Name Promoters ForeignInstitutions ForeignOthers FinancialInstitutions OtherCompanies GeneralPublic NBanksMutualFunds Others ForeignNRI No of Shares 63931963 52374079 26854380 23125660 9339096 9241779 2884447 1536204 444567 % Share Holding 33.70% 27.60% 14.15% 12.19% 4.92% 4.87% 1.52% 0.81% 0.23% Company History - Magma Fincorp Ltd.Print YEAR EVENTS 1978 - Magma Leasing Limited was incorporated on December 18, as ARM Group Enterprises Private Limited and was converted into a Public Limited Company with effect from October 30, 1980. - The Company has been carrying on various business activities in manufacturing, trading and financial services and has laid the foundation for emerging as a multi-divisional enterprise specialising in diverse lines of business such as Financial Services covering leasing, hirepurchase and bill discounting through a separate division as well as through an exclusive Financial Services Company called Magma Leasing Limited (erstwhile) which was separately incorporated for the purpose. - The name of the Company was also changed from ARM Group Enterprises Ltd. to Magma Leasing Limited, (August 24, 1993). The activity of manufacture and selling of Industrial Gases has been subsequently discontinued by the Company. - Another Company, Calcutta Credit Corporation Limited, was earlier merged with ARMGroup Enterprises Ltd. in 1987. Calcutta Credit Corporation Ltd. was one of the earliest hire-purchase companies in Eastern India having been incorporated in 1937. 2000 - The Company has signed an agreement with CDSL & NSDL for dematerialisation. 2003 -Members approved delisting of its equity shares from Kolkata Stock Exchange. 2004 -Magma has entered into a tie-up with the National Insurance Company Ltd (NIC) for extending insurance cover to its customers -MLL launches 'Magma Carisma' car loan scheme 2005 -Magma ties up with National Insurance to unveil co-branded product 2006 -Magma Leasing Ltd has appointed Mr Narayan Seshadri as an Additional Director of the Company to hold office till the next Annual General Meeting of the Company. 2007 - Magma Shrachi Finance Ltd has informed that at the meeting of the Board of Directors of the Company held on October 29, 2007, Mr. Ashish Moti Chugani has been appointed as the Alternate Director to Mr. Neil Graeme Brown, Director of the Company w.e.f. October 29, 2007. -Company name has been changed from Magma Leasing Ltd. to Magma Shrachi Finance Ltd. 2008 - Once again company name changed from Magma Shrachi Finance Ltd. to Magma Fincorp Ltd. 2010 - Magma Fincorp Ltd has informed that Mr. V. Lakshmi Narasimhan has been appointed as Chief Financial Officer (CFO) of the organization with effect from April 01, 2010. Management Name Ashutosh Shukla Brahmajyoti Mukherjee Dinesh Chandna G P Pattanaik Girish Bhatia Girish Bhatia Kailash Nath Bhandari Mahender Bagrodia Mayank Poddar Nabankur Gupta Narayan K Seshadri Neil Graeme Brown Sanjay Chamria Sanjay Chamria Sanjay Nayar Satya Brata Ganguly Sumit Mukherjee Swaraj Krishnan V Lakshmi Narasimhan Designation Chief Operating Officer Chief People Officer Chief Information Officer Chief - Receivables Management Company Secretary & Compliance Officer Secretary Director National Credit & Risk Head Chairman / Chair Person Director Director Director CEO Vice Chairman & Mng.Director Non Exe.Non Ind.Director Director National Sales Head (High-yield business) Chief Executive Officer Chief Financial Officer Director ReportPrint Mar2010 Mar 2011 The directors have pleasure in presenting the 31st annual report on the audited accounts of the Company for the year ended 31st March, 2011. The summarised financial results are given below: Financial results (Rs. in lac) Year ended 31 March 2011 Year ended 31 March 2010 Total income 84,732.98 70,300.89 Profit before interest and depreciation 53,648.17 Less: Interest and finance charges 33,813.00 Less: Depreciation Profit before tax Tax Expense Profit after tax 2,785.07 17,050.10 5,606.78 11,443.32 45,207.66 31,624.96 3,278.58 10,304.12 3,658.09 6,646.03 6,677.91 Add: Surplus brought forward Balance available for appropriation - Statutory reserves - General reserve Provision for dividend - On Preference Shares - On Equity Shares - Dividend tax 10,191.97 21,635.29 2,290.00 1,150.00 13,323.94 1,330.00 500.00 961.53 778.64 282.42 599.28 517.39 185.30 Balance carried forward to the next year 16,172.70 10,191.97 Net worth Earning per equity share (Rs.) - Basic - Diluted 72,214.16 46,458.69 8.12 7.94 5.46 5.45 43.36 32.00 Book value per equity share (Rs.) Note: EPS and Book Value are shown after adjusting for split of share in ratio of 1 share of Rs.10/- into 5 shares of Rs.2/Business The Indian economy achieved good growth in the year and is estimated to have grown at 8.6 percent during FY 2010-11, as compared to 7.4 percent during FY 2009-10. WPI based inflation remained high in major part of the year and was at 8.9 percent at March end. High food inflation, which was 9.2 percent for the week ended 26 March 2011, has been one of the major contributors to overall high inflation in the economy. Responding to this, RBI has been following policies of monetary tightening for the entire year, which has pushed up the interest rates in the economy. Despite this, retail assets demand continues to be strong. There was robust growth in sales of new vehicles during fiscal 2010-11. Domestic sales of new commercial vehicles registered a healthy growth of 27.3 percent during 2010-11 as compared to 2009-10, while sales of new cars and UVs registered a growth of 29.3 percent during the financial year. Tractors sales also grew about 21 percent during the year under review. As supported by strong growth in primary sales, Magma Fincorp Limited recorded total funding of Rs.5,262 crore (on a standalone basis) during FY 2010-11, resulting in 31.9 percent growth over Rs.3,989 crore recorded during FY 2009-10. Aided by growth in business, build up of on-book assets and increasing share from high yield products such as Suvidha (Used CV), Tractors and SME Loans, total income enhanced to Rs 847.33 crore, representing a 20.53 percent growth over Rs.703.00 crore achieved in last year. Higher business volumes have been accompanied by better asset quality, superior collection performance, dramatically lower write-offs and higher cost efficiency. Accordingly, profit before tax increased to Rs.170.50 crore during 2010-11, compared to Rs.103.04 crore for 2009-10, a growth of 65.5 percent. Profit after tax recorded remarkable 72.2 percent growth, from Rs.66.46 crore in last year to Rs.114.43 crore in 2010-11. Profitability parameters of the Company have shown significant improvement during the year. RoA (return on average assets) has improved from 1.7 percent in 2009-10 to 2.2 percent in 2010-11, while RoE (Return on Average Equity) has enhanced from 18.5 percent in 2009-10 to 22.7 percent in 2010-11. Insurance Joint Venture : The Company is in Joint Venture Agreement with HDI Gerling International Holding AG for the purpose of entering into General Insurance Business in India through the existing Company, Magma HDI General Insurance Company Ltd. (the "JV Company"). The JV Company has since received the R1 approval and is in the process of filing the R2 application with IRDA. Dividend Your Directors recommend a tax-free dividend of 30 percent, i.e. Rs.0.6 per Equity Share on 12,97,73,550 Equity Shares of Rs.2 each; a 9.7 percent dividend on 21,09,199 Cumulative Non-Convertible Redeemable Preference Shares of Rs.100 each for the period from 1.4.2010 to 17.2.2011 and 9.7 percent on 21,09,199 Cumulative Non-Convertible Redeemable Preference Shares of Rs.80/- each (reduced to Rs.80/- upon redemption of 1st installment of Rs.20/- each per share on 17th Feb,2011) for the period from 18.2.2011 to 31.3.2011; a 5 percent dividend on 30,00,000 Cumulative Non-convertible Redeemable Preference Shares of Rs.100 each; a 3.7 percent dividend on 65,00,999 Cumulative Non-Convertible Redeemable Preference Shares of Rs.100 each; a 12 percent dividend on 25,00,000 Cumulative Non-Convertible Redeemable Preference Shares of Rs.100 each for the period from 30.6.2010 to 31.3.2011; a 9.6 percent dividend on 10,00,000 Cumulative Non-Convertible Redeemable Preference Shares of Rs.100 each for the period from 19th June, 2010 to 31st March,2011; a 1 percent dividend on 21,09,199 Cumulative Non Convertible Redeemable Preference Shares of Rs.100 each for the previous year ended 31 March 2010, subject to your approval at the ensuing Annual General Meeting . Employee Stock Option Scheme Your Company formulated and implemented an ESOP scheme (Magma Employees Stock Option Plan 2007) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.The details of options granted and outstanding as on 31 March 2011 along with other particulars as required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Auditors Certificate required to be placed at the forthcoming Annual General Meeting pursuant to Clause 14 of the said guidelines are set out in the Annexure to the Report. Pursuant to Subdivision of Equity Share of the face value of Rs.10/each into 5 Equity Shares of the face value of Rs.2/- each, the existing 7,41,900 Options of Rs.10/- each available for grant out of the 10,00,000 Options under the Plan stands converted into and increased to 37,09,500 Options of Rs.2/- each and existing 2,58,100 live options of Rs.10/- each stands converted into 12,90,500 options of Rs.2/- each. The exercise price is also revised from Rs.180/- per option to Rs.36/- per option. Pursuant to the Plan, 17,54,000 stock options of Rs.2/- each (increased from 3,50,800 stock options of Rs.10/- each to 17,54,000 stock options of Rs.2/- each following subdivision of 1 equity share of the nominal value of Rs.10/- each into 5 Equity Shares of the nominal value of Rs.2/- each ) were granted to the eligible employees in October 2007 out of which 4,63,500 stock options of the nominal value of Rs.2/- each have lapsed and 7,74,300 stock options of the nominal value of Rs.2/each were vested till 31st March,2011. During the year 5,51,750 stock options of the nominal value of Rs.2/- each were exercised by the eligible employees and equivalent number of Equity Shares of the nominal value of Rs.2/- each were issued and allotted under the scheme ranking pari passu with the existing Equity Shares of your company. Capital – issuances and redemptions Changes in Share Capital Equity Shares During the year,the following changes were effected in the share capital of the Company : i) Issue of Warrants: During the year, 20,00,000 warrants (increased to 1,00,00,000 warrants following subdivision of 1 equity share of the nominal value of Rs.10/each into 5 Equity Shares of the nominal value of Rs.2/- each ) were allotted to one of the Promoter entities, carrying an option / entitlement to subscribe to equivalent number of Equity Shares at a price of Rs.250/- per Equity Share (revised to Rs.50/- per Equity share following Sub division ), on a future date not exceeding 18 months from the date of issue of such warrants in terms of provisions of SEBI Guidelines for Preferential Issue (Chapter VII of the SEBI (Issue and Disclosure Requirements) Regulations, 2009). ii) Issue of Equity Shares through the Qualified Institutional Placement ( QIP ) route The Company has raised a sum of Rs.122.42 crore through the Qualified Institutional Placement ( QIP ) route by way of issue of 40,67,220 Equity Shares of Rs.10/- each for cash at a price of Rs.301/- per equity share (including premium of Rs.291/- per equity share) to a host of Institutional Investors who are Qualified Institutional Buyers. iii) Sub-division of Equity Shares Each Equity share of the face value of Rs.10/- of the Company was sub-divided into 5 Equity Shares of the face value of Rs.2/- each with effect from 16th August,2010. iv) Change in Authorised Equity Share Capital : The Authorised Equity Share Capital of the Company comprising of 3.5 crore Equity Shares of Rs.10/- each stand revised to 17.5 crore Equity Shares of Rs.2/- each . v) Issue of Equity Shares under the Magma Employees Stock Option Plan 2007: During the year, 5,51,750 Equity Shares of the face value of Rs.2/each at a price of Rs.36/- per share ( including a premium of Rs.34/per share ) were allotted to the eligible employees under the Scheme against the exercise of stock options by them. Consequently, the issued, subscribed and paid up equity share capital of your company stands increased to Rs.25.95 crore divided into 12,97,73,550 Equity Shares of Rs.2/- each. The new Equity Shares issued during the year rank pari passu with the existing Equity Shares . Preference Shares (i) Issue of Preference Shares During the year 10,00,000, 9.6% Cumulative Non - Convertible Redeemable Preference Shares of the face value of Rs.100/- each aggregating to Rs.10 crore were issued and allotted on preferential allotment basis, at par redeemable at the end of 5 years at a premium of 25 percent of the face value. The Company also issued 25,00,000, 12%, Cumulative Non Convertible Redeemable Preference Shares of the face value Rs.100/- each aggregating to Rs.25 crore at par on preferential allotment basis which are redeemable at par at the end of 5 years. (ii) Redemption of Preference Shares As per the terms of issue of 9.7% Cumulative Non-Convertible Redeemable Preference Shares of Rs.100/- each, the first installment of 20 percent ( Rs.20/- each) on 21,09,199 Preference Shares aggregating to Rs.4.22 crore was redeemed on 17th Feb, 2011 out of the profits of the Company and an equivalent sum has been transferred to the Capital Redemption Reserve. Consequently, the issued ,subscribed and paid up Preference share capital of your Company stands revised to Rs.146.88 crore. Debt Subordinated Debt During the year, the Company issued 1,36,200 Unsecured Redeemable Non-Convertible Subordinated Debt in the nature of Debentures of Rs.10,00,000 each, aggregating Rs.136.20 crore. Perpetual Debt During the year, the Company issued 250 Unsecured Subordinated Perpetual Bonds in the nature of Debentures of Rs.10,00,000 each, aggregating Rs.25 crore. Consolidated financial statements In accordance with the requirements under Clause 32 of the Stock Exchange Listing Agreement, your Company prepared consolidated financial statements in accordance with Accounting Standard-21 issued by The Institute of Chartered Accountants of India. The consolidated financial statements form a part of the Annual Report. Corporate Governance Your Company has consistently been complying with the Corporate Governance Code prescribed by SEBI and a detailed report on Corporate Governance together with a certificate of compliance from the statutory auditors, as required by Clause 49 of the Stock Exchange Listing Agreement, forms a part of this Annual Report. Directors responsibility statement In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm - That in the preparation of the annual accounts, the applicable accounting standards have been followed by your Company along with proper explanation relating to materia departures, if any; - Having selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financia year 31 March 2011 and of the profit of the Company for the period under review; - That proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any, have been taken; - That the annual accounts have been prepared on a going concern basis. RBI regulations - compliance Your Company continues to carry on its business of Non-Banking Finance Company as a Non-Deposit Taking Company and follows prudent financial management norms as applicable and continues to progressively follow the internationally accepted accounting principles on revenue recognition, provisioning and asset classification which are more stringent than the guidelines prescribed by the RBI. A detailed note is appended in Schedule 16 Notes on Accounts. The gross and net NPAs stood at Nil and Nil respectively. Your Company appended a statement containing particulars as required in terms of paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 in Note 2 (xxvi), Schedule 16 Notes on Accounts and additiona disclosures required for NBFCs-ND-SI in terms of notification dated 1 August 2008 issued by the RBI in Note 2 (xxv) Schedule 16 Notes on Accounts. Subsidiary Magma ITL Finance Limited, a subsidiary of the Company and the Companys joint venture with International Tractors Limited, manufacturers of Sonalika Brand of Tractors is registered with the RBI as a non-deposit taking NBFC.The Company has earned a PBT of Rs.11.71 crore for the year ended 31st March, 2011. For and on behalf of the Board Kolkata 18th April, 2011 Mayank Poddar Chairman Magma Fincorp Limited is one of the fastest growing retail asset finance company in India. It has a well-diversified product portfolio comprising Commercial Vehicle Finance, Car & Utility Vehicle Finance, ConstructionEquipment Finance, Used Vehicle Finance (Suvidha), Strategic Construction EquipmentFinance, Tractor Finance, SME Finance and Insurance (through third party arrangement).The Company follows an excellent credit appraisal policy through well-laid processes,which helps to build up a quality asset base over the years. With a vision to become India.s Largest RetailFinancing Company, Magma continues its customised services, striving towards excellence in retail financing, garnering prosperity and happiness to all. Magma has implemented several initiatives directed towards building a strong financial institution with innovative processes and support structures in mission critical functions like people, technology, customer relationships, branding and internal control. .MILESTONE 1989: Magma Leasing Limited commenced operations 1992: Merged with Arm Group Enterprises to strengthen its business 1996: Entered retail financing business for vehicles and construction equipment 1998: Expansion of retail financing operations in Orissa and Chhattisgarh, thus expansion of network in East India 1999: Acquisition of Consortium Finance Ltd (CFL); expansion of network across 40 branches in North and East India 2001: Strategic joint financing agreement with Citicorp 2003: Strategic arrangement with ICICI Bank 2005: Launched fee-based business - Insurance and Personal loan 2006: Rolled out two new products - Used Vehicle Finance (Suvidha) & Strategic Construction Equipment 25 August 2006: Magma Leasing and Shrachi Infrastructure merger announced; Magma also entered into a tie-up with Maruti Udyog Limited, the country's largest carmaker, to finance Maruti cars 2007: Merger and integration of Magma Leasing and Shrachi Finance completed - pan-India footprint with 160 offices in 20 states and asset base of over Rs 6,400 crore August 2007: Magma and International Tractors Limited (ITL) entered into a joint venture to form Magma ITL Finance Limited August 2008: Underwent a major branding exercise, subsequent to which the company was renamed Magma Fincorp Limited 2009 : Entered into a tie-up with Ashok Leyland for financing of commercial vehicles. 2009 : Magma inks JV with German insurer HDI Gerling to enter general insurance business. 2009 : Magma owns 7% stake in the newly formed Experian Credit Information Company of India Pvt Ltd, the Indian Credit Information Company (CIC) arm of the global information services company, Experian. 2010 : Entered into a tie-up with Caterpillar India to finance the latter's entire range of construction and mining machines. VISION To become India’s largest retail financing Company MISSION Continue service excellence in retail financing to bring prosperity and happiness to all OUR CORE VALUES Openness and transparency: We will foster honesty and frankness in all our dealings and be clearly discernible to everybody we deal with. Integrity and credibility: We will act with the utmost intellectual and financial uprightness and will be seen acting as such. Fairness and impartiality: We will be just in our dealings with others and practice empathy. Trust and respect for people: We will recognise and demonstrate through our actions our inherent belief in the dignity that every human being is entitled to. Demanding excellence: We will, in demanding excellence of ourselves and others, exceed all expectations and overcome perceived barriers. MAGMA CORPORATE PROFILE Intellectual Capital Human resource is the key to the success of any financial services company. Being a performance-driven, work-oriented organization, Magma has an eye for the best minds in the industry and has created a pool of employees from diverse backgrounds, with various skill sets and experiences. The Company has developed a robust performance measurement & evaluation system. Magma continuously undertakes noteworthy measures to chart a tangible career growth of its team members. The Company has been promoting people from within to take up the leadership positions to chart a long term career for the performers. Expeditious Technology Infrastructure Successful information management provides a critical competitive edge in the retail financing business: be it cross sell, customer sourcing, credit assessment, portfolio analysis, collection monitoring, or formulation of corporate strategy. Retail financing is also a process driven activity, which requires its various units to comply with pre-defined processes. Sound deployment of technology and its alignment with business strategy is an area where Magma constantly seeks to keep ahead of the competition. Non-Performing Assets Several initiatives are in place to improve portfolio quality and contain delinquency within manageable limits: physical verification by dedicated Field Investigation officers at the customer's place, strict compliance with credit processes, discipline in credit documentation for all contracts, verification of customers business and financial track record etc. are all directed at minimizing potential credit losses at the point of origination. Subsequently, during the collection process, the Company engages an experienced field force for bucket wise monitoring of collections and any chronic defaults are further dealt through appropriate legal actions. Loyal Customers Magma believes in sustainable partnerships and has always given priority to its customers. interest. Its financing solutions are tailor-made to the customer.s business and his capacity to pay. Well defined retail consumer target audience has resulted in clear customer focus; transparent and standardised documentation has shrunk turnaround time; the large network of offices ensures prompt and efficient customer service; while continuous customer interaction and improved quality of customer service results in repeat transactions with customers. Strategic Partnerships Magma protects the interest of its customers by financing products of only those manufacturers whose brands are synonymous with quality, longevity, service and value for money. Magma.s entrenched rural presence and semi-urban penetration . 20% of its network is present in villages . make it a preferred partner for companies seeking a presence in these markets. The Company enjoys partnerships with various manufacturers across all three product segments: v For passenger cars and utility vehicles, it has forged alliances with Maruti, Hyundai, Mahindra & Mahindra and General Motors; v For commercial vehicles, it has partnered with almost all leading manufacturers like Tata Motors, Ashok Leyland, Eicher, Bajaj and Volvo India; v In the construction equipment sector, Magma works closely with JCB and Telcon, which together have a dominant market share in the CE sector Corporate Image Building As Magma grows in size and scale, dissemination of knowledge about the Company and its activities is of benefit to all its stakeholders and the larger community it operates in. Corporate branding helps in identifying and aligning the Company.s image with its vision and objectives. It also acts as a platform for the corporate to participate in and discharge its wider social responsibilities. In this context, several initiatives are undertaken on a sustained basis like Customer outreach programs, Corporate advertising in business and trade publications, Corporate image building by maintaining personal relations with the media, Participation and sponsorship of corporate events, Corporate social responsibility activities across the country like health camp and eye check-up camp for truck drivers & helpers under the programme .Better Health with Magma., Maintaining strong Investor Relations, Media campaign to highlight Magma.s strength and brand equity and other activities. There are 3 numbers by which we would like our 2009-10 performance to be remembered. Net interest margin. Collection efficiency. Cost-to-income ratio. Net interest margin IN THE COMPETITIVE BUSINESS OF ASSET FINANCING, THE COMPANY PROFITABLE ACROSS ALL BUSINESS CYCLES IS THE ONE WITH THE WIDEST NET INTEREST MARGIN. Net interest margin is the difference between the average cost that one pays for borrowed capital and the average realisation that one derives from it. In a challenging 2009-10, Magma did not just protect its NIM, but widened it. Magma chose the most challenging year in its existence to report its highest NIM. What was a prevailing range of 3.5 percent to 3.8 percent touched 5 percent for the first time in the Company’s history. This improvement was a result of an increase in the contribution of higher yield products, a larger access to low cost funds based on superior asset quality and a more efficient treasury operation. Magma Fincorp Limited 5 Net interest margin (%) 06-07 3.7% 07-08 3.8% 08-09 3.6% 09-10 5.1% How a higher NIM was achieved Increased the proportion of high-yield products _ Reduced the average cost of debt from banks _ Borrowed low cost and short-term from the mutual funds market _ Strengthened collection efficiency _ Recovered 180-dayplus bucket debts (erstwhile NPAs) COLLECTION EFFICIENCY IN A BUSINESS WHERE WE UNDERWRITE RISK AND NEED TO UNDERTAKE THIS CONSISTENTLY, SUCCESS IS DERIVED FROM AN ABILITY TO COLLECT OUR DUES AT THE RIGHT TIME. Collection efficiency is a term that describes just how well we do this. In a buoyant 2007-08, our collection efficiency was 97.0 per cent. In a challenging 2008-09, our collection efficiency improved to 97.8 per cent. In a volatile 2009-10, we surprised industry observers by strengthening our collection efficiency even further to 99.8 percent. This was probably the highest collection efficiency achieved by any Company in our sector in the country. This performance was creditable when one recognises that this improved collection efficiency was achieved on volumes in excess of Rs. 4,000 crore. Besides, the collection efficiency was reported on a combination of existing and acquired portfolios, the latter being particularly challenging. Collection efficiency (%) 06-07 96.8 07-08 97.0 08-09 97.8 09-10 99.8 COST TO INCOME RATIO IN A BUSINESS THAT APPEARED TO BE IN DANGER OF SHRINKING FOR A PART OF 2008-09 AND 2009-10, IT BECAME IMPERATIVE TO RIGHT-SIZE ONE’S COST STRUCTURE WITH THE OBJECTIVE TO STAY PROFITABLE ACROSS ALL BUSINESS CYCLES AND INSPIRE THE CONVICTION THAT EVERY RUPEE SAVED IS TWO EARNED. This is precisely what Magma did when the slowdown started. The Company enhanced awareness among its members regarding the need to stay lean, enrolled them actively in the exercise of cost reduction and enabled them to scrutinise every cost element to reduce expenses. Magma’s operating costs declined from 32.7 percent of revenues in 2008-09 to 30 percent in 2009-10